CIRCULAR ECONOMY FOR SUSTAINABLE DEVELOPMENT
It’s a trillion-dollar economy, with huge potential for innovation, job creation and economic growth, writes DR PUAN YATIM
BY 2050, the world’s population will balloon to 9.2 billion from the current 7.6 billion. While busy consuming finite resources, we are producing vast quantities of waste, leading to unsustainable patterns of consumption and production. To ensure there is enough food and water in 2050, we need to move away from the traditional linear “make, use and dispose” economy, to a circular model. The circular economy is an evolving concept and it is rooted in the observation of physical phenomena and natural cycles.
The European Commission describes the transition to circular economy as follows: “In a circular economy, the value of products and materials is maintained for as long as possible, waste and resource use are minimised, and resources are kept within the economy when the product has reached the end of its life, to be used again and again to create further value”. Such a description resonates with the observation of Antoine-Laurent Lavoisier, an 18th century French chemist and father of modern chemistry that “nothing is lost, nothing is created, everything is transformed”. His observation fits well with the concept of circular economy as applied to economic production and consumption.
Circular economy is increasingly gaining attention as a way of decoupling growth from resource constraints. The World Economic Forum (WEF) estimates that it is a trillion-dollar economy, with huge potential for innovation, job creation, and economic growth. It has great potential in realising a number of the 17 Sustainable Development Goals, especially those relating to responsible consumption and production.
Currently, the circular economy is little more than a concept, albeit a potentially powerful one. The transition to a more circular economy has yet to be applied on a large scale. So, what can be done to speed it up, particularly in developing countries such as Malaysia which are blessed with abundance of natural resources? We are in the cusp of Industry 4.0. And, this new era, too, holds promise for a circular economy.
According to the 2015 report by the Boston Consulting Group’s on Industry 4.0, there are nine technological trends that have great potential to contribute to the development of a circular economy. These are big data and analytics, robotics, modelling and simulation technologies, horizontal and vertical system integration, the industrial Internet of things (IoT), cybersecurity, the cloud, additive manufacturing, and augmented reality.
Big data and analytics will enable faster and smarter collection and analysis of large amounts of data. This will enable the production of higher-quality products at reduced costs and low wastes. It will pave the way for improved product life cycles and energy savings. Data analytics has the potential to turbocharge circular economy models through greater efficiency of use, maintenance and longevity of assets.
Robotics is gaining traction in manufacturing, waste management and beyond. Waste-sorting robots have integrated intelligent systems that can function around the clock and are proficient at multitasking, making them well-suited for deployment in waste processing and recycling industries.
In the future, modeling and simulation technologies are expected to be used more extensively in manufacturing to test and optimise parts and products before they are produced, thereby increasing precision and product quality as well as reducing waste.
Horizontal and vertical system integration will enable systems integration that will make production capabilities become more cohesive through networking and integration among different production value chains. Such integration, which involves reverse logistics, product recovery and remanufacturing, can hasten the transition to a circular economy.
The implementation of Internet of things (IoT), with re-use and re-purpose in the design and manufacturing of products, can create products that can signal defects, determine when repairs are needed, and schedule product maintenance. All these will surely reduce waste.
One of the threats to the nexus between cybersecurity and the circular economy is intellectual property protection. Such protection does not foster the remanufacturing and re-purposing of products after their lifecycle. For example, car or smart-phone manufacturers do not embrace the open market in which the ecosystems of independent collectors, refurbishers, and recyclers, who are critical to the success of the circular economy, to reverse engineer, hack or digitally unlock their products for reusing and re-purposing.
Cloud computing can cause many physical assets and devices to become much less important in their own right because content is stored and accessed through the cloud. Since companies can now communicate with their suppliers predominantly over a cloud-based platform, they can save costs, resources, and ultimately reduce their carbon footprints thereby promoting a circular economy.
High performance, decentralised additive manufacturing technologies such as 3D printing, used mostly to prototype and produce individual components, also help promote a circular economy because these technologies reduce the amount of resources required. Augmented reality, on the other hand, helps us realise the impact of products before we turn them into waste as product developers will be able to visualise what the environmental impact will be at the prototype design stage.
Since SMEs make up 98 per cent of businesses in Malaysia and 65 per cent of the workforce, they can contribute to the development of a circular economy through the adoption of Industry 4.0 technologies. Initiatives, such as the Industry 4.0 Task Force and the upcoming National Industry 4.0 blueprint, should help SMEs to embrace the changes brought on by these environment-saving technologies.
To ensure there is enough food and water in 2050, we need to move away from the traditional linear ‘make, use and dispose’ economy, to a circular model. The circular economy is an evolving concept and it is rooted in the observation of physical phenomena and natural cycles.
The writer is associate professor at the Graduate School of Business, Universiti Kebangsaan Malaysia