Preface

With the rapid development of the economy, human civilization has experienced fishing and hunting civilization, as well as agricultural civilization to the present green civilization. The relationship between the economy and environment has also changed from pursuing economic growth at the expense of the environment to the harmonious development of the economy and environment. Cleaner production and a circular economy have become the general trend of global development.

How to adjust the relationship between resources, ecological environment, and economic development and protect the environment in promoting economic growth has become a major goal pursued by producers. The purpose of this book is to provide a comprehensive overview for reading, deepen everyone's understanding of a circular economy, change the original way of thinking and lifestyle, and promote the development of society towards a virtuous circle.

> **Tao Zhang** China Agricultural University, Beijing, China

**1**

Section 1

Practice Circular Economy

and Take the Road of

Green Development

Section 1

Practice Circular Economy and Take the Road of Green Development

**3**

**Chapter 1**

**Abstract**

**1. Introduction**

economy into a circular one;

*Rossitsa Chobanova*

Circular Economy as a New Stage

The chapter is devoted to understanding circular economy as a new stage of economic development, which is aimed to respect limited quantity of water, soil, clean air and ecosystem services, strongly connected to the new global social tensions, and how to achieve this stage. The literature survey has shown the current concepts for circular economy discuss new usage of resources, but not who and how will provide such changes. That is why it is suggested application of the Hegelian doctrine for economic development which is answering similar (we mean social) to the above questions – how to get freedom and society consolidation in market economy, suggesting state regulation of market economy. Consequently such regulation is needed to overcome the social tensions strongly connected to limited quantity of resources, vital for the future of society. Taking this doctrine as a theoretical background, it is assumed each new stage of economic development is characterised by different content of goals, subject and means for achieving the goals. The applicability of the notion circular economy is a new stage of economic development is tested and approved by demonstrated contemporary changes in policies for economic development, taking place in the European union, by

of Economic Development

recently changed and achieved goals of its development.

variety of concepts of circular economy. The chapter is aimed at:

ment and circularity of resources presented in these concepts;

• defining a theoretical background to solve the above problems;

• approbating its applicability into the practice.

**Keywords:** circular economy, economic development, Hegel, theory, measure

The recent tensions in the globalised world are strongly connected to resources in limited quantities. In this regard, the importance of producing more value using less material and diversifying consumption has been become a driver for developing

• summarising the recent achievements in understanding economic develop-

• identifying understandings how and who will transform linear free market

#### **Chapter 1**

## Circular Economy as a New Stage of Economic Development

*Rossitsa Chobanova*

#### **Abstract**

The chapter is devoted to understanding circular economy as a new stage of economic development, which is aimed to respect limited quantity of water, soil, clean air and ecosystem services, strongly connected to the new global social tensions, and how to achieve this stage. The literature survey has shown the current concepts for circular economy discuss new usage of resources, but not who and how will provide such changes. That is why it is suggested application of the Hegelian doctrine for economic development which is answering similar (we mean social) to the above questions – how to get freedom and society consolidation in market economy, suggesting state regulation of market economy. Consequently such regulation is needed to overcome the social tensions strongly connected to limited quantity of resources, vital for the future of society. Taking this doctrine as a theoretical background, it is assumed each new stage of economic development is characterised by different content of goals, subject and means for achieving the goals. The applicability of the notion circular economy is a new stage of economic development is tested and approved by demonstrated contemporary changes in policies for economic development, taking place in the European union, by recently changed and achieved goals of its development.

**Keywords:** circular economy, economic development, Hegel, theory, measure

#### **1. Introduction**

The recent tensions in the globalised world are strongly connected to resources in limited quantities. In this regard, the importance of producing more value using less material and diversifying consumption has been become a driver for developing variety of concepts of circular economy. The chapter is aimed at:


#### **2. Understanding the economic development and circularity**

Economic development is a term in which different content is invested. Based on etymology, it means a constant process of transition of the state of the economy from one stage to another more advanced one. In the scientific literature many different classifications of the stages of economic development and respected criteria for their identification take place. Practically none of them discusses circularity as a criterion for belonging to a specific stage. For this study we accept the main characteristic of the recent stage of economy development is that it is a free market one, and that the main challenges before is digitalization and circularity implementation. The latter is the focus of the further analyses.

#### **2.1 Circular economy concepts**

The basic concept of a circular economy depicts a production and consumption system that relies on the recycling, re-use, repair, remanufacturing, sharing of products, changing the consumption patterns and new business models and systems. Defining circular economy concepts and their problems could be find in academic literature, including contemporary academic reviews, official documents of the European Commission [1], OECD, G-8, etc., and from charities and NGOs, most prominently, the Ellen McArthur Foundation [2].

Contemporary academic rethinking of the progress within the limits of the planet has contributed to development of different theoretical and methodological dimensions of a concept for circular economy and for a transition from linear to a circular economy [3, 4]. They have concerned also measurement of the change like to redefine growth, focusing on society – wide benefits. The concept of circularity transforms all the elements of the take-make-waste system how to manage resources, how to make and use products, and what is done with the materials afterwards in the process of transforming linear to circular economy. (See: **Figure 1**).

Another dimension of concepts on the circular economy identified is focussed on how materials enter, flow within and (eventually) leave the economy. A visual overview is provided by a material flows diagram (See **Figure 2**<sup>1</sup> ). It shows all raw materials — aggregated as well as grouped by categories of materials — throughout the economy, from their extraction until they become waste.

More concretely, the input-side on the left shows that only 0.6 billion of 8 billion tonnes of materials are processed into energy or products annually in the EU originate from recycling. On the output-side, out of the 2.2 billion tonnes of waste that are generated only 0.6 billion tonnes re-enter the system as recycled materials. It means that the rest of the materials, equivalent to 1.5 billion tonnes, is waste. This concept for circular economy points to a significant potential for improvement in particular by increasing the share of materials recycled as secondary raw materials and decreasing the production of waste.

It could be assumed the above two dimensions of concepts for circular economy discuss how resources are used, or have to be used. But they do not characterise who and how will transform the linear free market economy to a circular one. Such answer could be found applying the Hegelian doctrine for economic development.

#### **2.2 Hegelian economic development doctrine**

The most of the recent conflicts are originating from the limited quantities of resources such as water, soil, clean air and ecosystem services which are vital to health and quality of life, but also to the human society as such.

**5**

*Circular Economy as a New Stage of Economic Development*

In all of this Hegel appears to be providing a philosophical account of modern

labor, produces fragmentation and diminishment of human life and the state must not only address social problems but also provide the means for the people's political participation to further the development of social self-consciousness. Regarding to it the state must not only address this phenomenon but also provide the means for the people's political participation to further the development of social selfconsciousness. Such participation could be understood as defining and introducing the objectives and means for economic development. Hegel repeats the need for strong state regulation of the economy, which if left to its own workings is blind to

Since start of Industrial revolution, the Hegelian doctrine for economic development has become more attractive in the frame of the concept for forth industrial revolution. It is because the notion the free market economy without a state does not contribute to meeting challenges such as diminishing freedom and fragmentation of social community is still correct now-a-days. Today the Hegelian doctrine is attractive also for understanding and approaching the challenges before health and life of human beings, which affect freedom and social community fragmentation also. This doctrine suggests an answer to the question how to avoid the negative effects of traditional linear economy, where raw materials are used to make a product, and after its use any waste (e.g. packaging) is thrown away. Here we are

not discussing the level of which a state is able to meet such expectations.

<sup>2</sup> The core of Hegel's social and political thought are the concepts of freedom, reason, self-consciousness, and recognition. Regarding economic development, although Hegel provides a defence of modern market societies, he calls into question their corrosive effects on society as a whole. The thoughts for economic development could be find in the manuscripts entitled *Realphilosophie*, based on lectures Hegel delivered at Jena University in 1803–04 (*Realphilosophie I*) and 1805–06 (*Realphilosophie II*), and were

. He argues the economy, especially through the division of

*DOI: http://dx.doi.org/10.5772/intechopen.94403*

economic developments2

*From linear to circular economy. Source: [5].*

**Figure 1.**

the needs of the social community.

originally published by Johannes Hoffmeister in 1932.

<sup>1</sup> Energetic use covers raw materials used for combustion or production of food and feed.

#### *Circular Economy as a New Stage of Economic Development DOI: http://dx.doi.org/10.5772/intechopen.94403*

#### **Figure 1.**

*Circular Economy - Recent Advances, New Perspectives and Applications*

most prominently, the Ellen McArthur Foundation [2].

overview is provided by a material flows diagram (See **Figure 2**<sup>1</sup>

the economy, from their extraction until they become waste.

and decreasing the production of waste.

**2.2 Hegelian economic development doctrine**

health and quality of life, but also to the human society as such.

<sup>1</sup> Energetic use covers raw materials used for combustion or production of food and feed.

**2.1 Circular economy concepts**

**2. Understanding the economic development and circularity**

Economic development is a term in which different content is invested. Based on etymology, it means a constant process of transition of the state of the economy from one stage to another more advanced one. In the scientific literature many different classifications of the stages of economic development and respected criteria for their identification take place. Practically none of them discusses circularity as a criterion for belonging to a specific stage. For this study we accept the main characteristic of the recent stage of economy development is that it is a free market one, and that the main challenges before is digitalization and circularity implementation. The latter is the focus of the further analyses.

The basic concept of a circular economy depicts a production and consumption system that relies on the recycling, re-use, repair, remanufacturing, sharing of products, changing the consumption patterns and new business models and systems. Defining circular economy concepts and their problems could be find in academic literature, including contemporary academic reviews, official documents of the European Commission [1], OECD, G-8, etc., and from charities and NGOs,

Contemporary academic rethinking of the progress within the limits of the planet has contributed to development of different theoretical and methodological dimensions of a concept for circular economy and for a transition from linear to a circular economy [3, 4]. They have concerned also measurement of the change like to redefine growth, focusing on society – wide benefits. The concept of circularity transforms all the elements of the take-make-waste system how to manage resources, how to make and use products, and what is done with the materials afterwards in the process of transforming linear to circular economy. (See: **Figure 1**). Another dimension of concepts on the circular economy identified is focussed on how materials enter, flow within and (eventually) leave the economy. A visual

materials — aggregated as well as grouped by categories of materials — throughout

More concretely, the input-side on the left shows that only 0.6 billion of 8 billion tonnes of materials are processed into energy or products annually in the EU originate from recycling. On the output-side, out of the 2.2 billion tonnes of waste that are generated only 0.6 billion tonnes re-enter the system as recycled materials. It means that the rest of the materials, equivalent to 1.5 billion tonnes, is waste. This concept for circular economy points to a significant potential for improvement in particular by increasing the share of materials recycled as secondary raw materials

It could be assumed the above two dimensions of concepts for circular economy discuss how resources are used, or have to be used. But they do not characterise who and how will transform the linear free market economy to a circular one. Such answer could be found applying the Hegelian doctrine for economic development.

The most of the recent conflicts are originating from the limited quantities of resources such as water, soil, clean air and ecosystem services which are vital to

). It shows all raw

**4**

*From linear to circular economy. Source: [5].*

In all of this Hegel appears to be providing a philosophical account of modern economic developments2 . He argues the economy, especially through the division of labor, produces fragmentation and diminishment of human life and the state must not only address social problems but also provide the means for the people's political participation to further the development of social self-consciousness. Regarding to it the state must not only address this phenomenon but also provide the means for the people's political participation to further the development of social selfconsciousness. Such participation could be understood as defining and introducing the objectives and means for economic development. Hegel repeats the need for strong state regulation of the economy, which if left to its own workings is blind to the needs of the social community.

Since start of Industrial revolution, the Hegelian doctrine for economic development has become more attractive in the frame of the concept for forth industrial revolution. It is because the notion the free market economy without a state does not contribute to meeting challenges such as diminishing freedom and fragmentation of social community is still correct now-a-days. Today the Hegelian doctrine is attractive also for understanding and approaching the challenges before health and life of human beings, which affect freedom and social community fragmentation also. This doctrine suggests an answer to the question how to avoid the negative effects of traditional linear economy, where raw materials are used to make a product, and after its use any waste (e.g. packaging) is thrown away. Here we are not discussing the level of which a state is able to meet such expectations.

<sup>2</sup> The core of Hegel's social and political thought are the concepts of freedom, reason, self-consciousness, and recognition. Regarding economic development, although Hegel provides a defence of modern market societies, he calls into question their corrosive effects on society as a whole. The thoughts for economic development could be find in the manuscripts entitled *Realphilosophie*, based on lectures Hegel delivered at Jena University in 1803–04 (*Realphilosophie I*) and 1805–06 (*Realphilosophie II*), and were originally published by Johannes Hoffmeister in 1932.

**Figure 2.** *Material flows in the economy* (EU-28, 2014)*. Source: [6].*

It could be assumed in regard to economic development the Hegel's theory [7] respects criteria for identification of different stages of this development - the object (goal), the subject (state) and the means for achieving the goals (free market vs., or with state regulation). If this assumption is correct we could conclude the circular economy is a stage of economic development, where circularity of resources is important integral part of the goal of the economic development. The achievement the goal of circularity, understood as minimising the usage of natural resources, minimised or 0 waste needs strong state monitoring and regulation in the frame of a free market economy.

#### **3. Monitoring circular economic development**

Monitoring circular economy is of vital importance for the society. It will be analysed on the case of European union. The monitoring there is based on identification of main areas of appearance of circularity and defining the available indicators to measure them. This approach has allowed monitoring assessment, strategy development and policy making and implementation. As such areas of circularity appearance identified are:


The content of indicators and interpretation of their contribution to understanding of circular economy is grouped according to the areas of circularity appearance as follow [8]:

SUSTAINABLE RESOURCE MANAGEMENT - indicators examining the performance of the EU Member States in transforming their economies toward circularity

**7**

*Circular Economy as a New Stage of Economic Development*

pressures on the environment domestically and abroad.

by lowering resource demands, thereby increasing resource security and lowering

SOCIETAL BEHAVIOUR – indicators, reflecting citizen awareness, engagement and participation in the circular economy. Citizen engagement, behaviour change and social norms are integral to the success of a circular economy transition. This means that people participate in new forms of consumption (e.g. sharing, product-service systems, willingness to pay more for durability), re-use (requiring changed mindsets regarding repair and refurbishment), and disposal (separating waste streams and bringing "waste" to remanufacturing/ recycling/

BUSINESS OPERATIONS – indicators, which depict eco-innovation activities toward changing and adapting business models according to the principles of a circular economy. Business activities and their digitalization are the engine behind the circular economy transition. They foster circularity across the life-cycle of material use, beginning with how and what materials are sourced (quality, environmental and health standards). The design stage of business operations is particularly crucial to enabling re-use /re-manufacturing / recycling and raising the durability of goods for keeping within the economy longer. Remanufacturing and recycling are key business operations critical to scaling up

The monitoring and assessment of circularity have become a fundament for

The transition to a more circular economy in Europe is accompanied by imple-

In 2015 the EC adopted an action plan to accelerate Europe's transition to a circular economy. It was aimed at strengthen global competitiveness, promote sustainable economic growth and create new jobs. This action plan contains 54 measures to "close the loop" of the life cycle of products - from production and consumption to waste management and the market for secondary raw materials. Five priority sectors to accelerate the transition along the value chain are identified: plastics, food waste, critical raw materials, construction and demolition,

• Amendments to renewable energy policy that seek to address resource issues.

The transition to a circular economy is in the agenda of world fora as well. It was in the focus of discussions during the 2019 Annual Meeting in Davos. The four key

developing vast majority of economic development policy measures.

**4. Circular economy development policy measures in Europe**

The strategic documents of today EU institutions include:

priorities emerging for the year ahead identified are as follow:

b.Leverage the potential of the Fourth Industrial Revolution;

mentation of several specific policy measures.

biomass and bio-based materials.

• A clear resource efficiency agenda;

• The Circular Economy package;

a.Leadership is critical;

• Roadmap to a resource efficient Europe;

*DOI: http://dx.doi.org/10.5772/intechopen.94403*

sorting sites).

the circular economy.

#### *Circular Economy as a New Stage of Economic Development DOI: http://dx.doi.org/10.5772/intechopen.94403*

*Circular Economy - Recent Advances, New Perspectives and Applications*

It could be assumed in regard to economic development the Hegel's theory [7] respects criteria for identification of different stages of this development - the object (goal), the subject (state) and the means for achieving the goals (free market vs., or with state regulation). If this assumption is correct we could conclude the circular economy is a stage of economic development, where circularity of resources is important integral part of the goal of the economic development. The achievement the goal of circularity, understood as minimising the usage of natural resources, minimised or 0 waste needs strong state monitoring and regulation in

Monitoring circular economy is of vital importance for the society. It will be analysed on the case of European union. The monitoring there is based on identification of main areas of appearance of circularity and defining the available indicators to measure them. This approach has allowed monitoring assessment, strategy development and policy making and implementation. As such areas of circularity

The content of indicators and interpretation of their contribution to understanding of circular economy is grouped according to the areas of circularity

SUSTAINABLE RESOURCE MANAGEMENT - indicators examining the performance of the EU Member States in transforming their economies toward circularity

the frame of a free market economy.

*Material flows in the economy* (EU-28, 2014)*. Source: [6].*

**Figure 2.**

appearance identified are:

• Societal behaviour;

• Business operations.

appearance as follow [8]:

• Sustainable resource management;

**3. Monitoring circular economic development**

**6**

by lowering resource demands, thereby increasing resource security and lowering pressures on the environment domestically and abroad.

SOCIETAL BEHAVIOUR – indicators, reflecting citizen awareness, engagement and participation in the circular economy. Citizen engagement, behaviour change and social norms are integral to the success of a circular economy transition. This means that people participate in new forms of consumption (e.g. sharing, product-service systems, willingness to pay more for durability), re-use (requiring changed mindsets regarding repair and refurbishment), and disposal (separating waste streams and bringing "waste" to remanufacturing/ recycling/ sorting sites).

BUSINESS OPERATIONS – indicators, which depict eco-innovation activities toward changing and adapting business models according to the principles of a circular economy. Business activities and their digitalization are the engine behind the circular economy transition. They foster circularity across the life-cycle of material use, beginning with how and what materials are sourced (quality, environmental and health standards). The design stage of business operations is particularly crucial to enabling re-use /re-manufacturing / recycling and raising the durability of goods for keeping within the economy longer. Remanufacturing and recycling are key business operations critical to scaling up the circular economy.

The monitoring and assessment of circularity have become a fundament for developing vast majority of economic development policy measures.

#### **4. Circular economy development policy measures in Europe**

The transition to a more circular economy in Europe is accompanied by implementation of several specific policy measures.

In 2015 the EC adopted an action plan to accelerate Europe's transition to a circular economy. It was aimed at strengthen global competitiveness, promote sustainable economic growth and create new jobs. This action plan contains 54 measures to "close the loop" of the life cycle of products - from production and consumption to waste management and the market for secondary raw materials. Five priority sectors to accelerate the transition along the value chain are identified: plastics, food waste, critical raw materials, construction and demolition, biomass and bio-based materials.

The strategic documents of today EU institutions include:


The transition to a circular economy is in the agenda of world fora as well. It was in the focus of discussions during the 2019 Annual Meeting in Davos. The four key priorities emerging for the year ahead identified are as follow:

a.Leadership is critical;

b.Leverage the potential of the Fourth Industrial Revolution;


Implementation of the developed visions, strategies and respective policy measures has required developing respective instruments. On the first place they concern defining appropriate indicators.

#### **5. Circularity: indicators for assessing economic development policy implementation**

The literature suggests different methodologies to be applied for collecting and interpreting data for monitoring and assessing policy measures for circular economy. There are a variety of indicators applied now, although most have limitations. There are two most used indicators, predominantly applied by the OECD and G-8, more concretely those:


The first indicator is measuring circularity as a ratio between GDP and domestic material consumption, in other words, it is focusing circularity on the resource use.

The second one means using the Earth's limited resources in a sustainable manner while minimising impacts on the environment. It allows interpreting the level of creating more with less and to deliver greater value with less input. Such indicator is also measured through EU resource efficiency scoreboard [9], as EU eco-innovation index recycling rates [10, 11], through the amount of municipal waste per capita, or amount of waste per GDP output.

The monitoring framework on the circular economy as set up by the European Commission consists of ten indicators, some of which are broken down in subindicators, selected in order to capture the main elements of a circular economy. These ten indicators are divided into four thematic areas [8]:

Production and consumption. This area comprises four indicators:


Waste management. This area comprises two indicators:


**9**

*Circular Economy as a New Stage of Economic Development*

• Private investments, jobs and gross value added;

structure of the European circular economy action plan.

sufficiency for raw materials

procurement\*

3a-c Waste generation In a circular economy

4 Food waste\* Discarding food has

for specific waste streams

Secondary raw materials. This area comprises two indicators:

• Contribution of recycled materials to raw materials demand;

Competitiveness and innovation. This area comprises two indicators:

• Patents related to recycling and secondary raw materials as a proxy for

This European monitoring framework aims at measuring progress toward a circular economy in a way that encompasses its various dimensions at all stages of the lifecycle of resources, products and services. In this regard the monitoring framework has a set of the ten indicators (see **Table 1**), grouped into four stages and aspects of the circular economy: (1) production and consumption, (2) waste management, (3) secondary raw materials and (4) competitiveness and innovation. The logic and structure of this monitoring framework broadly follows the logic and

> The circular economy should help to address the supply risks for raw materials, in particular critical raw materials.

Public procurement accounts for a large share of consumption and can drive the circular

waste generation is minimised.

negative environmental, climate and economic

Increasing recycling is part of the transition to a circular economy.

This reflects the progress in recycling key waste

economy.

impacts.

streams.

Raw Materials Initiative; Resource Efficiency Roadmap

Public Procurement Strategy; EU support schemes and voluntary criteria for green public procurement

Waste Framework Directive; directives on specific waste streams; Strategy for Plastics

General Food Law Regulation; Waste Framework Directive; various initiatives (e.g. Platform on Food Losses and Food Waste)

Waste Framework Directive

Waste Framework Directive; Landfill Directive; directives on specific waste streams

• Trade of recyclable raw materials between the EU Member States and with the

*DOI: http://dx.doi.org/10.5772/intechopen.94403*

rest of the world.

innovation.

Production and consumption 1 EU self-

Waste management

5a-b Overall recycling

6a-f Recycling rates

rates

2 Green public

*Circular Economy - Recent Advances, New Perspectives and Applications*

Implementation of the developed visions, strategies and respective policy measures has required developing respective instruments. On the first place they

**5. Circularity: indicators for assessing economic development policy** 

The literature suggests different methodologies to be applied for collecting and interpreting data for monitoring and assessing policy measures for circular economy. There are a variety of indicators applied now, although most have limitations. There are two most used indicators, predominantly applied by the OECD and

The first indicator is measuring circularity as a ratio between GDP and domestic material consumption, in other words, it is focusing circularity on the

while minimising impacts on the environment. It allows interpreting the level of creating more with less and to deliver greater value with less input. Such indicator is also measured through EU resource efficiency scoreboard [9], as EU eco-innovation index recycling rates [10, 11], through the amount of municipal waste per capita, or

The second one means using the Earth's limited resources in a sustainable manner

The monitoring framework on the circular economy as set up by the European Commission consists of ten indicators, some of which are broken down in subindicators, selected in order to capture the main elements of a circular economy.

These ten indicators are divided into four thematic areas [8]:

• Self-sufficiency of raw materials for production in the EU;

• Waste generation (as an indicator for consumption aspects);

Waste management. This area comprises two indicators:

• Recycling rates (the share of waste which is recycled);

Production and consumption. This area comprises four indicators:

• Green public procurement (as an indicator for financing aspects);

• Specific waste streams (packaging waste, bio-waste, e-waste, etc.).

c.Circular material value chains;

concern defining appropriate indicators.

d.Collaboration is key.

**implementation**

G-8, more concretely those:

• for resource efficiency.

amount of waste per GDP output.

resource use.

• Food waste.

• for resource productivity and

**8**

Secondary raw materials. This area comprises two indicators:


Competitiveness and innovation. This area comprises two indicators:


This European monitoring framework aims at measuring progress toward a circular economy in a way that encompasses its various dimensions at all stages of the lifecycle of resources, products and services. In this regard the monitoring framework has a set of the ten indicators (see **Table 1**), grouped into four stages and aspects of the circular economy: (1) production and consumption, (2) waste management, (3) secondary raw materials and (4) competitiveness and innovation. The logic and structure of this monitoring framework broadly follows the logic and structure of the European circular economy action plan.



#### **Table 1.**

*Indicators on the circular economy included in the monitoring framework.*

#### **6. Assessment of circularity of European economic development: first findings**

The analyses of data for the ten indicators of the monitoring framework provide a broad picture of increase the circularity of the EU's economy [8]. The areas of the European economic development where circularity is of importance could be characterised as follow:

*Production and consumption*: progress can be observed toward more circular trends in production and consumption e.g. in terms of waste generation; considerable room for narrowing the gap in performance between Member States and across materials. The EU is largely self-sufficient for most non-metallic minerals such as construction materials and industrial minerals; for the EU's critical raw materials [12] the EU is relying on imports to a large extent, which highlights the need for secure access and diversification of supply3 . EU municipal waste4 generation per capita has dropped by 8% between 2006 and 2016 to an average of 480 kg per capita per year; large

**11**

per year)5

**Figure 3.**

are still below 25%.6

**6.1 Secondary raw materials**

*Circular Economy as a New Stage of Economic Development*

variations among Member States are observed (between 250 and 750 kg per capita

It is positive that the data on total waste generation (including industrial and commercial waste but excluding major mineral waste) per unit of GDP shows a decrease of 11% since 2006. According to Eurostat's preliminary estimates, EU food waste decreased from 81 to 76 million tonnes (i.e. by around 7%) between 2012 and

*Waste management:* between 2008 and 2016, EU recycling rates for municipal waste increased from 37–46% (See: **Figure 3**.). Five Member States recycle more than half of their municipal waste, while some countries are approaching the 2030 recycling target of 65% proposed by the Commission, however, five Member States

Between 2008 and 2015, the recycling rates for packaging waste also increased in the EU, from 62–66%; it increased in almost all Member States, and in 2015 almost all Member States had met the 2008 target of 55% (the Commission has proposed a target of 65% by 2025 and 75% by 2030 [12]). For plastic packaging, the average recycling rate in the EU is significantly lower, at 40%, even though there have been improvements in recent years. The recycling of municipal bio-waste in the EU was

In the EU, the level of demand for raw materials exceeds what could be supplied even if all waste were turned into secondary raw materials. Therefore, the supply of primary raw materials will remain necessary. On average, recycled materials only satisfy around 10% of the EU demand for materials, in spite of a steady improvement since 2004. For a number of bulk materials, secondary raw materials satisfy over 30% of total demand for materials (e.g. copper and nickel). The EU is a net exporter of several major recyclable waste streams such as plastics, paper and cardboard, iron and steel, copper, aluminium and nickel. Trade within the EU of plastics, paper and cardboard, copper, aluminium, nickel and precious metals waste

<sup>5</sup> Differences in the way Member States measure waste generation can explain some of the differences. <sup>6</sup> Member States are using different methods to calculate recycling rates, which can explain part of the differences. The Commission has proposed a common method in its legislative proposal on waste.

2014, equivalent to a drop from 161 to 149 kg per capita.

*Municipal waste treatment, EU (kg per capita). Source: Eurostat.*

79 kg per capita in 2016, an increase of 23% compared to 2007.

, and municipal waste generation is still growing in several Member States.

*DOI: http://dx.doi.org/10.5772/intechopen.94403*

<sup>3</sup> E.g. cobalt for batteries used in electric cars, silicon for solar panels.

<sup>4</sup> Waste from households and in public spaces and similar waste from other sources.

#### **Figure 3.**

*Circular Economy - Recent Advances, New Perspectives and Applications*

recycled materials to raw materials demand

recyclable raw materials

investments, jobs and gross value added

10 Patents Innovative technologies

*Indicators on the circular economy included in the monitoring framework.*

In a circular economy, secondary raw materials are commonly used to make new products.

Trade in recyclables reflects the importance of the internal market and global participation in the circular economy.

This reflects the contribution of the circular economy to the creation of jobs and

related to the circular economy boost the EU's global competitiveness.

growth.

Waste Framework Directive; Eco-design Directive; EU Ecolabel; REACH; initiative on the interface between chemicals, products and waste policies; Strategy for Plastics; quality standards for secondary raw materials

Internal Market policy; Waste Shipment Regulation; Trade policy

Investment Plan for Europe; Structural and Investment Funds; InnovFin; Circular Economy Finance Support Platform; Sustainable Finance Strategy; Green Employment Initiative; New Skills Agenda for Europe; Internal Market

policy

Horizon 2020

Secondary raw materials

7a-b Contribution of

8 Trade in

Competitiveness and innovation 9a-c Private

**6. Assessment of circularity of European economic development: first** 

a broad picture of increase the circularity of the EU's economy [8]. The areas of the European economic development where circularity is of importance could be

. EU municipal waste4

<sup>4</sup> Waste from households and in public spaces and similar waste from other sources.

<sup>3</sup> E.g. cobalt for batteries used in electric cars, silicon for solar panels.

by 8% between 2006 and 2016 to an average of 480 kg per capita per year; large

The analyses of data for the ten indicators of the monitoring framework provide

*Production and consumption*: progress can be observed toward more circular trends in production and consumption e.g. in terms of waste generation; considerable room for narrowing the gap in performance between Member States and across materials. The EU is largely self-sufficient for most non-metallic minerals such as construction materials and industrial minerals; for the EU's critical raw materials [12] the EU is relying on imports to a large extent, which highlights the need for secure access and

generation per capita has dropped

**10**

**findings**

*Source: [8].*

**Table 1.**

characterised as follow:

*\*Indicators under development.*

diversification of supply3

*Municipal waste treatment, EU (kg per capita). Source: Eurostat.*

variations among Member States are observed (between 250 and 750 kg per capita per year)5 , and municipal waste generation is still growing in several Member States.

It is positive that the data on total waste generation (including industrial and commercial waste but excluding major mineral waste) per unit of GDP shows a decrease of 11% since 2006. According to Eurostat's preliminary estimates, EU food waste decreased from 81 to 76 million tonnes (i.e. by around 7%) between 2012 and 2014, equivalent to a drop from 161 to 149 kg per capita.

*Waste management:* between 2008 and 2016, EU recycling rates for municipal waste increased from 37–46% (See: **Figure 3**.). Five Member States recycle more than half of their municipal waste, while some countries are approaching the 2030 recycling target of 65% proposed by the Commission, however, five Member States are still below 25%.6

Between 2008 and 2015, the recycling rates for packaging waste also increased in the EU, from 62–66%; it increased in almost all Member States, and in 2015 almost all Member States had met the 2008 target of 55% (the Commission has proposed a target of 65% by 2025 and 75% by 2030 [12]). For plastic packaging, the average recycling rate in the EU is significantly lower, at 40%, even though there have been improvements in recent years. The recycling of municipal bio-waste in the EU was 79 kg per capita in 2016, an increase of 23% compared to 2007.

#### **6.1 Secondary raw materials**

In the EU, the level of demand for raw materials exceeds what could be supplied even if all waste were turned into secondary raw materials. Therefore, the supply of primary raw materials will remain necessary. On average, recycled materials only satisfy around 10% of the EU demand for materials, in spite of a steady improvement since 2004. For a number of bulk materials, secondary raw materials satisfy over 30% of total demand for materials (e.g. copper and nickel). The EU is a net exporter of several major recyclable waste streams such as plastics, paper and cardboard, iron and steel, copper, aluminium and nickel. Trade within the EU of plastics, paper and cardboard, copper, aluminium, nickel and precious metals waste

<sup>5</sup> Differences in the way Member States measure waste generation can explain some of the differences.

<sup>6</sup> Member States are using different methods to calculate recycling rates, which can explain part of the differences. The Commission has proposed a common method in its legislative proposal on waste.

increased considerably between 2004 and 2016, allowing economic operators to reap the benefits of the EU internal market for secondary raw materials [13].

#### **6.2 Competitiveness and innovation**

The transition to a circular economy is accompanied by an increase of investments, value added and jobs, and stimulates innovation. In 2014, private investments in economic sectors relevant to the circular economy7 are estimated to have been 0.1% of the GDP. There were more than 3.9 million jobs in these sectors, having an increase of 2.3% compared to 2012. The circular economy sectors created value added in 2014 an increase of 6.1% compared to 2012. Significant role for these achievements play EU funding programmes, available to support the transition to a circular economy, such as the European Fund for Strategic Investments, the European Structural and Investment Funds, Horizon 2020 and the LIFE programme. In in January 2017 a Circular Economy Finance Support Platform was launched.

For patents on recycling and secondary raw materials, the data show an increase of 35% between 2000 and 2013. EU patents for glass recycling represent 44% of the world total for such patents, while the EU's share is 18% for plastics and 23% for paper.

Concluding the analysis of the above figures we could assume the transition to a circular economy is taking place in the European Union. For the period 2012–2014 the circular economy sectors created 3.9 mln. Jobs, contributed to the increase of 6.1% value added in 2014 (Euro 141 billion), compared to 2012, attracting private investment of Euro 15 bln. Circular economy is realised as a vital necessity and has become an important part of the strategy and of policy making of the society. Thus it has become an integral part of the goals of economic development.

#### **7. Conclusions**

The chapter provides some arguments for understanding circular economy as a new stage of economic development, where the goal is to meet the challenges of tensions in globalised world, which are strongly connected to resources in limited quantities. The content of the goal is transforming, addressing not only resource productivity and efficiency, but also waste minimization, and many other areas of circularity. The analyses have shown market forces are limited and not strong enough to achieve the new goal of economic development, reflecting the needs of society, vital for its future. It was shown the Hegelian doctrine for economic development provides instruments for understanding and solving new challenges. The new instruments include state regulation and respective monitoring, analysing and drawing conclusions and recommendation, using new indicators, developed for monitoring economic processes and for new economic policies concerning achievement of the new goals of society.

The above notion is argumented on the case of Europe: A new policy for a new stage of economic development focused on circularity on European level has taken place, first achievements are registered. This new policy, in Hegelian tradition, includes A state regulation, aimed at SUSTAYNING economy IN ORDER TO

**13**

**Author details**

Rossitsa Chobanova

Economic Research Institute at the Bulgarian Academy of Sciences, Sofia, Bulgaria

© 2020 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium,

\*Address all correspondence to: r\_chobanova@iki.bas.bg

provided the original work is properly cited.

*Circular Economy as a New Stage of Economic Development*

CONTRIBUTE TO ACHIEVING SOCIAL GOALS - preservation of the world's resources, create local jobs and in this way to generate competitive advantages in globalised economy IN ABILITY TO COOPERATE FOR ACHIEVEMENT BETTER

*DOI: http://dx.doi.org/10.5772/intechopen.94403*

COMMON FUTURE.

<sup>7</sup> I.e. reuse and recycling activities. Renting and leasing activities can also contribute to circular economy, but are for now not included because current statistics may not distinguish with sufficient granularity those activities that clearly contribute to circular economy from those that do not. For further details, see the Staff Working Document.

*Circular Economy as a New Stage of Economic Development DOI: http://dx.doi.org/10.5772/intechopen.94403*

*Circular Economy - Recent Advances, New Perspectives and Applications*

ments in economic sectors relevant to the circular economy7

**6.2 Competitiveness and innovation**

launched.

for paper.

**7. Conclusions**

ment of the new goals of society.

further details, see the Staff Working Document.

increased considerably between 2004 and 2016, allowing economic operators to reap the benefits of the EU internal market for secondary raw materials [13].

The transition to a circular economy is accompanied by an increase of investments, value added and jobs, and stimulates innovation. In 2014, private invest-

For patents on recycling and secondary raw materials, the data show an increase of 35% between 2000 and 2013. EU patents for glass recycling represent 44% of the world total for such patents, while the EU's share is 18% for plastics and 23%

Concluding the analysis of the above figures we could assume the transition to a circular economy is taking place in the European Union. For the period 2012–2014 the circular economy sectors created 3.9 mln. Jobs, contributed to the increase of 6.1% value added in 2014 (Euro 141 billion), compared to 2012, attracting private investment of Euro 15 bln. Circular economy is realised as a vital necessity and has become an important part of the strategy and of policy making of the society. Thus

The chapter provides some arguments for understanding circular economy as a new stage of economic development, where the goal is to meet the challenges of tensions in globalised world, which are strongly connected to resources in limited quantities. The content of the goal is transforming, addressing not only resource productivity and efficiency, but also waste minimization, and many other areas of circularity. The analyses have shown market forces are limited and not strong enough to achieve the new goal of economic development, reflecting the needs of society, vital for its future. It was shown the Hegelian doctrine for economic development provides instruments for understanding and solving new challenges. The new instruments include state regulation and respective monitoring, analysing and drawing conclusions and recommendation, using new indicators, developed for monitoring economic processes and for new economic policies concerning achieve-

The above notion is argumented on the case of Europe: A new policy for a new stage of economic development focused on circularity on European level has taken place, first achievements are registered. This new policy, in Hegelian tradition, includes A state regulation, aimed at SUSTAYNING economy IN ORDER TO

<sup>7</sup> I.e. reuse and recycling activities. Renting and leasing activities can also contribute to circular economy, but are for now not included because current statistics may not distinguish with sufficient granularity those activities that clearly contribute to circular economy from those that do not. For

it has become an integral part of the goals of economic development.

been 0.1% of the GDP. There were more than 3.9 million jobs in these sectors, having an increase of 2.3% compared to 2012. The circular economy sectors created value added in 2014 an increase of 6.1% compared to 2012. Significant role for these achievements play EU funding programmes, available to support the transition to a circular economy, such as the European Fund for Strategic Investments, the European Structural and Investment Funds, Horizon 2020 and the LIFE programme. In in January 2017 a Circular Economy Finance Support Platform was

are estimated to have

**12**

CONTRIBUTE TO ACHIEVING SOCIAL GOALS - preservation of the world's resources, create local jobs and in this way to generate competitive advantages in globalised economy IN ABILITY TO COOPERATE FOR ACHIEVEMENT BETTER COMMON FUTURE.

#### **Author details**

Rossitsa Chobanova Economic Research Institute at the Bulgarian Academy of Sciences, Sofia, Bulgaria

\*Address all correspondence to: r\_chobanova@iki.bas.bg

© 2020 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

### **References**

[1] European Commission. Circular Economy Action Plan. [Internet]. 2015. Available from: http://ec.europa. eu/environment/ci/rcular-economy/ index\_en.htm [Accessed: 2020-09-20]

[2] Our mission is to accelerate the transition to a circular economy. [Internet]. 2020. Available from: https://www.ellenmacarthurfoundation. org [Accessed: 2020-09-20]

[3] Geisendorf S, Pietrulla F., The circular economy and circular economic concepts-a literature analysis and redefinition. Thunderbird International Business Review 60(3). 2017 .DOI: 10.1002/

[4] Ghisellini P, Cialani C, Ulgiati S., A review on circular economy: The expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production. 2016: 114, 11-3214(7):11-32

[5] Chaturvedi M. Towards the Circular economy. [Internet]. 2018. Available from https://chaturvedimayank. wordpress.com/tag/biowaste/[Accessed: 2020-09-20]

[6] Mayer A, Haas W, Wiedenhofer F, Krausmann D, Nuss P, Blengin GA., Measuring Progress towards a Circular Economy: A Monitoring Framework for Economy-wide Material Loop Closing in the EU28. Journal of industrial ecology. [Internet]. 2018. https:// doi.org/10.1111/jiec.12809[Accessed: 2020-09-20]

[7] George H./ Гегель Г., Избранные сочинения в 14 томах, М.; Л.: Госполитиздат; Соцэкгиз; Л.: Госполитиздат; Соцэкгиз; George Gegel G, (1929-1959) Izbrannie cochineniya v 14 tomah, M.-L.:Gospolitisdat, Sotsekgis

[8] COM/2018/029 final,

Communication From The Commission To The European Parliament, The Council, The European Economic And Social Committee And The Committee Of The Regions On A Monitoring Framework For The Circular Economy [Available from: https:// eur-lex.europa.eu/legal-content/EN/ TXT/?uri=COM%3A2018% 3A29%3AFIN [Accessed: 2020-09-20]

[9] The EU Resource Efficiency Scoreboard indicators. Available for 2013, 2014 and 2015. Available from: Eurostat data: available from: https://ec.europa.eu/eurostat/web/ environmental-data-centre-on-naturalresources/resource-efficiencyindicators/resource-efficiencyscoreboard [Accessed: 2020-09-20]

[10] Eco-Innovation of products: Case studies and policy lessons from EU Member States for a product policy framework that contributes to a circular economy. [Internet]. 2018. Available from: https://ec.europa.eu/environment/ ecoap/sites/ecoap\_stayconnected/ files/documents/eio\_report\_2018.pdf. [Accessed: 2020-09-20]

[11] COM/2018/029 Final Communication from the Commission to the European Parliament, The Council, The European Economic and Social Committee and the Committee of the Regions on the 2017 List of Critical Raw Materials for the EU. [Internet]. 2018. Available from: https:// eur-lex.europa.eu/legal-content/EN/ TXT/?uri=CELEX%3A52017DC0490, [Accessed: 2020-09-20]

[12] COM 595 final. Proposal for a Directive of the European Parliament and of The Council amending Directive 2008/98/EC on waste. [Internet]. 2015. Available from https://eur-lex.europa.eu/resource.

**15**

*Circular Economy as a New Stage of Economic Development*

*DOI: http://dx.doi.org/10.5772/intechopen.94403*

[13] COM (2015) 596 final. Proposal for a Directive of the European Parliament and of The Council Amending Directive 94/62/EC on packaging and packaging

html?uri=cellar:c2b5929d-999e-11e5-b3b7-01aa75ed71a1.0018.02/ DOC\_1&format=PDF[Accessed:

2020-09-20]

waste

*Circular Economy as a New Stage of Economic Development DOI: http://dx.doi.org/10.5772/intechopen.94403*

html?uri=cellar:c2b5929d-999e-11e5-b3b7-01aa75ed71a1.0018.02/ DOC\_1&format=PDF[Accessed: 2020-09-20]

[13] COM (2015) 596 final. Proposal for a Directive of the European Parliament and of The Council Amending Directive 94/62/EC on packaging and packaging waste

**14**

*Circular Economy - Recent Advances, New Perspectives and Applications*

[8] COM/2018/029 final,

TXT/?uri=COM%3A2018%

[9] The EU Resource Efficiency Scoreboard indicators. Available for 2013, 2014 and 2015. Available from: Eurostat data: available from: https://ec.europa.eu/eurostat/web/ environmental-data-centre-on-natural-

resources/resource-efficiencyindicators/resource-efficiencyscoreboard [Accessed: 2020-09-20]

[Accessed: 2020-09-20]

[11] COM/2018/029 Final

[Accessed: 2020-09-20]

[12] COM 595 final. Proposal for a Directive of the European Parliament

and of The Council amending Directive 2008/98/EC on waste. [Internet]. 2015. Available from https://eur-lex.europa.eu/resource.

[10] Eco-Innovation of products: Case studies and policy lessons from EU Member States for a product policy framework that contributes to a circular economy. [Internet]. 2018. Available from: https://ec.europa.eu/environment/ ecoap/sites/ecoap\_stayconnected/ files/documents/eio\_report\_2018.pdf.

Communication from the Commission to the European Parliament, The Council, The European Economic and Social Committee and the Committee of the Regions on the 2017 List of Critical Raw Materials for the EU. [Internet]. 2018. Available from: https:// eur-lex.europa.eu/legal-content/EN/ TXT/?uri=CELEX%3A52017DC0490,

3A29%3AFIN [Accessed: 2020-09-20]

Communication From The Commission To The European Parliament, The Council, The European Economic And Social Committee And The Committee Of The Regions On A Monitoring Framework For The Circular Economy [Available from: https:// eur-lex.europa.eu/legal-content/EN/

[1] European Commission. Circular Economy Action Plan. [Internet]. 2015. Available from: http://ec.europa. eu/environment/ci/rcular-economy/ index\_en.htm [Accessed: 2020-09-20]

**References**

[2] Our mission is to accelerate the transition to a circular economy. [Internet]. 2020. Available from: https://www.ellenmacarthurfoundation.

[3] Geisendorf S, Pietrulla F., The circular economy and circular economic concepts-a literature analysis and redefinition. Thunderbird International Business Review 60(3). 2017 .DOI:

[4] Ghisellini P, Cialani C, Ulgiati S., A review on circular economy: The expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production. 2016: 114,

[5] Chaturvedi M. Towards the Circular economy. [Internet]. 2018. Available from https://chaturvedimayank.

[6] Mayer A, Haas W, Wiedenhofer F, Krausmann D, Nuss P, Blengin GA., Measuring Progress towards a Circular Economy: A Monitoring Framework for Economy-wide Material Loop Closing in the EU28. Journal of industrial ecology. [Internet]. 2018. https:// doi.org/10.1111/jiec.12809[Accessed:

org [Accessed: 2020-09-20]

10.1002/

11-3214(7):11-32

2020-09-20]

[7] George H./ Гегель Г.,

Избранные сочинения в 14 томах, М.; Л.: Госполитиздат; Соцэкгиз; Л.: Госполитиздат; Соцэкгиз; George Gegel G, (1929-1959) Izbrannie cochineniya v 14 tomah, M.-L.:Gospolitisdat, Sotsekgis

wordpress.com/tag/biowaste/[Accessed: 2020-09-20]

**17**

**Chapter 2**

**Abstract**

**1. Introduction**

Sustainability Route for Industry

Economic Transition

*and Razim Mohammed Salahudeen*

*Smitha Chandran Sreedevi* 

4.0: The Future of Global Circular

The traditional linear models have proved to be ineffective in perspective of the limited resources of the earth and there is an intensifying stress on the resource side due to the ever-rising global population. Moreover, this results in the unsustainable and inefficient consumption of natural resources, increasing costs of commodities and volatility in the markets, which are unaffordable for the manufacturing base of our economy. The current business models based on the traditional economic policies are not only blindly followed globally but they also neglect the organizational specifics. The circular economy or closed-loop economy is an approach in which the waste or residuals from an industry can be used as raw material for another industry there by reducing the demand on earth's natural resources. The expected ultimate goal of this circular system is the reduction of gap between the organizational characteristics like profitability, organizational structure and decision making policies,

market position and the adoption of circular economic practices.

economic development, circular economy, carrying capacity

**Keywords:** sustainability, Environment Management Systems, industry 4.0,

The idea is to dream about an economic model where the products that we use today are tomorrow's resources which results in creation of a cycle that encourages development in this world running by a limited amount of resources. Therefore, it is equally important to address some of the numerous challenges in the present scenario. Traditional linear paradigm (take-make-dispose) has proved to be inefficient in perspective of the finite resources of the earth and there is a mounting stress on the resource side due to the ever-rising global population. In addition, this results in the unsustainable and inefficient consumption of natural resources, increasing costs of commodities and volatility in the markets, which are unaffordable for the manufacturing base of our economy. As an imminent response to these upcoming challenges, we should adopt a circular economic model thereby shifting the current economic model of 'take-make-dispose' to designing products capable of regeneration which should also be accompanied by secondary benefits such as innovations and growth in employability of the economy. The time has come

#### **Chapter 2**

## Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition

*Smitha Chandran Sreedevi and Razim Mohammed Salahudeen*

#### **Abstract**

The traditional linear models have proved to be ineffective in perspective of the limited resources of the earth and there is an intensifying stress on the resource side due to the ever-rising global population. Moreover, this results in the unsustainable and inefficient consumption of natural resources, increasing costs of commodities and volatility in the markets, which are unaffordable for the manufacturing base of our economy. The current business models based on the traditional economic policies are not only blindly followed globally but they also neglect the organizational specifics. The circular economy or closed-loop economy is an approach in which the waste or residuals from an industry can be used as raw material for another industry there by reducing the demand on earth's natural resources. The expected ultimate goal of this circular system is the reduction of gap between the organizational characteristics like profitability, organizational structure and decision making policies, market position and the adoption of circular economic practices.

**Keywords:** sustainability, Environment Management Systems, industry 4.0, economic development, circular economy, carrying capacity

#### **1. Introduction**

The idea is to dream about an economic model where the products that we use today are tomorrow's resources which results in creation of a cycle that encourages development in this world running by a limited amount of resources. Therefore, it is equally important to address some of the numerous challenges in the present scenario. Traditional linear paradigm (take-make-dispose) has proved to be inefficient in perspective of the finite resources of the earth and there is a mounting stress on the resource side due to the ever-rising global population. In addition, this results in the unsustainable and inefficient consumption of natural resources, increasing costs of commodities and volatility in the markets, which are unaffordable for the manufacturing base of our economy. As an imminent response to these upcoming challenges, we should adopt a circular economic model thereby shifting the current economic model of 'take-make-dispose' to designing products capable of regeneration which should also be accompanied by secondary benefits such as innovations and growth in employability of the economy. The time has come

to provide the deserving importance to the circular economy, which is the only plausible and deep-rooted solution to our present challenges and future endeavors.

As we all know, the future is Industry 4.0 which is considered globally as the fourth industrial revolution. The world as we know it is going through its imminent transformation from traditional business models to a digitalized era and it is imperative to us to discuss the impacts and outcomes of this transition towards the ecological and economical sustainability of the world as well as how the circular economic model will be adapting to this massive transformation. Industry 4.0 and the related digitalization of industries are undergoing an exponential progress. While an individual's life is reshaped by the tremendous advancement of industrial digitalization, the world is optimistically looking forward to its impact on Sustainability. According to the MICMAC analysis conducted by reveals that production efficiency and business model innovation which are the economic sustainability functions are the one to be impacted as an immediate outcome of Industry 4.0, which in turn leads its way to the advancement of socio-ecological sustainability functions of Industry 4.0 which are social welfare improvement, reduction of harmful emissions and energy sustainability [1]. This chapter provides a deeper understanding of what the digital industrialization can offer for sustainability and also measures to make sure that I4.0 delivers the expected sustainability functions globally effectively, equally and fairly.

#### **2. Current Economic Paradigm: Linear Economy**

Even though the current economic paradigm followed in a global scale underwent radical evolution and development over the years, the economy still sticks to the fundamental characteristic, which came to action during the initial stages of industrialization. The linear economic model which follows the cycle of 'take-make-dispose' has proved to be inefficient and not resource friendly in the long run. Industries source materials, implement labor force to manufacture the desired product and is sold to a customer- 'which in turn he discards after use' does not fulfill the purpose of sustainable development which is really hot topic required at a global scale. However, large-scale improvements are undertaken in the current model, any code, which does not concentrate on economic and restorative consumption of finite resources, will lead to imminent losses throughout the value string [2–5].

In the recent past, many companies started to surface the disadvantages and risks related with the linear economic model. The most notable risks is the surge of resource prices which tangles the businesses between the unchangeable demand expressed by consumer markets on one side and the mercurial and precarious market prices of raw materials on the other. The inconsistent prices are likely to remain on the higher note as the populations rise and urbanize, resource sourcing reaches unreachable destinations and the associated risks to the environment increases. To counter-act this backdrop, a new industrial model was necessary which would answer the questions of efficient utilization of resources and which aligns with sustainable ecological development [6, 7]. The term 'Circular economy' symbolizes a restorative design. It encompasses a cycle of using and reusing of natural sources with maximum possible efficiency throughout the life cycle of finished products and the basic principle behind being:


**19**

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition*

imbalance between supply and demand for natural resources.

With this expected transition, the central role of economic process will be taken over by unlimited resources like labor and the limited natural resources will play a supporting role. Numerous industries were successful in counter-action of the

The present scenario, which is 'take-make-dispose' model, leads to the significant wastage of finite natural resources. Even though throughout our past, the decrease of cost of resources have paved way for economic growth, this low costs of resources related to labor cost has led to the present economic model we follow which encompass wastage of resources on a significant scale. While considering the ease of getting our hands on new raw materials and the cheap cost related to the disposal of the residual, the re-usage of materials has never been our chief economic priority. Various factors affect the capability of self-correction of the system. The present rules, both accounting and managerial has let on for a wide array of secondary costs to be not put into accounts and are considered as externalities. In addition to this, certain products such as pharmaceuticals and fertilizers are to be faced with long approval periods, which is also a drawback to the change [8, 9]. The resulting model known as the linear model works in a non-complex way. Companies' source raw materials manufacture the products and sell them to their respective customers which are then discarded when the products reach their end-of-life. The resource wastes involved in this model

i.Misuse of raw materials during production process: Significant amount of materials are usually lost during the manufacturing processes of products mainly in the sequence amid the initial and final process. For example, SERI (Sustainable Europe Research Institute) came into conclusion that in OECD countries during their manufacturing processes expend about 21 billion tons of materials, which has no direct involvement in products themselves like elements, which has no role in economic system - like segregation of materials from mining, wood and agricultural losses, also materials from construction activities. Wastage of substances takes place in different steps during production. Field damages due to attack of pests and pathogens, production related losses due to lack of efficiency, losses happen because of inappropriate storage condition of goods and products wasted use to inefficient usage by the consumers. The global wastage contributed by the food supply chain adds up to roughly one-third of produced food per year for

ii.Wastage by end of life: For majority of the goods, elementary manufacturing rates are greater when compared to traditional restoration rates of goods after the end of their useful life cycle. Based on quality, the global economic system saw a rise of approximately sixty-five million tons of raw materials in 2010 which is expected to rise up to eighty-two billion in 2020. In Europe, approximately only 40% of the total waste materials were recycled of the total 2.7 billion tons of waste. While the sole waste streams are taken into consideration, the present recycling rates cover only a few waste types. The latest UNEP report states approximate losses are calculated only for specific industries of certain level. Rubble created as a result of construction and demolition of buildings contributes to twenty-six percentage of the entire non-industrial solid waste produced by the United States, which consists of

*DOI: http://dx.doi.org/10.5772/intechopen.94884*

**3. Limitations of Linear Economy**

are briefed below:

human consumption.

With this expected transition, the central role of economic process will be taken over by unlimited resources like labor and the limited natural resources will play a supporting role. Numerous industries were successful in counter-action of the imbalance between supply and demand for natural resources.

#### **3. Limitations of Linear Economy**

*Circular Economy - Recent Advances, New Perspectives and Applications*

**2. Current Economic Paradigm: Linear Economy**

lead to imminent losses throughout the value string [2–5].

life cycle of finished products and the basic principle behind being:

achievable thereby leading to the optimization of resources.

preserving finite stocks

to provide the deserving importance to the circular economy, which is the only plausible and deep-rooted solution to our present challenges and future endeavors. As we all know, the future is Industry 4.0 which is considered globally as the fourth industrial revolution. The world as we know it is going through its imminent transformation from traditional business models to a digitalized era and it is imperative to us to discuss the impacts and outcomes of this transition towards the ecological and economical sustainability of the world as well as how the circular economic model will be adapting to this massive transformation. Industry 4.0 and the related digitalization of industries are undergoing an exponential progress. While an individual's life is reshaped by the tremendous advancement of industrial digitalization, the world is optimistically looking forward to its impact on Sustainability. According

to the MICMAC analysis conducted by reveals that production efficiency and business model innovation which are the economic sustainability functions are the one to be impacted as an immediate outcome of Industry 4.0, which in turn leads its way to the advancement of socio-ecological sustainability functions of Industry 4.0 which are social welfare improvement, reduction of harmful emissions and energy sustainability [1]. This chapter provides a deeper understanding of what the digital industrialization can offer for sustainability and also measures to make sure that I4.0 delivers the expected sustainability functions globally effectively, equally and fairly.

Even though the current economic paradigm followed in a global scale underwent radical evolution and development over the years, the economy still sticks to the fundamental characteristic, which came to action during the initial stages of industrialization. The linear economic model which follows the cycle of 'take-make-dispose' has proved to be inefficient and not resource friendly in the long run. Industries source materials, implement labor force to manufacture the desired product and is sold to a customer- 'which in turn he discards after use' does not fulfill the purpose of sustainable development which is really hot topic required at a global scale. However, large-scale improvements are undertaken in the current model, any code, which does not concentrate on economic and restorative consumption of finite resources, will

In the recent past, many companies started to surface the disadvantages and risks related with the linear economic model. The most notable risks is the surge of resource prices which tangles the businesses between the unchangeable demand expressed by consumer markets on one side and the mercurial and precarious market prices of raw materials on the other. The inconsistent prices are likely to remain on the higher note as the populations rise and urbanize, resource sourcing reaches unreachable destinations and the associated risks to the environment increases. To counter-act this backdrop, a new industrial model was necessary which would answer the questions of efficient utilization of resources and which aligns with sustainable ecological development [6, 7]. The term 'Circular economy' symbolizes a restorative design. It encompasses a cycle of using and reusing of natural sources with maximum possible efficiency throughout the

• Balancing the consumption of finite renewable resources and controlling and

• Elimination negative externalizations by implementation of effective methods.

• Circulation of the products and its basic materials in value at the best level

**18**

The present scenario, which is 'take-make-dispose' model, leads to the significant wastage of finite natural resources. Even though throughout our past, the decrease of cost of resources have paved way for economic growth, this low costs of resources related to labor cost has led to the present economic model we follow which encompass wastage of resources on a significant scale. While considering the ease of getting our hands on new raw materials and the cheap cost related to the disposal of the residual, the re-usage of materials has never been our chief economic priority. Various factors affect the capability of self-correction of the system. The present rules, both accounting and managerial has let on for a wide array of secondary costs to be not put into accounts and are considered as externalities. In addition to this, certain products such as pharmaceuticals and fertilizers are to be faced with long approval periods, which is also a drawback to the change [8, 9]. The resulting model known as the linear model works in a non-complex way. Companies' source raw materials manufacture the products and sell them to their respective customers which are then discarded when the products reach their end-of-life. The resource wastes involved in this model are briefed below:


countless recyclable materials from wood to steel and concrete. The complete re-usage happens only for 20–30% of all the construction and demolition wastes and this is usually because all structures are built up making them unfriendly to smashing down into recyclable or reusable components, which will ultimately lead to wastage of materials beneficial for the organization.


The troubles present in the current economic system followed which ignores the complete utilization of the potential of natural resources have surfaced as the increase in the commodity prices are becoming evident and also their volatility. From 2002, we have observed a continuous hike in the costs of natural resources. While referring the McKinsey's Commodity Price Index (2011), the mathematical average of the commodity sub-indices mainly metals, energy, food and other nonagricultural products, have reached a higher level when compared to past century

**21**

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition*

values. The most attention worthy commodity price hike was that of West Texas crude oil—147USD per barrel price, which was record breaking in 2008 and in addition, 107% increase in price of food grains from June 2010 to January 2011. The already weakened global economy was further subjected to blow by the sustained higher cost of resources [10–12]. Over the past years, the commodity price volatility was affected by numerous factors. Firstly, the metal prices reached a higher level, much more that their respective cost curves, due to a spike in demands—where it was forced to face the relatively high costs to produce an additional unit. This lead to a condition where a minor change in the demand can result to disproportionately large swings of resource costs. In addition, at the same time, the technological requisites for extracting numerous commodities increased due to the excessive pressure on the easy to access reserves, making malfunctions more common in area of resource accessibility, thereby causing disruptions in the supply chain. The supply dynamics has also been made vulnerable by the weather patterns and abrupt political changes. Finally, the new investors of the financial market was given access to the commodity price tags due to development and innovations in the financial market which in turn paved way to the worsening of price swings. All these factors all-together hindered the global business growth and thus the economic growth. The recent problem faced by the company Tata Steel was that the price of raw materials for the steel manufacturing faced a hike but the steel market did not rise enough to cancel off the higher material cost leading to a loss. The way the companies found out to limit their exposure to this constantly fluctuating cost swings is by hedging contracts at a cost [12–15]. The cost of hedging depends upon the credit rating of a company and the predicted changes in the market. However, in the current economic scenario, the company, which does not possess a grade credit history, will be most likely to spend more than 10% of hedged amount to financial services.

The term Circular Economy has gained popularity in the recent times. The concept puts forth a characteristic and more defined propaganda which is restorative and regenerative by nature while maintaining its primary objective of keeping utilities, products and materials at the highest utility and values at all times. The circular economic model overlooks the presently followed take-make-waste industrial model and strives to redefine social-economical-ecological growth concentrating on positive society-wide benefits. The model progressively decouples the economic activity from over utilizing the finite natural resources and tries to eradicate waste production out of the system [16]. The circular model builds economic, natural and social capital by promoting a transition towards renewable energy resources and CE

• Preservation of natural capital via balanced renewable resource flows and controlled finite stocks: This is carried out by dematerialization of utilities or virtual deliver of utilities. Whenever there is a need for resources, the circular system makes an educational choosing of technologies and processes which uses renewable and better performing resources wherever possible. These approaches enhance natural capital and devise conditions for regeneration.

• Circulating materials and products in the usage cycle while maintaining its highest utility: The proposed circulation is executed by designing products feasible for recycling, refurbishing and remanufacturing thereby providing towards the economy. Tighter inner loops are employed by the circulating

*DOI: http://dx.doi.org/10.5772/intechopen.94884*

**4. Circular Economy**

is based on three basic principles:

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition DOI: http://dx.doi.org/10.5772/intechopen.94884*

values. The most attention worthy commodity price hike was that of West Texas crude oil—147USD per barrel price, which was record breaking in 2008 and in addition, 107% increase in price of food grains from June 2010 to January 2011. The already weakened global economy was further subjected to blow by the sustained higher cost of resources [10–12]. Over the past years, the commodity price volatility was affected by numerous factors. Firstly, the metal prices reached a higher level, much more that their respective cost curves, due to a spike in demands—where it was forced to face the relatively high costs to produce an additional unit. This lead to a condition where a minor change in the demand can result to disproportionately large swings of resource costs. In addition, at the same time, the technological requisites for extracting numerous commodities increased due to the excessive pressure on the easy to access reserves, making malfunctions more common in area of resource accessibility, thereby causing disruptions in the supply chain. The supply dynamics has also been made vulnerable by the weather patterns and abrupt political changes. Finally, the new investors of the financial market was given access to the commodity price tags due to development and innovations in the financial market which in turn paved way to the worsening of price swings. All these factors all-together hindered the global business growth and thus the economic growth. The recent problem faced by the company Tata Steel was that the price of raw materials for the steel manufacturing faced a hike but the steel market did not rise enough to cancel off the higher material cost leading to a loss. The way the companies found out to limit their exposure to this constantly fluctuating cost swings is by hedging contracts at a cost [12–15]. The cost of hedging depends upon the credit rating of a company and the predicted changes in the market. However, in the current economic scenario, the company, which does not possess a grade credit history, will be most likely to spend more than 10% of hedged amount to financial services.

#### **4. Circular Economy**

*Circular Economy - Recent Advances, New Perspectives and Applications*

renewable energy thereby creating a virtuous cycle.

the current economic model:

iv.Erosion of ecosystem services: Even though it's as significant as climatic change but given minor s concentration compared as the deterioration of 'ecosystem services' The benefits provided by the ecosystem that bolsters and boost up human well-being, for instance, forests which being a fundamental equivalent of atmospheric, soil and hydrological systems, take in atmospheric CO2 and releases O2, contributes to the carbon content in the soil and also regulates underwater tables --along with further other benefits, are subjected to human mismanagement. The investigation undertaken by the Millennium Ecosystem Assessment on 24 environmental services ranging from immediate services like food arrangement to much more ambitious benefits like pest control and regulation of related diseases found out that 15 out of the twenty-four benefits are corrupted. We are currently consuming beyond the capacity that can be met by the earth's ecosystem, thereby depleting the earth's natural assets. If should be backed up by an example, according to The Economics and Ecosystem and Biodiversity, China lost around 12 billion US dollars in the period between 1950 and 1998 due to deforestation. The economic growth is weighed down due the imbalances of

The troubles present in the current economic system followed which ignores the complete utilization of the potential of natural resources have surfaced as the increase in the commodity prices are becoming evident and also their volatility. From 2002, we have observed a continuous hike in the costs of natural resources. While referring the McKinsey's Commodity Price Index (2011), the mathematical average of the commodity sub-indices mainly metals, energy, food and other nonagricultural products, have reached a higher level when compared to past century

countless recyclable materials from wood to steel and concrete. The complete re-usage happens only for 20–30% of all the construction and demolition wastes and this is usually because all structures are built up making them unfriendly to smashing down into recyclable or reusable components, which will ultimately lead to wastage of materials beneficial for the organization.

iii.Utilization of energy: In a linear system, whenever a material is disposed in a junkyard, it indicates the disappearance of all its residual energy. Re-usage saves more energy when compared to the merge share of energy redeemed by recycling disposed products. One of the most intense parts of the supply chain system is the usage of power resources in a linear production model. For instance, the procedures involved in extorting materials from the earth and its transformation to a commercial form favorable to access. During aluminum products manufacturing, the procedures involved in partially finished aluminum explains eighty percentage of energy absorbed. This is because of a system, which depends upon upstream production that leads to energy conservation. Upstream production means no new materials are used every time a product is manufactured and the industry along with its customers are relentless in ensuing immense recycle rates (In Ref. to the stats of UNEP, the 'end of life' rates of recycling of aluminum is between 43–70% and is higher compared to other non-ferrous metals, for example, copper (43–53%), zinc (19–52%), magnesium (39%)). While energy consumption by biological inputs is evenly extended throughout the value chain, the circular mode, which encompasses a reduced energy magnitude, leads to a decrease in the threshold energy demand and helps in the transition towards

**20**

The term Circular Economy has gained popularity in the recent times. The concept puts forth a characteristic and more defined propaganda which is restorative and regenerative by nature while maintaining its primary objective of keeping utilities, products and materials at the highest utility and values at all times. The circular economic model overlooks the presently followed take-make-waste industrial model and strives to redefine social-economical-ecological growth concentrating on positive society-wide benefits. The model progressively decouples the economic activity from over utilizing the finite natural resources and tries to eradicate waste production out of the system [16]. The circular model builds economic, natural and social capital by promoting a transition towards renewable energy resources and CE is based on three basic principles:


system whenever possible which basically means maintenance instead of recycling. This helps in preserving the embedded energy and also maximization of the consecutive cycle counts and time utilized in individual cycles by increasing product lifespan and optimization of reuse. Circular systems also boost the re-entry of bio-nutrients into the atmosphere safely for decomposition which will turn into precious raw materials for a new cycle. In case of the biological cycle, the intention behind product design is to make them consumable or metabolized by the economy and to be regenerated as a new resource value.

• Designing out negative externalities: In CE, waste does not exist as it is designed out purposely. Biological products are returned to the soil by employing biodegradable procedures as they are non-toxic. For technical materials- they are made to be recovered and upgraded there by reducing the inflow of energy and increasing the preserving value of products.

Further, CE believes that diversity important for building strength and it is considered as a major player for adaptability and flexibility. For instance, in living systems, biodiversity is very much needed for surviving environmental changes. Same as that, economies require a balance of businesses to survive and flourish in the long term. While smaller enterprises bring alternate models during crises, larger enterprises put forth volume and efficiency.

### **5. Value Creation for Circular Economy**


### **6. Economic Impacts**

• Economic growth: Economic growth can be achieved by an increase in revenues from upcoming circular practices combined with the reduction in production costs by improved efficient utilization of inputs. These purposed changes in input and output of economic production habits will have an impact on economy-wide supply, demand and prices, etc. through all economic sectors, both direct and indirect, which will add to the overall economic growth.

**23**

**8. What is Industry 4.0?**

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition*

• Job creation: The effect on employability depends mainly on the increase in expenditure power supplemented by the reduction in prices, which is expected across sectors and also to the intensity of human labor required in high quality recycling practices and high skilled jobs in remanufacturing. Having said that the employment opportunities is not limited to the remanufacturing and growth within large corporations but is rich and diverse. There is an expected creation of jobs across industrial sectors, in small and medium enterprises, by a boost in innovation and entrepreneurship, by local reverse logistics and finally

• Innovation: The driving force of innovation is fueled by the dream to replace one-way products with products designed to align with the circular system and which will help in the creation of reverse logistics networks. The benefits attained from a much more innovative economy are energy and labor efficiency, quality improved materials, improved technological developments and

• Increased security and decreased fluctuation of supply: The transition towards a circular system based economy basically means the utilization of less virgin material, usage of more recycled materials encompassing a higher share of labor expenses, decreasing company dealings with fluctuating raw material prices and also increased resilience. CE also decreases the threat posed by natural calamities/political issues on supply chain networks as there is an access for alternate materials provided by decentralized operators.

• Demand creation for business services: More demand for service businesses are

1.Products at the end of their life are reintroduced into the system by collection

2.The utilization of a product to its maximum capacity or longer life cycles are

3.Information and input on components remanufacturing and product refurbishment is offered by the respective specialized service businesses.

The need for specialized skills in order to collect products, disassemble, refurbish,

We are in the midst of a powerful transformation in terms of the way we develop products, thanks to the digitalization of the manufacturing sector. This transition

integrate into remanufacturing and finally delivering products to customers, is imperative and this is where specialized service businesses comes to play. The current enterprises doing these processes are mostly subsidiaries of existing manufacturers, and hence there are new opportunities for new business models. Such responsible business models will help companies to attain a unique insight on product usage patterns which will further aid in the development of improved products, advanced

*DOI: http://dx.doi.org/10.5772/intechopen.94884*

a new service-based economy.

increased opportunities to profit for companies.

created by the implementation of circular economies.

services and also improved customer satisfaction [17–23].

made possible by product remarketers and sales platforms

and reverse logistics companies

**7. Benefits of Circular Systems on Enterprises**

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition DOI: http://dx.doi.org/10.5772/intechopen.94884*


#### **7. Benefits of Circular Systems on Enterprises**

	- 1.Products at the end of their life are reintroduced into the system by collection and reverse logistics companies
	- 2.The utilization of a product to its maximum capacity or longer life cycles are made possible by product remarketers and sales platforms
	- 3.Information and input on components remanufacturing and product refurbishment is offered by the respective specialized service businesses.

The need for specialized skills in order to collect products, disassemble, refurbish, integrate into remanufacturing and finally delivering products to customers, is imperative and this is where specialized service businesses comes to play. The current enterprises doing these processes are mostly subsidiaries of existing manufacturers, and hence there are new opportunities for new business models. Such responsible business models will help companies to attain a unique insight on product usage patterns which will further aid in the development of improved products, advanced services and also improved customer satisfaction [17–23].

#### **8. What is Industry 4.0?**

We are in the midst of a powerful transformation in terms of the way we develop products, thanks to the digitalization of the manufacturing sector. This transition

*Circular Economy - Recent Advances, New Perspectives and Applications*

resource value.

enterprises put forth volume and efficiency.

**5. Value Creation for Circular Economy**

system whenever possible which basically means maintenance instead of recycling. This helps in preserving the embedded energy and also maximization of the consecutive cycle counts and time utilized in individual cycles by increasing product lifespan and optimization of reuse. Circular systems also boost the re-entry of bio-nutrients into the atmosphere safely for decomposition which will turn into precious raw materials for a new cycle. In case of the biological cycle, the intention behind product design is to make them consumable or metabolized by the economy and to be regenerated as a new

• Designing out negative externalities: In CE, waste does not exist as it is designed out purposely. Biological products are returned to the soil by employing biodegradable procedures as they are non-toxic. For technical materials- they are made to be recovered and upgraded there by reducing the

inflow of energy and increasing the preserving value of products.

Further, CE believes that diversity important for building strength and it is considered as a major player for adaptability and flexibility. For instance, in living systems, biodiversity is very much needed for surviving environmental changes. Same as that, economies require a balance of businesses to survive and flourish in the long term. While smaller enterprises bring alternate models during crises, larger

• Value of a product is most preserved when it is repaired and maintained to its complete utilization. When it comes to an extend where maintenance is not recommended, then the constituents are reused or remanufactured. The

• Maximization of the count of successive cycles and/or time utilized in individual cycle for products which means number of times a product is reused or extension of a products life. The prolonged cycles of an individual product

• Diversification of reuse practices throughout the value chain. For instance, cotton clothing can be reused and then can be crossed to the furniture industry as a fill-in for upholstery, and further the fiber can be reused in stone wool insulation for construction. This will avoid the input of unused materials into the economy, which in this case before the cotton fibers are safely returned to

• Economic growth: Economic growth can be achieved by an increase in revenues from upcoming circular practices combined with the reduction in production costs by improved efficient utilization of inputs. These purposed changes in input and output of economic production habits will have an impact on economy-wide supply, demand and prices, etc. through all economic sectors, both direct and indirect, which will add to the overall

practice preserves greater value against recycling the materials.

saves material, energy and labor needed to create a new one.

**22**

the biosphere.

**6. Economic Impacts**

economic growth.

is significant in a way that it is termed as 'Industry 4.0' which defines the fourth industrial revolution ever occurred in the area of manufacturing. From the very first industrial revolution which depicted the mechanization of steam power and water, through the introduction of assembly lines and mass production using electricity in the second, the fourth industrial revolution is the continuation of the third revolution of computers and automation with a further enhancement by autonomous systems fueled by machine learning and data analytics. The definition of term 'Industry 4.0' can vary considerably depending on the point of view, but it can be easily referred as the intelligent and permanent linking and networking of machines and machine operated processes. Serious shifts are undergoing in the manufacturing sector which inevitably dismiss the claims that Industry 4.0 is merely a marketing buzzword. The introduction of computers was considered as a disruptive move during Industry 3.0 as it was an entirely new technology then but presently while Industry 4.0 unfolds, computers are interconnected and they can communicate with each other, ultimately capacitating them to make and implement decisions without the need for any human intervention. This revolution is made possible by the combination of technologies like cyber-physical systems; Internet of Things, the Internet of Systems; which will in-turn make smart factory a reality. These supporting machineries will get smarter as they gain access to more and more data, our factories will be more efficient, productive and at the same time, Sustainable. Ultimately, the true power of Industry 4.0 lies in the possibility to gather and analyze information across machines which enables quicker, more flexible and more efficient mechanism to manufacture high quality goods at reduced costs while the expected results being increased productivity, a shift in economics, industrial growth and a modification in the workforce profiles. With the emergence

**25**

to be expanded globally.

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition*

of new technologies, it is indeed an exciting time for the manufacturing industry as there will be a wave of new opportunities that will help a company towards achieving improved flexibility, sustainability and productivity. The Industry 4.0 will lead this generation towards an ecosystem where humans and machines can work together, empowering businesses to achieve greater insights, reducing risks of error

Industry 4.0 incorporates three technological trends leading the transition which

Once dissimilar systems and processes are now integrated across the value and supply chain by interconnected computer systems thus aiding the digital transformation. Embracing this digital transformation with the interdependence that comes along will lead to a multitude of advantages for the company encompassing improved agility, flexibility and operational performance. Even though numerous organizations are operating in denial about the implications of Industry 4.0 on their business or are striving hard to find talent or knowledge to implement the framework, several others are actively preparing towards a future of digitalization

**Design and production aligning to CE terms:** Primarily, circular economy must be regenerative and restorative by design. Importance must be provided towards the recovery of materials and products at the design level, contrary to the practice of waiting until the end of product life cycle. Design processes should be planned and organized in a manner that will facilitate product reuse, recycle and cross industrial transfer. This intricate CE product design is to be carried out with advanced skills, insights and working plans which are not very popular in the current situation. Material selection is expected to play a critical part in designing resilient products and the manufacturers are expected to detail the purpose of the end products over the specification of materials to be used. Standardized components, design which facilitates ease end of life sorting as well as taking into consideration the usage of by-products and wastes into something useful is also preferred [29–34]. **New Business models:** New business models should prioritize access over ownership in order to gain more attractive value propositions as this model will transform consumers into users. Companies that can leverage their market share and capabilities in the value chain can drive circularity in the mainstream business. Profitable businesses will inspire other businesses and there is a significant potential

**Reverse Cycle:** For companies to attain value from products at the end of their life cycle, used products must be collected and brought back. Such value preservation will bolster the transition towards a circular economy. This is made possible by reverse logistics and treatment methods which will help those materials to get back on the market. This will be an intricate process which includes delivery chain logistics, sorting, risk management, warehousing, power generation and may even employ molecular biology and polymer chemistry. Reverse logistics network which cascade materials to be used for other purposes is to be optimized totally and must be brought under the terms of circularity. User friendly collection schematics, accessible locations for customers and specialists as well as capability to maintain the quality throughout the diverse applications of the collected products are to be

are connectivity, intelligence and flexible automation. I4.0 merges Operational Technology (OT) and Information Technology (IT) for creating a cyber-physical environment (**Figure 1**). This is made feasible due to the development of digital solutions and the advancement in associated technologies which include:

accepting that smart machines can improve their business.

**9. How to promote Circular systems?**

*DOI: http://dx.doi.org/10.5772/intechopen.94884*

and to make better decisions [24–28].

**Figure 1.** *Components of Industry 4.0.*

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition DOI: http://dx.doi.org/10.5772/intechopen.94884*

of new technologies, it is indeed an exciting time for the manufacturing industry as there will be a wave of new opportunities that will help a company towards achieving improved flexibility, sustainability and productivity. The Industry 4.0 will lead this generation towards an ecosystem where humans and machines can work together, empowering businesses to achieve greater insights, reducing risks of error and to make better decisions [24–28].

Industry 4.0 incorporates three technological trends leading the transition which are connectivity, intelligence and flexible automation. I4.0 merges Operational Technology (OT) and Information Technology (IT) for creating a cyber-physical environment (**Figure 1**). This is made feasible due to the development of digital solutions and the advancement in associated technologies which include:

Once dissimilar systems and processes are now integrated across the value and supply chain by interconnected computer systems thus aiding the digital transformation. Embracing this digital transformation with the interdependence that comes along will lead to a multitude of advantages for the company encompassing improved agility, flexibility and operational performance. Even though numerous organizations are operating in denial about the implications of Industry 4.0 on their business or are striving hard to find talent or knowledge to implement the framework, several others are actively preparing towards a future of digitalization accepting that smart machines can improve their business.

#### **9. How to promote Circular systems?**

**Design and production aligning to CE terms:** Primarily, circular economy must be regenerative and restorative by design. Importance must be provided towards the recovery of materials and products at the design level, contrary to the practice of waiting until the end of product life cycle. Design processes should be planned and organized in a manner that will facilitate product reuse, recycle and cross industrial transfer. This intricate CE product design is to be carried out with advanced skills, insights and working plans which are not very popular in the current situation. Material selection is expected to play a critical part in designing resilient products and the manufacturers are expected to detail the purpose of the end products over the specification of materials to be used. Standardized components, design which facilitates ease end of life sorting as well as taking into consideration the usage of by-products and wastes into something useful is also preferred [29–34].

**New Business models:** New business models should prioritize access over ownership in order to gain more attractive value propositions as this model will transform consumers into users. Companies that can leverage their market share and capabilities in the value chain can drive circularity in the mainstream business. Profitable businesses will inspire other businesses and there is a significant potential to be expanded globally.

**Reverse Cycle:** For companies to attain value from products at the end of their life cycle, used products must be collected and brought back. Such value preservation will bolster the transition towards a circular economy. This is made possible by reverse logistics and treatment methods which will help those materials to get back on the market. This will be an intricate process which includes delivery chain logistics, sorting, risk management, warehousing, power generation and may even employ molecular biology and polymer chemistry. Reverse logistics network which cascade materials to be used for other purposes is to be optimized totally and must be brought under the terms of circularity. User friendly collection schematics, accessible locations for customers and specialists as well as capability to maintain the quality throughout the diverse applications of the collected products are to be

*Circular Economy - Recent Advances, New Perspectives and Applications*

is significant in a way that it is termed as 'Industry 4.0' which defines the fourth industrial revolution ever occurred in the area of manufacturing. From the very first industrial revolution which depicted the mechanization of steam power and water, through the introduction of assembly lines and mass production using electricity in the second, the fourth industrial revolution is the continuation of the third revolution of computers and automation with a further enhancement by autonomous systems fueled by machine learning and data analytics. The definition of term 'Industry 4.0' can vary considerably depending on the point of view, but it can be easily referred as the intelligent and permanent linking and networking of machines and machine operated processes. Serious shifts are undergoing in the manufacturing sector which inevitably dismiss the claims that Industry 4.0 is merely a marketing buzzword. The introduction of computers was considered as a disruptive move during Industry 3.0 as it was an entirely new technology then but presently while Industry 4.0 unfolds, computers are interconnected and they can communicate with each other, ultimately capacitating them to make and implement decisions without the need for any human intervention. This revolution is made possible by the combination of technologies like cyber-physical systems; Internet of Things, the Internet of Systems; which will in-turn make smart factory a reality. These supporting machineries will get smarter as they gain access to more and more data, our factories will be more efficient, productive and at the same time, Sustainable. Ultimately, the true power of Industry 4.0 lies in the possibility to gather and analyze information across machines which enables quicker, more flexible and more efficient mechanism to manufacture high quality goods at reduced costs while the expected results being increased productivity, a shift in economics, industrial growth and a modification in the workforce profiles. With the emergence

**24**

**Figure 1.**

*Components of Industry 4.0.*

provided significant importance. Efficient reverse cycle will be cost effective, will have a better quality collection and also will employ efficient and effective segmentation of utilized products thereby resulting in the decrement of loss of materials outside the system in turn aiding circular design.

#### **9.1 Advantages of Circular Economy**

The world population is growing at alarming rate, so is the usage of natural resources. We will reach to a point where the nature will be depleted of the resources and will not have any to offer the human race. This is when circular economy benefits on a global scale. In addition to using up the resources, the development these days has an adverse effect on the environment. Moving towards a circular economy could offer reduced pressure on the environment. The wastes those are otherwise discarded to the environment are instead recycled and made to use up to its maximum potential. This could improve the security and availability of the natural resources, which are the raw materials for the production processes. This will increase competitiveness among the companies and bring about more innovation, which in turn will boost the economic growth. The economic growth is marked with creating more jobs and other opportunities. Circular economy can also help companies provide more durable and innovative goods with increased quality of life, which help consumers save money in the end [35–37]. According to waste management priority order, the first and foremost priority is to reduce the amount of wastes generated. It is followed by reuse, recycle and other recovery procedures. Disposal of waste to environment is the least desirable waste management procedure. This exactly aligns with the characteristics of a circular economy.

#### **9.2 Circular Economy and Sustainability**

It combines the scientific disciplines of management, economy, technology, engineering, environment and society. As circular economy is essential today to promote the goals of sustainable development and all these scientific areas are not independent, their connections and synergies exist and should be further developed. Multidisciplinary approaches and numerous connections between these scientific areas are mandatory to reach the sustainability goals and to solve environmental problems, expand technological limits and overcome potential economic disturbances. This approach is expressed with new policies (market-based instruments, command and control, and circular public procurement), technological suggestions (e.g. technical cycle solutions), environmental engineering technologies (e.g., waste management, 3R strategies, water recycle, wastewater treatment and reuse, renewable energy), circular business models, circular innovations, circular management solutions, consumers' behaviour in circular economy, new circular economy products labels and social acceptance in circular economy.

Journal information.

Nowadays, in the recognized economic systems, goods and services are used, created, and rejected, there is a well-defined pattern in linear economy, where the flow has a clear start and end. The circular economy works relatively differently, the services and products in a circular economy are intended to reused or recycled both in technical or biological cycles. All the products are synthesized in such a way that they can be easily take to bits and the materials used will either be broken down by natural process or returned to fabrication of any other product. The main advantage is that it will reduce the demand on earth's finite resources, also the waste or unwanted residues from industry can be used as resources for another industry. It also provides a well-defined framework that put together approaches and methods

**27**

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition*

manufacturers and also the quality of the product or services.

from diverse foundations like biomimicry, cradle-to-cradle, ecosystem services, industrial symbiosis, and collective consumption. The circular economy is evidently a diverse way to do business, obliging the establishments to rethink everything starting from resource procurement, design and final manufacture of the products or services. Advocates of the circular economy propose a sustainable world, in which there will not be any depreciation in the standard of life the consumers and can be easily attained without any economic loss of revenue or additional costs for

Following are the principles that define **how the circular economy should work** 

1. **Any waste is a resource:** All the biodegradable and non-biodegradable

2.**Second hand use**: The product can be reintroduced in the economic circuit

3.**Reuse**: Some products or certain parts of those products that still work can be

5.**Recycle**: Making value added products from waste materials discarded in

6.**Valorization**: hitch energy from waste that cannot be recycled further.

7.**Functionality economy**: it establishes a system of rental property. After the use of the particular product, it is returned to the producer, it is dismantled

8.**Relying on energy from renewable sources**: rejection of demand on the finite fossil fuels resources for the manufacture of the product, recycle and reuse.

9.**Eco-design**: This reflects and incorporates in its beginning, the environmental impacts throughout the life cycle of a product i.e. from cradle to grave.

tional method in an area/territory branded by an augmented management of

The increasing needs and multiplying wants of human beings resulted in the overexploitation of the natural resources. From the primitive cave man to the present computer oriented man, both the volume and methods of natural resources exploitation have undergone tremendous changes. But modern research in science and technology has resulted either in the improved versions of already existing ones or in the inventions of the new ones at the cost of limited natural resources. As a result, the luxuries are becoming comforts and comforts are becoming necessities. Resources are limited, but people's wants are unlimited. Therefore, limited resources need to be used carefully through efficient allocation among the various

10. **Territorial Industrial and ecology**: instituting of an industrial organiza-

resources, flows of resources, stocks, services and wastes.

**10. Industry 4.0 as Facilitator for Sustainable Development**

4.**Repare**: the damage products can be repaired and can be used.

waste with or without minor addition or deletion.

*DOI: http://dx.doi.org/10.5772/intechopen.94884*

**in the present scenario:**

materials are use again.

after the use by the initial consumers

and the effective parts can be reused.

reused to elaborate new artifacts.

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition DOI: http://dx.doi.org/10.5772/intechopen.94884*

from diverse foundations like biomimicry, cradle-to-cradle, ecosystem services, industrial symbiosis, and collective consumption. The circular economy is evidently a diverse way to do business, obliging the establishments to rethink everything starting from resource procurement, design and final manufacture of the products or services. Advocates of the circular economy propose a sustainable world, in which there will not be any depreciation in the standard of life the consumers and can be easily attained without any economic loss of revenue or additional costs for manufacturers and also the quality of the product or services.

Following are the principles that define **how the circular economy should work in the present scenario:**


#### **10. Industry 4.0 as Facilitator for Sustainable Development**

The increasing needs and multiplying wants of human beings resulted in the overexploitation of the natural resources. From the primitive cave man to the present computer oriented man, both the volume and methods of natural resources exploitation have undergone tremendous changes. But modern research in science and technology has resulted either in the improved versions of already existing ones or in the inventions of the new ones at the cost of limited natural resources. As a result, the luxuries are becoming comforts and comforts are becoming necessities. Resources are limited, but people's wants are unlimited. Therefore, limited resources need to be used carefully through efficient allocation among the various

*Circular Economy - Recent Advances, New Perspectives and Applications*

outside the system in turn aiding circular design.

**9.1 Advantages of Circular Economy**

**9.2 Circular Economy and Sustainability**

Journal information.

provided significant importance. Efficient reverse cycle will be cost effective, will have a better quality collection and also will employ efficient and effective segmentation of utilized products thereby resulting in the decrement of loss of materials

The world population is growing at alarming rate, so is the usage of natural resources. We will reach to a point where the nature will be depleted of the resources and will not have any to offer the human race. This is when circular economy benefits on a global scale. In addition to using up the resources, the development these days has an adverse effect on the environment. Moving towards a circular economy could offer reduced pressure on the environment. The wastes those are otherwise discarded to the environment are instead recycled and made to use up to its maximum potential. This could improve the security and availability of the natural resources, which are the raw materials for the production processes. This will increase competitiveness among the companies and bring about more innovation, which in turn will boost the economic growth. The economic growth is marked with creating more jobs and other opportunities. Circular economy can also help companies provide more durable and innovative goods with increased quality of life, which help consumers save money in the end [35–37]. According to waste management priority order, the first and foremost priority is to reduce the amount of wastes generated. It is followed by reuse, recycle and other recovery procedures. Disposal of waste to environment is the least desirable waste management proce-

dure. This exactly aligns with the characteristics of a circular economy.

economy products labels and social acceptance in circular economy.

It combines the scientific disciplines of management, economy, technology, engineering, environment and society. As circular economy is essential today to promote the goals of sustainable development and all these scientific areas are not independent, their connections and synergies exist and should be further developed. Multidisciplinary approaches and numerous connections between these scientific areas are mandatory to reach the sustainability goals and to solve environmental problems, expand technological limits and overcome potential economic disturbances. This approach is expressed with new policies (market-based instruments, command and control, and circular public procurement), technological suggestions (e.g. technical cycle solutions), environmental engineering technologies (e.g., waste management, 3R strategies, water recycle, wastewater treatment and reuse, renewable energy), circular business models, circular innovations, circular management solutions, consumers' behaviour in circular economy, new circular

Nowadays, in the recognized economic systems, goods and services are used, created, and rejected, there is a well-defined pattern in linear economy, where the flow has a clear start and end. The circular economy works relatively differently, the services and products in a circular economy are intended to reused or recycled both in technical or biological cycles. All the products are synthesized in such a way that they can be easily take to bits and the materials used will either be broken down by natural process or returned to fabrication of any other product. The main advantage is that it will reduce the demand on earth's finite resources, also the waste or unwanted residues from industry can be used as resources for another industry. It also provides a well-defined framework that put together approaches and methods

**26**

alternative uses. The rising socio-economic inequality, growing environmental degradation, climate change, urban sprawl and ever increasing cyber-dependency can be underlined as the global tendencies and this may result in social instability, natural catastrophes, water crises, pollution, heavy resource depletion, unemployment and migration throughout the globe [38–43].

After the UN General Assembly in 2015, implemented the Agenda 2030- which amounts seventeen inseparable and self-sustaining goals called Millennium Sustainable Development Goals are envisioned to function as a foundation stone for the renovation of the global economies towards sustainable development. This alteration procedure must result in economic development in agreement with equal opportunity, social uniqueness within the so-called ecological margins. As indispensable investors' for sustainable development, industrial establishments have to move towards an innovative archetype which places much prominence on sustainable value creation. The industrial value creation has undergone thorough changes starting from the age of discovery of fire to the industrial revolution throughout the years. Industry 4.0 (The fourth industrial revolution) which was initiated in 2010s, the ultramodern concept of technology and research for Industry 4.0 and sustainability are highlighted. In response to the Agenda −2030, the European Union released an outline for action, which collectively tells about the planet, people, peace and prosperity [17]. As indispensible stakeholders for sustainable development, all the industrial organizations have to move towards an innovative manufacturing pattern which puts importance on both sustainable development goals together with value creation.The sustainable value creation has three dimensions, such as economic, social and environmental.

The major objectives of industry 4.0 include, linking services, resources and humans in real-time during the making on the basis of CPS (Cyber Physical Systems) and the Internet of Things (IoT). The major physical systems consist of several actuators, sensors, embedded data handling soft wares which enables fast processing and communication of data to different interfaces. There is complete automation in all the systems, process, manufacturing, packing, error maintenance, which helps in easy maintenance and control of the complete system.The value making elements in Industry 4.0 are, Business Models, Value Creation Network and Product Life Cycle, Product, Process, Organization and Equipment.

#### **11. Importance of Sustainable Manufacture in Industry 4.0**

The World Commission on Environment and Development (WCED) was appointed in 1983 by the UN to study the relationship between environment and development and it submitted the report in 1987-Our Common Future'. After the publication of 'Our common Future' in 1987, the concept of sustainable development came in to being and is defined as the development which meets the needs of the present generation without compromising the ability of future generations to meet their needs [20]. Sustainable development provides a healthy model for the progress of the world. Sustainable development involves the eco-economic management of resources to reach an optimum level of use and satisfaction, instead of maximum level. It also involves the restoration of degraded resources, maintenance of production and the elaboration of resource base by the wise use of the renewable resources.

As development involves a progressive transformation of the society in all aspects, sustainable development indicates the uninterrupted continuity of the improvement of social, economic. Ethical, scientific, technological, educational and spiritual condition. Thus it is an all-round human development of an integrated

**29**

the renewable resources.

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition*

environment and economics in the final decision making [21–24].

or holistic nature. Sustainable development necessitates the rate of depletion of non-renewable resource to be reduced to make future options possible. The national strategies suggested by the WCED for attaining the concept of sustainable development are revitalizing growth, meeting crucial needs for jobs, water, sanitation and energy, guaranteeing sustainable level of population, reorienting technology, conserving and enhancing the resource bases and handling risks and integration of

Interaction between economic growth and development fully depends on the natural resources and human resources. The attitude of human beings determines both the content of growth in material and energy terms and its impact in terms of equity. Now both developing and developed countries are in the process of evolving sound methodologies to estimate the real stock and the value of national disasters, providing larger and better opportunities for education and health, assessing social and ecological costs of development projects and taking decisions less vulnerability to economic crisis and these resources that are not exploited in enterprises or national accounts. Only if the quantity of decrease in the deterioration of the natural resources and the conditions along with human resources are calculated we will be able to estimate whether growth is quantitatively acceptable or not. Equitable distribution of income, less vulnerability to economic crisis and national disasters, providing larger and better opportunities for education and health, assessing the social and ecological costs of development projects and taking decisions based on it etc. are the different aspects of improving the quality of growth in order to attain sustainable development. Thus sustainable development can accelerate and assure social welfare by taking steps to improve both natural and human resources. The approach of sustainability comprises of three pillars which include, the economic, environmental and social dimensions as ultimate and integrative arenas of action. Environmental sustainability designates the conservation and existences of the whole ecological complexes, which is both, a source as well as a sink of natural resources and anthropogenic activities. Social sustainability comprises of the equitable sharing of human resources, taking into consideration about the age groups, social classes, gender, and regional distinctiveness together with social justice and solidarity. Economic sustainability needs the keeping of modest benefits and efficient market orientation together with targeting at the conservation of the available resources and thereby increasing the standard of life. Sustainable development involves the eco-economic managing of resources to reach an optimal level of use and satisfaction, instead of maximum level. It also involves the restoration of degraded resources, maintenance of production resources and the enlargement of resource base by the judicious use of

**12. Decision Making with Environmental and Economic Considerations**

Economic decisions of the past were taken mainly on the basis of the market value generated as a consequence of implementing the decisions. But quite often markets do not represent the real costs and benefits involved in a particular production process. Therefore reflecting the hidden costs and benefits mainly environmental became a major concern of modern policy makers and planners who aim at sustainable development. Integrating economic and environmental concern proper changes in attitudes and institutional arrangements have become the hall mark of most modern developmental models. Ecological and economic interactions and interdependence and testified through trade, finance, investment and travel. Hence sustainable development requires the association of ecology and economics in order

to promote development and safeguard environment.

*DOI: http://dx.doi.org/10.5772/intechopen.94884*

#### *Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition DOI: http://dx.doi.org/10.5772/intechopen.94884*

or holistic nature. Sustainable development necessitates the rate of depletion of non-renewable resource to be reduced to make future options possible. The national strategies suggested by the WCED for attaining the concept of sustainable development are revitalizing growth, meeting crucial needs for jobs, water, sanitation and energy, guaranteeing sustainable level of population, reorienting technology, conserving and enhancing the resource bases and handling risks and integration of environment and economics in the final decision making [21–24].

Interaction between economic growth and development fully depends on the natural resources and human resources. The attitude of human beings determines both the content of growth in material and energy terms and its impact in terms of equity. Now both developing and developed countries are in the process of evolving sound methodologies to estimate the real stock and the value of national disasters, providing larger and better opportunities for education and health, assessing social and ecological costs of development projects and taking decisions less vulnerability to economic crisis and these resources that are not exploited in enterprises or national accounts. Only if the quantity of decrease in the deterioration of the natural resources and the conditions along with human resources are calculated we will be able to estimate whether growth is quantitatively acceptable or not. Equitable distribution of income, less vulnerability to economic crisis and national disasters, providing larger and better opportunities for education and health, assessing the social and ecological costs of development projects and taking decisions based on it etc. are the different aspects of improving the quality of growth in order to attain sustainable development. Thus sustainable development can accelerate and assure social welfare by taking steps to improve both natural and human resources.

The approach of sustainability comprises of three pillars which include, the economic, environmental and social dimensions as ultimate and integrative arenas of action. Environmental sustainability designates the conservation and existences of the whole ecological complexes, which is both, a source as well as a sink of natural resources and anthropogenic activities. Social sustainability comprises of the equitable sharing of human resources, taking into consideration about the age groups, social classes, gender, and regional distinctiveness together with social justice and solidarity. Economic sustainability needs the keeping of modest benefits and efficient market orientation together with targeting at the conservation of the available resources and thereby increasing the standard of life. Sustainable development involves the eco-economic managing of resources to reach an optimal level of use and satisfaction, instead of maximum level. It also involves the restoration of degraded resources, maintenance of production resources and the enlargement of resource base by the judicious use of the renewable resources.

#### **12. Decision Making with Environmental and Economic Considerations**

Economic decisions of the past were taken mainly on the basis of the market value generated as a consequence of implementing the decisions. But quite often markets do not represent the real costs and benefits involved in a particular production process. Therefore reflecting the hidden costs and benefits mainly environmental became a major concern of modern policy makers and planners who aim at sustainable development. Integrating economic and environmental concern proper changes in attitudes and institutional arrangements have become the hall mark of most modern developmental models. Ecological and economic interactions and interdependence and testified through trade, finance, investment and travel. Hence sustainable development requires the association of ecology and economics in order to promote development and safeguard environment.

*Circular Economy - Recent Advances, New Perspectives and Applications*

ment and migration throughout the globe [38–43].

sions, such as economic, social and environmental.

alternative uses. The rising socio-economic inequality, growing environmental degradation, climate change, urban sprawl and ever increasing cyber-dependency can be underlined as the global tendencies and this may result in social instability, natural catastrophes, water crises, pollution, heavy resource depletion, unemploy-

amounts seventeen inseparable and self-sustaining goals called Millennium Sustainable Development Goals are envisioned to function as a foundation stone for the renovation of the global economies towards sustainable development. This alteration procedure must result in economic development in agreement with equal opportunity, social uniqueness within the so-called ecological margins. As indispensable investors' for sustainable development, industrial establishments have to move towards an innovative archetype which places much prominence on sustainable value creation. The industrial value creation has undergone thorough changes starting from the age of discovery of fire to the industrial revolution throughout the years. Industry 4.0 (The fourth industrial revolution) which was initiated in 2010s, the ultramodern concept of technology and research for Industry 4.0 and sustainability are highlighted. In response to the Agenda −2030, the European Union released an outline for action, which collectively tells about the planet, people, peace and prosperity [17]. As indispensible stakeholders for sustainable development, all the industrial organizations have to move towards an innovative manufacturing pattern which puts importance on both sustainable development goals together with value creation.The sustainable value creation has three dimen-

After the UN General Assembly in 2015, implemented the Agenda 2030- which

The major objectives of industry 4.0 include, linking services, resources and humans in real-time during the making on the basis of CPS (Cyber Physical Systems) and the Internet of Things (IoT). The major physical systems consist of several actuators, sensors, embedded data handling soft wares which enables fast processing and communication of data to different interfaces. There is complete automation in all the systems, process, manufacturing, packing, error maintenance, which helps in easy maintenance and control of the complete system.The value making elements in Industry 4.0 are, Business Models, Value Creation Network and

Product Life Cycle, Product, Process, Organization and Equipment.

**11. Importance of Sustainable Manufacture in Industry 4.0**

The World Commission on Environment and Development (WCED) was appointed in 1983 by the UN to study the relationship between environment and development and it submitted the report in 1987-Our Common Future'. After the publication of 'Our common Future' in 1987, the concept of sustainable development came in to being and is defined as the development which meets the needs of the present generation without compromising the ability of future generations to meet their needs [20]. Sustainable development provides a healthy model for the progress of the world. Sustainable development involves the eco-economic management of resources to reach an optimum level of use and satisfaction, instead of maximum level. It also involves the restoration of degraded resources, maintenance of production and the elaboration of resource base by the wise use of the renewable

As development involves a progressive transformation of the society in all aspects, sustainable development indicates the uninterrupted continuity of the improvement of social, economic. Ethical, scientific, technological, educational and spiritual condition. Thus it is an all-round human development of an integrated

**28**

resources.

In the final phase of suggesting essential requirements for attaining sustainable development, the World Commission puts forward the presence of the following systems.


These necessities actually depict the different dimensions of sustainable development. Unless sincere, omniscient, integrated and harmonious changes in attitude take place from the bottom of human hearts, sustainable development will remain a distant dream.

#### **13. Carrying Capacity based Resource Consumption**

Carrying capacity is the number of human beings, which can be sustained in a specified area together with the natural resource limits without degrading the social, economic natural and cultural environment for the present and coming generations. The carrying capacity of every system is the maximum amount of resources it can provide and maximum amount of residuals or wastes it can assimilate. Man as an organism has a carrying capacity to use the resources and dump the waste/byproducts back to the environment like any other organism in the universe. If the population of a specific organism is well below the carrying capacity of the environment, it will support positively for natural increase in the number of organisms of the particular species. Several reports are there regarding the carrying capacity of the earth for humans' shows that it has been exceeded far above the normal rate the biosphere can sustain. If carrying capacity of the biosphere is exceeded, living organisms must acclimatize to the new levels of consumption or find alternative resources for meeting their needs. As there is rapid rise in population, the demand for natural resources is increasing in an alarming rate also the pollution load and environmental degradation results. However, through effective management systems and development of new resource saving technologies, we can sustain with limited resources available.

The world Summit, 2002 identified key objectives of sustainable development: protecting natural resources, eradicating poverty and changing unsustainable consumption and production patterns. A multidisciplinary team including

**31**

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition*

people inhabiting in the area on a sustainable basis [41–46].

technologists, ecologists, economists and policy analysts has to ascertain the consumption pattern globally and determine the human carrying capacity and come up with sustainable solutions in which we are considering both environment and economic development equally. The carrying capacity can be changed by improving the technological advancements. As the system exceeds its natural carrying capacity, leaving the environment no longer able to support even the original number of

For development, we need resources, due to rapid increase in population, urbanization, industrialization the resource depletion is increasing in an alarming rate. We cannot avoid development; we are not able to change to the bullock cart age, so we have to find alternatives for the sustainable use of available resources. We will reach to a point where the nature will be depleted of the resources and will not have any to offer the human race. This is when circular economy benefits on a global scale. In addition to using up the resources, the development these days has an adverse effect on the environment. Moving towards a circular economy could offer reduced pressure on the environment. The wastes those are otherwise discarded to the environment are instead recycled and made to use up to its maximum potential. This could improve the security and availability of the natural resources, which are the raw materials for the production processes. This will increase competitiveness among the companies and bring about more innovation, which in turn will boost the economic growth. The economic growth is marked with creating more jobs and other opportunities. Circular economy can also help companies provide more durable and innovative goods with increased quality of life, which help consumers save money in the end. According to waste management priority order, the first and foremost priority is to reduce the amount of wastes generated. We can follow the reuse, recycle and other recovery procedures. Disposal of waste to environment is the least desirable waste management procedure. This exactly aligns with the characteristics of a circular economy, finally can attain in sustainable future also. The present work evaluated the prospective of industrial value creation in Industry 4.0 in terms of their involvement to sustainable development. The importance of the study was to put together the social, economic and environmental dimensions of sustainability. The fundamentals concepts of Industry 4.0 and its basic technologies for value development in the context of Industry 4.0, as well as of sustainable value creation were delineated. This work also aims to propose a novel sustainability approach in industrial environment, especially in environment management systems in industries in order to achieve better performance in terms of both economic and environmental perspectives. The work also supports the engineering systems to be sustainable and feasible industrial systems that can support a transition to the circular economy by change in their process, product and approach finally help them to act in fruitful congruence with the recuperative mechanisms of the Mother Nature. Also results in less demand on the earth's natural resources and less impact on environment. The challenge involves complex array of issues and problems that require more sustainable solutions than that are usually done as the end-of pipe-remedies. Hence there is urgent need for environment management together with the incorporation of principles of sustainable development.

Nowadays growing attention has been modeled to enhance the sustainability component in the manufacturing process by decreasing the consumption of natural resources and its key materials, the energy consumption and the ecological footprint which also increases the company's acceptability and competiveness

*DOI: http://dx.doi.org/10.5772/intechopen.94884*

**14. Conclusion**

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition DOI: http://dx.doi.org/10.5772/intechopen.94884*

technologists, ecologists, economists and policy analysts has to ascertain the consumption pattern globally and determine the human carrying capacity and come up with sustainable solutions in which we are considering both environment and economic development equally. The carrying capacity can be changed by improving the technological advancements. As the system exceeds its natural carrying capacity, leaving the environment no longer able to support even the original number of people inhabiting in the area on a sustainable basis [41–46].

#### **14. Conclusion**

*Circular Economy - Recent Advances, New Perspectives and Applications*

systems.

decision making.

development.

business.

distant dream.

self-correction.

contained and sustainable basis.

the ecological basis for the development.

**13. Carrying Capacity based Resource Consumption**

sustain with limited resources available.

In the final phase of suggesting essential requirements for attaining sustainable development, the World Commission puts forward the presence of the following

• A political system that fortifies effective citizen's participation in the final

• An economic system which is able to create technical knowledge on a self-

• A social system that offers solutions to the pressures arising from discordant

• A production system which compliments the responsibility of the presence of

• A technological system that can explore unremittingly for new clarifications

• An international system that nurtures sustainability patterns of trade and

• An administrative system that is very flexible and has the capability of

These necessities actually depict the different dimensions of sustainable development. Unless sincere, omniscient, integrated and harmonious changes in attitude take place from the bottom of human hearts, sustainable development will remain a

Carrying capacity is the number of human beings, which can be sustained in a specified area together with the natural resource limits without degrading the social, economic natural and cultural environment for the present and coming generations. The carrying capacity of every system is the maximum amount of resources it can provide and maximum amount of residuals or wastes it can assimilate. Man as an organism has a carrying capacity to use the resources and dump the waste/byproducts back to the environment like any other organism in the universe. If the population of a specific organism is well below the carrying capacity of the environment, it will support positively for natural increase in the number of organisms of the particular species. Several reports are there regarding the carrying capacity of the earth for humans' shows that it has been exceeded far above the normal rate the biosphere can sustain. If carrying capacity of the biosphere is exceeded, living organisms must acclimatize to the new levels of consumption or find alternative resources for meeting their needs. As there is rapid rise in population, the demand for natural resources is increasing in an alarming rate also the pollution load and environmental degradation results. However, through effective management systems and development of new resource saving technologies, we can

The world Summit, 2002 identified key objectives of sustainable development: protecting natural resources, eradicating poverty and changing unsustainable consumption and production patterns. A multidisciplinary team including

**30**

For development, we need resources, due to rapid increase in population, urbanization, industrialization the resource depletion is increasing in an alarming rate. We cannot avoid development; we are not able to change to the bullock cart age, so we have to find alternatives for the sustainable use of available resources. We will reach to a point where the nature will be depleted of the resources and will not have any to offer the human race. This is when circular economy benefits on a global scale. In addition to using up the resources, the development these days has an adverse effect on the environment. Moving towards a circular economy could offer reduced pressure on the environment. The wastes those are otherwise discarded to the environment are instead recycled and made to use up to its maximum potential. This could improve the security and availability of the natural resources, which are the raw materials for the production processes. This will increase competitiveness among the companies and bring about more innovation, which in turn will boost the economic growth. The economic growth is marked with creating more jobs and other opportunities. Circular economy can also help companies provide more durable and innovative goods with increased quality of life, which help consumers save money in the end. According to waste management priority order, the first and foremost priority is to reduce the amount of wastes generated. We can follow the reuse, recycle and other recovery procedures. Disposal of waste to environment is the least desirable waste management procedure. This exactly aligns with the characteristics of a circular economy, finally can attain in sustainable future also.

The present work evaluated the prospective of industrial value creation in Industry 4.0 in terms of their involvement to sustainable development. The importance of the study was to put together the social, economic and environmental dimensions of sustainability. The fundamentals concepts of Industry 4.0 and its basic technologies for value development in the context of Industry 4.0, as well as of sustainable value creation were delineated. This work also aims to propose a novel sustainability approach in industrial environment, especially in environment management systems in industries in order to achieve better performance in terms of both economic and environmental perspectives. The work also supports the engineering systems to be sustainable and feasible industrial systems that can support a transition to the circular economy by change in their process, product and approach finally help them to act in fruitful congruence with the recuperative mechanisms of the Mother Nature. Also results in less demand on the earth's natural resources and less impact on environment. The challenge involves complex array of issues and problems that require more sustainable solutions than that are usually done as the end-of pipe-remedies. Hence there is urgent need for environment management together with the incorporation of principles of sustainable development.

Nowadays growing attention has been modeled to enhance the sustainability component in the manufacturing process by decreasing the consumption of natural resources and its key materials, the energy consumption and the ecological footprint which also increases the company's acceptability and competiveness in global markets. The rebuilding comprises of a set of processes or systems, tools and knowledge based approaches to reuse and recover functions and valuable materials from industrial waste products and postconsumer products under a circular economy perspective. Globally the industries are facing several challenges to attain the reasonable and sustainable health by upholding peaceful and good relationship between the societies and the biosphere. To overcome these challenges the components of industry 4.0 is set to achieve sustainable development in three dimensions- economic, ecological and social. The new evolution of the production and industrial process called Industry 4.0, and its related technologies such as the cyber–physical systems, big data analytics and Internet of Things, still have an unidentified potential influence on the environment. Though, the existing economic strategies and the resultant business models are more or less universal, they largely neglect the organizational essentials. The closed-loop economy or circular economy present modewort on debate on sustainable development as it an approach in which the waste or residuals from an industry can be used as raw material for another industry there by reducing the demand on earth's natural resources. The vital aim of the work is to bond the gap between organizational characteristics, such as profitability, market position, structure, decision-making style and the adoption of circular economy practices.

### **Conflict of interest**

The authors certify that there will not exists any conflict of interest in the subject matter or materials discussed in this manuscript.

### **Author details**

Smitha Chandran Sreedevi1 \* and Razim Mohammed Salahudeen2

1 Department of Chemistry, Amrita Vishwa Vidyapeetham, Amritapuri Campus, Kollam, Kerala, India

2 Strathclyde Business School, University of Strathclyde Glasgow, Scotland

\*Address all correspondence to: smithachandran@am.amrita.edu

© 2021 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

**33**

needs; 2011.

*Sustainability Route for Industry 4.0: The Future of Global Circular Economic Transition*

2005.

pdf

2018;**117**:408-425

[10] Ruth DeFries, Stefano Pagiola. Millennium Ecosystem Assessment, Current State & Trends Assessmen;

[11] Kamble SS, Gunasekaran A, Gawankar S. Sustainable Industry 4.0 framework: A systematic literature review identifying the current trends and future perspectives. Process Safety and Environmental Protection.

[12] 'Oil markets and Arab unrest: The Price of Fear', The Economist. 2011. https://www.economist.com/ briefing/2011/03/03/the-price-of-fear.

[13] Climate Change Indicators: Snow and Ice', from: Climate Change Indicators Report, U.S. Environmental Protection Agency; 2010, p. 54. https://

www.epa.gov/sites/production/ files/2016-08/documents/ci-full-2010.

[14] McKinsey and Company: Transforming the Water Economy – Seven Ways to Ensure Resources for Growth; 2011; https://www.mckinsey. com/~/media/McKinsey/dotcom/client\_ service/Sustainability/PDFs/McK%20 on%20SRP/SRP\_09\_Water.ashx

Prospects – The 2014 Revision 2014; https://population.un.org/ wup/Publications/Files/WUP2014-

Methodology.pdf

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[15] United Nations, World Urbanization

[16] World Economic Forum (WEF), The Global Risks Report 2017: 12th Edition, Gueneva; 2017. http://www3. weforum.org/docs/GRR17\_Report\_web.

[17] United Nations (UN), Transforming

Sustainable Development; 2015. https://

our world: the 2030 Agenda for

sustainabledevelopment.un.org/ post2015/transformingourworld

*DOI: http://dx.doi.org/10.5772/intechopen.94884*

[1] The Ellen MacArthur Foundation. Towards a Circular Economy - Economic and Business Rationale for an Accelerated Transition. Greener Management International. 2012:97-110

[2] Ellen MacArthur Foundation, McKinsey & Company. Towards the Circular Economy: Accelerating the scale-up across global supply chains. World Econ Forum 2014; 1-64.

[3] Ellen MacArthur Foundation. Towards the Circular Economy: Opportunities for the consumer goods

[4] Yang H. Design for transition to a circular economy. Lect. Notes Comput. Sci. (including Subser. Lect. Notes Artif. Intell. Lect. Notes). Bioinformatics.

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sustainability into construction project portfolio management. KSCE Journal of Civil Engineering. 2016;**20**(1):101-108. DOI: 10.1007/s12205-015-0520-z

[6] McEvedy, C R Jones, Atlas of World Population History, Penguin, London;

[7] McKinsey .Global Institute: Resource revolution: Meeting the world's energy, materials, food, and water needs; November; 2011. p. 468-471.

[8] J. Gustavsson C, Cederberg, U Sonesson R. van Otterdijk, A Meybeck. Global food losses and food waste – Extent, causes and prevention. Food And Agriculture Organization Of The

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#### **References**

*Circular Economy - Recent Advances, New Perspectives and Applications*

in global markets. The rebuilding comprises of a set of processes or systems, tools and knowledge based approaches to reuse and recover functions and valuable materials from industrial waste products and postconsumer products under a circular economy perspective. Globally the industries are facing several challenges to attain the reasonable and sustainable health by upholding peaceful and good relationship between the societies and the biosphere. To overcome these challenges the components of industry 4.0 is set to achieve sustainable development in three dimensions- economic, ecological and social. The new evolution of the production and industrial process called Industry 4.0, and its related technologies such as the cyber–physical systems, big data analytics and Internet of Things, still have an unidentified potential influence on the environment. Though, the existing economic strategies and the resultant business models are more or less universal, they largely neglect the organizational essentials. The closed-loop economy or circular economy present modewort on debate on sustainable development as it an approach in which the waste or residuals from an industry can be used as raw material for another industry there by reducing the demand on earth's natural resources. The vital aim of the work is to bond the gap between organizational characteristics, such as profitability, market position, structure, decision-making style and the adoption

**32**

**Author details**

Smitha Chandran Sreedevi1

provided the original work is properly cited.

of circular economy practices.

**Conflict of interest**

Kollam, Kerala, India

\* and Razim Mohammed Salahudeen2

1 Department of Chemistry, Amrita Vishwa Vidyapeetham, Amritapuri Campus,

© 2021 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium,

The authors certify that there will not exists any conflict of interest in the

subject matter or materials discussed in this manuscript.

2 Strathclyde Business School, University of Strathclyde Glasgow, Scotland

\*Address all correspondence to: smithachandran@am.amrita.edu

[1] The Ellen MacArthur Foundation. Towards a Circular Economy - Economic and Business Rationale for an Accelerated Transition. Greener Management International. 2012:97-110

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doi:10.1016/J.ENG.2017.05.015

10.3390/ECSA-2-S5002

jengtecman.2013.11.004.

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Newman S. T. Intelligent manufacturing in the context of industry 4.0: a review. Engineering, 2017; 3(5), 616-630. DOI:

ant=32117835366434

industrial-revolution

dp/0912111909

Elgar; 2001.

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(accessed 2.12.2016)

wirtschaftliche Zusammenarbeit und Entwicklung (BMZ), Die Agenda; 2030 für nachhaltige ntwicklung, http://www.bmz.de/de/ministerium/ ziele/2030\_agenda/index.html, 2016

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and Development, Report of the World Commission on Environment and Development; 1987. https:// sustainabledevelopment.un.org/ content/documents/5987our-common-

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[23] W R Stahel, The Performance Economy, Palgrave Macmillan; 2006.

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cradle%20design\_0.pdf

Industrie 4.0, 2016. https:// sustainabledevelopment.un.org/ content/documents/5987our-common-

de/buch/Handbuch+Indust rie+40/9783446446427

future.pdf

future.pdf

269-287.

**34**

[34] Singh Z. Sustainable development goals: Challenges and opportunities. Indian Journal of Public Health. 2016;**60**(4):247-250. DOI: 10.4103/0019-557X.195862

[35] Ustundag A, Cevikcan E. Industry 4.0: managing the digital transformation. Springer; 2017 https://www.springer.com/gp/ book/9783319578699

[36] Batth RS, Nayya, A, Nagpal, A, Internet of Robotic Things: Driving Intelligent Robotics of Future-Concept, Architecture, Applications and Technologies. In 2018 4th International Conference on Computing Sciences (ICCS), 2018; 151-160. IEEE. DOI:10. 1109/ICCS.2018.00033

[37] Singh S, Nayyar A, Kumar R, Sharma A. (2019). Fog computing: from architecture to edge computing and big data processing. The Journal of Supercomputing. 2019;**75**(4):2070-2105. https://www.ibm.com/downloads/ cas/0WOR6ORJ

[38] Singh P, Gupta, Jyoti K, Nayyar. Research on Auto-Scaling of Web Applications in Cloud: Survey, Trends and Future Directions. Scalable Computing: Practice and Experience, 2019; 20(2): 399-432. DOI: 10. 12694/ scpe.v20i2.1537

[39] Tukker A, Charter M, Vezzoli, C, Stø, E, Andersen, M M. (Eds.). 2017. System innovation for sustainability 1: Perspectives on radical changes to sustainable consumption and production. Routledge.

[40] Hammer J, Pivo G. The triple bottom line and sustainable

economic development theory and practice. Economic Development Quarterly. 2017;**31**(1):25-36. DOI: 10.1177/0891242416674808

[41] Beckerman, W. 2002. A poverty of reason: Sustainable development and economic growth. The Independent Institute. https:// www.amazon.in/Poverty-Reason-Sustainable-Development-Economic/ dp/0945999852

[42] Carney, D. 1998. Sustainable livelihoods. Sustainable Livelihoods: What contribution can we make. https://www. environmentandurbanization.org/ sustainable-rural-livelihoods-whatcontribution-can-we-make

[43] Solanki A, Nayyar A. Green Internet of Things (G-IoT): ICT Technologies, Principles, Applications, Projects, and Challenges. In: Handbook of Research on Big Data and the IoT. IGI Global; 2019. pp. 379-405. DOI: 10.4018/978-1- 5225-7432-3.ch021

[44] Das S, Nayyar A. Innovative Ideas to Manage Urban Traffic Congestion in Cognitive Cities. In: In Driving the Development, Management, and Sustainability of Cognitive Cities, 2019;139-162. IGI: Global; 2019. DOI: 10.4018/978-1-5225-8085-0.ch006

[45] Bahrin MAK, Othman M, Azli NN, Talib MF. Industry 4.0: A review on industrial automation and robotic. Jurnal Teknolog. 2016;**201, 78**(6-13): 137-143. DOI: 10. 11113/JT.V78.9285

[46] Nayyar A, Jain R, Mahapatra B, Singh A. Cyber Security Challenges for Smart Cities. In: Driving the Development, Management, and Sustainability of Cognitive Cities. IGI Global; 2019. pp. 27-54. http:// link-springer-com-443.webvpn. fjmu.edu.cn/chapter/10.1007 %2F978-3-030-14544-6\_11

**37**

Section 2

Regulation and Control of

Economic Development

### Section 2
