Circular Economy in Turkish Manufacturing Sector: The Roles of Green Manufacturing and Innovation

An emerging phenomenon, circular economies (CEs) seek to reduce the amount of raw materials needed for production and reuse waste products in the production process. Enterprises need to change their manufacturing processes to achieve the CE approach’s goal of reintroducing waste into the economy through recycling. Creating a circular manufacturing process requires innovative practices. Emerging countries, in particular, need to improve manufacturing performance to reduce waste, material waste, energy consumption, industrial pollution, etc. Turkey’s manufacturing companies are developing green innovation strategies and integrating environmental management systems into their business strategies to combat environmental degradation. Therefore, it is appropriate for enterprises to adopt green manufacturing (GM) methods to implement this initiative. In particular, emerging economies must innovate, develop, and adopt low-carbon energy sources and technologies that are environmentally friendly and sustainable. This study used a case study method to explore the possible effects of green production and innovation on the CE implementation of ArçelikArçelik, a leading white goods manufacturer. According to case study findings, companies are significantly more likely to adopt CE practices and to develop green products when GM goals are in place. The study also indicates that CE innovation reduces a firm’s costs by using fewer resources. When these cost savings are reflected in the prices of the products by the manufacturing firm, the demand for the products is likely to increase in the long run. On the other hand, since CE innovations require incurring high investment costs in the short run, price increases may be possible in the short run to cover these costs. This means that the demand for the firm’s products decreases in the short run, hence its output and employment. Therefore, it can be argued that there is a U-shaped relationship between CE innovations and firm-level employment over time. As a result, CE and GM applications lead to lower-cost products in the long run; contribute to ensuring sustainability in economic, environmental, and social dimensions; and are most likely to have an employment-increasing effect of meeting the increase in demand for green products.