Is the world finally ready for the circular economy

The 4th industrial revolution is driven by The Internet of Things, artificial intelligence, robotic process automation and other advanced computing technologies. But what makes this revolution complete is a new attitude towards re-using and re-cycling the IT devices so central to our modern world. As technology advances, the circular economy is finally coming of age…

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When 3 Step IT’s founding partners started the company 20 years ago, they did so with a vision of re-use and re-cycling that was far ahead of its time. The term “circular economy” was still in its infancy, even so, the company’s founders built their new business on this pioneering model. On the way, they brought both economic and environmental benefits to users of these devices and society in general.

Fast forward two decades, and the circular economy model is becoming firmly established as a way to minimise economic and environmental costs. Increasingly, we’re moving from ‘take, make and dispose’ to ‘take, make and re-use’ one. This shift – which is accelerating globally – is driven by a number of demographic, environmental and technological factors that are often intertwined. Broadly speaking, they can be divided into three key areas:

1. Access over ownership
Young people have been prioritising access to goods and services rather than owning them. In IT, and for many other types of equipment, this means they are prepared to lease their devices if they can upgrade them more often. Service providers – including mobile network operators, cloud service providers and equipment lessors – have responded to this demand with pricing and subscription models that allow regular (and sometimes frequent) renewal. But these service providers also need to realize economic benefits from returned devices, so they are increasingly turning to re-use and re-cycling, is re-use is not practical.

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2. Environmental concerns
Even though people want new devices more often than ever before, they also want to know that the old ones are properly taken care of. Service providers and device manufacturers who embrace re-use, and caferul re-cycling, can promote their environmental and circular economy credentials as a differentiator in their marketing.

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3. Advanced recycling technologies
There is a great deal of value in used devices that can be realized either through their re-use, or by stripping them down to extract the raw materials. For example, Apple – arguably the world’s largest manufacturer of electronics – uses a disassembly robot to dismantle an iPhone and separate its component parts in just 11 seconds. The robot, which Apple calls “Liam”, has extracted over 27 million kilograms of re-usable materials, including substantial amounts of gold.

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Where to from here?
While the benefits of the circular economy are now widely accepted, practices that realise these benefits are still lacking. Eurostat estimates that used technology collection rates are only around 50% today, while re-use is less than 5%. The growth potential is massive. So big in fact that global consulting firm Accenture predicts circular economy activity will deliver USD 4.5 trillion of economic output by 2030.

Over the past 20 years, the 3 Step IT business model has been based on re-using devices to realise economic value at the end of their first life. In 2016, 3 Step IT refurbished some 360,000 devices in five ISO certified centres. In our centres, equipment is securely data erased, cleaned and tested before reselling. Some 98% of this equipment was resold for further use, while the remaining 2% was recycled.

There is no single party responsible for the circular economy; it needs an interdependent web of partnerships between manufacturers, retailers, distributors and lessors – each of which brings different skills and capabilities. It will take time for more of these parties begin to see the economic benefits of re-use and re-cycling. As they understand the potential, we’ll see the development of business models, practices and behaviours that give the circular economy the central role it deserves within the 4th industrial revolution.

Over the last 20 years, the 3StepIT business model has run on the basis of device reuse to realise economic value at the end of its first life. In 2016, 3 Step IT refurbished 360,000 devices in five ISO certified centres. Equipment is data erased, cleaned and tested before reselling. 98% of equipment was resold for further use, with the remaining 2% recycled.

Download 3 Step IT’s whitepaper for more on the circular economy using the form below. You will also find further details about our leadership in IT re-use and recycling.