Software and Circular Economy

Software and Circular Economy

Software supports circular economy; at the same time the instruments of circular economy serve as tools for circular software development. This insight matured during a workshop. The discussion arose about the extent to which software itself can be considered circular. Up to now, I had seen digitization, Big Data and other software solutions mainly as enablers for circular economy, less as objects for the use of circular strategies themselves. In this blog I will discuss both how software supports circular economy and which analogies exist between software and circularity.

For software development is one of the best examples to explain circular thinking. Let’s take a look at “as a Service” strategies. The idea of leaving ownership with those who are best at handling the software (the developers) and giving users (through cloud-based solutions) access to the latest and best version of the solution explains the Product as a Service strategy from the Circular Economy best. But there is much more that good software development and circular economy have in common.

Circular Economy solution areas

To brainstorm about the business possibilities through the recycling economy, I like to use 7 areas in my workshops, from which possibilities arise. In practice, the focus for more sustainability is often on manufacturing, because you can influence it yourself. You use less material, look at the type of material (bio-based, biodegradable, recycled or recyclable) and the reduction of energy in processing. But the most important factor is the design of the products – when designing, you should consider all aspects for a better and longer use of the products or components. This already creates new business opportunities. Because modular design, which includes easy repair, upgrading and reuse of individual components, enables better service for the user. And it facilitates cooperation with service providers who accompany the product’s life cycle (e.g. repair shops or users of secondary materials).

The business models for all other areas can be implemented both by the manufacturer itself or by partners. The more valuable the products and components, the more important it is to use them efficiently. Circular approaches are pursued in particular for materials of high quality – because there the expenditure of energy and labour in the initial production is very high, associated with many emissions and sometimes promoted under working conditions that are difficult to control. E.g., there is both a primary and secondary market for construction machinery; these are shared, rented, repaired, resold, remanufactured, individual parts are recycled and some are made available as a service with qualified personnel. We see it as our task to find solutions for every area – with our approach every company finds the best starting points.

Software supports circular solutions

For many of these business models, software is very valuable – because it is about decoupling the required use from the need of additional resources. Knowing exactly what materials and components the products are made of is becoming increasingly important. Only in this way can the individual components be reused or recycled. Testing and ensuring the quality of secondary materials is easier if the components are clearly marked. Tracking and tracing of installed material is also important, especially in the case of parts with low mobility. There is still a lot of potential for urban mining in the construction sector, to know early on where resources will be available.,, or are platforms that aim to make better use of secondary materials.


There is still a wide range of possible applications for software to optimize utilization, be it through energy efficiency in production, simulations such as “digital twins” of factories for the optimization of material. All these ensure that the use of existing resources is improved. In my opinion, there is a lot of potential in improving the links between the various actors, i.e. targeted manufacturer information for users, repair and recycling and feedback from use, repair and reuse back to the manufacturers. The greater the transparency about consequences in use and possibilities for reuse, the more likely it is that the design of products and services will take a circular view.

Circular software solutions

When is a software circular? What circular business models exist in the software sector. Not every circular economy strategy is suitable for every scenario. Therefore, it is always important to understand how the software will be used. How can software be designed in terms of the circular economy, and what questions should be asked for your own software solution? I have connected my thoughts on this with the areas of business models.

Design and creation:

For which purposes is the software created? Because of the connectedness it is important to know and consider the environment, so that as few adjustments as possible are made during integration and existing data can be used by other systems. Redundant data storage, high consumption of storage space or bandwidth during use are also aspects that are not conducive to the circular economy.

Software should be created in such a way that it can be easily understood (and thus documented) by many. A distinction must be made between which stakeholder needs which information. Programmers of the software, operators of interface systems that communicate with the software and IT specialists who set up or maintain the software for the user have higher demands on information than the users themselves. These needs should be considered in the development process as much as those of the users.

When creating software, the same design requirements should apply as for products: Expandable, quick identification of errors for repairs, easy to correct, interfaces that facilitate integration with other systems. Which data can be easily deleted, which must be archived? A large part of the “memory guzzlers” and garbage in the systems is data – many people who look at what occupies the memory space of their laptops or smartphones know this.

An early involvement of the users via agile procedures ensures that no “waste” is produced, i.e. that what the users really need and use is delivered. In general, you should evaluate what can cause complications and unnecessary capacity in later use.

Use and share

Some of the points are already mentioned in the previous paragraph. When it comes to further strategies of use, you should take a look at the data. Which data is already available and can be used for further purposes? How can storage space be shared – how are updates provided? How much functionality must be provided on the client side and what runs centrally on the server. Cloud-based solutions are a development of a circular economy offering.

Business opportunities for use do not have to be offered by the manufacturer itself, there are already solutions for this as well. Joint purchasing of software solutions, discounted offers for consultants, who can then use them for several customers. Offers to reduce redundant data storage are just as circular as setting up local networks where not everyone needs every software.

Repair, resell and remanufacture

The increasingly easy to use remote support tools help to repair errors. The service desk and simple troubleshooting ensure that software can be used better and longer. Large providers often take over and optimize these services, but often at the expense of user-friendliness. As users, we are becoming increasingly involved in the producers’ service provision, whether it is clearing the tables on our own after meals or assembling our furniture. Many software providers have also outsourced user services to customers, as this is the most efficient solution. All answers are already available somewhere. But how much time do you want to spend trying to ask the right question in support forums, with chatbots or automated announcements over the phone?  The best provision I get personally is when I can communicate with a person through an online chat. And this person can use my request/question to optimize the software instead of error handling. To know what is still missing for software users, you can always take a look at YouTube. Which tutorials are best suited for use is decided there directly by the market.

Collecting feedback from users in a structured way and using it for development is certainly a great potential for more recyclability. This is because the information cycles are not only in the software, but also in other areas. Those who are better able to handle this have also learned a lot for supporting circular solutions.

Open source solutions do simplify and facilitate remanufacture and further development of the solutions. Some other questions you may ask yourself when it comes to circularity: Are there re-sellers for software? Or is there a processing of software, especially if the providers do not develop further? How do I easily bring my desktop solution to the smartphone? How do I facilitate an upgrade including the migration of data? How do I clean up code or transfer it?

Recycling of software

How can software be recycled? If a software is no longer used, the question always arises whether parts of it can still be reused? Which functionality is still needed, how was it successfully provided? Another part of recycling is licenses, mainly those which are stored on a computer and may get lost if the computer isn´t working anymore or the employee is changing the company. Retrieving licenses and passing them on to other/new employees will make life easier for every customer. Tools and staff for license management do exist for larger companies, but for smaller companies simple and easy-to-use solutions are needed. Otherwise there are many “license corpses”, which often still bring the provider income without having to provide anything in return.

Software as a Service

I don’t need any software: I want to create a document together, keep a presentation effective, control the production, ensure fair and correct payment of my employees. It is a common strategy to use cloud based solutions to provide software that is centrally developed and continuously updated. As a user, I usually don’t even notice this, but as an internal IT department I have to make sure that the deployment in combination with all other programs in use runs smoothly. Can the software be used largely independently or do I have many interfaces? How do I ensure continuous integrated testing of all updates? Who checks the effects of small changes on my entire IT landscape and what does this mean for my hardware?

What is the next step?

These are some thoughts on the Circular Economy for software – I have left the whole area of artificial intelligence out of this. This provides an extended application spectrum, and partly increased complexity of the interactions. Cooperation and communication will become more and more important, because we can no longer process the amount of information and data. We should admit to ourselves as humans that we need support:

– Analysis and preparation of data

– A constant tidying up of what is still needed and what is no longer

– People who find and give answers instead of us searching in archives and forums

– Continuous improvement of software usability instead of focusing on efficient solutions

– Setting up information loops: providing the knowledge required at each point and incorporating feedback loops to optimise all loops

You need the will to optimize user needs in order to create circular solutions in and with software. I would be happy to work with you to find out which changes in thinking and which partners are needed to achieve this.