Circular economy enterprises could operate more efficiently with the help of data – but combining and analysing it is challenging

The circular economy is expected to help solve the global sustainability challenge. Circular economy enterprises, such as recycling and waste management companies, play a major role in keeping materials in circulation and, in this way, preventing the use of virgin materials.

– Material cycles could be made more efficient by taking advantage of digitalisation and data. In my doctoral dissertation, I have researched how circular economy enterprises, SMEs in particular, can utilise data, says Anne-Mari Järvenpää, who will be defending her doctoral dissertation at the University of Vaasa on Friday, 2 December.

Reduction of expenses and CO2 emissions as well as more efficient cycles using data

Circular economy enterprises are expecting more competition in the future. Customers are increasingly highlighting green values. Therefore, waste transportations should have lower CO2 emissions than now.

 – To take advantage of data, circular economy SMEs need help with planning operations, preparing for the future as competition increases, changing trends, increasing environmental requirements, reducing CO2 emissions as well as investments, says Järvenpää.

According to Järvenpää’s research, it is possible to reduce expenses and increase efficiency by taking advantage of data. Material flows could be better managed and cooperation between enterprises in the circular economy ecosystem promoted. However, data do not contain meaning per se; instead, you need to be able to produce information to support decision-making on the basis of that data.

The results of the dissertation show that the data utilised by circular economy SMEs often originate from their business processes and systems. The data are used to describe the current state rather than to predict the future.

– Operations could be developed further if it were possible to combine relevant data from different sources and to produce tangible information for the use of the company’s personnel. Circular economy SMEs find it challenging to combine relevant data from different sources and to use analytics, says Järvenpää.

Understanding data, incoherence and weak know-how in using information systems challenge SMEs

Järvenpää says that circular economy SMEs face many challenges with taking advantage of data. According to the study, these difficulties are related to the very understanding of the data and how they are processed as well as resources, capabilities and legislation. The data may be scattered across several systems and it is time-consuming to manually input and combine data.

Enterprises also have challenges with using information systems. Enterprises may not have adequate skills to use information systems or the capability to refine data and develop reporting. The legislation also poses challenges as the data format required for reporting to authorities might differ from how the data is measured in practice.  

Cooperation with universities helps SMEs

How can circular economy SMEs develop their capacity to take advantage of data when it can be difficult in the labour market to compete with larger enterprises for skilled employees? According to Järvenpää, one way is to cooperate with a university and its students. 

– The results show that enterprises benefited from cooperating with students in data analytics projects in many ways. Enterprises not only acquainted themselves with analytics tools, but they also learned to better understand their data with the help of visualisations made by students.

At best, the visualisations produced more understanding of the enterprise’s problem and led to concrete development ideas. The user manuals made by students also helped to take advantage of the visualised solution and to develop it further in the enterprise. 

Järvenpää points out that not only companies benefit from cooperation with universities, but also students. For them, cooperation provides a learning environment where they can apply their skills and gain an understanding of the development challenges related to the circular economy.  

Doctoral dissertation

Järvenpää, Anne-Mari (2022) Developing data analytics capabilities of circular economy SMEs. Acta Wasaensia 496. Doctoral dissertation. Vaasan yliopisto / University of Vaasa.

Publication pdf

Public defence

The public examination of M.Eng. Anne-Mari Järvenpää’s doctoral dissertation ”Developing data analytics capabilities of circular economy SMEs” will be held on Friday 2.12.2022 at noon at the University of Vaasa, auditorium Kurtén. Professor Nina Helander (Tampere University) and Associate Professor, Docent Kaisa Henttonen (University of Eastern Finland) will act as opponents and Docent Iivari Kunttu as custos. The defence will be held in Finnish.

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