Resilience and Digital Technology 

Brought to you by Attila Márton, Andreas Wieland, Christiane Lehrer from Copenhagen Business School 

Digital technology is arguably the most important enabler of the circular economy. Digital sensors, for instance, are necessary for tracking the movement of products and resources, while large-scale information systems are needed to manage incredibly complex supply ecosystems. Of course, digital technology also brings its own issues. Just consider how the tech sector is a major consumer of rare resources and producer of e-waste, or how our carbon footprint is escalating because of the current AI (artificial intelligence) boom.  

Without minimising these issues, we want to dedicate this post to a more fundamental problem that comes with digital technology – our tendency to use it as a quick-fix for short-term gains, which undermines the resilience of complex supply ecosystems long-term. 

Resilience or Robustness 

First, let us explain the notion of resilience. A helpful point of departure is to compare it with robustness, as these two are often conflated.  

Robustness is the capacity to resist change; that is to “bounce back” from a disturbance and to revert things to the way they were before. A robust system, therefore, is not about adapting to changing circumstances, which also means that such a system can become brittle. It will eventually break if the demands for change (such as a catastrophe) surpass the capacity of the system to resist it. 

Resilience, by contrast, is the capacity to adapt to change, particularly when such change comes in the form of a shock or crisis. This is to say, a resilient system learns from a shock or crisis (in other words, the system changes its behaviour) and thus can better cope with similar shocks or crises in the future. 

Historically, humanity has been using technology to turn resilient systems into robust systems to make them more predictable and controllable for the purpose of maximizing their output. Think how we, over centuries, domesticated rivers to maximise their efficiency for shipping. For this purpose, it was necessary to get rid of the natural redundancies of rivers, that is watersheds and swamps, which allowed them to absorb excess rainfall. As a result, rivers lost their adaptive capacity to deal with too much rain; this, in turn, increased the likelihood for excess rainfall to cause floods. Using technology as a solution to control rivers (by making them robust) created only more problems, as it undermined the resilience of rivers to take care of themselves. 

Are we building a resilient circular economy? 

Viewed against above backdrop, the danger of digital technology for transitioning into a circular economy is to use it only for purposes of maximising the efficiency of how products and resources circulate through the economy. To be sure, efficiency is not the issue here; it is the maximisation that undermines resilience (be it the maximisation of profit, efficiency, power, etc.), as more and more redundancies have to be reduced in order to allow for the maximisation to continue. 

Hence, one of the major questions we engage with as part of the DiCE project is how we can use digital technology not as a tool to, as it were, quick-fix the problems that come with introducing circular economy principles into the digital health ecosystem. In other words, how can digital technology contribute to the resilience of this ecosystem rather than undermine it?  

The answer: digital technology is not a solution for the circular economy – rather the circular economy is a solution to prevent digital technology from undermining resilience. In other words, digital technology needs to be designed and operated in such ways that it applies the principles of the circular economy. This is obvious when it comes to computer hardware or energy consumption; it is, however, completely unclear how circular economy principles can be applied to software and data. As always, the answer to a good question is a better question.  

Nanett Kalapos
July 2, 2024