1. What is Digital Circular Economy?
Digital circular economy is a new approach to sustainability that uses technology, data, and creativity to make businesses more efficient and sustainable. The goal of the Digital Circular Economy (DCE) is to reduce ecological impact and maximize resource lifespan through the integration of cutting-edge digital technology inside the conventional circular economy framework.
Businesses are adopting circular economy models as a result of consumer and corporate preference for goods and services that are in line with sustainable and environmentally friendly practices globally. Reusing, refurbishing and recycling goods may save costs and improve operational efficiency, as significant firms in the industry are beginning to realize.
2. Understanding Digital Circular Economy in b2b landscape
In the realm of business-to-business (B2B) interactions, understanding the dynamics of the digital circular economy is crucial. Digital technologies not only facilitate the emergence of new, impactful business models but also drive innovation within existing frameworks. The integration of digital technology into the circular economy represents a groundbreaking approach that has the potential to redefine traditional business operations.
The convergence of technology, data, and creativity forms the cornerstone of the digital circular economy, paving the way for more efficient and sustainable business practices. Notably, the percentage of companies investing in circular economy projects has seen a significant uptick, nearly doubling within a year. This surge reflects a growing recognition of the tangible benefits associated with such investments, particularly within industrial sectors.
The heightened global focus on sustainability, exacerbated by the COVID-19 crisis, has propelled organizations towards circular economy initiatives with unprecedented urgency. As a result, businesses are increasingly embracing digital technologies and embarking on transformation journeys to position themselves as leaders in the circular economy landscape.
Let us have a look at what the Digital Circular Economy Market will be.
Table of Contents
- Introduction: Digital Circular Economy Impact on Business
- Understanding Digital Circular Economy in b2b landscape
- Opportunities and Challenges in Digital Circular Economy
- Digital Circular Economy Applications Across Industries
- Digital Circular Economy Regional Landscape
- Digital Circular Economy Competitive Landscape
- Conclusion: Embracing Digital Circular Economy for Competitive Advantage
3. Opportunities and Challenges in Digital Circular Economy
3.1 Opportunity: Cross-Industry Collaborations creating opportunities for Digital Circular Economy Revolution
A promising opportunity within the digital circular economy system landscape lies in fostering strategic partnerships and alliances throughout industries to force innovation, collaboration and sustainability. By combining information, assets and technologies organizations can create synergies that accelerate the transition closer to a round economic system. For instance, collaboration between technology corporations, manufacturers, stores and waste management agencies can result in the development of integrated answers for product lifecycle management, waste reduction and resource optimization. These alliances facilitate the sharing of nice practices, records and insights, fostering continuous development and innovation.
Moreover, cross-industry partnerships can unlock new revenue streams and market opportunities via tapping into numerous purchaser bases and addressing rising customer needs for sustainable products and services. Embracing collaboration and collective action not only drives positive environmental impact but also enhances competitiveness and resilience in the global economy. Companies like Infosys, partnering with the Ellen MacArthur Foundation and Evonik, committing to producing sustainable price through circular merchandise and technology, exemplify the transformative capability of go-enterprise alliances in advancing the digital circular economy.
3.2 Challenge: High Upfront Costs for Digital Circular Economy Startups
One significant restraint facing digital circular economy startups is the high upfront costs associated with implementing innovative technologies and infrastructure. Unlike traditional linear economy models, which may have lower initial investment requirements, transitioning to a digital circular economy often necessitates substantial capital outlay. Startups aiming to integrate advanced AI-driven solutions, IoT devices and complex statistics analytics systems face full-size prices in obtaining, imposing and maintaining those technologies.
Additionally, building the vital infrastructure for green waste management, recycling procedures and deliver chain optimization can incur considerable upfront costs. These financial limitations can also pose demanding situations for startups, in particular those with restricted get entry to capital or funding resources, probably hindering their capacity to compete and scale within the digital circular economy landscape. Overcoming those obstacles may additionally require innovative financing mechanisms, partnerships with established industry gamers or government support to incentivize investment in sustainable technology and practices. Despite these challenges, addressing the high upfront costs of digital circular economy initiatives is crucial for fostering innovation and driving widespread adoption of more sustainable business models.
4. Digital Circular Economy Applications Across Industries
In Automotive industry, Supply chains are being optimized through the use of digital technology, which primarily lowers waste and boosts the productivity. Real-time monitoring of inventory levels, demand forecasting and logistics management are made feasible by advanced analytics, machine learning and blockchain, which also reduces the environmental effect of transportation and storage. For instance, in October 2023, to enhance or optimize the supply chain visibility and streamline the movement of components and materials, Gestamp has joined the Catena-X data-sharing network. According to the Spanish tier-one automotive component manufacturer, joining the platform will help it achieve its corporate governance, environmental and social goals in addition to advancing technological progress. By joining Catena-X, the company can strengthen its position as a partner supplier and keep driving the automotive industry's change. The vision of Catena-X is in line with their ESG and technological development strategy, which are essential to achieving our objectives for Industry 4.0 and the circular economy.
On the other hand, about 5% of all industrial waste produced worldwide comes from the automotive sector, which also consumes a significant portion of global resources. Many of these issues can be reduced by the adoption of the circular principles of reusing and recycling materials and components. By 2030, the automotive sector may reduce resource consumption by up to 80% per person-kilometer and carbon emissions by up to 75% by implementing circular concepts. By the same year, they can also cut 66% of emissions from material production at no additional expense.
In the realm of healthcare digital solutions can help to optimize their recycling and waste management procedures. Healthcare organizations wants to improve medical waste management, seek opportunities for recycling or repurposing materials and maintain compliance with waste disposal rules by implementing smart waste tracking systems and leveraging data analytics. Clarium, a startup in U.S., automates supply chain activities using data. It integrates real-time data across the supply chain into a unified data environment. This data is analyzed to detect crowdsourced signals and potential operational concerns. The technology also increases data transparency into supply and demand, hence easing collaboration and operations.
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5. Digital Circular Economy Regional Landscape
North America digital circular economy market is projected to reach US$ 5.4 billion by 2031. According to the data given by, International Monetary Fund (IMF), Canada has the 3rd highest total estimated value of natural resources, at US$ 33 trillion. The U.S. has the seventh highest. Regarding technology, finance and innovative design, both countries are dominating. Canada produces 1,587 pounds of waste per person per year, more than any other developed country. Every year, U.S. discards 500 billion pounds of solid waste. Of this garbage, 75 % can be recycled or used again. Re-manufacturing accounted for 2% of the production in US.
Cities in North America are adopting practices and policies of circular which help to boost regional market growth over the forecast period. Toronto is the first city in Canada which become a circular city. The revised Extended Producer Responsibility policy and the introduction of the Green Market Acceleration Programme, which grants private partners access to city infrastructure to expedite circular solutions, are two instances of this. By 2020, Phoenix City planned to recycle 40 % of its waste. By 2050, the city wants to have zero waste and part of that effort includes the creation of a public-private incubator designated with recycling waste materials including batteries, food scraps and textile waste.
South America digital circular economy market is projected to reach US$ 110 million by 2031, Though a wasteless world is the ultimate objective of the circular economy, in the short term, effective waste management needs to be among the top goals for a fair transition to the circular economy (CE) in South America. According to the World Bank estimation, South America will generate the most waste per capita in the developing world by 2050 with an average recycling rate of only 4.5% which is the lowest among developing regions.
The growing pilot initiatives by the major key players help to boost the regional market growth of the digital circular economy. For instance, Santiago de Chile implemented the Bigbelly solar-powered compacting bins in its Metropolitan Park in South America. The pilot used smart bins to collect data, assess metrics and send notifications when the bins were full, thereby allowing for efficient collection schedules.
Europe digital circular economy is projected to reach US$ 5.5 billion by 2031. Europe has been leading the way in implementing rigorous environmental regulations and sustainability policies. Businesses are encouraged by the regulatory structure to implement digital circular economy strategies to comply with requirements. The circular economy has been strongly promoted by European governments. Startups and enterprises using digital circular economy technology are assisted by several financing, promotion and policy initiatives.Furthermore, on November 29, 2023, Nokia joined Orange in United Nations Industrial Development Organization (UNIDO) circular economy initiative in Egypt. Egypt Vision 2030 includes several aggressive goals it has set for itself to enhance waste management systems, including e-waste.
Asia-Pacific faces a significant challenge with plastic pollution, as rivers, streams and oceans are increasingly contaminated by plastic waste, as reported by the World Urban Forum. Out of the 8.3 billion metric tonnes (Mt) of plastic generated globally in recent decades, only 9% has been recycled, with the remaining 79% likely ending up in landfills or the environment. Additionally, an estimated 13 million Mt of plastic enters the oceans annually. Without action, projections suggest that by 2025, the world's oceans could contain over 250 million metric tonnes of plastic waste. 50% of the world's garbage made of plastic leakage occurs in developing nations in the Asia-Pacific. As consumers and companies in the Asia Pacific area become more conscious of environmental challenges and sustainability, they are looking for solutions related to the circular economy. Digital technologies provide scalable and effective solutions for recycling, trash reduction and resource conservation.
Middle East and Africa digital circular economy market is projected to reach US$ 316.26 million by 2031. Minerals and metals belong to the numerous natural assets found in this region. The production of electronics and other digital products, which are vital elements of the circular economy, relies on these resources. There has been a rise in tech start-ups across the MEA region, focusing on various aspects of the digital economy, including circular economy solutions. These start-ups are driving innovation and contributing to the growth of the digital circular economy market in the region.
6. Digital Circular Economy Competitive Landscape
Several prominent companies competing vigorously to maintain and expand their market share. Companies are expanding their geographical presence to tap into emerging markets.
The major five companies in the global digital circular economy market companies hold 67% of the total market in 2023, whereas the major three players account for nearly 59% of the total market.
Companies operating in the digital circular market are increasingly focusing on innovative product design that emphasizes durability, repairability and recyclability. By incorporating modular designs, eco-friendly materials and digital tracking capabilities, these companies aim to create products that can be easily disassembled, reused or recycled at the end of their lifecycle.
6.1 Recent Developments in Digital Circular Economy
|
Company |
Strategy |
Date |
Development |
|
KPMG International Limited |
Launch |
May 25, 2023 |
Global professional services firm KPMG announced the launch of Circularity Tracker, a new tool aimed at supporting organizations’ shift from a linear to a circular economy through automated data collection and processing and performance analysis and monitoring. The new tool is part of a series of ESG-focused solutions by KPMG built on Microsoft’s sustainability-focused platform, Cloud for Sustainability. |
|
Rheaply |
Expansion |
February 21, 2024 |
Rheaply, an online platform for diverting usable items from disposal, aims to expand from a few major cities to 50 locations by the end of 2025. Rheaply has expanded the service to be available publicly. Its Circular Cities program, available in several major U.S. cities, facilitates materials exchanges for businesses, not-for-profits and government organizations. The expansion expansion plans in multiple cities to reuse more furniture amid office rethink. |
|
Lenzing Group |
Partnership |
February 14, 2023 |
The Lenzing Group, the world’s leading supplier of specialty fibers and Sweden’s leading pulp producer Södra have reached the next major milestone in their strategic partnership to promote circularity in fashion. Together with Portuguese fabric manufacturer Riopele, the two companies are developing textiles made from recycled and sustainably produced materials for a spring/summer collection by fashion brand Filippa K, which will be presented to the fashion world this autumn. |
7. Conclusion: Embracing Digital Circular Economy for Competitive Advantage
In conclusion, the adoption of a digital circular economy model presents an unparalleled opportunity for businesses to gain a competitive edge while fostering long-term sustainability. By integrating digital technologies into circular economic practices, companies can not only improve environmental quality but also drive economic development on a scalable level.
The profound technological and social shifts associated with the digital circular economy carry significant implications for environmental conservation and energy efficiency. Embracing this paradigm represents a pivotal step towards achieving sustainable development goals, as it leverages digital tools and data to cultivate a circular and regenerative economy. As organizations navigate the complexities of an evolving business landscape, embracing the digital circular economy becomes imperative for staying ahead of the curve. By harnessing the power of digital innovation, businesses can unlock new avenues for growth, resilience, and environmental stewardship, thereby securing a competitive advantage.
Read: Want to Know Major Investments in Digital Circular Economy
Frequently Asked Questions (FAQ's)
Here are some frequently asked questions about the topic
1. Which Industry is investing Heavily in Digital Circular Economy?
Construction & Building sector is in need of digital circular economy for a number of reasons, as this industry generates waste and releases emissions into the atmosphere in addition to using a lot of resources. Reducing the environmental impact of the sector can be achieved by using circular practices with digital assistance.
2. Who are the Top 10 Players in Digital Circular Economy?
SAP SE, Landbell Group, Anthesis Group Ltd., IBM Corporation, iPoint-systems GmbH, Rheaply, One Click LCA Ltd, LENZING AG, KPMG International Limited, KPMG International Limited
3. What is the Demand for Digital Circular Economy?
The global Digital Circular Economy market was US$ 2,818.04 billion in 2023 and is expected to reach US$ 16,620.02 billion in 2031 growing at a CAGR of 25.0% during the forecast period (2024-2031).
4. Which Region is leading in Digital Circular Economy?
Europe is a dominating region in the market accounting for 37.24% of the global market due to the growing government initiatives to promote a digital circular economy. The Circular Economy (CE) stands as a primary focus within the European Green Deal, serving as a key component of the twin transitions in Europe.
5. What is the Driving Factor for Digital Circular Economy?
Growing Consumer’s E-Waste Awareness and Transformative Role of AI in Shaping the Digital Circular Economy are the major factors driving the market
