As the global population will reach over 9 billion people by 2050, the well-being of future generations relies on us enabling a transition towards a more sustainable society now. One of the major challenges we face lies in the necessity to lessen the impact of economic growth on the environment.
Our global economy cannot be sustainable unless we decouple necessary business activity growth from resource usage and environmental impact – a process known as resource decoupling or dematerialisation of the economy. This means that even though our economy may keep growing, the impact of this growth on the environment does not grow, or at least not at the same rate.
How ICT and IoT enabled sustainable innovations drives resource decoupling
Information and Communication Technologies (ICT) and the Internet of Things (IoT) can contribute significantly to resource decoupling. Examples include the virtualization of processes (web-meetings over physical travelling, digitalization of paper-based processes etc.), the substitution of physical products, such as car sharing over car ownership as well as the contribution to behaviour change of consumers through digital incentivisation (e.g. smart-home energy usage displays, usage based insurance).
Successful examples of IoT and ICT contributing to recourse decoupling can be found in many industries, ranging from transportation over energy to the pubic sector. For example, tele-health solutions may reduce the number of doctor visits by patients and thus the associated transportation costs, and advanced decision making software may enable institutions to make more informed long-term decisions.
To get an idea of the sustainability impact of ICT, we can consider a simple cost-benefit analysis. Currently, ICT has a carbon footprint comparable to the complete global air traffic (~2%). At the same time, ICT has the potential to reduce greenhouse gas emissions by the year 2020 by 20%! The savings potential of ICT amounts to 12 gigatons of CO2 – more than the total emissions of China in 2015.
This enables ICT to offer a very high return on sustainability investment: 20% CO2 savings potential vs 2% energy use. At the same time, ICT could generate $11 trillion in economic benefits by 2030 .
Together with the circular economy, the potential of ICT and IoT to unlock 21st century sustainability is widely recognised and proven in practice. In an ever-growing consumer society, our challenge lies in speeding up its application. This is urgent and requires action from policy makers and the support from consumers. Most importantly, it requires businesses to take sustainability seriously by recognising its potential to drive innovation and curb corporate short-termism.
To do this, businesses need to embed sustainable innovation into their corporate culture, for example through the application of appropriate tools for product and business model innovation, such as the Sustainable Business Model Canvas, the related game and the Impact Canvas.
R. Gerlach - Connected Business as a driver for sustainable innovation, mm1, 2015
GeSI, SMARTer 2030, ICT Solutions for 21st Century Challenges, 2015