The Circular Economy: Using a Wired World to Eliminate Waste and Boost Profits
On June 4, it was announced that, for the first time, Canada will play host to the World Circular Economy Forum. WCEF2020 will be the first large-scale international event to bring circular economy leaders to North America.
The annual forum is a response to the growing interest in circular economies. As global demand for finite resources increases, and waste becomes more problematic, organizations have been moving from an obsolete, wasteful operating system to a more sustainable model—the circular economy model.
At its core, a circular economy is a system that is restorative by design. It’s based on principles of elimination of waste, the distinction between consumable and durable components of a product, and the use of renewable energy to fuel this cycle. When we don’t properly recycle and reuse materials, we are throwing away potential economic value.
As Ashima Sukhdev, program lead for the Government and Cities Program at Ellen MacArthur Foundation, puts it, “Waste does not exist in nature... Why not redesign the world around us and make sure products are kept in reuse?”
So which industries stand to benefit, and how can they leverage technology in switching over to a circular economy?
Which industries can benefit?
The possibilities for creating a circular economy and streamlining workflows and processes extend to countless different industries. The benefits are at least three-fold: it’s profitable, it engages communities, and it encourages innovation. Businesses can play a major role in solving global issues such as pollution, waste, biodiversity, climate change, water, and food security while simultaneously spring-cleaning their own processes.
Here are a few ways in which the circular economy is transforming industry:
Manufacturing: To transform a linear economy into a circular economy, the whole lifecycle of a product needs to be reconceived, “from design, manufacturing and delivery to usage, and maintenance.” Finnish biotech firm Infinited Fiber Company manufactures a fabric that feels similar to denim. But it’s cheaper to produce and more resilient, and it’s made out dried and discarded husks from agriculture, recycled and reconstituted cardboard, and old clothes.
Food and agriculture: In Chicago, a former meatpacking building in an industrial neighborhood now houses a dozen small food and agricultural businesses. They use waste streams of companies as inputs for others, including using beer waste to grow mushrooms.
Oil and gas: In May, Amarjeet Sohi, Canada’s Minister of Natural Resources, announced an investment of $8M in Alberta oil sands company MEG Energy Corporation for a clean technology demonstration project. The plan is for the new green tech to reduce the amount of steam and water used for bitumen production while enhancing bitumen recovery. MEG Energy's technology is expected to reduce GHG emissions by up to 40 percent.
Digital’s role in circular economies
For most if not all industry, the move to a circular economy will be aided and enabled by technology. The employment of new tools such as AI will enable this reuse. Machine learning and AI can use incoming data to detect areas of waste and find ways to maximize resources.
In India, for example, software solutions company SAP and leading pipe and water storage solution company Vectus used IoT and mobile technologies to pinpoint leaking water pipes and avoid water wastage.
The world of recycling is also benefiting from AI. Recycling facilities in Colorado, Japan and Europe are turning to sensors, smart robots and vision systems fortified with machine learning software to speed up the rate of sorting goods and improve the accuracy of identifying certain materials.
Many industry leaders, thought leaders, and politicians see huge potential in transforming current practices into circular economies. As we go forward, we will see how much these new models rely on data from a cloud-connected world.