Digitalisation accelerates the circular economy

When talking about the circular economy, the role of digitalisation is almost always mentioned. The deployment of digital solutions may reduce the use of resources and facilitate the implementation of circular economy systems. However, as yet not much research has been done on how digitalisation enables the transition to a circular economy in practice. The CloseLoop strategic research project of the Academy of Finland systematically assesses challenges associated with the development of new business models, and brainstorms new circular economy business models and concepts for Finnish companies. These concepts are developed and tested in collaboration with companies and stakeholders, including end-users and consumers.

Digitalisation may provide assistance for achieving three objectives of the circular economy. The digitalisation of the industrial sector increases resource efficiency, helps to close the loop of material cycles and contributes to keeping materials in use for a longer time. Intelligent solutions enable, for example, the reduction of energy consumption, optimisation of logistics chains and more efficient use of capacity. Digitalisation can be used to gain access to material-specific data and resource consumption, which enables the product life cycle to be optimised for circular economy solutions. Good examples of this include Resq Club and Lunchie, which offer restaurant food for consumers through a digital platform. They reduce food waste by providing an easy way to buy food that would otherwise go to waste.  eRENT  offers companies a platform for the digital sharing and tracking of machines and devices, making it possible to improve their usage rates.

Circular economy systems with interconnected cycles often contain large amounts of data. Digitalisation offers new ways to collect and use it in real time. This data can be put to use when decisions need to be made about the phases of the product’s life cycle, reuse of waste materials, logistical arrangements and the operators needed in the value network. For example,  Konecranes offers warehouse management as a service that includes remote monitoring and preventive equipment maintenance and advanced digitalisation, enabling the monitoring of the entire supply chain. The solution allows Konecranes customers to efficiently provide their suppliers with information on warehouse usage levels.

In the circular economy, the coordination of materials and information flows is of crucial importance. Information on the quantity and quality of products and the raw materials they contain must be collected, stored and used efficiently. It must be possible to do this in a reliable and transparent manner, for which such methods as block chain technology may provide a solution. Digital technologies enable data storage combined with materials and the use of waste as a resource.

Digitalisation comes with a lot of challenges

The key challenges of digitalisation are related to business models, data ownership, data sharing, data integration, collaboration and competence. Issues related to the availability and ownership of data are of crucial importance. There are also challenges related to the sharing of data between competitors, protection of privacy, the IPR rights and confidence building. Integration of the large amounts of data owned by various operators is also needed, because the management of data flows is also a big challenge.

Other important issues include the organisation of cooperation between different partners, the definition of joint processes, search for suitable partners and pooling of different areas of competence. The pooling of the competences in information and communication technology and sustainable development also has its own challenges. At the moment, many organizations lack sufficient competence related to the basic concepts of the circular economy and sustainable business models.

Hackathons, training and research projects promote cooperation across disciplines

Cooperation, networking, increased transparency and the provision of information are key methods for promoting digitalisation. Collaboration can be practiced by sharing expertise between organisations and pooling competences between different actors. The operators should come from different fields and include both small and large organisations. In training, the cooperation between schools and enterprises could be increased. Various competitions and hackathons could be increasingly used for cooperation purposes. Participation in research and development projects is also a good way of creating cooperation networks.

It is important to involve consumers or end-users in the planning and implementation of a service, because consumers themselves function as service providers in many services that use platforms. In such a case, getting a critical mass involved in the process from the outset is of paramount importance, and the service must offer a first-rate solution to consumer needs in terms of both attractiveness and usability. One example is Zadaa, which provides consumers with a mobile application that makes it easy to put used clothes up for sale and to find clothes that fit. Digital solutions make it possible to reach consumers and end users in a more efficient way than before. It is important to note that instead of the earlier one-way communication, the solutions needed today must allow end-users to give feedback on products and services.

Read more: www.closeloop.fi

 

Maria Antikainen VTT

 

Maria Antikainen
Principal Scientist
maria.antikainen(a)vtt.fi
@MariaAntikainen

 

Teuvo Uusitalo VTT

 

Teuvo Uusitalo
Senior Scientist, VTT
teuvo.uusitalo(a)vtt.fi
@TeuvoU

 

 

Kiertotalous_digitalisaatio

Under the theme “Digitalisation as enabler of the circular economy”, we organized a workshop at the From Waste to Valuables event held at the Hotel Torni of Tampere on 23 November 2017. It was attended by 62 representatives of business and research organisations. The workshop presented three innovative examples in which digitalisation forms an essential part of the operations: Uusioaines Oy, Hiedanranta and Resq Club. We discussed in small groups how digitalisation contributes to the circular economy, what challenges this entails and how they can be solved

Digitalisaatio vauhdittaa kiertotaloutta

Digitalisaation rooli tulee esille lähes aina puhuttaessa kiertotaloudesta. Digitaalisten ratkaisujen käyttöönotto voi vähentää resurssien käyttöä ja helpottaa kiertotalouden järjestelmien toteuttamista. Vielä on kuitenkin vähän tutkimusta siitä, miten käytännössä digitalisaatio mahdollistaa siirtymisen kiertotalouteen. 

Digitalisaatio voi vauhdittaa täyttämään kiertotalouden kolme tavoitetta. Teollisuuden digitalisaatio lisää resurssitehokkuutta, auttaa sulkemaan materiaalien kierron kehän sekä edesauttaa pitämään materiaalit pidempään käytössä. Älykkäät ratkaisut mahdollistavat esimerkiksi energiankulutuksen vähentämisen, logistiikkaketjujen optimoinnin ja kapasiteetin hyödyntämisen tehokkaammin. Digitalisaation avulla voidaan saada pääsy materiaalikohtaisiin tietoihin ja resurssien kulutukseen, mikä mahdollistaa tuotteiden elinkaaren optimoinnin kiertotalouden ratkaisuihin. Kuluttajille digitaalisen alustan kautta ravintolaruokaa tarjoavat  Resq Club  ja Lunchie vähentävät ruokahävikkiä  tarjoamalla helpon tavan ostaa muuten hävikiksi päätyvää ruokaa. eRENT  tarjoaa yrityksille koneiden ja laitteiden digitaalista jakamis- ja seuranta-alustaa. Palvelun avulla on mahdollista parantaa koneiden ja laitteiden käyttöastetta.

Kiertotalouden järjestelmät, joilla on toisiinsa liittyvät kierrot, sisältävät usein suuria määriä dataa. Digitalisaatio tarjoaa uusia keinoja kerätä ja käyttää sitä reaaliaikaisesti. Dataa voidaan hyödyntää, kun on tehtävä päätöksiä tuotteiden elinkaaren vaiheista, jätemateriaalien uudelleenkäytöstä, logistisista järjestelystä ja arvoverkossa tarvittavista toimijoista. Esimerkiksi Konecranes tarjoaa varastonhallintaa palveluna, johon kuuluu etäseuranta ja laitteiden ennakoivat huollot sekä pitkälle viety digitalisaatio, joka mahdollistaa koko toimitusketjun seurannan. Ratkaisun avulla Konecranesin asiakkaat pystyvät välittämään omille toimittajilleen tehokkaasti tietoa varaston täyttöasteesta. 

Materiaalien ja tietovirtojen yhteensovittaminen kiertotaloudessa on ratkaisevan tärkeää. Tietoja tuotteiden määrästä ja laadusta sekä niiden sisältämistä raaka-aineista on kerättävä, säilytettävä ja hyödynnettävä tehokkaasti. Tämä on voitava  tehdä luotettavasti ja läpinäkyvästi, mihin esimerkiksi lohkoketjuteknologia voi tarjota ratkaisun. Digitaaliset teknologiat mahdollistavat tietojen säilyttämisen yhdistettynä materiaaleihin ja mahdollistavat jätteen hyödyntämisen resurssina. 

Digitalisaatioon liittyy runsaasti haasteita 

Digitalisaation keskeiset haasteet liittyvät liiketoimintamalleihin, tiedon omistukseen, tietojen jakamiseen, tietojen integrointiin, yhteistyöhön ja osaamisvaatimuksiin. Datan saatavuus ja datan omistajuuteen liittyvät kysymykset ovat ratkaisevan tärkeitä. Haasteita liittyy myös datan jakamiseen kilpailijoiden välillä, yksityisyyden suojaan, IPR- oikeuksiin ja luottamuksen rakentamiseen. Tarvitaan myös useiden toimijoiden omistamien suurien tietomäärien integrointia, sillä tietovirtojen hallinnointi on myös iso haaste.  

Tärkeää on myös yhteistyön järjestäminen eri kumppanien välillä, yhteisten prosessien määrittely, sopivien yhteistyökumppaneiden etsintä ja eri osaamisalueiden yhdistäminen.  Haasteita liittyy tieto- ja viestintätekniikan ja kestävän kehityksen osaamisen yhdistämiseen. Tällä hetkellä kiertotalouden ja kestävän liiketoimintamallien peruskäsitteiden osaaminen on monessa organisaatiossa puutteellista. 

Hackathonit, koulutus ja tutkimusprojektit edistävät yhteistyötä yli rajojen 

Yhteistyö, verkottuminen, avoimuuden lisääminen ja tiedon tarjoaminen ovat keskeisiä keinoja edistää digitalisaatiota. Yhteistoimintaa voidaan tehdä jakamalla organisaatioiden välistä asiantuntemusta ja yhdistämällä osaamista eri toimijoiden välillä. Toimijoiden olisi oltava eri aloilta ja koostuttava pienistä ja suurista organisaatioista. Koulutuksessa koulujen ja yritysten välistä yhteistyötä voitaisiin lisätä. Erilaisia kilpailuja ja hackathoneja voitaisiin käyttää yhä enemmän yhteistyöhön. Myös osallistuminen tutkimus- ja kehityshankkeisiin on hyvä keino luoda yhteistyöverkostoja. 

Kuluttajien tai loppukäyttäjien ottaminen mukaan palvelun suunnitteluun ja toteutukseen on tärkeää, koska monissa alustoja hyödyntävissä palveluissa kuluttajat itse toimivat palveluntuottajina. Tällöin kriittisen massan saaminen alusta lähtien mukaan on ensiarvoisen tärkeää, ja palvelun tulee olla sekä houkuttelevuudeltaan että käytettävyydeltään ensiluokkainen kuluttajien tarpeisiin. Yksi esimerkki on Zadaa, joka tarjoaa kuluttajille mobiilisovellusta, jolla on helppo laittaa myyntiin käytettyjä vaatteita ja löytää itselleen sopivia vaatteita. Digitaaliset ratkaisut mahdollistavat kuluttajien ja loppukäyttäjien tavoittamisen entistä tehokkaammin. Tärkeää on huomioida, että entisen yksisuuntaisen viestinnän sijaan tarvitaan ratkaisuja, joilla loppukäyttäjät voivat antaa palautetta tuotteista ja palveluista.  

Maria Antikainen VTT

 

Maria Antikainen
Principal Scientist
maria.antikainen(a)vtt.fi
@MariaAntikainen

 

Teuvo Uusitalo VTT

 

Teuvo Uusitalo
Senior Scientist, VTT
teuvo.uusitalo(a)vtt.fi
@TeuvoU

 

Järjestimme From Waste to Valuables tapahtumassa 23.11.2017 Tampereen Torni-hotellissa “Digitalisaatio kiertotalouden mahdollistajana” -näkökulmaan liittyen työpajan, johon osallistui 62 yritys- ja tutkimusorganisaatioiden edustajaa. Työpajassa esiteltiin kolme innovatiivista esimerkkiä, joissa digitalisaatio on keskeinen osa toimintaa:  Uusioaines Oy, Hiedanranta sekä Resq Club. Keskustelimme pienryhmissä , miten digitalisaatio edistää kiertotaloutta ja mitä haasteita tähän liittyy ja miten ne voidaan ratkaista.  

Kiertotalous_digitalisaatio

Suomen Akatemian strategisen tutkimuksen CloseLoop-hankkeessa arvioidaan systemaattisesti uusien liiketoimintamallien kehittämiseen liittyviä haasteita sekä ideoidaan uusia kiertotalouden liiketoimintamalleja ja konsepteja suomalaisille yrityksille. Konsepteja kehitetään ja testataan yhdessä yritysten ja sidosryhmien, kuten loppukäyttäjien ja kuluttajien, kanssa.

www.closeloop.fi 

When your industrial business is about to change dramatically, don’t try to survive alone

Amazon, Uber and Airbnb are often mentioned examples of disruptive innovations. They also are so-called “platform ecosystem models”.

First, we must realize that companies like Amazon are operating in a very different playground and have much shorter development paths than the traditional industry actors. Because of path dependency, the challenge of disruption is huge in established companies compared to newcomers.

Disruptive innovation = Business model + Technology + Agility

Transformation requires a business model that links new technology to an emerging market need. Within industrial ecosystems, disruptive business models are driven by the emergence of data-driven economies as well as servitisation, i.e. offering operational excellence

In order to renew, and survive, an organization needs to balance stability and change. Business disruption requires changes in the organization’s processes – at the same time it requires changes in the capabilities of individuals. Especially it requires a well-grounded understanding of the wider ecosystem – which enables turning disruptive technologies to novel business models together with new partners, for new customers, while the playground is changing. Success in global competition of industrial ecosystems requires deep understanding of customer value, an ability to utilize technological developments in products and services, and renewal of operations with digitalization.

valkokari_katri_kuva

Transformation requires co-evolution of ecosystem

The disruption means that the future structure and paths of change are always unknowable and actors need tools to understand how these systems co-evolve, while their actions – both intentional and emerging – are connected to each other. The forerunners need agility to change their path. Just ask yourself: are you able to kill your well-planned business model within a week – and create a new one the week after that? And with whom you should scan the new opportunities arising from technology?

Future is built together – and we are here to help you

Key for ecosystem composing and orchestration is to generate shared meanings together with key actors. This becomes crucial – so does the need for effective boundary spanning when parties have different interests and those interests collide.

Finland with high innovation capability and skilled workforce is in a strong position to be a frontrunner in the next generation manufacturing and service business. VTT supports this transformation of Finnish industrial companies.
Katri Valkokari
Katri Valkokari
Research Manager
katri.valkokari(a)vtt.fi
Twitter: @valkatti

Rebirth of manufacturing in the digitalized world

Manufacturers need to change rapidly because digital technologies are disrupting not only the way to do business and to collaborate with customers but also the manufacturing supply chains and manufacturing operations. If manufacturing truly adopts the next ware of digital technologies, productivity will explode.

According to IDC FutureScape Worldwide Manufacturing Predictions 2018, already by 2020, 60% of manufacturers will rely on digital platforms, which will support as much as 30% of their overall revenue. By 2021, 20% of the top manufacturers will depend on a secure backbone of embedded intelligence to automate large-scale processes and speed execution times by up to 25%. The main innovation accelerators are:

* IoT
* cognitive computing
* next-generation security
* 3D printing
* robotics, and
* augmented and virtual reality.

Furthermore, cognitive technologies will drive towards highly automated supply chains with optimized asset utilization.

Productivity explodes

The speed of the change predicted is huge. Can we understand what this actually means for industry? For quite some time, productivity has been stagnated or only slowly increased. One of the reasons is that the current digitalization development has reached a mature level, where most of our practical operations work well even when using slightly outdated computers, smart phones, software and connections. Advances in such technologies do not necessarily add much to effectiveness or disrupt current operations.

The next, already ongoing, wave of digitalization (IoT, big data, digital platforms etc.) is different. We are witnessing the convergence of digital and physical worlds where decision-making is based on full situation awareness and where actions are optimally automatized. As traditional sectors, such as manufacturing, truly adopt the next ware of digital technologies, productivity will explode.

Customers and ecosystems are central

This is a great opportunity for agile actors to make manufacturing in high-cost countries profitable again. It also enables true customer-centricity where consumers’ and users’ individual needs are followed and future desires anticipated.

As a result of the increased overall efficiency due to the adoption of digital technologies, automation and material and manufacturing innovations, unique products can be produced with mass production efficiency. Cognitive technologies support fast product introductions and delivery, which in turn increase customer satisfaction and profitability.

Those companies that want to belong to the 60% share of manufacturers that adopt digital platforms by 2020 to support their business, need to act. The change is hardly carried out alone but in ecosystem with other companies and partners.

At VTT, we study and develop digital platforms, cognitive methods, robotics and many other enabling technologies in manufacturing context. A VTT-funded strategic project on Cognitive Factories has been started and companies are welcome to join. We also continue to define digitalization pathways for manufacturing companies in a European project Connected Factories where input from Finnish companies is gathered. Would you like to know more? Please contact us. We step forward to support the manufacturing companies in the rapid and profound change.

Read more: VTT Lighthouses – Industrial Renewal
image
Riikka Virkkunen
Manager, Digitalising industries
riikka.virkkunen(a)vtt.fi
@VirkkunenRiikka

What’s invisible, smart and changing the world?

Imagine an invisible force that can move material swiftly from place to place, flash images of faraway lands instantly before our eyes, or shine light on darkness at the flick of a wrist. Our ancestors would have called it magic, but it’s what we know as the force of electricity. Ever since humans first saw lightening in the sky and called it the work of the gods, our vision of energy has been linked to the miraculous. And in today’s world it is wielded not by magicians or gods but by smart, sustainable technologies and human ingenuity.

Energy is more than just kilowatt hours

I recently joined VTT Technical Research Centre of Finland Ltd. from the management team of an electricity company, where I spent fifteen years in customer service, witnessing the changing pace of energy in our lives.  I came to understand that energy distribution means more than just selling electrons or kilowatt hours. Energy is smarter than that. Energy can equal a good cup of coffee or a comfortable commute. It can be about finding shelter or having a secure home with clean indoor air. Energy can also be about our ability to apply environmental technology to promote low-carbon lifestyles and fight climate change.

What is smart energy?

In my new position as the Co-Creation Manager at VTT, you could say I’ve moved from selling energy to selling the idea of energy, which brings me to the question: what is Smart Energy?

If I ask a customer, they might talk to me about Smart Energy as a service enabler that will change their way of doing business. If I ask one of the experts on my team, I might get a more technical answer about what happens when energy meets digital technology. Then if I ask a city manager, the answer may be different again, to do with how new smart grid infrastructure will affect the quality of life for citizens.

The answer comes from a shared vision

So I continue to ask the question: what is Smart Energy? The most comprehensive answer I can get is through what VTT does best. That is, bringing together wide cross-sector groups into what we call living laboratories. The Smart Otaniemi project as a smart energy innovation ecosystem among customers, technology experts, and the Espoo municipality is a case in point.

To realize a shared understanding and vision of what Smart Energy is, we need everyone at the table. We need these broad ecosystems, cross-cutting value chains, co-creating new solutions, bringing in new actors and new businesses, as well as combining pilots to find synergies.

Who will be teaching whom in our energy future?

To understand this shared Smart Energy vision, we also need to look beyond the present set-up. Clearly, the rising economies outside Europe, where renewable energy consumption is exploding, will soon lead the world in green energy. Smart energy is more easily applied to the light footed rising economies with little or no existing infrastructure, leaving them free to experiment. If we look at the history of energy in Europe, the US and China, growth came from substantially from coal. But now Smart Energy is changing the map. Africa is becoming the first region in the world to power its economic development on renewable energy rather than fossil fuel and India looks set to become the world’s largest energy consumer. According to Bloomberg New Energy Finance, global electricity use looks set to double over the next 20 years. But the good news is that renewable energy sources should represent almost three quarters of the estimated $10.2 trillion the world is to invest in new power generating technology between now and 2040.

So as a newly appointed Smart Energy visionary, I have my answer: Smart Energy means combining energy with the power of technology and the power of partnership to co-create a cleaner, greener, and higher-quality life. And as a mother of two children, I would add, while leaving the world a better place than we found it.

Read more:  www.vttresearch.com/services/sustainable-and-smart-city/energy 
Sanna_Öörni_02
Sanna Öörni
Co-Creation Manager, Smart Industry and Energy Systems
sanna.oorni@vtt.fi
@OorniSanna

 

 

This is the first in a series of VTT Smart Energy blogs, bringing you the very newest thinking and action around Smart Energy. Stay tuned for our next blog in August: “Finnish energy companies will conquer the world or will they?”, by Juha Hämekoski, Head of Sales and Customer Partnerships

Where can we find future growth areas for Finland? The VTT lighthouses provide us with many opportunities

Various actors in the world follow and examine a variety of megatrends and phenomena, trying to predict future development trends. The boldest among them claim that they are creating the future. This is what we at VTT do as well. In this blog, VTT’s Strategy Manager Sanna Tuominen explains how VTT has sought − and found − future growth opportunities for Finland. They benefit the whole world.

VTT began the search from megatrends and big challenges in society. Such change drivers are great in number, and they are scalable to different extents. For example, the United Nations has listed a few dozen major challenges for humanity and agreed on 17 sustainable development goals with a multinational consortium. Finland has a lot to offer towards reaching goals like this, and certain subject areas offer real opportunities for Finnish expertise to boost business and increase export. But how can we find and choose the most potential growth areas?

Lighthouses illuminate the way towards future growth

In our strategy work, we examined how societal challenges are transformed into opportunities for growth in Finland. Together with our stakeholders, we discussed where Finland’s strengths lie. Next, we considered how to accelerate growth with technological innovations.

As stated in our vision, we at VTT believe that a brighter future is created through science-based innovations. Extensive maps were drawn on the opportunities identified during the strategy work that were re-grouped under various areas of societal challenge. This led to the creation of five focus areas, which we call lighthouses:

* Climate action – Clean energy for the future
* Resource sufficiency – Prosperity from resource wisdom
* Good life – Improved quality of life, work, health and well-being
* Safety and security – Resiliency in turbulent world
* Industrial renewal – Innovations empowering industry

lighthouses

The lighthouses and opportunities for Finland selected by VTT

Come join us to change the world

No actor can solve the major societal challenges alone. Through its lighthouse work, VTT has chosen focus areas on which it wishes to cooperate with other business actors in seeking solutions to the chosen global challenges. In these areas, Finland has national strengths. Ecosystems and new forms of collaboration enable our challenge-driven work towards sustainable solutions.

We describe the challenges related to the lighthouses and the opportunities for growth in the publication VTT Lighthouses – growth opportunities for industry and society. It is freely available to everyone. Get acquainted with our way of thinking and come join us in making a change towards creating a better future.

In addition, we will shortly begin a series of podcasts on Finland’s opportunities for growth, which will present our approach and the subject areas of opportunity in closer detail. Follow the VTT social media accounts to learn more about this!

 

tuomistosannaSanna Tuominen
Manager, Strategy, VTT
sanna.tuominen(a)vtt.fi
Twitter: @SannaPTuominen

P.S. VTT will organize five events for invited guests (Beyond the Obvious – Growth Labs) on the lighthouse themes. The first event on 4 June 2018, with Minister of Transport and Communications Anne Berner as the keynote speaker, will address the challenges and opportunities of the Climate action lighthouse. Follow #VTTGrowthLab in social media