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Building A Digitally-Enabled Circular Economy:
Outline of a Research Program
What I do
I study how firms deal with the opportunities and boundaries of
digitalization.
– I do engaged field research, usually phenomenon-driven.
– My research mostly draws on quantitative, qualitative, and
computational field methods. I sometimes do design science.
My research interests include:
– Digital transformation of firms
– Digital innovation of products, services, and processes
– Digital entrepreneurship
– Digital solutions for sustainable development
– Technology analysis and design practices in the digital age
Digital solutions for sustainable development
 Seidel, S., Recker, J., & vom Brocke, J. (2013). Sensemaking and Sustainable Practicing: Functional Affordances of
Information Systems in Green Transformations. MIS Quarterly, 37(4), 1275-1299.
 Loeser, F., Recker, J., vom Brocke, J., Molla, A., & Zarnekow, R. (2017). How IT Executives Create Organizational
Benefits by Translating Environmental Strategies into Green IS Initiatives. Information Systems Journal, 27(4),
503-553.
 Watson, R. T., Ketter, W., Recker, J., & Seidel, S. (2022). Sustainable Energy Transition: Intermittency Policy Based
on Digital Mirror Actions. Journal of the Association for Information Systems, 23(3), 631-638.
 Degirmenci, K., & Recker, J. (2023). Breaking Bad Habits: A Field Experiment About How Routinized Work
Practices Can Be Made More Eco-efficient Through IS for Sensemaking. Information & Management, 60(4),
103778.
3
 Study ordered by the Club of Rome in 1972
 Details scenarios about how the
exponential growth of the human
population and ist resource demands will
impact the planet and global society.
 Key implication:
 Continuing „as is“ will lead to the
destruction of natural sources required
for a living planet
© nasaworldmap.com
Current Economy
Use
Produce Dispose
Source
Naturalresource
depletion
Growing
wastestreams
2
August 2, 2023
Global Footprint Network
"The development of production and consumption
in a way that meets the needs of the present
generation without jeopardizing the ability of
future generations to meet their own needs and
choose their own lifestyles."
Definition of sustainable development, from the Brundtland report for the
UN World Commission for the Environment and Development 1983
© nasaworldmap.com
Circular Economy
Source
Produce
Use
Dispose
3
Example: The Fairphone
 Design-for-sourcing
minimizes use of virgin
resources and rare earth
materials
 Design-for-disassembly
built entirely modular
 Design for durability
built to last, not for obsolence
[https://shop.fairphone.com/en/spare-parts]
Known Barriers preventing a Circular Economy
11
• Cultural: lack of public knowledge, awareness, and acceptance  new advocacy and commitment
(e.g., Fridays 4 Future, Extinction Rebellion, Intergovernmental Panel on Climate Change)
• Regulatory: lack of supportive international policy frameworks  new regulation and legislation (e.g.,
EU CE Action Plan, WEEE, EPR, Rights-to-Repair)
• Market: low prices of virgin materials; high upfront investment costs  shifts in financing and
business models (e.g., EU Horizon 2020)
• Institutional: complex value chain structures and limited willingness to collaborate  new digital
market models (e.g., platform economies)
• Technological: limitations in tracking products and materials across entire lifecycle; lack of reliable
and standardized information  new affordances for sensing, tracking, trusting, pooling, etc. (e.g.,
Distributed ledger, internet of things, AI)
Die gegenwärtigen Umsetzungspläne
Existing research on digital
solutions in the context of a CE
Reuse
Repair
Recycle
13
Our research on digital solutions for establishing a CE
- Reuse
 Recker, J., Bockelmann, T., & Barthel, F. (2024). Growing Online-to-Offline Platform
Businesses: How Vytal Became the World-Leading Provider of Smart Reusable Food
Packaging. Information Systems Journal, 34(1), 179-200.
 Bockelmann, T., & Recker, J. (2022). How One Company Used Data to Create Sustainable
Take-out Food Packaging. Harvard Business Review (November).
 Serafeim, G., Toffel, M. W., Duchene, L., & Beyersdorfer, D. (2023). Vytal: Packaging-as-a-
Service. Harvard Business School Case 124-007, July 2023.
14
How often is packaging reused?
 For reusable packaging to be environmentally viable (used >10x), a return rate of
>90% must be guaranteed.
 Deposit-based systems achieve ~ 50-75%, sometimes 80%: means each packaging
is used a maximum of 5 times.
 Often the exact numbers cannot be determined.
 Incentive: purely monetary (e.g.: Recup €30 flat fee; €1 deposit).
 Experience from the bottle business shows: Single-use disposables (25 cent
deposit) are used more frequently (57%) than reusables (8 cent deposit).
Vytal achieves a reuse rate of 99.3% through analytics,
algorithmic scheduling, gamification, and nudging.
Our research on digital solutions for establishing a CE
- Repair
 Recker, J., Zeiss, R., & Mueller, M. (2024). iRepair or I Repair? A Dialectical
Process Analysis of Control Enactment on the iPhone Repair Aftermarket.
MIS Quarterly, 48(1), https://doi.org/10.25300/MISQ/2023/17511
17
18
Our research on digital solutions for establishing a CE
- Recycle
 Borchard, R., Zeiss, R., & Recker, J. (2022). Digitalization of Waste
Management: Insights from German Private and Public Waste
Management Firms Waste Management & Research, 40(6), 775–
792.
 Reports level and ambition of digitalization across all phases of
the waste management process
 Low penetration of digital technologies in the industry
 Mainly used for cost optimization and operational efficiency
 No value transformation or “circular” ambitions of any sort.
19
Digital solutions for
establishing a CE: Research
opportunities
• Zeiss, R., Ixmeier, A., Recker, J., & Kranz, J. (2021). Mobilising Information Systems Scholarship For a Circular Economy: Review, Synthesis, and
Directions For Future Research. Information Systems Journal, 31(1), 148-183.
• Baptista, J., Chasin, F., Horita, F., Ixmeier, A., Johnson, S. L., Ketter, W., Kranz, J., Miranda, S. M., Nan, N., Pentland, B. T., Recker, J., Sadeghi, S.,
Sarker, S., Sarker, S., Sutanto, J., Wang, P., Wilopo, W., Boh, W., & Melville, N. P. Digital Resilience for the Climate Crisis: Theory, Context, and
Insights to Catalyze Information Systems Research. MIS Quarterly (under review).
20
21
Transitioning to a CE is
primarily an
informational challenge.
22
Retailer
End consumer
Waste
collector
Municipal
waste sorting
Product
manufacturer
Plastics
manufacturer
Recycling
Plastics
machinery
Packaging
technology
Sorting
technologies
Material flow
Data flow
OEM#5
OEM#1
OEM#2
Manufacturing
firm
Disposer
Municipality
One or more
retailers
OEM#4
Manufacturing
firm
Batch Logistics
Product Logistics
Batch Logistics
Collector
technologies
OEM#3
Component Logistics
Batch Logistics
Return Logistics
Households/
individuals
Three grand challenges for IS research in the context of a CE
23
Governance
Information
processing Coordination
Opportunity 1: Capturing Product Data
 Digital twins: Virtual counterparts of physical and non-physical entities that capture the form, function, and operation of those
entities at a very granular level
 recording of product location and use enables product tracking, early detection of physical issues, predictive maintenance, optimization
of reverse logistics, and maintaining compliance to regulations.
24
https://aecmag.com/digital-twin/digital-twins-the-case-for-open-source/
26.02.2024 Thema, Name des Referenten/der Referentin 25
Opportunity 1: Capturing Product Data
 Digital twins: Virtual counterparts of physical and non-physical entities that capture the form, function, and operation of those
entities at a very granular level
 recording of product location and use enables product tracking, early detection of physical issues, predictive maintenance, optimization
of reverse logistics, and maintaining compliance to regulations.
 Key Challenge: Tethering
 Key issues: Material restrictions, economic viability
 Research Opportunity: balancing representational faithfulness with level of control
 Representational faithfulness: completeness, clarity, but also synchronicity and granularity
 Level of control: control process (e.g., specification, evaluation, or sanctioning) and purpose (e.g., reactive monitoring or proactive
interaction)
 Both representation and control are large research streams in IS, never used together.
26
https://aecmag.com/digital-twin/digital-twins-the-case-for-open-source/
Opportunity 2: Orchestrating Transactions in Secondary
Markets
 Secondary markets circulate recycled and reused materials across dispersed
and heterogeneous entities that differ in intentions (e.g., goals and
capacities), agency (e.g., strategies and incentives), and processes (e.g.,
search, transactions, and logistics).
 Re-use of secondary materials for product creation comes with substantial
uncertainty.
 whether to buy virgin plastics from a trusted supplier or to buy recycled
granules from post-consumer plastics from unknown provenance and
quality
 Issues include quality uncertainty, transaction costs, customer
acceptance risks, and frequently also prices
27
Un-lemoning secondary material markets through digital
platforms
 Digital platforms reduce search costs, uncertainty, and information asymmetry and thus
minimize participants’ informational and behavioral uncertainty.
28
26.02.2024 Thema, Name des Referenten/der Referentin 29
Un-lemoning secondary material markets through digital
platforms
 Digital platforms reduce search costs, uncertainty, and information asymmetry and thus
minimize participants’ informational and behavioral uncertainty.
 Key challenge: secondary material markets require physical product transactions.
 Means platforms cannot as readily scale freely or benefit from data network effects
 Product transactions occur in a temporally asynchronous and geographically dispersed manner
 Leads to typically regional bound markets (e.g., the Kalundborg industrial system)
 Research opportunity: smart market design – creating incentives, rules, and protocols for digital
platforms that minimize behavioral risks and transaction costs, protect against rebound effects,
reduce greenhouse gas emissions, and improve efficiency.
30
Opportunity 3: Facilitating Reliable and Safe Data-Sharing
 A CE relies on extensive product connectivity and traceability, which generates large
amounts of heterogeneous data about a variety of products and materials from a large
number of inter-organizational actors.
 All CE participants require timely, sufficient and relevant product data, such as the
provenance and composition of product systems, their condition, or instructions on how to
disassemble them, etc.
 That data dynamically changes throughout the product lifecycle, and its availability to the
different CE participants involved, such as producers, consumers, recyclers, and waste
collectors, varies.
How can this be solved?
 Shared data provenance standards
 agreed data formats and interfaces
 Data sharing via secure, decentral data spaces
 E.g., Blockchains involving “smart questioning” protocols
 Questions are posed to the entire network
 Federated open data spaces
 share specific aspects of data about particular products and allow
data owners to grant or deny access to interested parties according to
predefined terms through APIs
 Coordination through consortia or alliances
 Effective yet inefficient decision-making system
26.02.2024 Thema, Name des Referenten/der Referentin 33
Unlocking the Potential of Digital Technologies for a CE in
an Environmentally Sustainable Manner
 The solution potential is evident. But…
 Digital technologies themselves are part of the problem that requires us
to transition to a circular economy.
 We need to balance utopian and dystopian narratives  digital
responsibility
34
Issue #1: e-Waste
35
Issue #2: ICT Industry growth and lack of optimization
 The ICT industry is a massively growing industry sector with an enormous, and
growing, environmental footprint
 Greenhouse gas emissions of the ICT industry are between 1.5-4% of total
emissions.
 have long surpassed those of the aviation industry.
 The world’s ICT industry uses about 1,500 TWh of electricity annually.
 Equal to all the electric generation of Japan and Germany combined
 Approaches 10% of world electricity generation.
 One data center use enough electricity to power 180,000 homes.
36
Artificial Intelligence has a particularly high footprint
 2024 (Feb) Article in Nature:
 ChatGPT consumes energy of 33,000 households
 GenAI search uses 5-times the energy of a Google search.
 Release of GenAI by OpenAI, Google, Microsoft saw district water consumption go up by 6, 20, and 34%.
 Other studies report similar assessments:
 Training a single AI model can emit over 626,000 pounds of CO², equivalent to the emissions of five cars over their entire
lifetime.
 The carbon footprint of training one large ML model, such as Meena, is equivalent to 242,231 miles driven by an average
passenger vehicle.
 Training GPT-3 with 175 billion parameters can consume 1287 MWh of electricity and result in emissions of 502 tonnes of
carbon, equivalent to the emissions of 112 petrol-powered cars in one year.
 The resource requirements for AI scaling outpaces that of system hardware
 Check for yourself: https://mlco2.github.io/impact/#compute
Resource optimization has not been in focus enough
38
Gibney, E. (2022). How to Shrink AI’s Ballooning Carbon Footprint. Nature,
607(7920), 648. https://doi.org/10.1038/d41586-022-01983-7
Issue #3: Resource demands
 Demand for virgin rare-earth
elements is skyrocketing
 e.g., cobalt, lithium, tantalum, indium,
gallium, niobium, selenium
and zirconium
 Sourcing and supply of REE is a
complex geopolitical issue
39
Questions instead of a conclusion
 The implementation of a digital circular economy must balance economic,
technical as well as environmental feasibility considerations.
 What is the environmental footprint of digitally twinning every single
product component?
 How do we deal with rebound effects on digital secondary market
platforms?
 How do we minimize energy and resource consumption of technologies
(such as Blockchain or AI) that we might need for governance?
 How do we secure access to rare resources required for the digital age?
40
Prof. Dr. Jan Recker, PhD
Nucleus Professor for Information Systems and Digital Innovation
Hamburg Business School
University of Hamburg
email jan.christof.recker@uni-hamburg.de
web www.janrecker.com
twitter janrecker
youtube Jan Recker
spotify this IS research

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Building a digitally-enabled circular economy

  • 1. Building A Digitally-Enabled Circular Economy: Outline of a Research Program
  • 2. What I do I study how firms deal with the opportunities and boundaries of digitalization. – I do engaged field research, usually phenomenon-driven. – My research mostly draws on quantitative, qualitative, and computational field methods. I sometimes do design science. My research interests include: – Digital transformation of firms – Digital innovation of products, services, and processes – Digital entrepreneurship – Digital solutions for sustainable development – Technology analysis and design practices in the digital age
  • 3. Digital solutions for sustainable development  Seidel, S., Recker, J., & vom Brocke, J. (2013). Sensemaking and Sustainable Practicing: Functional Affordances of Information Systems in Green Transformations. MIS Quarterly, 37(4), 1275-1299.  Loeser, F., Recker, J., vom Brocke, J., Molla, A., & Zarnekow, R. (2017). How IT Executives Create Organizational Benefits by Translating Environmental Strategies into Green IS Initiatives. Information Systems Journal, 27(4), 503-553.  Watson, R. T., Ketter, W., Recker, J., & Seidel, S. (2022). Sustainable Energy Transition: Intermittency Policy Based on Digital Mirror Actions. Journal of the Association for Information Systems, 23(3), 631-638.  Degirmenci, K., & Recker, J. (2023). Breaking Bad Habits: A Field Experiment About How Routinized Work Practices Can Be Made More Eco-efficient Through IS for Sensemaking. Information & Management, 60(4), 103778. 3
  • 4.  Study ordered by the Club of Rome in 1972  Details scenarios about how the exponential growth of the human population and ist resource demands will impact the planet and global society.  Key implication:  Continuing „as is“ will lead to the destruction of natural sources required for a living planet
  • 5. © nasaworldmap.com Current Economy Use Produce Dispose Source Naturalresource depletion Growing wastestreams 2
  • 6. August 2, 2023 Global Footprint Network
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  • 8. "The development of production and consumption in a way that meets the needs of the present generation without jeopardizing the ability of future generations to meet their own needs and choose their own lifestyles." Definition of sustainable development, from the Brundtland report for the UN World Commission for the Environment and Development 1983
  • 10. Example: The Fairphone  Design-for-sourcing minimizes use of virgin resources and rare earth materials  Design-for-disassembly built entirely modular  Design for durability built to last, not for obsolence [https://shop.fairphone.com/en/spare-parts]
  • 11. Known Barriers preventing a Circular Economy 11 • Cultural: lack of public knowledge, awareness, and acceptance  new advocacy and commitment (e.g., Fridays 4 Future, Extinction Rebellion, Intergovernmental Panel on Climate Change) • Regulatory: lack of supportive international policy frameworks  new regulation and legislation (e.g., EU CE Action Plan, WEEE, EPR, Rights-to-Repair) • Market: low prices of virgin materials; high upfront investment costs  shifts in financing and business models (e.g., EU Horizon 2020) • Institutional: complex value chain structures and limited willingness to collaborate  new digital market models (e.g., platform economies) • Technological: limitations in tracking products and materials across entire lifecycle; lack of reliable and standardized information  new affordances for sensing, tracking, trusting, pooling, etc. (e.g., Distributed ledger, internet of things, AI)
  • 13. Existing research on digital solutions in the context of a CE Reuse Repair Recycle 13
  • 14. Our research on digital solutions for establishing a CE - Reuse  Recker, J., Bockelmann, T., & Barthel, F. (2024). Growing Online-to-Offline Platform Businesses: How Vytal Became the World-Leading Provider of Smart Reusable Food Packaging. Information Systems Journal, 34(1), 179-200.  Bockelmann, T., & Recker, J. (2022). How One Company Used Data to Create Sustainable Take-out Food Packaging. Harvard Business Review (November).  Serafeim, G., Toffel, M. W., Duchene, L., & Beyersdorfer, D. (2023). Vytal: Packaging-as-a- Service. Harvard Business School Case 124-007, July 2023. 14
  • 15. How often is packaging reused?  For reusable packaging to be environmentally viable (used >10x), a return rate of >90% must be guaranteed.  Deposit-based systems achieve ~ 50-75%, sometimes 80%: means each packaging is used a maximum of 5 times.  Often the exact numbers cannot be determined.  Incentive: purely monetary (e.g.: Recup €30 flat fee; €1 deposit).  Experience from the bottle business shows: Single-use disposables (25 cent deposit) are used more frequently (57%) than reusables (8 cent deposit).
  • 16. Vytal achieves a reuse rate of 99.3% through analytics, algorithmic scheduling, gamification, and nudging.
  • 17. Our research on digital solutions for establishing a CE - Repair  Recker, J., Zeiss, R., & Mueller, M. (2024). iRepair or I Repair? A Dialectical Process Analysis of Control Enactment on the iPhone Repair Aftermarket. MIS Quarterly, 48(1), https://doi.org/10.25300/MISQ/2023/17511 17
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  • 19. Our research on digital solutions for establishing a CE - Recycle  Borchard, R., Zeiss, R., & Recker, J. (2022). Digitalization of Waste Management: Insights from German Private and Public Waste Management Firms Waste Management & Research, 40(6), 775– 792.  Reports level and ambition of digitalization across all phases of the waste management process  Low penetration of digital technologies in the industry  Mainly used for cost optimization and operational efficiency  No value transformation or “circular” ambitions of any sort. 19
  • 20. Digital solutions for establishing a CE: Research opportunities • Zeiss, R., Ixmeier, A., Recker, J., & Kranz, J. (2021). Mobilising Information Systems Scholarship For a Circular Economy: Review, Synthesis, and Directions For Future Research. Information Systems Journal, 31(1), 148-183. • Baptista, J., Chasin, F., Horita, F., Ixmeier, A., Johnson, S. L., Ketter, W., Kranz, J., Miranda, S. M., Nan, N., Pentland, B. T., Recker, J., Sadeghi, S., Sarker, S., Sarker, S., Sutanto, J., Wang, P., Wilopo, W., Boh, W., & Melville, N. P. Digital Resilience for the Climate Crisis: Theory, Context, and Insights to Catalyze Information Systems Research. MIS Quarterly (under review). 20
  • 21. 21 Transitioning to a CE is primarily an informational challenge.
  • 22. 22 Retailer End consumer Waste collector Municipal waste sorting Product manufacturer Plastics manufacturer Recycling Plastics machinery Packaging technology Sorting technologies Material flow Data flow OEM#5 OEM#1 OEM#2 Manufacturing firm Disposer Municipality One or more retailers OEM#4 Manufacturing firm Batch Logistics Product Logistics Batch Logistics Collector technologies OEM#3 Component Logistics Batch Logistics Return Logistics Households/ individuals
  • 23. Three grand challenges for IS research in the context of a CE 23 Governance Information processing Coordination
  • 24. Opportunity 1: Capturing Product Data  Digital twins: Virtual counterparts of physical and non-physical entities that capture the form, function, and operation of those entities at a very granular level  recording of product location and use enables product tracking, early detection of physical issues, predictive maintenance, optimization of reverse logistics, and maintaining compliance to regulations. 24 https://aecmag.com/digital-twin/digital-twins-the-case-for-open-source/
  • 25. 26.02.2024 Thema, Name des Referenten/der Referentin 25
  • 26. Opportunity 1: Capturing Product Data  Digital twins: Virtual counterparts of physical and non-physical entities that capture the form, function, and operation of those entities at a very granular level  recording of product location and use enables product tracking, early detection of physical issues, predictive maintenance, optimization of reverse logistics, and maintaining compliance to regulations.  Key Challenge: Tethering  Key issues: Material restrictions, economic viability  Research Opportunity: balancing representational faithfulness with level of control  Representational faithfulness: completeness, clarity, but also synchronicity and granularity  Level of control: control process (e.g., specification, evaluation, or sanctioning) and purpose (e.g., reactive monitoring or proactive interaction)  Both representation and control are large research streams in IS, never used together. 26 https://aecmag.com/digital-twin/digital-twins-the-case-for-open-source/
  • 27. Opportunity 2: Orchestrating Transactions in Secondary Markets  Secondary markets circulate recycled and reused materials across dispersed and heterogeneous entities that differ in intentions (e.g., goals and capacities), agency (e.g., strategies and incentives), and processes (e.g., search, transactions, and logistics).  Re-use of secondary materials for product creation comes with substantial uncertainty.  whether to buy virgin plastics from a trusted supplier or to buy recycled granules from post-consumer plastics from unknown provenance and quality  Issues include quality uncertainty, transaction costs, customer acceptance risks, and frequently also prices 27
  • 28. Un-lemoning secondary material markets through digital platforms  Digital platforms reduce search costs, uncertainty, and information asymmetry and thus minimize participants’ informational and behavioral uncertainty. 28
  • 29. 26.02.2024 Thema, Name des Referenten/der Referentin 29
  • 30. Un-lemoning secondary material markets through digital platforms  Digital platforms reduce search costs, uncertainty, and information asymmetry and thus minimize participants’ informational and behavioral uncertainty.  Key challenge: secondary material markets require physical product transactions.  Means platforms cannot as readily scale freely or benefit from data network effects  Product transactions occur in a temporally asynchronous and geographically dispersed manner  Leads to typically regional bound markets (e.g., the Kalundborg industrial system)  Research opportunity: smart market design – creating incentives, rules, and protocols for digital platforms that minimize behavioral risks and transaction costs, protect against rebound effects, reduce greenhouse gas emissions, and improve efficiency. 30
  • 31. Opportunity 3: Facilitating Reliable and Safe Data-Sharing  A CE relies on extensive product connectivity and traceability, which generates large amounts of heterogeneous data about a variety of products and materials from a large number of inter-organizational actors.  All CE participants require timely, sufficient and relevant product data, such as the provenance and composition of product systems, their condition, or instructions on how to disassemble them, etc.  That data dynamically changes throughout the product lifecycle, and its availability to the different CE participants involved, such as producers, consumers, recyclers, and waste collectors, varies.
  • 32. How can this be solved?  Shared data provenance standards  agreed data formats and interfaces  Data sharing via secure, decentral data spaces  E.g., Blockchains involving “smart questioning” protocols  Questions are posed to the entire network  Federated open data spaces  share specific aspects of data about particular products and allow data owners to grant or deny access to interested parties according to predefined terms through APIs  Coordination through consortia or alliances  Effective yet inefficient decision-making system
  • 33. 26.02.2024 Thema, Name des Referenten/der Referentin 33
  • 34. Unlocking the Potential of Digital Technologies for a CE in an Environmentally Sustainable Manner  The solution potential is evident. But…  Digital technologies themselves are part of the problem that requires us to transition to a circular economy.  We need to balance utopian and dystopian narratives  digital responsibility 34
  • 36. Issue #2: ICT Industry growth and lack of optimization  The ICT industry is a massively growing industry sector with an enormous, and growing, environmental footprint  Greenhouse gas emissions of the ICT industry are between 1.5-4% of total emissions.  have long surpassed those of the aviation industry.  The world’s ICT industry uses about 1,500 TWh of electricity annually.  Equal to all the electric generation of Japan and Germany combined  Approaches 10% of world electricity generation.  One data center use enough electricity to power 180,000 homes. 36
  • 37. Artificial Intelligence has a particularly high footprint  2024 (Feb) Article in Nature:  ChatGPT consumes energy of 33,000 households  GenAI search uses 5-times the energy of a Google search.  Release of GenAI by OpenAI, Google, Microsoft saw district water consumption go up by 6, 20, and 34%.  Other studies report similar assessments:  Training a single AI model can emit over 626,000 pounds of CO², equivalent to the emissions of five cars over their entire lifetime.  The carbon footprint of training one large ML model, such as Meena, is equivalent to 242,231 miles driven by an average passenger vehicle.  Training GPT-3 with 175 billion parameters can consume 1287 MWh of electricity and result in emissions of 502 tonnes of carbon, equivalent to the emissions of 112 petrol-powered cars in one year.  The resource requirements for AI scaling outpaces that of system hardware  Check for yourself: https://mlco2.github.io/impact/#compute
  • 38. Resource optimization has not been in focus enough 38 Gibney, E. (2022). How to Shrink AI’s Ballooning Carbon Footprint. Nature, 607(7920), 648. https://doi.org/10.1038/d41586-022-01983-7
  • 39. Issue #3: Resource demands  Demand for virgin rare-earth elements is skyrocketing  e.g., cobalt, lithium, tantalum, indium, gallium, niobium, selenium and zirconium  Sourcing and supply of REE is a complex geopolitical issue 39
  • 40. Questions instead of a conclusion  The implementation of a digital circular economy must balance economic, technical as well as environmental feasibility considerations.  What is the environmental footprint of digitally twinning every single product component?  How do we deal with rebound effects on digital secondary market platforms?  How do we minimize energy and resource consumption of technologies (such as Blockchain or AI) that we might need for governance?  How do we secure access to rare resources required for the digital age? 40
  • 41. Prof. Dr. Jan Recker, PhD Nucleus Professor for Information Systems and Digital Innovation Hamburg Business School University of Hamburg email jan.christof.recker@uni-hamburg.de web www.janrecker.com twitter janrecker youtube Jan Recker spotify this IS research