Posted: 20 Jan. 2020 5 min. read

Making the Australian circular economy a reality

The state of Victoria is currently in the grip of a recycling crisis, placing renewed focus on the need for innovative ways of managing the state’s waste. The recent insolvency of SKM Recycling in August, contracted to manage the waste of 31 local councils in Victoria, led to the transfer of more than 4,600 tonnes of recyclable material to landfill in a single week. With countries like Malaysia sending plastic back to our shores and China banning the import of most recyclable plastics in 2018, it has become clear that we need to explore new ways of managing our waste in Australia. A shift towards a circular economy supported by a range of exponential technologies like artificial intelligence (AI), Internet of Things (IoT), and advanced robotics offers a promising future that, if designed responsibly, will create jobs, reduce our nation’s waste, drive customer experience, and propel Australia towards an abundant and prosperous future.

The circular economy is a new way of creating value, and ultimately, prosperity. Unlike our existing linear economy based on a take-make-dispose model, a circular economy is a regenerative resource model. In the future, products will be designed for durability, reuse, and recyclability. Circular economies aim to reduce the resources used in production and consumption by closing the loop between end-of-life disposal and product repair and refurbishment. Above all, materials used for new products will come from old products. Thus, we will prolong product lifespans through improved design and servicing and relocate waste from the end of the supply chain to the beginning.

However, the circular economy represents a paradigm shift that requires a fundamental rethink of entire business and operating models, value propositions, and consumer habits. Disruptors like car-sharing services, meal-kit subscriptions, and even fashion-as-a-service start-ups are showing promise as consumers start migrating towards access-oriented value propositions. But, the service-based nature of the circular economy and the complex networks between actors within reimagined supply chains will pose challenges that we simply cannot solve by ourselves.

Exponential technologies like AI, IoT, and robotics will be the key enablers in helping Australia transition to a circular economy. AI will be integral in optimising supply chains and assessing the condition of products returned to manufacturers for repair, refurbishment, or dismantling. IoT sensors will provide ongoing usage analytics and signal the best time to repair or replace componentry with minimal downtime for customers. Finally, advanced robotics will enable the analysis of materials required for speedy repairs, refurbishment, or breakdown of products into valuable componentry and resources. In the not-too-distant future, these technologies will operate at scale and across urban and regional areas. This will create networks of data that can be leveraged to further optimise supply chains, provide insights for game-changing innovation, and set humanity on a course for prosperity that does not come at the cost of our planet.

This is good news for the Australian economy. Australian Government analysis points to nearly ten full-time jobs created for every 10,000 tonnes of material recycled compared to just 2.8 for the same amount sent to landfill. The World Economic Forum estimates that the fast-moving consumer goods (FMCG) industry alone stands to gain US$ 700 billion per annum globally in net material savings if it moves towards circular solutions.

The circular economy will require deep relationships between the public and the private sector to create a generation’s worth of employment opportunities as we install more sophisticated infrastructure, train technicians to manage IoT-enabled networks, and seek new opportunities from data-driven insight. Australia has a unique opportunity to lead the world towards alternative models of prosperity and abundance. A circular economy supported by exponential technology could very well set us up to be the lucky country for generations to come.

Meet our author

Francois Kirsten

Francois Kirsten

Manager, Consulting

Francois Kirsten is a Service Designer in Deloitte Digital’s Customer Strategy & Experience Design team. He has extensive experience working in design-led innovation and is passionate about business-model innovation, sustainability, customer experience, exponential technology, and the future of work. He has deep expertise in design thinking, service design, systems thinking, customer research, and design-led strategy and innovation. Francois is driven by a desire to tackle wicked and intractable problems like overpopulation, the future of work, and climate change. At the same time, he is pragmatic and passionate about the design of modern business, thus seeking solutions that balance profit and prosperity for people and planet in uncertain times.