Circular Economy and the Internet of Things - doing more with less

By Walter Knitl – CEO at Praxiem

We still live in a linear world. A world dominated by linear economies that have contributed to the deterioration of the atmosphere and biosphere from waste materials and substances – a cradle to grave mentality. Fortunately, the Circular Economy is stepping in as the new paradigm founded on recirculation of all materials to stem these harmful effects – a cradle to cradle approach.

The Circular Economy is a mix of different technologies, solutions, business models, and governance. Among them, and playing a significant and central role, is the Internet of Things or IoT.

The Internet of Things is an extension of the Internet that interconnects Things, humans, and applications. It is a digital paradigm with connected physical sensors and devices at its inception. However, it has expanded to a broader multidimensional space defined by architectural pieces (e.g. sensors, devices, 5G, edge computing, cloud, and other), related applications and verticals (e.g. smart homes, connected transportation, and other), and related enabling disciplines and technologies (e.g. machine learning, digital twins, cybersecurity, and so on). IoT is fundamentally transforming our economies, society, and personal lives.

Round and Around We Go

The linear economy is conceptually straightforward. We Take resources from the earth, the biosphere, and atmosphere that make up our environment, Make products out of them, Use the products, and Discard waste. Here, the Make and Use constitute the core human activity and economy – or the technosphere. The technosphere and the benefits it provides rely heavily on externalities through Taking and Discarding. Taking means getting resources from the environment – the minerals, the water, the plant and animal life, oxygen, and other resources. Discarding means shedding waste – the unwanted products, industrial process byproducts, and byproducts, such as GHG’s, from the energy used for these processes. The latter is significant as the production of goods accounts for 45% of all GHG emissions, of which making of steel, aluminum, plastic, and cement account for most of the industrial emissions.

There are two main problems with the linear economy – scarcity & damage. The first is the scarcity of raw resources either due to their finite supply on earth, such as oil and gold, or due to long replenishment cycles such as wood or fish stocks. The second is the damage to the biosphere and atmosphere from discarded waste and emissions, resulting in such quandaries as the climate crisis, microplastics pollution, fish stock extinction, and others. It all boils down to capacity depletion and possible extinction of the very externalities the economy and society depend on.

The circular economy drastically minimizes or eliminates economic dependence on externalities by recirculating the material already within the Technosphere. Here again, the core of the technosphere consists of the Make and Use, but it now adds a new Recoup phase to the cycle. That is, recouping material from unwanted products, process byproducts, and byproducts of energy use everywhere. It means collecting, separating and recovering the material, and where needed post-processing to make it usable again by the Make part of the cycle. It also recovers energy from recouped material – such as biomass.

The circular economy will eliminate the taking of new resources, except to address incremental demand that can’t be satisfied from within the Technosphere, such as new types of minerals needed by new technologies, or due to population growth (which is another concern). It will also eliminate discarding. While there may still be marginal material transfer out of the technosphere, it’s better characterized as Returning benign material back to the environment. The circular economy has the potential to reduce emissions from heavy industry up to 56% by 2050. Any harmful material will remain stocked and managed within the technosphere, such as, for example, spent uranium fuel bundles from nuclear reactors. In addition to the ecologic benefits, the circular economy has absolute bottom-line economic benefits for manufacturers through reduced costs.

The overarching principle of the Circular Economy is to do more with less by remaking from recouped materials and energy.

Step in – the Internet of Things

The Internet of Things (IoT) plays an important role in all parts of the Circular Economy. Here are just some of them:

  • Automation– throughout all parts of the Circular Economy, especially in the Make phase. This means connected sensors, devices, machines, and robots coordinating to transform raw materials into technical materials, produce parts, and assemble into products according to design with minimal material and energy. And not just in manufacturing, but also many other sectors such as precision agriculture where IoT sensors and devices enable recirculation of water and other resources through automation.
  • Logistics and distribution– enabled by device status and location connectivity. This includes, for example, tracking containers of materials and parts on the supply side, finished goods delivery, or placement within stores, resulting in less stranded or spoiled products and materials.
  • Maintenance and repair – of products ranging from vehicles to wind turbines, enabled by telematics and Digital Twin technologies. It involves tracking product health and predetermining their maintenance or removal from use. The result is lower effort and energy by pre-emptive response compared to post-fault action. It also extends product life, reducing the need for new or recouped materials.
  • Sharing products and services– among users enabled by connectivity and location information. For example, sharing vehicles, various types of equipment and appliances, floor space, parking spaces, and so on. It results in a reduced amount of material in circulation within the technosphere and correspondingly reduced energy consumption.
  • Collection and recycling– of used products or materials relying on knowledge of their availability and location – whether embedded in the product itself or the fill of recycling or waste collection bins and depots. The result is less stranded material, earlier return into circulation, and reduced effort and energy used in the collection process.
  • Prosumer Energy– enabled through sensors and connectivity, allowing citizens, small businesses, and farmers to both produce and consume (prosume) electricity for and from the grid. This includes renewable sources like private solar panels, wind turbines, bioreactors as well as any excess energy stored in on-site batteries including in electric vehicles. The result is less Take from the geosphere (e.g., oil, coal) and corresponding emissions into the atmosphere.
  • Smart anything– can generally aid efficiency by reducing the Take of resources from the environment, and the energy involved in the Take, thing operation, and rendering it benign before its return. This includes things like smart cars, smart cities, smart buildings, smart agriculture, smart energy, and many other smart things.

These are just some underpinning functions of IoT, without which the Circular Economy would not happen.

Systemic Thingking and Governance

Making the Circular Economy happen will require new systemic ways of thinking – about technologies, about the business cycle, and about governance.

On the technology and business side, a systemic approach and thinking will be needed, not just over the full cycle, but over multiple cradle-to-cradle spins. This will undoubtedly incorporate the Internet of Things, which is itself a poster child for systemic innovation and application. It includes designing-in material, energy, and function circularity into product and processes from the start, as well as business return expectations over several cycles rather than a single cradle-to-grave path. This must involve all functions and areas of an organization, brought together through collaborative innovation techniques such as Design Thinking, including Internet of Things incorporation – or Thingking.

Paradigm shifts have always resulted in new governance models, too-often being reactive, and ultimately forced by lingering socioeconomic dissonance. The circular-economic shift will be no different and will itself compel a systemic governance approach – to foster innovation, level the playing field, and respect social values. It must obviously be systemic due to its cut across all socio-economic “silos” and its systemic technology and business character – further propelled by the inherent systemic governance demands of the Internet of Things.

Let’s go Circular

The world, as we knew it, based on linear economies, can’t continue if we are to avert the depletion and potential extinction of our environment – the biosphere, atmosphere, and even the geosphere – with spillover social and political effects. We must put the linear approach itself on the extinction list and embrace the circular economy, not just for economic reasons, but also as a lever to achieve the Sustainable Development Goals. This will require us to use all the tools at our disposal, including the employment of the Internet of Things in its solution and effective collaborative techniques such as Design Thinking for systemic echnological, business, and governance innovation.

RELATED: For more insight on IoT and its role in the Circular Economy enroll in Digital Literacy through Internet of Things and Design Thinking workshop.

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