Old computers – new business

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Old computers – new business

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Microsoft’s SEAN NICHOLSON wrote an article in the UNIDO magazine “Making It: Industry for Development” that you can read here - http://www.makingitmagazine.net/nicholson.html I have posted the article here with permission from UNIDO.

It is estimated that around 20% of the world’s one billion-plus personal computers in current use will be disposed of by the end of this year, rendering e-waste the fastest growing global waste stream. Exacerbating the state of affairs are unscrupulous agencies that transport e-waste from developed countries and dump it in emerging economies which lack the capacity to properly handle hazardous waste. In countries like India and Ghana, tens of thousands of people are involved in informal recycling of dumped e-waste, and every day there are news stories about the dangerous consequences for people’s health and environment.

At the same time, millions of usable computers are being thrown away while most people in the world don’t have access to any computing technology.

There are several views regarding proper solutions to e-waste. Some lobbyists want all computers to be recycled in the same country they were used in, while others insist computing equipment should be reused, rather than recycled. Since PC-reuse could potentially harm sales of new computers, fingers are often pointed at big IT companies on account of the slow progress they are making in this direction. Some people have proposed giving surplus computers to schools, but others are against such donations, as often the PCs are broken, or the schools do not have the facilities to maintain the PCs. Yet another perspective is provided by some large multinational corporations which express concern about the risk of data leakage from improper hard disk disposal, leading them to support policies of immediate destruction/recycling of disposed PCs.

As an initial step, effective legislation regulating e-waste could play a role in stimulating positive change. This is illustrated by the fact that PC reuse is higher in those countries that are members of the European Union, than it is in neighbouring countries outside the EU. In countries with adequate e-waste regulations, people have stronger incentives to collect PCs and reuse them, thereby extending their life cycle.

On the other hand, stricter legislation on e-waste trade is not necessarily the answer. Calls for policy-makers in developing countries to block all imports of second-hand computers are problematic because in those very same countries such imports may constitute the only path to PC ownership for many people. For example, new PCs in South Africa are often beyond the reach of people at the lower end of the economic pyramid, while quality refurbished PCs, available for US$80, offer affordable computers to a much wider audience.

It is against this background that coalitions of multinational companies, governments, and non-profit organizations, have begun coming together to find sustainable solutions for tackling e-waste. One example of this is ‘SteP’ (Solving The E-Waste Problem), a UN-led initiative. Although the primary objective of SteP is to address environmental issues stemming from e-waste, the initiative also recognizes the opportunity to develop sustainable green business capacity in developing economies.

So what are the commercial opportunities presented by second-hand computers?

The first is asset disposal services. This opportunity involves reliable data-wiping of computers when they leave their owners. Regardless of the final destination of disposed-of PCs, corporations and governments can rest-assured that no data will get into the wrong hands.

The second is refurbishment for reuse and resale. Most PCs disposed of by corporations are usually in working order. It costs a commercial refurbisher around US$40 to process a PC for resale. While the resale price of refurbished PCs depends on PC specifications, the average three-year-old laptop can be resold for more than a couple of hundred dollars, thereby presenting a large profit margin.

The third is recycling. This includes disassembly of the PC into component parts. There is a large international market in PC components, e.g. for memory chips. A high-tech commercial recycler can extract far more precious components from the same materials compared to a low-tech recycler. For example, an informal recycler might harvest 20% of the gold, but a commercial recycler could potentially achieve an 80%+ yield.

In countries like the USA and the UK, a number of companies now offer all these services. They provide PC owners a safe and ethical disposal solution for their computers, they support legislation development, and their business capacities often extend into handling other forms of e-waste such as mobile phones. A customer bringing in his computer for disposal could expect around 90% recycling, with 10% incineration and zero landfill. Also, the customer may make money as well from the resale of the PCs.

However, in most other countries around the world, the capacity to provide such services is absent. But this is starting to change as corporations, such as Microsoft, see opportunities to support the reuse and recycling of PCs. A move in this direction makes commercial sense because it provides access to new customer segments, supports the agendas of traditional customers such as governments, helps customers who are updating their computer systems, and provides opportunities for staff to support social programmes, which further increases job satisfaction.

The opportunity now exists to expand the capacity for PC disposal, reuse, and recycling in developing countries. This could be a way to create jobs, develop new green industrial capacities, support environmental legislation, and ensure affordable access to quality PC technology for people unable to afford new PCs.

Sean Nicholson is Global Manager of Emerging Solutions for the Microsoft Corporation in Seattle, USA.

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