The digital circular economy: how digital tech will pave the way

Digital Circular Economy: Why is digitalisation relevant for the circular economy?

The vision of a circular economy foresees to use our earth’s resources in a more sustainable way. Following the motto “reduce, reuse, recycle”, this closed loop economy delegates responsibility to manufacturers and consumers alike. Instead of wasting materials and resources already in use and extracting ever more nonrenewable primary raw materials, like metals, minerals and oil from the earth, we have to focus on the prevention of waste or on the use of alternatives such as recycled materials, so-called secondary raw materials recovered from waste. Therefore, one vital precondition for a circular economy is to provide information on the circularity of products and materials. In order to create material cycles, both producers and consumers need to be well informed about the quality, quantity and best possible use of raw materials from waste or alternative products and materials as well as their environmental benefits. Manufacturers might wonder: What material is the product composed of? How can the usage process be extended? Is the product designed for recycling? Can materials be recovered after use? Where to find products or materials within the waste system that could be reused for manufacturing? Consumers, instead, might wonder: What happens to the products I dispose of? How can I prevent waste? Where can I find alternatives? How can I be sure about the quality of sustainable alternatives? But guess what: We have a lack of information on that front. Manufacturers might not know how to find data on recycled or alternative materials and continue spoiling resources; consumers might doubt the quality of alternatives like secondary raw materials compared to primary materials and refrain from buying sustainably – all because they simply do not have the information. This is a strange discovery since we live in the age of internet and information overflow. But maybe we need to start communicating in the proper way, connecting the right dots and finally make use of digital solutions and technologies in order to produce, live and think in closed loops.

4 Digital must-haves to enable a circular life

In a digital circular economy, digitalisation helps to better coordinate and connect material and information flows via technical solutions such as sensoring, automated platforms, Internet of Things or block chain applications. This might sound to be still a long way off, however, many seemingly ordinary digital solutions like apps directly connect to our everyday consumer life. If you would like to prevent food waste, for example, and you sign up for the ResQ Club service, which you can use via your browser or a smartphone app, you plunge right into the digital circular economy. With the help of Finnish startup ResQ Club, finalist of the Green Alley Award 2016, customers can use an app to purchase leftover food in their neighbourhood for a lower price: Restaurants that offer a broad variety of dishes have to reckon with a great deal of leftover food at the end of the day and – without alternative – might add to the 222 million tonnes of food thrown away in industrialised countries each year. The startup offers a second chance for food leftovers while at the same time providing restaurants a novel way to transform would-be waste into a new source of revenue. Not only in restaurants, but also in supermarkets, the amount of waste increases steadily. In Germany alone eleven million tonnes of food end up in the trash every year. That's why the startup FoodLoop, winner of the Green Alley Award 2014, has developed a smartphone application offering products close to their expiry date for a lower price. The app connects the supermarkets' merchandise management system directly to the FoodLoop service which informs consumers via their smartphone where to get discounts on food.