Implementing Product-Service System Business Models in the Building and Construction Sector

The building and construction industry, which is responsible for 39% of global carbon emissions, is far off track in achieving its net-zero emission targets. Product-service system (PSS) business models are one of the instruments used by the industry in the transition toward reaching these targets. A PSS business model is designed around an end-of-life solution that minimizes material usage and maximizes energy efficiency. It is provided to customers as a marketable set of products and services, jointly capable of fulfilling a customer’s needs. There are signals from practice however, that suggest that the implementation of this type of business model is falling behind. This study investigates this and seeks to identify key challenges and opportunities for sustainable PSS business models in the built environment. Using a grounded theory approach, data from 13 semi-structured interviews across five companies is used to identify challenges and opportunities that suppliers are facing in selling their products through PSS business models. Our preliminary data analysis points to nine challenges and opportunities for PSS business models. We discuss these in the context of the current economic transition toward a sustainable and circular built environment and provide suggestions for further research that could help to overcome resistance toward the implementation of PSS business models. The contribution of this research to researchers and practitioners is that it provides insights into the adoption of new business models in fragmented and competitive business environments.