To help achieve SDG 9 (sustainable industrialization) and. SDG 12 (sustainable production ... As consumers increasingly
G-STIC 2017 – Circular Economy summary – Final version – November, 2017
MOVING TOWARDS A DIGITALLY POWERED CIRCULAR ECONOMY Report of the G-STIC 2017 Circular Economy Thematic Sessions Key findings Circular Economy represents a fundamental alternative to the currently predominating linear takemake-consume-dispose model that is based on unlimited resource extraction but disregards the natural boundaries of planetary resources. That model has brought unprecedented economic growth and welfare. Now it has run out of course. To help achieve SDG 9 (sustainable industrialization) and SDG 12 (sustainable production and consumption), a new model is needed to ensure that material usage per unit of functionality can be minimized and to manage materials such that we reduce waste and avoid pollution. The value chain needs to be revisited based on circularity principles, and customers need to be provided with services rather than throw-away products. From an industry and technological viewpoint, circular economy needs: • • • •
advanced collection, sorting and recycling technologies, efficient materials processing technologies, production methods that support design for circularity, interactive platforms for enhanced connectivity.
These needs can be covered by technologies typically labelled as Industry 4.0. The challenge is to make these existing technologies available and integrate them into a systemic transition to a circular economy. As consumers increasingly prefer access to services (e.g. mobility) rather than own the goods (e.g. cars), this change in customer behaviour triggers a need for new business models such as Products as a Service (PaaS), sharing platforms, peer-to-peer interactions, industrial symbiosis, etc. Many of these are based on the availability of efficient ICT tools including apps, websites, online user platforms, and databases. Forwarding circular innovation through the concept of Industry 4.0 Industry 4.0 provides the technological driver for circular innovation, while Circular Economy is a driver for envisioning the industrial framework in 2030. We can’t have a circular economy without the 4th industrial revolution, nor can we have a socially useful and sustainable 4th industrial revolution without advancing the circular economy. Industry 4.0 refers to a broad set of smart manufacturing and automation processes enabled by technologies such as the Internet of Things (IoT), Big Data & Analytics, Rapid Prototyping (3D printing), Augmented Reality, Artificial Intelligence and Blockchain Technology. To further the systemic transition to a circular economy using these technologies, a closer cooperation between the technology and business communities is needed. That in turn requires the creation of enabling policies and the creation of appropriate institutional, business and financial environments that support the shift from waste thinking to materials management for circularity.
G-STIC 2017 – Circular Economy summary – Final version – November, 2017
Major entry points to make the shift to a circular economy are the exploitation of raw materials and the management of waste materials, which are at the beginning and the end of the circular economy model. Mining and processing companies can use Industry 4.0 technologies to work more efficiently, while the same technologies can be used to close the materials cycle by turning waste materials into "new" raw materials. Envisioning a circular economy based industry in 2030 New disruptive technologies, business model innovations and regulatory changes are transforming the competitive landscape of the Raw Materials industry. That industry needs to refocus its approach, using resource diversification as the basis for a stronger resilience and shifting away from maximising material supply to providing the right material for the right product at the right place. Coupling resource diversification to circular economy principles will enable a different approach for sourcing and managing raw materials to the traditional resource intensive approach. The systemic and collaborative approach that is needed to build circularity into our economies and societies requires a joint effort from governments, inter-governmental organisations, UN agencies, businesses, academia and civil society. Businesses that are capable of anticipating this global value chain transformation will be able increase their market access, value creation, business growth and operational resilience. Innovation potential throughout the value chain The transition towards advanced digital manufacturing systems will result in a further integration of the entire value chain. By building sustainability principles into the heart of these systems, Industry 4.0 will become a strong enabler for circular innovation in our economies and societies. Companies that have been pioneering the digital era, such as HP and IBM, are driving the development of new Industry 4.0 technologies. But innovative and agile start-ups and SMEs with no need to defend legacy business are also entering the circular economy and Industry 4.0 field by providing new digital platforms and disruptive service solutions that maximize the value of products and materials. Partnerships between established and small companies hold a great promise for disruptive new solutions. The future of the waste industry To enable a circular economy approach, a major mind shift is needed to move the focus from waste management to resource management - bringing the management of products and materials at the very centre of our economic system. The role of the waste industry will change. Facilitating product redesign and innovative recycling practices, new materials and sensors are the technologies that can have the highest impact on this industry. Development and investment in Big Data, Artificial Intelligence and Blockchain Technology are necessary to enable this impact and to deliver viable business models for waste creators, waste processors and remanufacturers. In particular, the use of apps will allow for better waste collection practices and waste reduction through the enhanced involvement of citizens. Implementation of Circular Economy
G-STIC 2017 – Circular Economy summary – Final version – November, 2017
As Circular Economy brings a new framework for our production and consumption systems, its implementation requires a multifaceted and systemic approach. The combination of legislative actions with the establishment of a new infrastructure and the restructuring of waste services is crucial in this respect. The set-up of local stakeholder platforms, involving policy makers and representatives from industry, research and society, is considered a strong driver to enable and smoothen the implementation of a circular economy. Collaboration and sharing of expertise on a regional level or between continents will allow capacity building for local policy makers. The young generation is seen to embrace circular economy in a natural way. Being digital natives, open to change and peer-to-peer interaction, they are stepping away from a product ownership focus and show increased participation in sharing systems, leasing systems and community platforms. This evolution holds great promise for the implementation of a digitally powered circular economy.
Prof. Dr. Karl Vrancken – G-STIC Circular Economy workstream lead, with support from speakers and partner organisations: EIT RawMaterials, VERAM, FUTURING, UN Environment, UNEP-IRP, RRC-AP, SITRA, ISWA, UNCRD, ERIA, inno4sd, CSCP.
