The 90s marked the birth of the web, which lay the virtual foundation for technological progress. Soon after its advent, companies and industries alike rushed to incorporate digital models into their commercial framework as an indicator of their dedication to progress and advancement. As benefits were reaped, digitalization became the newest hype. Distinct from digitization, digitalization refers to more than just data transformation from analogue to numerical, but also the conversion of data to a digital form.
Synonymous with efficiency, digitalization has been proved to be linked to shorter supply chains, quicker decision-making, and a host of other advantages that will be delved into in the course of this article. While the topic of sustainability grows increasingly critical to the business sphere, the question does arise of whether the two can thrive in a mutually beneficial environment. Can digitalization drive sustainability, and vice versa?
Digitalization has shown a great deal of popularity across a wide gamut of industries and sectors, from airports to manufacturing units. The Asian Development Bank (ADB) has purported that digitalization has been instrumental in closing the finance gap incurred in SMEs, honing development and stable access to required resources. This concept so firmly rooted in technology is more than capable of lending a hand to a variety of fields – including sustainability.
The reinvention of the conventional business structure is strictly urged with the integration of digitalization. While traditional systems employed tactics that created segmented markets and customers, the goal of digitalization is to curb the behaviors by filling in those gaps with complete information. Going back to the example of ADB, bridging the finance gap for small, minority-owned firms is possible when digitalization creates platforms of data access and financing. Apps have been shown to be especially helpful in evolving this dynamic – Olio allows users to donate surplus foods to mitigate food wastage, while ThredUp generates an avenue for secondhand selling and buying of apparel to reduce the negative consequences of excess clothing production. Provision of options and sources of education continue to prove themselves as cultivating responsibility in the commercial realm.
Analytic and storage programming offer a unique opportunity to both reduce ecological impact while streamlining and introducing efficiency into operations. Digital archives boast the benefits of traceability, transparency, and accountability, paving way for a more reliable sense of compliance and governance. Dismissing paper trails for online records has a positive environmental effect, as paper use has been tied to deforestation, solid waste dumping, and greenhouse gas emissions. Innovations in this capacity has produced solutions like cloud computing, a concept that has truly revolutionized shared resources and centralized internet solutions. Minimal capital expenditure is required by cloud computing and climate risks are managed as disaster recovery efforts are made simple, permitting a wider scope of opportunity.
Generating circularity in the market has been praised for being significant in the reduction of waste produced through resource usage. Considering purely commercial motives, creating a circular economy increases productivity of inputs and has been shown to be just as profitable, if not more, than linear structures, and here is where artificial intelligence (AI) plays a major role. AI translates human intelligence systems to a computerized format and is characterized by heightened and broader scopes of knowledge and operational work. Aiding the circularity transition, AI can be leveraged to develop products and services that close gaps in the system, such as a scheme for testing the efficiency of goods or producing as per estimated demand requirement. Its ability to tackle large and complex data can combine real-time and historical information to produce effective inventory management and forecasting models. Once a circularity has been achieved, AI can step in once again to handle logistics to ensure that closures are optimized – think recycle and reuse initiatives. Media representation of the phenomenon is sprinkled with fear, however this seems misguided considering the enviroeconomic worth that it has the capacity to provide. AI is no longer a futuristic possibility; Siri is a foremost indicator that it is very much a present reality.
Market forces at work tend towards a skew. It comes as no surprise that capitalism biases wealth in favor of the few, however it is a radical idea that digitalization can remedy exploitation to a certain extent and bring about fair wages. The digital waste recycling marketplace titled rePurpose is designed to connect scrap collectors in India (known as Kabadiwalas) with waste producers and recyclers to create a livable income stream for once marginalized workers. The business case for digitalized sustainability solution such as this is rooted in time-efficiency, quick material delivery, and legitimate wages. Feeding into Sustainable Development Goals 1 (No Poverty), 10 (Reduced Inequalities), and 12 (Responsible Consumption & Production), this is just one example of how sustainable digitalization align immensely with one another.
Cash obsoletion is a major talking point at present. With statistics pointing towards the fact that immense resources that are extracted, processed, and designed to create paper and coin money, demand for a substitute is prevalent. Enter blockchain. Apple Pay and PayPal exemplify how blockchain is a form of payment rail – a payment platform that seamlessly moves funds between parties – and have been important drivers of change. In actuality, digitalization is pegged to the demise of several sectors however the results of this occurrence have been environmentally favorable –online news platforms have replaced print media, and folding maps have been swapped for GoogleMaps. 3D printing, for instance, uses significantly less materials when compared to orthodox manufacturing techniques, as well as materials that are biodegradable. Substitution is possible and is, often, a deeply positive movement.
Returning to blockchain’s power, we cannot ignore the platform’s ability to completely transform global supply chains to cause them to become more sustainable. Traditional supply chains were growing more regressive with the advent of broader regulations and consumer demands, creating a market opening that tech instrument, blockchain, rushed in to remedy. It enables supply chains to move away from a discrete record that considers a wider spectrum of details by creating visibility that hones accountability, transparency, and traceability. From transactions to data exchanges to product management, blockchain orders grouped information into a virtual data block that accounts from chronology. Security is big plus point for a system that already sees a great deal of popularity through its enforcement of corporate responsibility.
The obstacles involved in hampering digitalization from reaching its full potential as a sustainability driver are slowly being identified by bumps in its implementation. Data centers currently make up a total of 3% of the world’s greenhouse gas emissions and is slated to increase in the coming years. Data management hazards and cloud hacks are a genuine concern. Weak perception of its potential is yet another challenge to overcome, while growth of knowledge and related skills needs to occur.
