Abstract
The intersection of circular business models (CBMs) and Industry 5.0, promotes sustainable development. Industry 5.0 drives a resilient and sustainable industrial ecosystem, achievable through Circular Economy (CE) principles. Blockchain, IoT, AI, AM/3DP, and other advanced technologies facilitate the incorporation of CE within Industry 5.0, these have been applied in CBMs, promoting sustainable human-machine collaboration and efficient resource utilisation. CBMs like circular supply, resource recovery, product life extension, sharing, and product service system have promising possibilities and challenges abound in adoption. However, a holistic approach addresses the cultural, regulatory, economic, and technical barriers. Additionally, strategic management in CBMs for industry 5.0 is vital.
TopIntroduction
Circularity and Industry 5.0 are most crucial in today’s world, with both concepts sharing a symbiotic relationship, seeking to promote the very ideas of sustainable development. Industry 5.0 commonly called the fifth industrial revolution, recognizes the undeniable importance of a resilient, sustainable, and value-driven industrial ecosystem, which can be achieved via a Circular Economy (CE), that is, an industrial economy that is restorative or regenerative by intention and design (Ellen McArthur Foundation, 2013: 14). The drivers that will most likely facilitate the seamless integration of CE within Industry 5.0 are technological advancements such as the Internet of Things (IoT), Artificial Intelligence (AI), blockchain, big data analytics; human-machine collaboration; efficient reverse logistics; additive manufacturing amongst others (Anane-Simon & Atiku, 2023; 2024). The Circular Economy strives to keep resources in use for as long as possible through responsible practices, conservation, and innovation. The Ellen McArthur Foundation (2016) makes the case for the use of intelligent assets in achieving circular economy objectives, and many businesses have embraced this circular economy approach in various ways and have achieved the same sustainable results evident in increased resource use efficiency and reduced waste. However, Circular Business Models (CBM) inform how companies create, capture, and deliver value with the value creation logic designed to improve resource efficiency by contributing to extending the useful life of products and parts (e.g., through long-life design, repair, and remanufacturing) and by closing material loops (Nußholz, 2017, p. 12). While these models encourage innovative approaches to production, consumption, waste management, promoting sustainability and resilience within industries and economies, it is challenging to create a CBM, and taking the wrong approach can be expensive. Hence, it becomes even more important to understand how to apply the right strategies or frameworks to obtain results that are in sync with the tenets of sustainability (Atiku, 2020). Consequently, approaching CBMs from an integrated management perspective, and not just from an industrial ecology perspective alone, can reveal promising pathways to transition effectively into an effective and functioning CBM (Pietrulla & Frankenberger, 2022). Consequently, Industry 5.0 and effective CBMs reinforce each other with a people-centric approach in leveraging technology for sustainable development, where human creativity (Fields & Atiku, 2017) and decision-making optimise circular processes that are driven by technological capabilities.
Accordingly, this chapter introduces the concept of circular economy and asserts that it is essential to adopt an integrated approach to providing the enabling environment that organisations can utilise in formulating and successfully executing CBMs in the fifth industrial revolution. Additionally, this chapter proactively directs the future development of CBMs that are considered holistically sustainable, along with its component units in a manner that both maintains and extends competitive advantages in a complex and competitive business environment.
Also, elucidated in this chapter are ideas and insights that will enhance CBMs within Industry 5.0 including setting clear sustainability goals to be achieved, integrating technological advancements and tenets of Industry 5.0, collaborative efforts, innovation in design and production, and continuous research and improvement. By focusing on these aspects, businesses can further embed circularity into their operations to achieve greater resource efficiency and other sustainability goals, including the economic and human dimensions, thereby staying ahead of the curve.
Key Terms in this Chapter
Industry 5.0: An industrial era where humans and advanced machines collaborate to achieve more resilience and sustainable development.
Strategic Management: It is the process of setting the direction of an organisation to achieve its overall goals and long-term objectives.
Internet of Things (IoT): It is a collection of physical objects that are embedded with sensors which are connected to one another and the Internet, thereby enabling collection, exchange of data, and remote control.
Artificial Intelligence: Artificial Intelligence (AI) is made up of computer systems, softwares and hardwares that enables machines to perform tasks that would normally require human intelligence, like learning, problem-solving, and decision-making.
Competitive advantage: Is the unique quality or strength an organisation possesses that makes a customer choose them over others.
Circular Economy (CE): It is a system where resources are used efficiently, and wastage avoided through minimal use of virgin raw materials and maximum use of waste materials which closes the material loop by keeping them in use for as long as possible.
Sustainable Development: It is a form of development that strives to simultaneously achieve economic growth, social progress, and environmental conservation.