We hear conflicting messages every day, sometimes about increasing consumption power, sometimes about the need to be frugal to save the planet. After decades of talking in all circles about the importance of economic growth for our well-being, we have begun to redefine this well-being. Moreover, after centuries in which innovation and the emergence of technologies unimaginable before the Industrial Revolution were associated with progress, we are looking for new models to continue to progress through innovation and technology, but not at any cost.
What does GDP not tell us?
Economic growth is important as a means of facilitating progress, and to measure economic progress economists traditionally use gross domestic product (GDP). The modern concept was developed by the American economist Simon Kuznets in 1934 and adopted as the main measure of a country’s economy at the Bretton Woods conference in 1944. In short, GDP measures the monetary value of all final goods and services produced and sold on the market in a country over a period of time, usually a year.
In simple logic, higher GDP should equate to greater human progress because it means more valuable goods and services have been created. But what can’t GDP tell us? Although changes in the production of goods and services per person (GDP per capita) are often used as a measure of whether the average citizen in a country is better off or worse off, they do not capture important things about overall well-being, since they are freely limited to the depletion of non-renewable natural resources.
Balance through sustainable development
In the 60s, we reached a psychological threshold: the planet was already feeding 3 billion inhabitants. Rachel Carson published the book Silent Spring in 1962, in which she published data from several fields, synthesizing the information in what was the first coherent report of the effects of persistent chemicals on the environment. His book marked the turning point in society’s understanding of the interconnections between the environment, the economy and social well-being. Far more effective than previous calls to use modern technology responsibly, Silent Spring launched a revolution in attitudes at all levels of society, from schoolchildren to government and industry leaders.
Ten years later, the United Nations Conference on the Human Environment was held in Stockholm, the first world conference to place environmental issues at the forefront of international concern, marking the beginning of a dialogue between industrialized and developing countries on the link between economic growth , air, water and ocean pollution and the well-being of people around the world.
In 1987, the United Nations World Commission on Environment and Development released the report “Our Common Future”, commonly called the Brundtland Report, in which it included a definition of sustainable development that is widely used today: “Sustainable development is development that responds needs of the present without compromising the ability of future generations to meet their own needs”. It was only in 2015 that the United Nations General Assembly (UNGA) adopted the Sustainable Development Goals (2015-2030), which address global challenges including poverty, inequality, climate change, environmental degradation, peace and justice, and explained how they are integrated and indivisible to achieve sustainable development globally.
While the planet’s population has crossed a new psychological threshold, reaching 8 billion last year, and technology has developed exponentially, theorists still vacillate between criticizing the concept of sustainable development, which they consider a paradox, and disillusionment with the arduous progress. Perhaps not as early as needed and not as quickly as we expect, the creation of theoretical concepts and their institutionalization was seconded by the emergence of the first economic models, such as the circular economy.
What is the vision of the circular economy?
The notion of circular economy is used for the first time by Pearce and Turner (1990), who find that the idea of recycling is missing from the traditional or linear economic model, with a negative impact on the environment-economy relationship, proposing a new economic model based on the basic principle according to which “everything is an input for something else” or, to paraphrase the French chemist Antoine-Laurent de Lavoisier, “nothing is lost, everything is transformed.” This circular model explains how a closed-loop approach does not seek to end growth, but has the potential to transform industry into harmony with nature so that we can continue to thrive in a circular economy.
The book Cradle to Cradle: Remaking the Way We Make Things, published in 2002 by architect William McDonough and chemist Michael Braungart, provides the first integrated presentation of design and science that delivers lasting benefits to society. In essence, a circular economy mimics the Earth’s naturally circular systems, and in their book McDonough and Braungart frequently use the metaphor of a cherry tree: “The tree produces tasty flowers and fruit without depleting its environment. Once they fall to the ground, their matter breaks down into nutrients that feed microorganisms, insects, plants, animals and the soil. Although the tree makes more of its “product” than it needs for its own success in an ecosystem, this abundance has evolved (through millions of years of success and failure, or in business terms, research and development) to serve rich and varied purposes.”
The circular economy works on the principles of regeneration, keeping materials in use while reducing waste and reducing pollution (Ellen MacArthur Foundation, 2013), being seen as an alternative to the linear economy, and the transition to this economic model has become increasingly much the strategic priority of organizations around the globe, which are encountering new challenges, such as those related to the availability of data and its integration into various processes. Scientists demonstrate that the solution is digital transformation, which includes the effective use of big data, artificial intelligence (AI), blockchain, the Internet of Things (IoT) and cloud computing, facilitating predictive analytics, tracking and monitoring throughout the life cycle of a product.
The circular economy is centered on an innovation ecosystem, model adopted by Green eDIH
We have seen the contribution of companies, society and institutions to the development of the circular economy concept. But the viability of strategies in the field requires the contribution of each interested party, motivated by common values to collaborate in different phases of transition to the circular economy. The role of innovation generated by digital technologies, especially in process management, is generally accepted, but a systemic vision is not always outlined.
The digital innovation ecosystem built around Green eDIH is, in this context, the favorable environment for collaboration between all categories of actors, along a value chain, regardless of industry. Through our involvement in projects that, through research activities, enable the availability of shared, interoperable and reliable data to improve recycling, we contribute to the promotion of new businesses that adopt concepts specific to the circular economy.
It is important for everyone involved to have access to accurate, reliable and immutable information, which defines our role and involvement in projects that result in the creation of digital product passports (DPP), traceability solutions using blockchain technology, or other solutions which enable built-in verification of data authenticity, along the value chain. As part of Green eDIH’s
commitment to constantly develop international projects to strengthen cooperation and support innovation and ecological transition, we participate in consortia with various organizations, together with which we develop innovative solutions through the integration of digital technologies in various industries. The Horizon Europe program provides us with the framework to create a digital passport for batteries, optimize battery performance and lifetime, validate recycling and promote a new business model based on data sharing (Bat4EU Partnership). In the coming weeks, together with 15 partners, we will work on a project proposal under the priority “A more competitive and smarter Danube region”. The project will cover the Danube area and achieve better territorial, economic and social integration through research, development of action plans and blockchain solutions for agriculture and energy. Through all these collaborations, we aim to achieve transnational cooperation for the analysis of the current situation and the development and improvement of research and innovation capacities in various sectors, through advanced digital technologies. Thus, our members who use the competitive advantages of the circular economy today collaborate with their partners in the Green eDIH ecosystem to develop sustainable and thriving businesses like McDonough and Braungart’s cherry.
