Circular economy using AIoT: Advantages and challenges

By: Bibisumaiya Chappu, International Center for AI and Cyber Security Research and Innovations, Asia University, Taiwan, Email:


We live in an era where implementation of Artificial Intelligence of Things (AIoT) can be seen in various sectors of the industry and can be applied on circular economy. Traditional methods not only disrupt the workflow of the supply chain but also lead to significant costs associated with the dependence on manual labour, which can be time-consuming also prone to errors including increased efficiency, reduced waste, and enhanced safety measures. This study aims to explore advantages of AIoT when utilized in Circular economy, ways to apply and the challenges that can occur while the application. Addressing the ways on application while investigating the ways to overcome the challenges.

Keyword: Circular economy, AIoT, supply chain


The goals of a circular economy are to reduce waste and pollution, extend the useful life of goods and resources, and restore natural systems. In word reduce the over-consumption, reuse the resources and recycle them creating sustainable environments [1] . The integration of Internet of Things (IoT) and AI has attracted significant attention as an innovative method to digitize manufacturing sectors and advance sustainability within the context of circular economy [2] . The integration aims to enhance interactions between humans and machines, IoT operations, and big data analysis [3]. AIoT solutions offer benefits to the manufacturing sector, such as improved efficiency, waste reduction, and enhanced safety [4]. Manufacturers can adopt a circular economy approach through AIoT, focusing on sustainability and social good by cutting waste and costs while boosting efficiency [4] [5]. The manufacturing industry is increasingly embracing AI and IoT solutions for early malfunction detection, ensuring high-quality product output. Despite the growing adoption of AI and IoT in manufacturing, there is limited research on integrating circular economy principles with AIoT [6]. This research explores the advancement of circular economy with AIoT, reduction manual work, sustainability, and efficiency. Figure1 and table 1 explicitly highlight’s the study.

Waste reduction

The circular economy seeks to achieve zero emissions and zero waste by reducing input, waste, and emissions in order to optimise resource utilisation[7] .It entails the intelligent manufacturing and use of products, the extended life of items, and the effective use of materials [4].A business concept known as the “circular economy” encourages resource reduction, recycling, and reuse [5].

Reduction manual work

AIoT enables the speedier processing of repetitive operations and the reusing of orders by mimicking human actions within digital systems [8] .By automating and optimising procedures, decreasing errors, and boosting efficiency, the application of (AIoT) can aid in minimising human contributions to the circular economy [9]. This may result in fewer malfunctions and increase the circular economy’s general efficacy.


AI technologies can be used to monitor and optimize food production and supply chains, redistribute excess food, and support circular economy initiatives [4]. The integration of IoT architecture with circular economy principles can lead to the development of intelligent systems that regulate energy demand, reduce costs for consumers, improve asset utilization, and increase the use of renewable energy sources [5]. Digital transformation and data-driven business models enabled by digital technologies play a significant role in achieving circular solutions and increasing competitive advantages.

Challenges in Integrating AIoT and Circular Economy

AIoT technology integration with the circular economy offers chances to accomplish sustainable goals, but there are obstacles as well that must be overcome. The circular economy seeks to manage finite stocks and renewable flows in an efficient manner in order to maximise resource returns, protect natural capital, and minimise risks [10] .

Data security and privacy

Offering data security and privacy is one of the major issues facing the Internet of Things [11]. Strong cybersecurity protocols are required to manage, store, and distribute sensitive data that is collected and analysed by Internet of Things (IoT) devices safely [12]. To preserve integrity and public trust, it is imperative to manage the substantial risk posed by the possibility of data breaches and unauthorised data usage [12].


One of the financial challenges is the initial outlay needed to integrate AIoT devices. For smaller producers who might not have the required capital reserves, the hefty setup costs—which include purchasing equipment, software, and other infrastructure—can be a major barrier to entry [12]. The short-term financial expense is frequently an obstacle, even though the long-term benefits might be significant [12]


Interoperability on AIoT the is a problem since different manufacturers employ different technologies and protocols, which makes it difficult for these systems to interact with one another without problems. This necessitates further spending on software or appropriate technologies to close the gaps [13]

A diagram of circular economy

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Figure 1: Tree of advantages and Challenges of Circular Economy

Table 1 : Advantages and Challenges of Circular Economy




Waste reduction

Data security and privacy


Reduction manual work






To sum up, the convergence of the AIoT and the circular economy principles presents a hopeful fundamental change, though not without its share of challenges. To begin with the advantages by utilising AIoT, we can prolong product lifecycles, manage production processes intelligently, and optimise resource utilization—all of which are completely in line with the circular economy’s core values. AIoT reduces human intervention through automation and optimisation, which reduces errors and improves operational efficiency in circular economy activities. Within circular economy projects, AI-driven technologies have the potential to optimise energy use, optimise supply networks, and streamline production, all of which can lead to resource efficiency and sustainability. But in addition to these benefits, we also need to take count of the challenges that comes along. It’s critical to protect the private information that Internet of Things devices generate. Strong cybersecurity defences are necessary to reduce the dangers of illegal access and data breaches. AIoT device deployment might be prohibitively expensive up front, especially for smaller businesses. Notwithstanding the enduring advantages, managing these fiscal obstacles continues to be a barrier. A major obstacle to interoperability is the wide range of technologies and protocols used by various manufacturers. In order to close these technology gaps, more money must be spent on compatible solutions. In conclusion, even though AIoT has a great deal of promise to advance efficiency and sustainability within the circular economy, resolving these issues is essential to maximising its advantages.


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Cite As

Chappu B (2024) Circular economy using AIoT: Advantages and challenges, Insights2Techinfo, pp.1

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