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Developing Disruptive Innovations for Sustainability: A Review on Impact of

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 2017 Proceedings of PICMET '17: Technology Management for Interconnected World
Developing Disruptive Innovations for Sustainability:
A Review on Impact of Internet of Things (IOT)
Mina Nasiri, Nina Tura, Ville Ojanen
LUT School of Business and Management, Lappeenranta University of Technology, Lappeenranta, Finland
Abstract—Demands towards sustainable choices in business
operations are increasing and more influential solutions are
required. This means changes and development of innovations
that allow the creation of new markets and value networks by
combining new set of sustainability -driven values- finding
disruptive innovations for sustainability. Increased digitalization
is seen to provide multiple value creation mechanisms and
possibilities by enhancing the more effective use of resources. The
emergence of IOT (Internet of Things) has connected objects (e.g.
physical devices, buildings and vehicles) to existing network of
information. IOT can work as a trigger for creation of new
markets and value networks by connecting existing information,
networked economies and societies together in a new way.
Expectations towards IOT solutions are high and they are
expected to revolutionize the business markets by promoting the
emergence of disruptive innovations for sustainability e.g. in
healthcare and transportation solutions, smart cities, intelligent
energy services and circular economy. The study focuses on
reviewing the impact of IOT in developing these innovations
aiming to foster disruptive sustainable change.
I. INTRODUCTION
The aim of the study is to review and analyze the impact of
the Internet of Things (IOT) for enhancing the development of
solutions aiming to foster the disruptive innovations for
sustainability. The motive behind the research is to shed light
on the enablers and barriers of disruptive innovations for
sustainability and to provide various illustrative examples of
the potential of IOT, as well as to reveal opportunities for
further research in this novel area.
Innovations have been acknowledged to be an important
component of corporate strategy [1] as well as sustainable
development, achieved by making improvements in products,
process, business models and organizational structures [2, 3,
4]. Especially in recent years, innovations have been named as
the main way to improve sustainability, and enhance
companies’ competitiveness [5, 6, 7]. Existing literature has
provided methods and guidelines for enhancing the social,
economical, and environmental performance of the
organizations. However, many of these techniques for
innovation are limited to small product/service improvements
[8]. In order to solve sustainability challenges, more impactful
innovations are also needed [4, 9, 10].
Disruptive innovations play a significant role in creating
new market value [11, 12, 13]. New disruptive technologies,
such as IOT, are seen to provide sources for this value creation
independently but also combining them with current standards
and protocols [e.g. 14]. The introduction of internet has been
978-1-890843-36-6 ©2017 PICMET
changed the accessibility of information, people, services, and
technologies [15, 16]. IOT adds another room for this
revolution by embedding RFID tags, sensors, and actuators in
objects [17]. Due to this, Standard IP, phones, cars, and other
devices have the ability to contain more information and also
exchange information with each other. It is expected that in
the future, these devices will be the main part of the structure
of e.g. smart cities, intelligent energy services, transportation
networks, logistics, health, and medical care services and
households [18]. Emergence of IOT is seen to open many
possibilities for creating new market value and innovate. IOT
connects with a wide range of networked economies and
societies, requiring social and organizational innovations, as
well as innovations in information and communication
policies and regulations [15]. Furthermore, IOT is seen also to
have an impact on developing environmental performance of
companies, as improved technologies allow for example
savings of money and energy by observing the status of the
energy and water supply consumption [19], Sensing
technologies provide possibilities to increase environmental
safety and danger detection thus enhancing safety and
reducing the number of disasters [20]. Furthermore, sensors
can be used in examining the water pollution [15, 21]. Thus
IOT is seen as an opportunity to answer sustainability
challenges. Although there exist strong research fields
considering IOT, innovations and sustainability, the research
combining these three aspects is still in its infancy. Our study
attempts to open the debate of the issue by considering the
following research question: What is the impact of IOT in
developing disruptive innovations for sustainability?
The focus of the study is on providing managerial state-of-
the-art knowledge of the issue by focusing on three different
themes in the analysis of earlier studies in this research field.
The study was conducted by searching relevant information by
using combinations of following keywords: disruptive
innovation, sustainability, Internet of Things, sustainable
business, and circular economy. The search was done by
utilizing a national search engine, which combines
information from all main academic research databases (incl.
e.g. EBSCO, IEEE/IEE electronic library, SCOPUS and Web
of Science), and library collections, and was complemented by
using commercial databases such as Google and Google
Scholar. Furthermore, insights from the literature were
combined by empirical insights of the researchers and a
business expert from a public funding organization focusing
on stimulating sustainable business.
At first, we introduce the concept of innovations for
sustainability and provide examples of two innovation types,
 2017 Proceedings of PICMET '17: Technology Management for Interconnected World
sustaining and disruptive innovations. Secondly, we set
special attention of the enabler and barriers of disruptive
innovation for sustainability. This is followed by insights of
the IOT as an enabler for innovations and sustainability value
creation. Furthermore, the research was complemented by
setting the focus on the impact of IOT in promoting the
emergence and performance of circular economy (CE)
business models.
II. INNOVATIONS FOR SUSTAINABILITY
To answer the demands of fast changing markets,
organizations are increasingly seeking for innovations [22].
Innovations are seen to provide business advantages, ensure
steady economic growth [23, 24, 25] and have become a vital
factor for companies’ survival and successfulness [26].
However, to satisfy the changing customer demands and
lifestyles, companies are required to develop their business
procedures so that they are able to utilize the opportunities
proposed by technologies, marketplace transformation,
structures and dynamics [22].
In addition to innovation, sustainability is widely used
term in today’s business development. Innovation and
sustainability both are seen to provide possibilities for secure
development and finding unique business capabilities [6, 27].
Therefore, concentrating on the combination of these two
terms in business development, might lead to real success
stories and long-term business advantages. In general, the
development of these innovations for sustainability, can be
defined as the development of new products, business, and
services based on considering the value creation in social,
economic as well as environmental dimensions of
sustainability [4, 28].
Studies of innovation reveal that innovation can be
categorized in two groups; sustaining innovation and
disruptive innovation [29]. According to [30, 31], sustaining
innovations equate with incremental innovation while
disruptive innovations often equate with a radical innovation.
Sustaining innovations rely on answering the existing and
predicted customer needs, based on listening the signals from
customers [32, 33]. These include e.g. incremental
improvements on current technologies in a way that satisfies
the best-selling customer groups and larger margin products
[11, 34]. For example, technical improvements such as the
picture quality improvements of television (from black and
white to color, HD and 3D) [35] or proposing extra features
(e.g. related to packaging, design, material) [29] are examples
of sustaining innovation. In this type of innovation, companies
concentrate on the costs and attributes of the current products,
services, production techniques, and procedure with the aim of
performance development [36, 37].
With disruptive innovations, the concentration is on new
markets and customers who were not satisfied with the
previous products or services [34]. Disruptive innovations
create new markets, relying heavily on creating new demand
for novel technology [38]. Examples of new-market disruptive
innovations include e.g. first mobile radio, personal computer,
cloud storage, and solar chargers. In these cases people didn’t
value the products and technology initially but later teenagers
who started to listen the music outside home created a market
for these types of products [11, 39]. Twitter is another
example of new-market disruptive innovation which led to
dramatic shift and rises in customer services, tracking, and
broadcasting [29]. Another type of disruptive innovations is so
called low-end innovation that depends on the current
technologies with less sustainability cost [38]. For example,
the case of General Electric’s portable ultrasound machine
with low cost can be named as a low-end disruptive
innovation [40]. These innovation types can be also
overlapping. For example, when notebooks were discovered,
they both grasped the attention of the least demanding
customers in a laptop market, but also created new market for
the people who wanted a smaller device with lower cost. [11,
35]
III. DISRUPTIVE INNOVATIONS FOR SUSTAINABILITY
Disruptive innovations for sustainability aim to answer the
complex sustainability problems by disrupting existing
markets. According to [41], innovations drive the industrial
growth and create possibilities for social and environmental
disruption. More radical, disruptive innovations for
sustainability are needed to meet sustainable development
pressures and challenge current businesses. For example, wind
power was seen to provide disruptive sustainability impact for
the incumbent oil and gas industry by forcing companies to
create new capabilities. [41]
Another example is Flash converting technology,
introduced in the copper production industry in 1995 as a
complex production system technology that promotes the
purity of the copper. Flash converting technology represent
the disruptive innovation, especially in greenfield industry,
because this technology not only satisfies the customers’
requirements but also providing extra values such as reducing
emissions and enhancing complete online availability [42].
Furthermore, Nanotechnology can be named as the disruptive
innovation due to its disruptive shifts in a vast number of
industries such as material, automotive, aerospace, healthcare,
and electronic production [43]. “Mirra” chair is the example of
disruptive innovation for sustainability which is created by the
American furniture company called Herman Miller cooperated
with the McDonough Braungart, Design Chemistry Company.
These two companies try to apply innovative process for a
novel ergonomic chair by the development of tailored “Design
for the environment”. They make changes to chemicals and
elements in order to enhance the performance of products in
terms of material poison, ease of detachment, as well as
recyclability [28].
In addition to alternative technologies, disruptive
sustainability impact may also be reached by service and
business model innovations. As an example, Interface
Incorporated has built their business on providing leasing
services for the floor carpeting. Compared to traditional
business models, where the floor carpets are sold, in their
model carpets are taken back and recycled after use, thus
providing environmental benefits such as reducing the number
of wastes in landfills. Also customer satisfaction increases as
they do not need to worry about post-consumer waste [44].
 2017 Proceedings of PICMET '17: Technology Management for Interconnected World
A. Enabling disruptive innovation for sustainability
There exists certain strategies that aim to enhance the
creation of significant sustainability value. Based on the
review to the earlier studies, these include e.g. setting attention
on actions related to closing the loop, transforming supply
chain, leapfrogging, and sustainability partnerships. Table 1
summarizes the identified factors facilitating the occurrence of
disruptive innovations for sustainability.
Closing the loop refers to changing the way of thinking
from linear to closed loop, leading to the shift from eco-
efficiency to eco-effectiveness [45, 46].
Eco-efficiency describes the actions that require for toxic
emission reduction as well as maximization of productivity
and lifespan while eco-effectiveness viewpoints are related to
the industry activities have the ability to influence and direct
for supporting the recreation of environmental systems by
establishment of an exchange thoughts between biological and
technical material flows. Moreover, enhancement in eco-
efficiency involves reactionary, incremental as well as linear
activities while the implementation of eco-effectiveness
encompasses proactive exchange of poisonous materials,
making the new interaction between the product and the
consumer, as well as the act of creating cradle-to-cradle loops
[28, 46, 47].
TABLE I. ENABLERS OF DISRUPTIVE INNOVATIONS FOR
SUSTAINABILITY
Enablers
• Closing the loop
• Transforming supply chain
• Leapfrogging the unsustainable
• Partnership
Internal factors External factors
• Competition • Physical and biological shifts to natural
• Knowledge environment
• Culture • Evolution in understanding of the shifts
• Firms’ capabilities • Government policies
• Social forces
• Customer demands
• Needs for reduction of natural resources
Transforming supply chain [28] is another perspective for
enabling disruptive innovation for sustainability. Disruptive
innovation for sustainability among firm’s supply chain is a
system’s perspective of the effects of a firm’s product or
services, processes, as well as operations on problems
throughout product design, sourcing, production process,
materials’ selection, delivery, and disposal, as well as the end
of life [48, 49]. Strong relationship between multinationals
and suppliers from developing countries are continuously
changed. It is very important to consider the social effects of
the business in its value chain with addressing not only a basic
level of requirements such as decreasing poverty and
enhancing human health but also a high level of requirements
including education, gender equity, and quality of life [50]. In
recent years, also the importance of sustainable agriculture,
and markets of sustainable goods have increased [51]. For
example, Unilever’s complete changes to produce sustainable
tea with the help of Lipton brand cooperated with international
NGO Rainforest Alliance (RFA) can be named as an instance
of disruptive innovation for sustainable agriculture. Due to
this collaboration, more attention was paid to employee
welfare (e.g. working environments and occupational health),
farm management (including e.g. soil and integrated crop
management) and ecological protection (e.g. water
preservation and wildlife protection). [28]
Furthermore, enabling factors for disruptive innovation for
sustainability include also leapfrogging the unsustainable.
“Leapfrogging” can be described as the growth strategy that is
based on skipping straight to advanced clean technologies and
making thus possible for nations to keep away from the
polluting phase of the economic development. This strategy
can be considered from various perspectives such as enormous
economy-broad growth pathway, the method for “latecomer”
countries in order to improve with industrialized nations or
technological transformation. Companies located in
developing countries, have the ability to track various
leapfrogging pathways including path tracking, phase
jumping, path creation or disruptive innovation [52]. These
companies can also achieve other benefits from learning
economies. Industries in developing nations have a possibility
to skip straight to the most recent ecological technologies thus
having lower polluting levels [53]. Examples of this stage-
skipping leapfrogging include jump from coal to renewable
energy in China and India, presenting substantial example of
disruptive innovation for sustainability. These types of
actions however require significant support activities from the
favorable institutions, governments and foreign investors [28,
52, 54].
Sustainability partnership is a voluntary collaboration
among different actors from more than one sector with the aim
of sustainable goal achievement [55]. Multiple stakeholder
alliance including the Marine Stewardship Council or
Roundtable on Sustainable Palm oil might target for disruptive
innovation but the moving has been stopped by the lowest
common denominator which leads to being delicate and
inefficient incremental innovation. Disruptive innovation
needs partnerships in much deeper level with the vast variety
of stakeholder groups. “Suzlon” which creates diverse
interactions in India and Denmark is the example in this
regard [28, 54]. In addition to the enablers mentioned above,
there are some other factors enabling the occurrence of
innovations for sustainability. Internal factors include e.g.
knowledge, culture, and organizational capabilities. In
addition, external drivers have an effect on emerge of these
innovations. These factors encompass both physical and
biological shifts of natural environments, the evolution in
terms of scientific understanding of these shifts, needs for
reduction of natural resources, governmental policies and
regulations, social pressure, as well as customer demands.
B. Challenges for delivering disruptive innovation for
sustainability
There are many challenges in the occurrence of disruptive
innovation for sustainability. One of the major challenges is
balancing the performance between the three dimensions of
sustainability. In other words, the transformation required to
improve the performance of one dimension might reduce the
performance of the other dimension creating so called
 2017 Proceedings of PICMET '17: Technology Management for Interconnected World

“directional risks”. [56] Adopting an integrated approach for IOT is not limited to RFID, sensors or machine to machine
sustainability requires various components including communication which can connect with other gadgets.
recognizing and filling knowledge gaps, creating capabilities, Together with the capabilities of big data analysis, it enables
considering sustainability as an important part of everyday information exchange with people and devices providing
activities, as well as constructing bridges between companies possibilities for new, larger scale applications and services. In
to keep directional risk away [28]. other words, IOT makes fundamental shift in solving
governmental challenges, lowering social, and ethical risks,
In addition, challenges in applying innovations for and improving the methods of operations [15].
sustainability may occur in different levels. In the firm-level,
lack of knowledge and skills, having fear of making trade-offs The term “Internet of Things” encompasses with the words
through quality and sustainability performance, well- “Internet” and “Things” which lead to the manifold definition
established pathway dependencies, as well as delicate for IOT. The term “Internet” is defined as “the world-wide
customer demands create barriers for innovations [28]. network of interconnected computer networks, based on a
Another types of challenges rise from employees’ resistant of standard communication protocol, the Internet suite
making changes. The occurrence of disruptive innovations for Transmission Control Protocol (TCP) /Internet Protocol (IP)”,
sustainability without top-down directive approaches is while “Things” defines as “an object not precisely
impossible as these innovations require both hard and soft identifiable” [21]. Consequently, a combination of these two
skills [53, 57], as well as multidisciplinary systems approaches allows the disruptive level of innovation in ICT knowledge
[28]. and leads to a semantic definition for IOT as “a world-wide
network of interconnected objects uniquely addressable, based
On a more general level, including local, national and on standard communication protocols” [59].
international levels, delicate voluntary agreements as well as
creation of perverse motivations by public policies create As shown in Fig. 1, [59] have been defined IOT by the
barriers for innovations for sustainability. Furthermore, there combination of three paradigms; things-oriented (sensors),
are also barriers that affect all these previously mentioned internet-oriented (middleware) and semantic-oriented
levels. These include lock-in to wasteful, high reliance on (knowledge). The first one, things-oriented aspect, is based on
fossil fuels, and the linear system from individual behaviors to connections between things in IOT. Within the second one,
companies’ structures to socio-technical governments [28]. the focus is on IP and network technology. The last paradigm
Table 2 demonstrates these barriers for applying disruptive is limited to the semantic challenges in the IOT such as
innovation for sustainability. storage, search, and management of huge number of
information [59, 60].
TABLE II. BARRIERS IN DISRUPTIVE INNOVATION FOR
SUSTAINABILITY Furthermore, various organizations such as International
Telecommunication Union – Telecommunication (ITU-T),
Barriers
European Telecommunication Standards Institute (ETSI),
• How to balance the innovation creation between the dimensions of Institute of Electrical and Electronics Engineers (IEEE), and
sustainability
Local, national,
Internet Engineering Task Force (IETF) have their own
Firm Level All levels definitions for the term IOT. However, conceptually it can be
international levels
• Lack of knowledge • Delicate voluntary • Lock-in to defined as: “A global infrastructure which provides
and skills agreement wasteful intellectual services by converging context-awareness based
• Frightening for • Creation of perverse • High relience intelligence and interacting autonomously among self-
creation of trade-offs motivations by public on fossil fuels
recognized things on the common information network” [20].
between quality and policy • Linear system
sustainablity at all levels IOT enables the communication between things and
performance
devices and provides services without human intervention. As
• Well-stablished
pathway shown in Fig. 2, interworking technologies can be shared into
dependencies three dimensions including Anytime, Anyplace, and Anything
• Delicate customer communication [20]. The importance of this paradigm is
demand related to the impacts that these technologies has on everyday
• Employee resistance life. IOT has impacts on various industries, business and
society level practices. For example, e-health, education,
logistics, process management, automation, manufacturing,
and intelligent transportation are among the subjects which
IV. INTERNET OF THINGS AS AN ENABLER FOR INNOVATIONS can reap the benefits of IOT [59].
Internet of Things (IOT) is the modern paradigm that has
spread out quickly in the scenario of novel wireless
telecommunication. The main idea of IOT is to have
interaction and allow cooperation between people, devices,
things or objects by the use of modern wireless
telecommunications such as Radio Frequency Identification
(RFID), sensors, tags, actuators, mobile phones etc. [58].
 2017 Proceedings of PICMET '17: Technology Management for Interconnected World
Fig. 1. Convergence of IOT paradigms (modified from [59])
Anytime Communication
During movement, night,
daytime
IOT
Anything Communication Anyplace Communication
Between computers, human to Outdoor, indoor (far away
human, human to thing (using from computer), near the
generic equipment), Thing to
computer
thing
Fig. 2. Dimensions of IOT (modified from [20])
Therefore, the introduction of IOT might change living
manner in a way that many different home instruments can
utilize the knowledge of artificial intelligence. These include
for example having online connections and remote
communication with different devices. Currently, home
devices strongly rely on the human action while in near future
the home devices will increasingly work based on novel
communication systems [61].
According to the statistical information provided by
leading IOT solution provider Cisco, the number of connected
things will reach 50 billion in 2020 [62]. This amount of
connected device changes the world to the rich digital
environment by embedded sensors, cloud infrastructure, smart
fixed, and portable platforms including smartphones, tablets,
as well as home gateways which are created in order to
provide value to different sectors [62, 63]. Furthermore,
International Data Corporation (IDC) forecasts that the global
market for IOT will shift from 2014 number of $655 billion to
$1.7 trillion by 2020 [64]. In short, IOT has been estimated to
change our everyday life and thus provide also new value
creation possibilities for business [65, 66].
V. IOT AND DISRUPTIVE INNOVATIONS FOR SUSTAINABILITY
A. Creating sustainable value by IoT
Universal increase in product demands and manufacturing
activities have increased the need to pay attention on
sustainable development [67]. This includes the development
of strategic technologies to reduce the negative environmental
effects.
For instance, companies can create enormous
improvement for resource productivity by actions related to
energy efficiency, remanufacturing, and material reuse but
also with the development of disruptive technologies and
solutions including clean tech investment, which supports
carbon smart manufacturing [68].
Utilization of IOT in different fields results in saving
energy, cutting costs, fewer fuels, waste reduction, and time
saving which all of them can be named as the influential
factors in sustainability. Therefore, IOT is seen as an enabler
for disruptive innovation that can create and enhance
sustainability in organizations [68]. For example, providing
rooms heating and lighting according to users’ preferences,
weather, and the time of the day, as well as preventing from a
domestic accident by the use of an intelligent alarm, can be
named as few examples of IOT which can increase the level of
sustainability of organizations [69].
A mixture of physical and digital components provides
possibilities for innovation in product, service and business
model levels [70]. According to Fig. 3, the IOT solutions
combine physical things with IT in the form of software and
hardware resulting in creation of value. For example bulb as
the thing just provides light for a specific place. But with the
concept of IOT, the recognition of human’s presence and
provision of low-cost security system will be possible.
Furthermore, the bin has the application of storage capacity,
but with the utilization of IOT, the application of bin can shift
to an instrument which enables measure and monitor storage
weight and offer automatic replenishment service. Therefore,
the technology of IOT enhances the performance of objects
which facilitate and sustain activities for personal usage,
businesses, and industries [60, 71].
IOT is seen to provide benefits from the perspectives of all
sustainability dimensions. Using embedded sensors,
processors, and communication technologies, IOT enables
extraction of smartness from physical world which leads to
healthier life, safer cars, smarter homes and cheaper
maintenance and more efficient companies and farms, and in
overall improvements in eco-efficiency [72].
In more detail, the social benefits include the
improvements in the quality and comfortability of life. For
example, with the IOT technologies (e.g. smart clothes, books,
washing system, education, and intelligent traffic services)
improve the living standards, security, and safety of personal
life [21, 64, 73]. Smart treatment and quick detection provide
value in medical and healthcare domain. In addition, IOT
provides electronic data transfer in aerospace and aviation
industry, which promotes safety and security for passengers
[73].
 2017 Proceedings of PICMET '17: Technology Management for Interconnected World

hardware-coded methods) but also the management of data

and application levels. This includes many critical challenges
related to e.g. tamper-evident smart devices, dynamic and
trust models, secure data storage, and application security and
privacy [63].
TABLE III. IMPACTS OF IOT IN THREE DIMENSIONS OF
SUSTAINABILITY

Value Creation

Social Economic Environmental

Dimension Dimension Dimension
• Personal Life • Industrial IOT • Environmental
o Smart Clothes o Smart Product monitoring
o SmartBooks o Novel Service o Danger detection
o Smart Washing and operating o Disaster Protection
System models o Early alarm
o Intelligent o Novel o Pollution protection
Trafic Service Production o Fast control
o Smart Parking Methods o Optimum energy
Service • Manufacturing control
Fig. 1. IOT-Product-Services logic (modified from [70]).
o Smart Industry • Logistics
Crosswalk o Monitoring o Automatic
From economic perspective, IOT provides possibilities for Service status of warehouse
economic growth and sources for competitive advantages in o Smart shopfloors o Better asset
many industries. For instance, intelligent products, novel Education o Monitoring management
services, and operating models, and new production methods • Medical and condition of o Proactive planning
Healthcare production • Smart building
are among the values created by IOT [74].
o Smart machines o Reduce energy
Remote monitoring is an important action which offers a Treatment • Agriculture usage
o Quich Industry o Promote comfort
possibility of checking the status of the product, production Detection o Monitoring o Heating adjust
line, location of the products and delivery time [21, 73]. • Purchasing quality of soil o Lighting adjust
Furthermore, in environmental dimension, IOT opens up o Smart o Monitoring o Energy saving
possibilities to reduce natural resources and save energy [19, Checkout atmosphere • Automotive Industry
21, 73]. Optimum energy control, recognition of disasters at • Aerospace and condition o Monitoring status
early stages, danger detection, and pollution protection are Aviation o Monitoring of vehicle
o Electronic Data quality of o Improve quality
among the values which can be achieve by environmental Transfer products control
monitoring by IOT technologies. Automatic warehouse, better o Improve customer
asset management, and proactive planning in transportation service
and logistics result in using less fuels and thus reduce air o Intelligent car
pollution [21]. Table 3 summarizes the impacts of IOT in the
sustainability dimensions.
The concept of “Green IT” improves sustainability IOT technology enables objects and things to be smarter
performance by the use of carbon footprint measurement, which lead to cost savings and increased efficiency, thus
observing the environmental effect of business, cutting wastes providing additional value for organizations and societal
in the business procedures, reduction of resource usage, actors such as entire cities. Sustainable development requires
improve energy efficiency, as well as cutting greenhouse gas efficient management of various numbers of objects, and
emissions [75]. Thus Green IT provides opportunities to optimization of energy and resource consumptions, which can
produce and deliver novel products and services and make the be achieved by the use of IOT technology. IOT also provides
possibility of sustainability initiatives [76]. methods for more sustainable development of technologies to
manage all the available objects with various contexts,
According to [77], sustainability arguments have high applications, environments, administrative domains and
competitive impact in various industries. These include energy locations. In addition to this, in order to have tough and
savings, renewables and material recovery, eco-designs smarter things in smart cities, considering adaptability of
instruction and implementing directives for waste treatment. services and ICT systems with IOT application requests and
In addition, the networks and IOT are seen to play major role real world occurrence is required, while assessing the lifecycle
in achieving competitive advantage. of these applications [63]. As a result, the companies with the
Enhancing sustainability by IOT technologies requires right outlook to utilize the IOT platforms have great
methods to change the performance of devices and objects to opportunities in different domains such as providing novel
be more reliable, tough, autonomous, and smarter. Sustainable service offerings, better asset performance, better operational
IOT applications require mechanisms for assuring the security, efficiency, and novel way of representing value to customers
trust, as well as protected information [62]. To achieve these [74].
factors needs so called “low level of IOT society” (e.g.
 2017 Proceedings of PICMET '17: Technology Management for Interconnected World

B. Development of Circular Economy performance with IOT throughout their use cycle especially after sale. Avoiding
Circular Economy (CE) can be named as a sustainable waste is the next step in CE, in this step the data which
development approach with the aim of addressing urgent provided with IOT technology gives more information about
environmental issues as well as resource scarcity [78]. During waste operations in a way that enhance the system and design
the last decade, the development of CE has been attracted out waste. The sixth section is about sorting recycled
more attention around the world in order to find a better materials. The last action is to give permission to the owner to
alternative for the conventional economic model which based calculate the costs, value, as well as benefits of entire logistics
on “take, make and dispose”. Therefore, CE has been alternatives. Therefore, the owners can monitor and control
introduced as a novel business model which result in the process with smart devices remotely. [68]
sustainable development as well as pleasant society [79].
Technology can be named as a crucial factor for enabling
the growth of CE. High-tech development and sophisticated
technologies, as well as updated facilities and equipment, are
required for CE principles including Reduction, Reusing, and
Recycling [80]. IOT has been seen as the phenomenon, which
has the potential for constantly observing, adjusting and
redefining products and their relationships with other actors
and objects within networks [81]. IOT provides opportunities
to create connected prosperous biographies of products and
utilize particular elements and parts in many different ways
[82]. IOT enables data availability for companies to plan
appropriately and provide routine maintenance for deployment
of service capabilities. For instance, connected products will
provide opportunities for maintenance with smart management
of spare parts [83].
According to Janine Benyus [68], who is the co-founder of
Biomimicry Institute, the combination of IOT and CE
practices provides enormous opportunities for both business
Fig. 2. Smart Circular Economy (modified from [68])
and society. Moreover, utilization of IOT in CE leads to
systems which are resilient, decentralized, self-repairing and
To conclude, IOT is seen as one of the main enablers to
scalable without existing complications. Additionally, the
create improvement in CE at companies and enable emerge of
technology of IOT will provide more information about the
new circular business models [84]. Smart, connected products
availability of the resources or losing resources at the
improve the performance of CE and market approaches with
company. Improvement in tagging and tracking technologies
different capabilities including monitoring, control,
leads to immense economic opportunities in order to fill the
optimization as well as autonomy [82]. The abilities of IOT to
gaps and make the possibility of using material which has
track the products remotely enhance the performance of the
been considered as a waste previously. Furthermore, Tim
system for better quality management, optimization in
Brown, who is the Chief Executive Officer of IDEO, believes
recycling, producing intelligent products, as well as increasing
that real CE cannot be possible without IOT. Moreover,
the availability, gathering, and analyzing of data [81, 85]. The
sustainability in system needs reacting quickly, while action as
utilization of IOT in CE provides also better access to history
well as behaviors should be connected with each other via data
knowledge case of recovery activities such as refurbish,
and knowledge. The existence of systems with the ability to
dismantle, and dispose [85].
adapt and react to shift in a way that the purpose remains fit
can be happen with embedded intelligence in objects [68].
VI. DISCUSSION AND CONCLUSION
The concept of CE is coevolving with the IOT. This
technology enables broaden internet connectivity not only In previous sections, we have set attention on the different
between people but also between objects (so called smart, enablers and barriers of disruptive innovation for sustainability.
connected products) [82] leading to creation and gathering of Enabling factors were seen to include e.g. strategies of closing
large amounts of data in different domains. As it can be seen the loop, transforming supply chain, leapfrogging the
in Fig. 4, the smart CE starts with tracking products unsustainable activities, and partnerships as well as various
throughout their use cycle and then it continues with internal and external factors. On the other hand, especially
optimizing fleet efficiency. In this step, IOT will provide balancing the impacts between the sustainability dimensions,
information about the most efficient transportation modes resistance of employees, and frightening from losing the
from trucks and trains to ship and planes. The next step is to current business in general were identified as barriers for these
optimize delivery routes. In this stage, IOT provides real-time innovations. These barriers were seen to emerge in different
data which illustrates goods and transport locations and leads levels, including firm level. From the managerial viewpoint,
to quick routing, reduce fuel consumption, as well as decrease overcoming these barriers requires creation of long term plans,
damage, and loss of asset. The fourth step is to track products managerial support, education and clear guidelines to increase
 2017 Proceedings of PICMET '17: Technology Management for Interconnected World
the awareness of the requirements and possibilities to promote
disruptive innovations for sustainability.
Furthermore, in our study, we set special attention on the
impact of IOT in enhancing the emergence of innovations for
the three dimensions of sustainability. Within social
dimension, IOT is seen to improve the standards of life, safety
and security by e.g. smart clothes, books, washing system,
education, and intelligent traffic services. In addition, smart
treatment and quick detection provide value in medical and
healthcare domain. These values are seen to result in high
value added jobs, educated people, as well as less social issues
in nations. From economic perspective, IOT is seen to provide
economic growth and competitive advantages for many
different industries allowing the development of remote
monitoring, intelligent products, novel services, and operating
models, as well as new production methods are among the
values which create in industrial IOT. In environmental
dimension of sustainability, IOT opens up a possibility to
reduce natural resources and save energy. The solutions
provided by IOT open up a possibility to economic, industrial,
and business development. These solutions improve not only
the social sustainability but also environmental sustainability
and enable the provision of peoples’ facilities to have a safe,
secure, and environmental-friendly life. In addition, we
wanted to open discussion concerning IOT as a tool for
allowing the emergence of Circular Economy business
models. In general, IOT provides a possibility of smart,
connected products which make disruptive changes in
business models enabling the capabilities of monitoring,
control, optimization, and autonomy. Product tracking and
utilizing IOT technology in 3R principles of CE promote the
performance of CE with better quality management,
optimization in recycling, gathering, analyzing, and
availability of data. Although IOT is seen to provide multiple
possibilities to enhance emerge and performance of CE
models, the research on the inclusive impacts of IOT in each
3R principles of CE is still lacking. This provides openings for
future research.
Furthermore, the need for further research is required
according to the novel nature of this research. The aim of our
study was to open the discussion regarding to the impact of
IOT in applying disruptive innovations for sustainability. A
limitation of our study is that it is solely based on the insights
from the existing literature. Thus, future research with
empirical insights is needed to provide deeper understanding
on true impacts of IOT on sustainability innovations, and to
provide validation for our proposals related to development of
disruptive sustainability-oriented innovations. The empirical
studies could include e.g. qualitative interviews with business
leaders with sustainability initiatives. A deeper analysis of the
enablers and barriers and their impacts for emerge of
disruptive innovations for sustainability could help in realizing
sustainability benefits within various industries.
Based on our analyses, we see that the impacts of IOT are
not yet fully realized. This may be because of the varying
digitalization levels of the, industries and whole societies.
Development of a standard framework for the IOT in order to
recognize the level of digitalization in each field could provide
significant benefits in this regard. Therefore, designing the
framework for digitalization and in more detail for applying
IOT, would benefit from the research input of the specialists
of this knowledge. Furthermore, including the insights from
the sustainability research fields, would provide for companies
a tool to improve their digitalization status and execute
innovations with higher sustainability impacts.
On the one hand, the main concern using IOT to improve
the innovation actions are related to security and safety issues.
Although already much attention has paid on security, safety,
and reliability of technologies [86], there is a place for future
research that would enhance the users secure feelings and faith
on IOT technology. Finally, there is a need for more multi-
disciplinary research on relationship between IOT,
sustainability, disruptive innovation, and CE. This would
provide many opportunities to come up with many different
solutions with large scale impacts. In this way, people with
different jobs or from different areas of study can involve to
derive benefits from these concepts.
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