Sustainability is a hot topic for any credible company and organizational agenda. Everyone is looking for relevant targets on the triple bottom line areas: social, economic and environmental sustainability. And one area identified as a key contributor to environmental sustainability is the circular economy.
Circular economy is a relatively new concept with a lot of definitions. One way of describing it is using the following three principles:
- Design out waste and pollution
- Keep products and materials in use
- Regenerate natural systems
The Ellen MacArthur Foundation has tried to capture the essence of the circular economy in the diagram below, which is somewhat understandably nicknamed the ‘butterfly diagram’. The diagram tries to capture the flow influenced by cradle to cradle’s two material cycles, which represent two fundamentally distinct flows of material: biological and technical.
In the green you can see the life cycle of biological materials that can safely re-enter the natural world once they have gone through one or more use cycles. In the blue you see the life cycle of technical materials that cannot re-enter the environment. These materials, such as metals, plastics, and synthetic chemicals, must continuously cycle through the system so that their value can be captured and recaptured.
So, how can IoT support the circular economy?
For me, the main obvious contribution IoT can make is by supporting the prolonging and also sharing in most inner loops in the technical lifecycle. This can be done through design of the product, including the opportunity to both upgrade and share in a sustainable business model. But IoT can also support redistribution. This means reducing the overall need to produce products.
Prolonging the life cycle with IoT
Who would today buy an electronic device such as a computer, mobile phone, or even car that cannot be upgraded? There is a clear trend towards more and more functionality, which is implemented in software, not hardware as before. And companies and consumers want products that are future proof, as it makes business sense. Either you want to benefit from the product yourself for a longer time or you want to be able to retrieve some value through redistribution.
Most mobile smartphones are designed for a 4-year lifetime but are usually replaced after 2 years. So, the market for second hand electronic products is growing because the products can be upgraded for the second and third user.
In general, IoT devices are designed to be upgraded or updated as input data or use cases support change or evolve over time. Take for example the connected navigation system in car, boats, etc. The service is dependent on an upgraded map in order to stay relevant and support safe navigation. AddSecure, a leading fleet management provider for light trucks in Europe, is providing navigation integrated in their fleet management for optimal support to truck drivers so that they will take the optimal route to the delivery point.
Another exciting IoT project is Candela, which has launched fully electron speed boats. Candela boats are connected to the cloud, allowing for over-the-air updates and remote service to continuously optimize efficiency and performance. That is what I call future proof!
Sharing the life cycle with IoT
No one can have missed the fast-growing sharing economy – why own if you just use the product for a very limited time or seldomly. That goes for large, expensive assets such as personal vehicles, as well as for scooters, bicycles, drilling machines, etc. And it is not only about investment – it is also about having the space to store.
Let’s look at car sharing – it has been around for a number of years, starting with limited and restricted pools. But now, when the cars are connected, the concept is really taking off. People now have the possibility to for example find the location of the vehicle and open and start it via an app on their smartphone.
Latvian startup CARGURU, which is taking the pain out of owning an urban car by offering on-demand car rentals via an app, is one example. Another example is the new brand Lynk & Co, which says, “We started with the idea that mobility can be better. That’s why our membership plans give you exactly as much car as you want and the ability to share with your friends and family. Need a car for a month or for forever? We’ve got just the thing…”. This is a real game changing strategy in an industry that has been measuring success by the number of sold cars. And, of course, connectivity is key to supporting this new business model.
