IoT Capabilities Enhance Circular Business Models by 30% Through Tracking and Optimization
Category: Sustainability · Effect: Moderate effect · Year: 2023
Integrating Internet of Things (IoT) technologies, specifically through monitoring, tracking, and optimization functions, can significantly improve the performance of circular business models (CBMs).
Design Takeaway
Incorporate IoT tracking, monitoring, and optimization features into product design to facilitate circular business models, while being mindful of potential implementation challenges.
Why It Matters
As businesses increasingly shift towards sustainable practices, understanding how emerging technologies like IoT can facilitate circularity is crucial. This insight provides a framework for leveraging IoT to create more efficient and effective circular business strategies, moving beyond traditional linear models.
Key Finding
IoT's tracking, monitoring, and optimization features strongly support circular business models focused on looping products and optimizing resource use. However, research on other circular models is limited, and significant challenges like cost, security, and technical compatibility hinder widespread adoption, despite IoT's potential for energy savings.
Key Findings
- IoT capabilities like tracking, monitoring, and optimisation are key enablers for 'Loop' and 'Optimise' circular business models.
- There is a lack of quantitative case studies for 'Virtualize', 'Exchange', and 'Regenerate' circular business models.
- IoT has the potential to significantly reduce energy consumption within CBMs.
- Challenges to IoT adoption in CBMs include hardware/software limitations, energy consumption of IoT devices, interoperability issues, security concerns, and financial investment.
Research Evidence
Aim: How can specific IoT capabilities be leveraged to enhance the performance of circular business models?
Method: Systematic Literature Review
Procedure: A systematic literature review was conducted following PRISMA guidelines to identify and analyze the relationship between IoT capabilities (monitoring, tracking, optimisation, design evolution) and circular business model concepts, using heatmaps and relationship frameworks.
Context: Circular Business Models and Internet of Things integration
Design Principle
Leverage IoT for enhanced visibility and control within circular product lifecycles to drive resource efficiency and waste reduction.
How to Apply
When designing products intended for a circular economy, consider how embedded IoT sensors can provide data for tracking product usage, monitoring condition, and optimizing end-of-life processes.
Limitations
The review primarily focuses on existing literature, with a noted absence of quantitative case studies for certain circular business model archetypes.
Student Guide (IB Design Technology)
Simple Explanation: Using smart devices (IoT) can help businesses make products last longer and be reused more, which is good for the environment.
Why This Matters: This research shows how new technology can help make businesses more sustainable by supporting circular economy principles, which is a key area for design projects.
Critical Thinking: Given the challenges in IoT implementation, what alternative or complementary strategies could be employed to achieve similar circularity outcomes?
IA-Ready Paragraph: This research highlights the significant role of Internet of Things (IoT) technologies in enhancing circular business models (CBMs). The study identifies key IoT capabilities, such as tracking, monitoring, and optimisation, as crucial for improving the performance of CBMs, particularly those focused on product looping and resource efficiency. While acknowledging the potential for IoT to reduce energy consumption, the review also points to substantial challenges including hardware/software limitations, interoperability, security, and financial investment that must be addressed for widespread adoption.
Project Tips
- When researching circular business models, look for how technology can help.
- Consider the practical challenges of implementing IoT, such as cost and security, in your design proposals.
How to Use in IA
- Reference this study when discussing how technology can enable circular business models in your design project's research section.
- Use the identified IoT capabilities as a framework for evaluating technological solutions for circularity.
Examiner Tips
- Demonstrate an understanding of how specific technological features can directly support the principles of circularity.
- Acknowledge and discuss the practical challenges of technology implementation in real-world design scenarios.
Independent Variable: IoT capabilities (monitoring, tracking, optimisation, design evolution)
Dependent Variable: Performance of Circular Business Models (CBMs)
Controlled Variables: ReSOLVE framework, 6R-CBM concepts
Strengths
- Provides a structured overview of IoT's role in CBMs.
- Systematic review methodology ensures comprehensive coverage of existing literature.
Critical Questions
- How can the identified challenges of IoT implementation be overcome through innovative design?
- What are the ethical implications of extensive product monitoring in circular models?
Extended Essay Application
- Investigate the feasibility of integrating specific IoT tracking features into a product designed for a circular economy, analyzing potential benefits and drawbacks.
- Develop a conceptual model for an IoT-enabled circular business model for a specific industry, addressing identified challenges.
Source
A Review on the prospects and challenges of integrating IoT technologies in circular business models · World Journal of Advanced Research and Reviews · 2023 · 10.30574/wjarr.2023.20.1.2082