The obstacles standing in the way of the dream of the circular economy

According to Ellen MacArthur Foundation, a circular economy “aims to redefine growth” from a business and human perspective by disrupting the current pattern of resource consumption, which many call take-make-consume-throw away, literally and metaphorically. In other words, a perfectly circular economy will not contain any waste of resources or pollution. This ideal scenario can be achieved through endless resource regeneration and unlimited recyclability of consumables. The foundation, one of the main promoters of the concept of circular economy, has often pointed out the relationship between the waste of all types of resources and the growing threat of climate change. Thus, circularity will not only reduce the waste of resources, but also slow down the inevitable threat of climate change and global warming.

As you will see later, technologies such as AI and computer vision in smart cities can play an important role in overcoming most circular economy challenges and implementation barriers.

Obstacles to the circular economy

Before exploring technologies such as AI, robotics, and computer vision in smart cities to turn them into perfectly circular cities, businesses and governments need to consider the barriers that stand in the way of the transition. Understanding the main challenges of the circular economy is essential before you can develop strategies to overcome them. The challenges, or barriers, of the circular economy are present in various places. Here are some of these obstacles that can be considered as major challenges or obstacles to the circular economy:

Obstacles within companies

Building a circular economy requires a major transformation of infrastructure and operations in organizations across various sectors. Needless to say, significant investments in technology and manpower will need to be made for such a transition. Organizations will need to put in place the technology that can create circular products. Such circular models will need rare circular raw materials for the production of goods. Since there is no precedent, companies won’t even know how much money and resources need to be invested to achieve reasonable circularity goals. Such costs can deter companies from pursuing circularity.

Besides the high costs of secondary products and raw materials, companies with a rigid and dated corporate culture may view circularity as a high cost, low outcome exercise due to the novelty of the concept. Additionally, business leaders unwilling to embrace change may point to the supposed lack of consumer demand for circular goods due to their higher cost compared to non-circular goods. The lack of demand is wrong, however, with customers willing to invest in circular products if they are not very complicated to own and use.

Newly created companies need to break even before they can diversify their operations and attempt to overcome the challenges of the circular economy. At least for now, the high cost of developing and producing highly recyclable products is a major barrier to achieving circularity.

Government Policy Barriers

One of the main drivers of the high cost of circular goods is existing taxation systems, which may involve higher value added taxes for recycled products. This can cause customers to pay twice for the same product. Thus, occasionally, government laws and regulations may apparently promote the purchase of “linear” goods and the waste of resources for businesses and individual users. For example, governments and public bodies have strict laws in place regarding expiry dates for food. However, one of the lesser known facts is that several types of food are still edible for up to several days, even after their respective expiry dates. The expiry date on food products has more to do with the quality of the products. Thus, if the quality is optimal before the expiry date, it can still be consumed after the date for several types of food. As a result, strict laws regarding the use of food expiration lead to large-scale waste. Fortunately, in the case of the food industry in the United States, several organizations are working to solve the waste problem.

Government policies are perhaps the most stubborn challenges of the circular economy, as no amount of technology or investment can enable companies to overcome them. Policymakers around the world will have to strive to make laws with increased resource reuse and environmental sustainability top priorities.

Obstacles to waste management and recycling infrastructure

Businesses and governments need to put in place the necessary frameworks to improve the recyclability and reuse aspects of their countries. Recyclability stems from intelligent waste management. As you may know, waste has varying degrees of recyclability. To improve recyclability, the identification and separation of materials with higher recyclability is necessary. Unfortunately, most countries do not have the infrastructure required for this purpose. As a result, up to 91% of global plastic is not recycled according to a 2019 study. Unrecycled plastic is thrown away and later ends up in rivers, sewers and oceans, causing clogging and increasing carbon footprints across the board. More importantly, the large amount of plastic in water bodies is one of the main reasons for the devastation of marine ecosystems. Several aquatic plants and animals—up to 100,000 mammals– are killed due to such an accumulation of plastic in water bodies. The lack of recyclability is the result of several factors, namely a lack of will and funding to set up a circular infrastructure.

The concept of circular economy works best when embraced universally. However, it is almost impossible to achieve circularity at all levels, as most countries lack the financial muscle to achieve the goal. Countries like China, the Philippines, Indonesia, Thailand, and Vietnam contribute more than half of the world’s plastic waste. These countries must first optimize their waste management and recyclability to reduce waste before thinking about overcoming other challenges of the circular economy.

Poor countries simply do not have the means to crush and recycle plastic products to create products of similar or higher quality to the original. This is a major hurdle because the quality of plastic recycling mainly comes down to the quality of additives, technology and expertise to extract the maximum purity and reuse. For countries to achieve optimal circularity, high-quality technology and expertise will need to be made available to all countries.

These are just the tip of the iceberg when it comes to the challenges of the circular economy. Apart from this, the hyper-amplification of consumerism over the past decades has fostered a culture of use and discard across the world. If circularity is to be achieved, a massive cultural shift will be required.

Role of data and technology in achieving circularity

Smart cities, with their multitude of intelligent and data-driven technologies, are the areas most likely to achieve high recyclability and transform into circular cities in the future. A circular city is defined as a city that has made the transition from a linear to a circular economy. Such a city integrates recyclability protocols in all its functions. Moreover, these cities involve the collaboration of organizations, public agencies, citizens and research bodies to maintain circularity and long-term sustainability.

Technologies such as IoT, NLG, NLP, and robotics are integral to the operation of smart cities, and they will continue to be important in this regard. The use of AI and computer vision in smart cities will also be very important for this purpose.

AI will enable companies in smart cities to design, develop, produce and sell circular products. This can be achieved during iterative product development based on machine learning. As you know, machine learning models can cycle through thousands of materials to accurately quantify their reuse and recyclability. The implication of computer vision in smart cities makes it easier for designers and developers to find circular materials based on several visually sensed factors. Overall, computer vision, AI, and machine learning are enabling companies to choose the most “circular” materials for all of their products.

Computer vision and AI are also extremely important in waste management, recyclability and reverse logistics in smart cities. Computer vision allows waste disposal teams and smart city administrators to identify items and materials that have greater recyclability. This allows circular cities to waste fewer resources and generate less plastic.

The involvement of IoT, robotics, AI and computer vision in smart cities must be integrated and implemented in such a way that they can overcome the challenges of the circular economy and move the concept from paper to the real world.


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