Transformation to circular economy could enable a global GDP growth of $4.5 trillion by 2030…
But what is circular economy?
The successful adoption of circular economy lies in the hands of digital entrepreneurs rather than designers and engineers with good mechanical skills.
True circularity can only be achieved when smart marketers and innovative investors involve the consumer side in the value chain and satisfy customers’ needs.
Consider the following facts regarding the FMCG (Fast Moving Consumer Goods) industry:
- The material value accounts for 3.2 trillion USD, only 20% of which is recovered mainly by decomposing it;
- The other 80% is waste that cascades throughout the supply chain;
- Redesigning the value chains can increase the recovery of waste to 50%;
- Engineers are already working on new systems capturing material value of goods that are consumed far from the point of production;
- Designers are combining industrial food processing with biodegradable packaging to facilitate the return of bio-based materials;
- Managers are starting to pay more attention to recovering value in most-use stages of the supply chain because they realize they could actually extract value from otherwise wasted resources in the linear economy.
Beyond doubt, the main triggers of circular economy are innovation and technological advancements in the last decade. However, circular economists often focus mainly on the production side. True circularity, however, cannot be achieved without the active involvement of the buyers side of the value chain.
Therefore, Internet of Things (IoT) could enable the interaction between production and buyers side. Consumers could easily use smart technology to order their desired consumer goods e.g. groceries to be delivered timely. In the same manner IoT could have the packages of their consumed good returned to the supplier for recycling when having their new groceries delivered. Residual waste will be eliminated not only during the production process but also in the post-supply stage.
For instance, Samsung has already launched a smart fridge that is connected to a mobile app. When cameras within the fridge detect that a product is almost finished, a notification is sent to the user’s mobile device. But instead of only having his desired products restocked in the fridge, at the same time he could have the delivery company e.g. Amazon or Tesco collect the used packages. These packages will be returned to the production side where they will be recycled.
One of the main tools of circular economy will be disruptive innovation. Technology and design will create new models of commerce, replacing existing markets and creating new ones.
