CIOs can play a crucial role in the circular economy transition by developing and deploying new business models.
In the ever-increasing world’s population, which is expected to reach nearly 9 billion people by 2030, fulfilling the demand of raw materials and product consumption for every individual is very crucial. This is where the concept of the circular economy exists, which consists of sharing, reusing, repairing, refurbishing, remanufacturing and recycling existing materials and products as long as possible. This economic system is vital to create a closed-loop system and helps in lowering the use of resource inputs and the creation of waste, pollution, and carbon emissions.
In the business scenario, the circular economy can deliver new commercial opportunities, contribute to business growth and sustainability, create new revenue sources, transform business relationships with its customers, and safeguard the economy despite the lack of resources and the rising cost of materials. In its report Circular Advantage, Accenture identifies five business models driving the circular economy, including circular supplies, resource recovery, product life extension, sharing platforms, and product as a service.
Why Does the Circular Economy Matter?
Currently, the world uses a linear economic model that produces a tremendous amount of waste as resources are only used once. According to a report, the world produces as much as 50 million tonnes of electronic and electrical waste a year, while just 20 percent of this e-waste is formally recycled. The annual value of global e-waste is over US$62.5 billion, which is more than the GDP of most countries. If the current trends continue without taking any action in place, the amount of this waste will reach 120 million tonnes by 2050.
The surge in growth and manufacturing in the mid-1960s, which was called the Great Acceleration, led to exponential consumption patterns across almost every industry. During that time, development and inventions significantly revolutionized people’s daily lives. The inventions of plastic have also changed the consumption of products and services worldwide. But all these innovations now are forcing us to rethink and reconsider the way we design and consume products.
By moving towards a circular economic system, we can minimize the waste of raw materials by reusing, remanufacturing, reducing, and recycling of materials. Beverages Company Coca-Cola, for instance, recently introduced a sample bottle built using recovered and recycled plastic from the ocean, leading the way in recycling innovation. According to the company, nearly 300 sample bottles have been produced using 25 percent recycled marine plastic, recouping from the Mediterranean Sea and beaches.
CIOs Role in Driving Circular Economy Innovations
As several policies and programmes are implementing in place by governments worldwide to accelerate a circular economy, CIOs at the corporate level can play a significant role by leading the way into supervising the use of a product and taking strategic initiatives. The understanding of the circular economy requires a fundamental systemic change within an organization. Since a CIO is the most senior technology executive within an organization, he/she is responsible to assist in setting up and leading the technology strategy for the business, in collaboration with the other C-level executives and departments.
The circular economy offers an array of opportunities to a business, so in this way, CIOs can bring an innovation culture to drive circular value. They can implement awareness programs based on the circular economic ecosystem as they are the ones who always keep up to date with new technology trends. CIOs can generate circular value by gaining insights on which product is designed to last longer.
Moreover, advancements in technology in the last few years have accelerated the development and deployment of circular business models. For example, Rubicon, a technology company providing full-service waste management, which cloud-based, big-data platform connects waste producers with a network of independent waste haulers across 50 states in the United States and Canada, along with 18 additional countries. The company’s platform enables higher diversion rates from landfill, creative reuse of waste material, optimised truck routes and the detailed analysis of waste data.