Driving the Technology and Digital Edge in Circular Advantage: Ten Transformational Plays

Abstract

New business models offer companies powerful options for embracing the circular economy. But it would not be possible to scale many of these business models without the support of innovative technologies. Digital innovations in social, mobile, analytics, cloud, and machine-to-machine (M2M) communication are especially effective in connecting physical and digital channels, and in connecting people with the internet of things. Just think of the Sharing Platform business model (e.g., car sharing or asset sharing in industry) and the Product Life-Extension model (e.g., maintenance, repair, and remarketing). These are not new concepts, but where traditionally information costs, manual labor requirements and collaboration hurdles created barriers to scale, technology is now razing them. Sharing consumer goods or manufacturing tools historically required customized solutions and lots of manual work to exchange information, schedule handovers, track the position and status of goods, and so on. Companies like Nexia and Innoverne are now automating these logistics with remote-control software in the case of Nexia and, for Innoverne, white-label software platforms that turn products into services and run multistore, multichannel, end-to-end eCommerce, and reverse logistics. Designing value chains to embed circular business models all the way through to the customer’s use and return is a major new frontier for digital. It can revolutionize service and flexibility, where the physical and digital worlds merge and products start to flow between users, markets, and lifecycles at very low transaction costs.