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Blog April 29, 2021 Linda Ekener Mägi Business Development Manager , Tele2 IoT

Can IoT Contribute to a More Circular Economy?

Sustainability is a hot topic on 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.

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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.

Many experts say that the number of cars in a city can be reduced with up to 80%, with only 1 out of 5 needed! So, if sharing can reduce the number of cars produced it will have great implications on the technical life cycle, not only in the product phase but also in the use phase, saving parking spaces, fuel/electricity, water for washing, etc.

But there are other assets that can be shared. In Stockholm County, the roll-out of Grannboxen, a new tool sharing service, has begun. Here’s how it works: a box, which is filled with electric and battery-powered garden tools from Husqvarna and Gardena, as well as some household appliances, will be on the property of one of the homeowners in a neighborhood. For a fixed monthly fee, nearby neighbors can get access to all products without having to store, own, or worry about maintenance.

Redistribution with IoT

Around 40 million tons of electronic waste (e-waste) is generated annually, which is the equivalent of throwing away 800 laptops every second. E-waste comprises 70% of overall toxic waste and only 12.5% of e-waste is recycled. The rest ends up in landfills and incinerators, releasing harmful toxins into the air.

Equally important is that throwing away computers and other IT devices poses a big security risk, particularly after GDPR came into effect. Now more than ever companies need to ensure the often highly sensitive data contained on their IT devices is handled securely from start to finish.

How can IoT play a role?  Sweden’s Inrego is a trusted partner for companies looking for a secure way to dispose of their IT devices. For their customers it is imperative that sensitive information is kept secure during transport to the refurbishing site, and with IoT trackers with GPS from the provider Minifinder they have added that extra layer of security that was missing – and it’s changed everything.

IoT supports the circular economy

These are just a few examples on how IoT can support the circular economy. There are probably any number of great examples from other parts of the lifecycle, such as optimizing stock levels, but I’ll leave that for another in-depth exploration.

If you would like to learn more about how IoT can enable your business, please get in touch.

Linda Ekener Mägi
Business Development Manager
Tele2 IoT

Linda Ekener Mägi
Business Development Manager
Tele2 IoT