Digitalisation is providing the most effective means for developing a circular economy around plastic re-use, new research suggests.
The agility and capability of SMEs to adopt digital technologies to enhance and promote an effective circular economy could pave the way for effectively combating plastic pollution on land and in the oceans, according to new research from Durham University Business School.
The study, conducted Dr Atanu Chaudhuri at Durham University Business School, in partnership with colleagues Nachiappan Subramanian of the University of Sussex Business School and Manoj Dora of Anglia Ruskin University and previously at Brunel University sought to better understand how start-ups working to remove and recycle used plastic from the world’s oceans, made best use of technologies such as 3D printing and blockchain to make an impact, in an effort to share best practice with others.
“Plastic waste is one of the primary sources of pollution and biodiversity loss,” Dr Atanu Chaudhuri said. “The cleaning of rivers, oceans and cities of plastic waste has been attempted by many countries with varying degrees of success.”
However, the researchers say that plastic waste, if sorted and graded successfully, can have a second life and be used to create value-added products. It is here, they say, that SMEs can find opportunities to develop innovative business models which can benefit both planet and profits.
The challenge their research addresses lies in finding an effective means for developing a circular economy around plastic re-use. Digitalisation, they argue is providing the best way forward.
“Some SMEs are involved in recycling plastic waste to produce innovative products – by adopting digital technologies such as 3D printing and blockchain to gain competitive advantage from their circular-economy-based business models,” Chaudhuri continued. “However, the specific capabilities needed to create value for customers and to generate a competitive advantage for such SMEs are not known.”
By conducting in-depth interviews with circular-economy-based SMEs operating within plastic recycling; Plastic Bank, Waste2Wear, Benthos Buttons in collaboration with Fishy Filaments, and Filamentive, the study defines the capabilities needed by SMEs to adopt and embed digitalisation technology within the circular economy, and identifies the specific resources and capabilities needed to provide value to customers.
Crucially, Dr Chaudhuri and his colleagues observed that SMEs utilising circular economy initiatives to great success had qualities such as adaptability and exploration at their heart. Firms need to be able to swiftly understand, exploit and embrace the capabilities of such technologies to be able to both benefit the planet and gain a competitive advantage.
Here, the researchers say, managers seeking to move into a circular economy based business model have much to learn. SMEs with circular-economy-based business models must first work to identify the skills and knowledge gaps within their teams and the end-users to be able to utilise new technologies effectively.
“Our interviews show that the technologies are difficult to implement unless adequate attention is paid to adapting them to local conditions,” Chaudhuri added. “This means training users and demonstrating the technologies’ value to them, as well as optimising any manufacturing processes. Whilst this, no doubt, involves investment, the good news is that we’ve seen from multiple other research projects that such efforts pay off in the long run. Companies can indeed profit from investing in technology and sustainability.”
The research paper ‘Circular Economy And digital Capabilities Of SMEs For Providing Value To Customers: Combines Resource-Based View And Ambidexterity Perspective’, is published, and available to read in the Journal of Business Research
