Circular goes digital
Deloitte Finland study
Digital transformation is a major opportunity for individual companies to re-think their future, their strategy, their value chain, their value creation, their operations, and the basis of pricing, as well as their sales channels and customer engagement. Companies are encouraged to seize this opportunity and enhance their operations through digital circular innovation.
Deloitte Finland conducted a study on the connection between circular and digital innovation. The objective was to gain insight into what actions companies have taken to promote circular business and what role of digitalization has played within these innovations.
Currently, there is a window of opportunity for fundamental circular economy innovation.
A systematic approach to circular economy highlights which types of innovation are typical of companies’ circular economy efforts.
1. With a greater diversity of innovation types compared to similar studies from 2015, circular economy is getting more mature and strategic.
2. Circular economy efforts are identified within all innovation areas, but especially within areas related to networks and production & products.
3. Profit model scores surprisingly low.
4. Circular economy efforts in the domain of experience-related innovation types are emerging – this is a new development compared to a similar study from 2015.
There is untapped potential for Finnish companies to leverage on opportunities related to circular economy business development.
1. On average, the classic companies have more types of innovation compared to the Finnish companies, indicating untapped potential for Finnish companies
2. There are two significant differences in the distribution of innovation types: Finnish companies focus on product performance – classics embrace customer engagement
3. The findings indicate a higher maturity and more systematic approach to circular economy in the classic companies.
Deloitte Finland mapped 80 companies against Monitor Deloitte’s framework of Ten Types of Innovation. The top 30 Finnish and top 50 global companies using circular business models were analysed based on publicly available information. After categorizing the 80 companies’ respective circular economy innovations according to the framework, the team studied the role that digital technologies played in each new solution. Digital technologies were defined as those involving machine learning or predictive analysis.
A similar circular economy study was conducted in 2015, but without the digital lens.