This chapter provides an introduction to the concept of the circular economy (CE), positioning it as a strategic response to the environmental and economic limitations of the linear “take–make–dispose” model. It traces the evolution of CE definitions and principles, highlighting both the traditional 3Rs—reduce, reuse, and recycle—and expanded approaches such as redesign, remanufacturing, and cradle-to-cradle strategies. The discussion emphasizes the role of small and medium-sized enterprises (SMEs) in fostering innovation, advancing sustainability, and contributing to broader socio-economic transformation. Economic, environmental, and social benefits of CE adoption are explored, including cost efficiency, resource conservation, waste minimization, and local development. At the same time, the chapter critically examines systemic barriers such as market inefficiencies, institutional gaps, and limited awareness that hinder widespread adoption, particularly in developing contexts. The chapter establishes CE as a practical yet challenging pathway for integrating sustainability, innovation, and growth in contemporary economies.