How the Circular Economy Affects IT Asset Disposition and IT Sustainability
Sean Sheehan, Wisetek CEO, explains how the Circular Economy affects IT Asset Disposition and IT Sustainability.
Almost 100 years’ ago, the term ‘planned obsolescence’ was coined to describe how manufacturers built products with an artificially limited useful life so that they become unfashionable or no longer functional, thus forcing the consumer to replace the item.
Back then, the term was leveled at the car industry during a period when sales were falling. Nowadays, technology has ushered in a whole new era of planned obsolescence, though it’s not necessarily described as such.
Instead, we talk about necessary ‘Upgrades’ to products which ultimately force us to buy new versions of existing items for fear of missing out from small benefits or running out of support. And then there’s the concept that certain items have a natural ‘End of Life’ as though they are not products, but living, breathing things.
A great aspect of technological progress is the constant state of innovation, yet this also has a tendency to consume itself. Ditching old products is the norm; recycling has traditionally been frowned upon. Yet the time has come for IT assets to be ‘born again’ and be reused and not to end up in a shallow, landfill grave.
IT Asset Disposition and the Circular Economy
While all economies have the obvious benefits of manufacturing and selling more products in terms of employment, tax revenue and innovation, we have reached a point where our economic output and consumption levels are having a detrimental effect on our environment.
From an IT Asset Disposition (ITAD) perspective, we have a major part to play. As an industry which is at the forefront of technological progress – and how it affects our consumption of finite resources, and the supply chain – we see, not only the amount of waste that is generated from IT assets, but also how that waste can be reused and repurposed.
As ITAD providers, we face two choices: we can either keep acting in line with the Linear Economy or adopt the best practices of the Circular Economy.
The idea of the Circular Economy has been around for over 50 years and its main driving force is to minimize waste and make the most of resources, some of which are finite. The traditional Linear Economy was geared towards ‘take, make and dispose of’ whereas the Circular Economy is concerned with maintenance, repair, reuse, remanufacturing, refurbishment and recycling.
If you take apart the average PC, you’ll see around six or seven major components such as the motherboard, CPU, power supply, hard drive, RAM/memory, and graphics card. Also, there are the components which enable the PC to become functional such as the mouse, keyboard, monitor and cables.
If a company wants to upgrade a PC, traditionally, they would dispose of it in its entirety and buy a new one. Yet, as an ITAD provider, while we are in the business of disposing of such assets, we do so while trying to be as faithful to the Circular Economy as possible.
On a granular level, this means that we go through the components of each IT asset and decide on the best strategy to take regarding each item. This is in line with one of the fundamental principles of the Circular Economy: the optimization of resources yields by circulating components and products and therefore contributing to the actual economy.
Benefits of the Circular Economy
On one level, it sounds like painstaking work which may come at a further cost to a company that just wants to upgrade their IT assets. Not so – according to McKinsey and the Ellen MacArthur Foundation, the benefits from the Circular Economy could boost Europe’s productivity by 3% by 2030, while offering cost savings of €600 billion a year with €1.8 trillion in other economic benefits.
And if this is applied to ITAD, according to Gartner, a good ITAD strategy will typically achieve a 30% cost savings in the first year, and at least 5% cost savings in each of the following five years.
When it comes to IT sustainability, there are three main pillars. Firstly, IT products should be sustainably designed; secondly, use IT processes which consume energy in a sustainable fashion; and thirdly, there’s the sustainability from an ITAD perspective and how we deal with the end of life equipment.
From an ITAD provider’s point of view, we concentrate on the third pillar. Yet the more reusing and repurposing of parts will feed into the first pillar of IT sustainability – thus the Circular Economy in action.
The importance of ITAD adopting the principles of the Circular Economy cannot be overstated.
Not only is it part of our Corporate Social Responsibility (CSR), there are huge economic benefits for individuals, companies and the wider society.