Since the 1990s, most organisations have shifted how they operate to benefit from all the capabilities the technology of the internet has to offer. These included new business models through e-commerce, more intelligent decision-making throughdata, and individualised communications via messaging and social media. We have invested billions in this transition and learned countless lessons as a society.
How can we use the lessons from the digital age to tackle the climate challenge of this decade? And by doing so, safeguarding a habitable environment for future generations.
I am not a climate expert, but my experience with (digital) transformation efforts over the last 14 years led me to consider how we may speed up the transition to a circular economy by using the lessons we gained from the previous digital decades. Through this process, I hope to contribute to the transition. This blog is, therefore, a kick-off for a series of blogs where I explore this transition from an academic perspective and share and combine my experiences.
Since my work mainly involves for-profit organisations, my main focus will be on ideas and concepts for businesses and how to transform them into a circular economy. So let’s start with the basics.
Digitalisation is the best enabler to accelerate the shift to a circular economy.
Why should we strive toward a circular economy?
The United Nations, European Union, and OECD highlight the circular economy models as the healthiest way to achieve ecological sustainability.
A circular economy is a “regenerative system in which resources input and waste, emission, and energy leakage are minimised by slowing, closing, and narrowing material and energy loops” (Geissdoerfer et al., 2017). It supports a resource-oriented strategy that separates value creation from the extraction of raw materials by slowing down and closing loops (Sauvé, Bernard, and Sloan, 2016) in opposition to a linear consumption model (Bocken et al., 2016).
What relation does the circular economy have to digitalisation?
Digitalisation is the best enabler to accelerate the shift to a circular economy, according to research by Antikainen, Uusitalo and Kivikytö-Reponena ( 2018). The transition to a circular economy will make enhanced coordination of material and information flows essential (Parida, Sjödin and Reim, 2019). Additionally, it enables organisations to run processes more effectively, reduce waste, encourage product longevity, and lower transaction costs. And in turn, this allows new circular business models.
What can we learn from digital transformation in the transition towards a new circular economy?
Digitalisation is the enabling technology. But technology is just a tool and never solves any problem on its own. I once heard a quote, “ a fool with a tool is still a fool”. We must understand how to use it to organise ourselves and our organisations in this new economy.
Based on my experience in transforming organisations, all successful transformations are built on a set of fundamental building blocks. Over the next following weeks, I will therefore explore the transition into the circular economy through a deep dive into these elements:
- Targets and strategy
To reach your destination as fast as possible, you must define it to draw the best route. And like any digital transformation, your sustainable change needs clarity on the target you like to achieve. Furthermore, this needs to be translated into a strategy, underlying operating models and technologies to achieve it. - Organisational structure
Who is responsible for this transition within your organisation? Not only from a strategy perspective but also the execution of operations, go-to-market and HR functions. - Test-and-learn methodology
What can we learn from digital experimentation strategies to improve our decision-making and make our initiative more efficient? What can we test in the long term and the short term? - Talent, knowledge and skills management
How do you create better knowledge of the circular economy in your organisation, and how can you share best practices? How and what skills should your organisation build in-house, and where should you involve external experts? - Ecosystem-led leverage points
What is the point in your ecosystem to make the most impact and significant step forward? I’ll share how to identify, share best practices and where to begin. - Culture shift
All significant changes start from a shift of mind and culture. Do you start with the self or the collective? Where can we make a change? What should we be aware of? How did other organisations lead this shift?
Want to follow me on this exploration journey towards more circularity? Please follow me here or on Medium, and I will update you when new blogs go online.
