THE ROLE OF PLUT IN BRIDGING CIRCULAR ECONOMY POLICIES AND MSME INNOVATION IN INDONESIA

Abstract

This study aims to analyze the role of the Integrated Business Service Center (PLUT) as an intermediary institution connecting national circular economy policies with innovative practices in the micro, small, and medium enterprises (MSMEs) sector. Using a qualitative case study approach in Tasikmalaya Regency, data collection methods included in-depth interviews, participatory observation, and documentation. The findings show that PLUT has successfully integrated circular economy principles into its MSME support programs through thematic training, creating recycling- based business models, and fostering cross-sector collaboration. The MSMEs responded positively toward sustainable production practices, primarily through simple initiatives like environmentally friendly packaging. Significant challenges include limited capital, a low understanding of concepts, and a lack of market incentives. This study highlights that the success of adopting a circular economy at the micro level depends on the preparedness of business actors and the strength of local institutions capable of translating macro policies into practical, context-specific interventions. These findings contribute to institutional-based circular economy theory development and offer policy recommendations for strengthening the PLUT model as part of a national green economic development strategy.