Integrating Circular Economy and Social Entrepreneurship for Community Empowerment: Lessons from Bank Sampah Flores

Abstract

The rapid growth of coastal pollution and unmanaged solid waste has intensified the need for sustainable approaches that address environmental degradation while improving community livelihoods. Previous studies have predominantly examined circular economy (CE) and social entrepreneurship (SE) as separate approaches, while limited attention has been given to how both are operationally integrated within grassroots waste management to foster community empowerment. This study examines how CE practices and SE are integrated through a community-based waste bank in Lokaria, Indonesia. A qualitative case study was conducted using semi-structured interviews, direct observation, and organizational documents involving five information-rich informants. Reflexive thematic analysis was combined with an abductive strategy, guided by Institutional Theory and the Resource-Based View (RBV). Findings show that the waste bank institutionalizes sorting, collection, pricing, recycling, and upcycling, converting waste into higher-value products while generating economic, social, and environmental value. Empowerment emerged through skills, inclusion, environmental awareness, and participation, but also functioned as a reinforcing capability for subsequent circular practices. Sustainability remained constrained by limited infrastructure, incentive-dependent participation, weak local demand, and insufficient institutional support. The study develops a Dynamic Community Empowerment Model in which circular practices enable resource transformation, social entrepreneurship organizes hybrid value creation, and empowerment feeds back to strengthen future circular engagement. The model extends RBV from firm-level resources to socially embedded community capabilities and complements Institutional Theory by showing that local capabilities require external institutional alignment to scale.