Circular economy, driver of the fourth industrial revolution

Published on Thursday, 1 June 2017

Within the debate on how to achieve the goals of environmental sustainability, the path followed by the circular economy appears increasingly clear: a net change of paradigm, compared to the present linear model of production and consumption. A paradigm where the waste produced by production or consumption is reinserted in the production cycle - with the goal of "closing the circle" – in order to transform any waste into a new resource, and where products can be repaired, reused and recycled. Compared to the sharing economy, which is revolutionising the concept of ownership of goods and services, at the heart of the circular economy are industrial and manufacturing products. The underlying purpose of the circular model is the effective use of existing continuous cycle resources, imagining and achieving the possibility of reusing, re-entering into the circuit a product that has already been used.

This model coexists with another revolution of our times, the industry 4.0, and the two advance alongside.

The new manufacturing industry, characterised by small batch production with scarce waste or none at all, made in  large-scale, near-consumer facilities, should result in reduced pollution, energy needs, freight transport costs and packaging waste. At the same time, manufacturing digitisation leads to greater production flexibility, leading to faster production and increased productivity.

Therefore, the question is: how can resource optimisation be connected - by rotating products, components, and materials in the various stages of the product's lifecycle, according to the maintenance, lifecycle scheme and recycling scheme - to a technologically advanced production that includes a massive use of information and connected objects? To this question Simone Angeli, author of the article "Innovation, key lever for the circular economy", published on May 23 on Il Sole 24 Ore, argues that it is "two sides of the same coin: on the one hand, consumers require products for an increasingly satisfying experience, based on their real needs and habits; on the other hand, due to the scarcity of resources, it is necessary to redesign production processes along the lines of sustainability".

Innovation is essential for this connection, in particular those "smart" components that "communicate what they are, where they are and how they are used, whether they need maintenance or are about to break down. From a manufacturing perspective, materials are no longer just consumed, they can be monitored and reused. They will assess their condition and will require repair or replacement if necessary, providing in this case an indication on how they should be recycled. " But not only: another connection between industry 4.0 and circular economy consists in "those businesses that progressively replace goods with services through a model that is no longer possessed but utilised. The process aiming at designing an object that will become part of a continuous service will be very different from that of a mere capital purchase ".

Obviously, underlying this evolution is a huge amount of data, those "initially produced at the intelligent factory of the IoT (Internet of Things), then by consumers during the customer journey". Only companies that can strategically read and interpret all the data made available by the various systems will be able to create value for their stakeholders. That's why the smart factory for the 4.0 industry is not enough: the entire company must become 4.0, to fully grasp the benefits of the Fourth Industrial Revolution.

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