DefinePK

Abstract

A linear economy fueled by increasing demand creates large amounts of e-waste and depletes limited resources, posing a major risk to the global electronics industry. Despite the urgent need for environmental action and corporate sustainability goals, high-quality recycled materials remain underused. This ongoing gap is driven by complex behavioral barriers, such as risk and loss aversion, and strong bias toward maintaining the status quo among suppliers and OEMs. It is worsened by institutional issues like fragmented regulations, misaligned incentives along the supply chain, and a lack of standardized systems for traceability and quality assurance. This study aims to break this deadlock. We analyze the causes of inertia through a rigorous mixed-methods approach, including a global survey of 150 electronics companies, in-depth interviews with 20 key stakeholders (OEMs, Tier 1-3 suppliers, recyclers, policymakers), and apply institutional theory (examining conflicting logics) and behavioral economics (developing incentive-compatible nudges). Our findings reveal that supplier lock-in contracts (43% of firms), concerns about performance risk (62%), and inconsistent regulations that hinder circularity investments are the main barriers. Importantly, we offer practical solutions after identifying these issues. We demonstrate how innovative multi-stakeholder governance systems, like independently verified certification schemes combined with behavioral nudges, can reduce perceived risks by 35% and better align incentives. The study introduces and evaluates collaborative "circularity compacts"—agreements with shared risk pools, common technology funds, and digital traceability tools like blockchain and Digital Product Passports. These compacts provide a feasible way to close the profit and circularity gap by fostering trust, transparency, and flexible collaboration. Industry leaders, governments, and students aiming to transform electronics supply chains from linear liabilities into circular opportunities will find these insights invaluable.
Keywords: Electronics Supply Chains, Adoption of Recycled Materials, Circular Economy, Behavioral Barriers, Institutional Voids, Multi-Stakeholder Governance, Risk Perception, Circularity Compacts, Incentive Alignment, Sustainable Electronics.