Intelligent Assets: Unlocking the Circular Economy Potential

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Intelligent Assets: Unlocking the Circular Economy Potential, Report produced by the Ellen Mac Arthur Foundation in collaboration with the World Economic Forum, December 2015

Type Article
Link 42f
Topics Circular Economy


This paper tries to ask to the following questions: “Could [the Internet of Things] enable a less resource dependent circular economy that is restorative and regenerative by design? And, in turn, could embedding circular economy principles in smart connected systems and devices significantly bolster the opportunity?” (p. 4). --> I.e.: Can the IoT be employed for circularity purposes? And, if it can, to what extent would it be effective in fostering circularity?

Circularity can promote the decoupling of economic development from resource consumption.

P. 17: “IoT value resides mainly in the value and volume of data”. See also p. 22.

P. 9: In order to use IoT for purposes of a circular economy, it is needed to “manage the complex questions raised by data circulation and capture”. “Companies need to shift towards more open-source, collaborative data platforms”. --> Think about the creation of new business models by third parties who want to foster circularity: they may need to be able to access data collected by/through or about the product, in order to add value to it by offering related services (e.g., of maintenance, of recycling, of sharing), and a data regime which prevents them from accessing such already existing data challenges such business models and therefore circularity; on the contrary, we might probably expect that a regime in which the consumer controls her own data would foster circularity, as consumers – if properly informed and educated – would certainly be interested in sharing such data in exchange for services beneficial for her (this is an example of USE CASE). How can we decline data ownership in order to not challenge – but on the contrary foster – that IoT which is used for purposes of circularity?

Data are critical for a successful outcome of the circular economy: “information and feedback” are in fact really important for circularity purposes; and thanks to IoT, it is now possible to track info we did not imagine could be tracked in the past (p. 14). Information generated by a connected machine can therefore be source of added value in terms of circularity (p. 16). --> IoT enables gathering of information of all kinds, and information is really important in order to implement a circular economy: information about product use, condition, location, etc. Therefore, we can conclude that IoT can help circularity, and that such IoT help mainly resides in the data which are the by-product of IoT (even if we can imagine some help derived from the IoT itself, and not its data: e.g., the use of connectivity in order to upgrade a product remotely and therefore make it more durable).

If data are critical for a successful circular economy, “organizations sharing data on assets and resources […] will again find synergistic value creation opportunities” (p. 17). --> For an IoT actually fostering circularity, data silos (“most of today's intelligent assets have been designed in closed innovation processes and therefore work largely in silos”: p. 22) should be replaced by open data platforms and data sharing.

What emerges from the paper is that also the public administration could benefit from the IoT for circularity purposes (see, e.g., p. 16). --> However, to really create added value in terms of circularity thanks to IoT (which, applied in the public administration context, normally evolves in the “smart city” concept), there is need for administration to access to and dispose of the data collected through the smart sensors placed across the city. But how often can such data availability be observed? Unfortunately, businesses often offer to public administration turnkey solutions for smart cities: these solutions are really easy to implement, but on the other side of the coin the business offering it often keeps the data collected (see, e.g., SIGFOX:, and this challenges the creation of that additional value which could be derived from the data collected, as the supplier (and not the administration) calls the shots.

What generally emerges from the paper is that the IoT which is embedded in consumer products can be used for circularity purposes by three different subjects: the producer himself (which can use Iot for recycling, recovery, repairing, etc.); a third party (providing a related service whose goal is to foster sustainability: e.g., optimizing energy efficiency); the consumer (e.g., driving him to recycling by a reward system: p. 17).

In the future we will “sense everything we can sense” (p. 17). --> From CAN BE to MUST BE. But this is a fallacy: not necessarily all what can be sensed should be sensed. Even when the purpose of sensing is circularity, we should reflect on the real opportunity of collecting data about something: the positive effects of such a collection are more than the negative ones? And even if they are, the negative effects include impairing some fundamental right? In that case, the collection should not happen, unless it can be shaped in order to avoid such impairment.

At p. 24 there is a list of businesses which are already matching IoT with circularity. --> We could for example examine them and investigate what data ownership models such firms implement.

From that paper it emerges that – in the practical and often real examples of use of IoT for circularity purposes – the IoT product supplier usually coincides with the subject implementing circularity. May it be because data silos systems are implemented, and therefore third parties cannot leverage already existing and commercialized IoT products (and the data they produce) for providing additional services? That should be verified, but it may be.--> Circular economieS