Why we wrote a book about Industry 4.0 and the Circular Economy
The next industrial revolution does not in itself lead to more sustainability. The right people need to show the way.
We live in a time of deep transformation of manufacturing systems and markets, enabled by technology. Just as in former paradigme shifts, we are confronted with a new set of threats and opportunities. In our book “Industry 4.0 and Circular Economy” Antonis Mavropoulos and myself view the forthcoming industrial revolution through the lens of resource management. Currently there is a direct correlation between growth rates and ecosystem degradation. The three former industrial revolutions have all, in their unique ways, contributed to the tsunami of waste that today is piling up in landfills, destroying natural ecosystems, creating huge costs for future generations. How do we avoid repeating and amplifying the failures of the past? Can technological innovation be used to fix the leaks in the current economical system?
Technology is not necessarily good news
Industry 4.0 describes the principles of an emerging industrial paradigm, characterized by “cyber-physical systems”. The material and virtual world is converging, machines and humans can now interact in ways unthinkable only a few years ago.
We see the rise of integrated value chains, with information-sharing in real-time. Cloud services and AI enables business processes and user experiences that responds to conditional data. Sensors and actuators opens up for a new level of automation, where we can make virtual twins of the physical reality. Molecules and bytes are becoming integral parts of the same high level processs.
Composites are being designed by computers to have specific material characteristics. Machine learning algorithms can simulate future scenarios. A lot of the stuff traditionally sold as physical objects are being delivered in the form of digital services. Customers are becoming co-creators of personalized products.
In a sustainability perspective this is not necessarily good news. Progress, as in movement towards a better society, is not intrinsically embedded in new technology. In the book we discuss the danger of rebound effects. Can increased efficiency lead to higher consumption?
At its worst the 4.0 reality may lead to more complex material streams, new forms of toxic waste in nature and deeper geopolitical conflict over resources. At its best it can mean more transparency, smarter incentives, and fair systems where those that enjoy the benefits also carry the responsibility and the cost.
What do our landfills tell the archeologist from the future?
As soon as you grasp the conceptual differences between a circular and linear economy, you cannot unsee that there is a deep system failure in our current economic playbook. Scientists from across a range of fields stress the urgency of the situation. There is no big quick fix, but there are thousands of opportunities in the intersection between technological opportunity, societal responsibility, and planetary necessity.
One of the messages in our book is that the people working in waste management and recycling should should seize the moment, and challenge the status quo. Those that on a daily basis witness the tsunami of scrap on the landfills and incineration plants have unique insights. They should take a leading role in creating new value loops, building reverse logistical systems and break the patterns of garbage colonialism. Waste has through several decades been exported out of sight, and many developing countries are carrying the burden of overconsumption and lack of recycling and lifecycle management in richer parts of the world. The skills, tools and insights we develop over the next years should be democratized. We need collaborative creation process that calls for openness and diversity. People from all parts of the circle and all parts of the world should take part in creating a more resource-efficient economy.
Another message is that we need to understand the past to be able to create a better future. The most fascinating part of the writing process was to explore the history of the four industrial revolutions from a perspective of resource utilisation. The compositions and volumes of waste tell important stories about any society. What will future archeologists think when they discover the landfills from our time?
The fuel in the growth machine has since the 1950ies been fossil fuels and non-renewable resources. This illusion of abundance is reflected in our current regulatory paradigm, where responsibility almost magically disappears the moment our products reach their end of life. Planned obsolescence is a driver of profit. The current resource depletion, aggregation of pollutants in ecosystems and unfair sharing of burdens is irrational and immoral.
Empowering the people at the end of the pipe
When degradation is considered value creation we need to redefine value. There is an urgent need to rethink the incentives, standards and system that We need regulatory constraints that the innovation a direction. Those that create more output with less input should somehow be rewarded. Better documentation and tracking systems is one key. Servicification is another. Robotics already replace workers in processes exposed to toxic and radioactive waste. We need to use the cloud and sensors and AI and a range of other technological solutions to achieve all of this.
But the most important key is human.
A paradigm reflecting the scarcity of resources on planet earth, will not be created by the top-level predators of consumer capitalism as we know it.
It will be created by young entrepreneurs in the global startup community, experimenting with low footprint business models, product/service-systems and closed loop programs.
It will be created by brave politicians that challenge the status quo, designing new regulatory constraints and incentives, making room for the connected and transparent systems to emerge.
It will be created by the people in waste trucks, workers along conveyor belts, creative administrators in the back office of municipal waste management organisations, and streetsmart waste pickers in the informal economy of many developing countries.
Those that currently work at the end of the pipe, and with their own eyes see the overwhelming piles of mixed-up, low-value scrap generated by the contemporary economic system, have a unique insight in both the problem and the possible solutions. With our book we want to empower them to start thinking of themselves as designers, business developers and political architects. It’s time for the downstream talent to swim upstream, and help fix the problem at the source.
One of the questions we explore in the book is kind of philosophical: What is waste, really? From a data management perspective it is resources that lost value due to missing metadata. We do not know the material characteristics. We do not know who was originally responsible. What should we do with it, and who should be charged?
In idealized Industry 4.0 systems data is managed in seamless ways that enable sharing and end-to-end transparency. Digital systems can and should create accountability all the way from source to consumer. We need industrial systems that keep track of how a product is made, from which materials. Resources should be managed to get back into the loop with lowest possible degradation.
This requires collaborative structures. driven by profitability. A key challenge of the circular economy is to create positive revenue in value chains that today are organized around cost sharing. Both the retailers, the producers and the waste handlers play a role in this. We need innovation across industriy borders make the circular dream a profitable reality. Shared technical standards, openness, diverse networks and curiosity are essential keys to make this happen.
Bending the linear logic
Yes, in some chapters the book dives deep into RFID technology, NIR scanners, fill level sensors, blockchain ledgers and microservices. We believe that people need to understand the potential in these technologies. Machines do neither have morality nor their own will. We emphasise that these are only hammers and screwdrivers, tools we can use to build stuff.
In transitional times we can build almost anything. We need visionary people to lead the way in this process, and networks that transcends the structures of the past. The people from the resource management industry should create alliances, experiment, learn from each other, make their voice heard, experiment and share experiences. Open standards and licensing models can help technical solutions spread faster. Brave and supporting policy measures will make the right business models thrive.
None of this will not be easy, but we hope our book can help start an important conversation. If enough people pull together, we can bend the linear logic all the way around, until it, one beautiful day, turns into a circle.
