It has been a year since the global outbreak of the pandemic. During this period, the world fought valiantly and collectively to survive this challenge; however, the battle is far from over.
While the pandemic impacted the global economy, it also exposed gaps in the notion of development across global markets. It further emphasised the need to build for the future through collective actions including self-reliance, technology, and digital investments across industries, equitable growth, rectifying the mismatch in demand and supply, and correcting the climate imbalance.
Despite its damaging effect on the world, the pandemic-induced crisis urged us to pause, reflect, and re-energise to leverage the opportunities that lie beyond the challenges. Now is the time for us to build a sustainable economy governed by mindful growth—one that is not built at the cost of the welfare of its stakeholders. Transitioning from a linear to a circular economy—a restorative or regenerative economy that lays equal emphasis on people, planet, and profits—is perhaps the only viable solution that can ensure this. It underscores the need to shift towards the use of renewable resources and aims at the elimination of waste through the superior design of materials, products, systems, and business models.
So how can we build a circular economy that is dynamic, resilient, and progressive?
Building a circular economy through collaboration
The opportunity to build a resilient and low-carbon economic recovery requires close collaboration between government, industries, and people to take critical actions that focus on safeguarding national economies. Italy, one of the leading countries in Europe with a circular economy, is a fine example of close stakeholder collaboration in order to promote innovative projects in sustainability, economy, tourism, decarburisation, and climate change mitigation. Based on the SMART city/country strategies, many structural changes have been incorporated to facilitate the transition to a green economy. According to Ellen MacArthur Foundation, the circular economy development path in India could create an annual value of ₹14 lakh crore ($218 billion) in 2030 and ₹40 lakh crore ($624 billion) in 2050 in comparison to the current development scenario. India is deploying SMART policies and strategies across its cities to maximise resource use, decrease pollution, and create countless business opportunities.
Building a circular economy through distributed growth
The world is a global village, much like an extended central nervous system connected by the Internet and telecommunication. Therefore, the focus should be on distributed growth across all industries—be it manufacturing, agriculture, telecommunications, information technology, or health. In India, the reliance on agriculture needs to be balanced by increased focus on the digital, education, healthcare, and new-age technologies. I believe that the spirit of entrepreneurship guides us, and we can boost our economy by supporting local entrepreneurs and business ventures. We also need to manage talent in developing countries by creating ample employment opportunities to ensure rounded growth.
Building a circular economy by leveraging technology
To develop a sustainable growth model, we must leverage technology as a key enabler to facilitate business and operations. We need to embrace the transformative capabilities of digital technologies for supply chain resilience: big data analytics to streamline supplier selection processes; cloud computing to facilitate and manage supplier relationships; and the Internet of Things for enhancing logistics and shipping processes.
Technology is the catalyst that can bridge the gap between Bharat and India and we must leverage it. Direct benefits/money transfer to citizens through digitisation of banks as part of the Jan Dhan scheme of the government is a great example for this. Similarly, the emergence of fintech and increased smartphone and Internet penetration has led to better connect between the government, industries, and citizens.
The global market is moving towards the next leap where technologies such as 5G, artificial intelligence, blockchain, machine to machine, and robotics could be applied to any services in any sector. In other words, we are taking the leap by making technology the common denominator. In this scenario, businesses need to place the tech-bets and nurture a growth mindset guided by sustainable goals like combating climate change, adopting renewable energy solutions, and using digital platforms.
Building a circular economy by going vocal for local
Circular and local models have proven to be more resilient and efficient in addressing the needs of the masses and catalysing recovery of businesses. We must hence encourage local alternatives to enable local supply chains. During the early stages of the pandemic in India, we were in dire need of PPE (personal protective equipment) kits and masks for our frontline line workers. However, within a few weeks of the lockdown, our country managed to manufacture these kits indigenously in huge numbers. This provided employment opportunities to many and together, we were able to turn the situation around successfully.
According to the Circularity Gap Report 2020, the global economy is only 8.6% circular. This means that over 90% of the resources that enter the economy—100 billion tonnes per year—are wasted. The Netherlands is one of the leading countries that works with a circular economy. It has an ambitious project to become a country 100% based on a circular economy by 2050 and is already working on strategies to manage raw materials, products, and services more efficiently. While it is important to go vocal for local, there is a need to foster global collaboration to provide the necessary infrastructure to collectively develop and sustain a circular economy.
A circular economy is not a new concept. From a very young age, we are taught about the importance of using our resources and money wisely, with an eye on the future. We must continue this practice in our lives to invest in initiatives that positively impact our future generations by becoming more environmentally conscious and responsible.
Views are personal. The author is Managing Director and Chief Executive Officer, Tech Mahindra.