Today, companies are enhancing the longevity of their products by utilizing over-the-air software updates, thus boosting the product's residual value. Consider the case of the iPhone. Currently, the iPhone dominates approximately 80% of the secondhand phone market, which consists of around 300 million phones. During an event, Marcelo Claure, former CEO of Sprint and Softbank International, attributed the success to the iOS operating system's forward compatibility. He emphasized that this ensures users can access the app ecosystem and benefit from all the new features released by Apple, thereby maintaining the appeal of iPhones as high-quality products in the secondhand market.
Vendors in the hardware industry are increasingly adopting the circular economy model in order to minimize the ecological footprint of their products. According to Gartner's prediction, by 2030, around 80% of hardware vendors' product portfolio will be associated with circular initiatives, which is a significant increase from the current 20% observed in 2023. Consequently, a greater number of electronic devices nearing their end-of-life will undergo re-manufacturing and reuse processes, rather than being disposed of in landfills. Various suppliers adopt varying methods to enhance the sustainability of their products.
There is a significant global need for increased sustainability. Natural resources are being depleted at an alarming rate, resulting in water pollution, and a dismal 5% of plastic waste produced in the United States is effectively recycled. As people evaluate their influence on the surroundings and implement beneficial modifications, companies should also strive to emulate this behavior by embracing a more sustainable and environmentally-friendly approach to their operations. An approach to achieve this is by engaging in the circular economy.
Technology plays a crucial role in accelerating the adoption of the circular economy by enabling innovative solutions, improving efficiency, and promoting sustainable practices. Here are several ways in which technology contributes to advancing the circular economy:
Technology allows for real-time tracking and monitoring of supply chains. This transparency helps identify inefficiencies and areas for improvement in resource management and waste reduction. Advanced analytics can provide insights into consumer behavior, product life cycles, and material flows. Businesses can use this information to optimize processes and design products with a longer lifespan and easier recyclability.
“The global rubber products market is expected to reach $442.8 billion in 2025 at a CAGR of five per cent. As the demand in the tyre industry grows, it gives rise to the need to manage the disposal of end-of-life tyres. This increase in demand for tyre disposal has given rise to businesses that are looking at circular solutions that put the recycled content back in the newly manufactured tyres,” says Harsh Gandhi, Joint Managing Director, GRP.
Accenture employs cutting-edge technologies and collaborates with renowned entities such as Mastercard, Amazon Web Services, Everledger, and Mercy Corps to enhance its circular supply chain capability. The objective of this capability is to improve financial inclusion, encourage sustainable behaviors, and empower customers.
“A great positive impact of a model like the circular economy would be innovation – it could be disruptive innovation, in a positive way,” says Khaled Soufani, Director: Circular Economy Research Initiative, Judge Business School, Cambridge University.
IoT enables the development of smart, connected products that can be tracked throughout their lifecycle. This facilitates better management of resources, predictive maintenance, and the ability to recover valuable materials at the end of a product's life. IoT sensors can be deployed in waste management systems to monitor and optimize collection routes, ensuring efficient and timely recycling and waste recovery.
Blockchain provides a secure and transparent way to track the origin, use, and disposal of products. This can enhance trust in the circular economy by ensuring the authenticity of recycled materials and promoting fair and sustainable supply chains.
Twig, a UK based company created an online payment wallet through which consumers are able to make payments using the value of the physical items they previously owned. This promotes the implementation of methods that aim to eliminate waste completely, by extracting value from previously owned items and prolonging their lifespan.
3D printing allows for on-demand and localized manufacturing, reducing the need for mass production and long-distance transportation. This can contribute to a more circular economy by minimizing waste associated with overproduction and transportation.
Design tools, including virtual prototyping and simulation, help designers and engineers create products with circular principles in mind. This involves designing for disassembly, recyclability, and durability.
For almost twenty years, HP has been integrating circular approaches into its operations by gathering and reusing used ink cartridges. Over the past few years, the company has taken its recycling initiatives a step further by introducing the world's first monitor and a complete PC constructed from plastics collected from oceans.
“We don’t have a choice but to do this. This is imperative for our survival. … If you think about starting a business today, designing a business around a circular economy philosophy, ultimately it’s going to give you better returns in the long run,” states Christopher Davis, International Director of Corporate Responsibility and Campaigns for The Body Shop.
AI can predict when equipment or products are likely to fail, allowing for proactive maintenance. This extends the lifespan of products and reduces the need for premature disposal. Machine learning algorithms can optimize the sorting and recycling processes by identifying and sorting materials more accurately, improving the efficiency of recycling operations.
Technology facilitates the growth of sharing economy models, where consumers can access products and services without the need for ownership. This can reduce overall resource consumption and waste generation. AR and VR can be used to educate consumers about the environmental impact of their choices, encouraging more sustainable behaviors and consumption patterns.
German-based company Numi.circular’s circular economy software is designed for implementing circular economy strategies. This innovative platform allows brands to establish product take-back initiatives, which not only help to minimize waste but also create fresh sources of revenue.
“If we really don’t change our mindset I think it will be the end of the world. … I think that the circular economy is all about co-creation, working together, bringing all the innovations and knowledge together in one chain and being responsible,” says Rien Otto, Founder and CEO, Dutch Awearness.
In conclusion, technology acts as a powerful enabler in the transition towards a circular economy by providing the tools and infrastructure needed to rethink how products are designed, produced, used, and recovered. As technology continues to advance, it will likely play an increasingly integral role in fostering a more sustainable and circular approach to economic activity.