Iot and Circular Economy

Nowadays, more and more fashion and luxury brands, as well as other market sectors, have to face the challenge of sustainability, which favours a fairer production process that minimises waste.

Therefore, companies adopt the circular economy model, a production and consumption model that tends to extend the life cycle of products, in favour of reuse and recycling.

According to this philosophy, unsold goods can no longer be destroyed, but will instead be placed in a circuit that will allow their recycling in favour of a decidedly more sustainable new production.

Throughout this process, IoT technologies are truly an ally for companies, a concrete tool that allows them to implement the circular economy model quickly and punctually. For example, thanks to the use of rfid tags applied to products, it will be possible to identify unsold items quickly and with absolute precision, thus facilitating the recovery and identification of unsold items to enter them in a new production model.

Circular Economy: Meaning and Definition

If today companies are increasingly eco-friendly and sustainable, it is also thanks to the position of the European Parliament, which asks brands to adopt concrete strategies in order to reduce waste.

Waste management in the EU is an increasingly sensitive issue as it is estimated that 2.5 billion tons of waste are produced every year in the European Union.

This is an alarming fact that must be managed with the utmost seriousness by all operators in the supply chain.

The trend in which companies find themselves is therefore a shift towards a circular economy model, as required by the European Commission.

In February 2021, the European Parliament voted in favour of the new action plan for circular economy. The goal is to achieve a completely circular, zero-carbon and sustainable economy by 2050.

But what is circular economy in practice then? Let us see together a possible definition that fully clarifies its meaning:

“The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible.

In this way, the life cycle of products is extended, reducing waste to a minimum. When a product reaches the end of its life, its materials are kept within the economy wherever possible. These can be productively used again and again, thereby creating further value.”

Source: Circular economy: definition, importance and benefits

Linear and Circular Economy: What are the differences between the two models

The circular economy model is a relatively recent innovation, which will replace the previous linear economy model. But what are the concrete differences between the two models?

In principle, we can say that linear economy is less attentive to sustainability as it is based on a principle based on the use of resources to produce goods to be used and then thrown away once they have become obsolete.

These are therefore two contrasting models, on the one hand we have the traditional economic model, on the other hand a model that increasingly focuses on sustainability.

Between the end of the 1800s and the beginning of the 1900s, the growth of productivity and strong industrialisation led to the affirmation of the linear economy whose products, however, are made by evaluating a certain planned obsolescence in order to stimulate and encourage the purchase of new and best performing products on the market.

This means that it is also economically more strategic for the consumer to throw away a product that is no longer functioning rather than considering repairing it.

As you can imagine, however, the linear economic system has generated a series of significant consequences, such as an impact on the environment and the scarcity of natural resources.

The progress of the energy crisis during the second half of the 1900s, as well as pollution, lead more and more to rethink production from an environmental perspective, to the point of embracing a new system called circular economy.

Artist: Björn Öberg

What are the Advantages of Circular Economy?

The advantages of circular economy are evident and have a strong impact on the health of our planet.

Companies are required to change their attitude towards production, taking responsibility for the impact they have on global pollution. Furthermore, the recycling and reuse of goods and raw materials is the basis of this new approach.

The advantages of the circular economy are many, such as:

• Reduction of waste materials and their reuse;
• Reduction of harmful emissions;
• Greater availability of raw materials;
• Increased competitiveness within the market;
• Possibility of economic growth.

Furthermore, adopting a circular economy system can also have a positive impact in terms of increasing available jobs. Thanks to the circular economy, there could be 700,000 new jobs by 2030 in the European Union.

Circular Economy Example

To adopt a circular economy model, companies will have to introduce new attitudes capable of facilitating this transition process.

For example, they will be able to resort to renewable energies, use recycled materials but also conceive and design products already optimised for their possible recovery once obsolescence is reached.

Valuing waste and implementing “reverse logistics” programmes are other excellent strategies that can assist in a circular economy scheme.

An example of a circular economy could be to recycle plastic to produce new goods or to make fabrics with waste from the processing of oranges.

If we want concrete examples of circular economy, then we must consult the Italian Atlas of Circular Economy, a real database with the most virtuous examples of circular economy in Italy.

Over 100 real cases of Italian businesses that tell their story to embrace green economy. Not only companies but also circular cities, for a real ecological transition of urban areas.