Blog|September 22, 2021

Data is a powerful motor for circular business

Data is foreseen as a powerful motor for circular business and practices. Today, we already have some great practical examples of circular business models based on data. For example, machine manufacturers are collecting technical data online from working machines at the customer site and are able to provide preventive maintenance services based on that. For car sharing services, digitally conveyed transaction and use data provide the profitability element, and many second-hand retail businesses have reached bulk volumes via data on digital platforms.

These examples can be seen as a natural continuum of the ongoing digitalization development.  But can data change the game in a really transformative way? Where are the major opportunities in that? How do we ensure data reliability, confidentiality, ownership, sustainability, and fair use?

Circular Design Network project explores data opportunities and challenges together with stakeholders.  We want to connect data providers, data management and data users to experiment how data can be collected, validated, refined and utilized for transformative circular business concepts and practices. And we want to learn by doing. We are also addressing the data gaps and governance issues as we learn more.

Our first step has been to set up interviews in three selected value chains: batteries, carbon cycles in food systems, and textiles. We asked the stakeholders about their circular economy related strategies and actions, and the role and potential of data in carrying out these agendas. More than 75 stakeholders have now been interviewed, including primary material suppliers, manufacturers, retail, platform service providers, recycling operators, technology providers, B2B customers, NGOs and governmental stakeholders.

Our first findings from the interviews indicate that the companies and other stakeholders in the selected value chains see circularity and sustainability as must-have business factors. Some of the companies have also set ambitious circularity targets for their products and/or operations. Further, data and digitalization is broadly understood as a relevant enabler for sustainable operations, especially in managing the supply chain and providing information about material origin for the customers, and product and material traceability is recognized as a future trend.

However, all that said, in the studied value chains the disruptive potential of data based circular business and management still remains much open and unexplored. Where do the truly transformative opportunities lie? What data do we need? Is the next opportunity in exploiting use data from the customer and residents and beyond, and re-designing our solutions from the circular and sustainable angle?  How do we ensure reliable and uniform data, confidentiality in data sharing, and easy and cost-efficient access?

We invite your views, ideas and participation in our collaboration initiative by VTT Technical Research Centre, Aalto University, GTK Geological Survey of Finland, Finnish Natural Resources Institute Luke and Finnish Environment Institute Syke.  Our Circular Design Network project funded by the Academy of Finland is running and looking for data demonstration topics and co-development opportunities. The registration is now open for the next round of Think Tank workshops in batteries and textiles.