Impact of digital transformation for sustainable circular economic environments

Abstract

Abstract Digital Transformation is a global phenomenon, capturing the attention in every industry and spurring major investment. However, digital transformation is not a single objective, but a multi-faceted approach depending on specific industrial goals and their digital maturity. Digital transformation is the way of change from a monolithic business approach to fully digitalized business strategies, resulting in digital transformation a key economic objective and a major success factor of a comprehensive corporate transformation. In addition to digital technologies, processes, and procedures, and aside from that also skilled employees required keeping pace in reacting quickly to changes in order to adapt to necessary needs and opportunities in the markets, to drive growth and innovation. In the first of the four industrial evolutions, steam power was a disruptive technology that has changed the working capabilities. In the second it was the assembly line and in the third the computer. Today, in the fourth industrial evolution, everything is digital. Intelligent digital technologies such as Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), Big Data and Analytics, Automated Robots, and others are accelerating a profound transformation in the way industries work and do business. However, beside digital transformation a second transformation narrative occur, which refers to the circularity of business models, based on the foundation, that sustainability, and specifically circularity is a path to an environmentally friendly production and profitability. This business model is not yet widespread everywhere, but economic, social, and technological changes are enabling circularity be enticing. Given this fact, circular economy makes sense not only from an environmental perspective, it’s also likely the way forward to the central goal of waste reduction in production, and also initiating a prosperous environmentally friendly business strategy. In this context, digital transformation can enhance circular economy and circular business models tantalizingly as enabler. Doing so, the technologies used beside circularity byproduct design, production, maintainability and for product life extension, are enabled by data streams about condition, location, availability of required resources. Furthermore, digital transformation technologies enable repairability, reusability of materials, recovery and recycling of materials used and others in circular economy. In this sense, the paper introduces the fundamental background of both transformation narratives in detail with their special capabilities, and also explains their pros and cons and potential applications.