This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.
The world is using approximately 1.5 planet's worth of resources every year. Based on the current pace, we shall consume three planets by 2050.
For all the talk of private sector efficiency, waste is at the heart of how companies make money. Beyond throwing away resources, or rubbish, they underutilise assets and offer shorter product lifecycles than they should. This waste is not only intensifying environmental damage and natural resource shortages, but it also is throwing away economic growth worth as much as US$4.5 trillion by 2030.
This is particularly true for ASEAN countries and companies operating in the region, with their specific development challenges and particularly vulnerable ecosystems. Consequently, it is crucial for ASEAN to look beyond the old models rooted in "take, make and waste", and to adopt alternative models of growth to ensure long-term sustainability.
The rapid rise of circular economy business models is beginning to change mindsets for the better and will help decouple growth from increased use of natural resources. Digital technologies are crucial to making that happen. Nevertheless, there is a danger that the role of digital technologies in the future of the circular economy is misunderstood.
The first wave of the digital circular economy arrived with the digitalisation of manufactured products. Music-streaming and e-readers are the classic examples. Next came the rise of the sharing economy and the huge growth enjoyed by companies leveraging connectedness and social media to improve asset efficiency by transforming idle or under-utilised assets into income-generating opportunities. Global trends in both mobile penetration and internet access bode well for both business models.
For example, Singapore-based business BlockPooling leverages the idea of sharing platform in a community. In this densely-populated country where most people live in high rise buildings, the business not only allows individuals to exchange goods, services or information with their neighbours but also to connect each other socially, thus creating loyalty that contributes to its success.
Many business leaders often leave it there, hoping the digital apps of the sharing economy can be applied to other, and more industrial, settings. While there is a greater ride yet on that wave, there are more interesting undercurrents that need to be better exploited.
A third wave is coming to life through the deployment of analytics and sensors to help drive new efficiencies and performance, as well as enabling more product-as-a-service offerings.
Take the example of Sunlabob, a solar enterprise based out of Laos that has created a service-based approach to sustainable lighting in rural areas. In off-grid villages where people use candles or oil lamps, solar lamp rental has become an increasingly popular business model, where a central enterprise rents out solar lamps on a daily or weekly basis for a fee, thus providing 'lighting as a service". This service-based approach provides better affordability to villagers and ensures better maintenance and equipment efficiency.
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