Opportunities and challenges in IoT-enabled circular business model implementation – A case study

Abstract

While the enabling capabilities of the Internet of Things (IoT) in the Circular Economy (CE) have been highlighted in a number of publications, knowledge about how to leverage IoT in actual implementation of circular strategies is still lacking. This paper aims to elucidate reasons for the apparent mismatch between the ‘theoretical opportunities’ of IoT for CE as described in literature, and current implementation in practice. To this end, we present a case study in the field of LED lighting, within a company with previous experience and knowledge in both IoT and CE. The primary data source is twelve semi-structured interviews with stakeholders from the company. We identify opportunities for using IoT to support circular strategies in this specific case: IoT can support servitized business models; improve tracking and record keeping of in-use and post-use products; enable conditions monitoring and predictive maintenance; improve estimations of remaining lifetime of used products; and inform design decisions to improve durability of products. Related to these opportunities, we identify implementation challenges faced by the company. The main IoT-specific implementation challenges in the case are (1) a lack of structured data management processes to ensure high quality data collection and analysis, and (2) the difficulty of designing IoT-enabled products for interoperability, adaptability, and upgradability, especially considering that IoT technologies develop at a high pace. By elucidating these challenges, this paper contributes with IoT-specific insights to the available literature about challenges in circular business model implementation. Moreover, this paper adds an important emphasis on real-world implementation challenges to the literature about digitally-enabled circular strategies.