Exploring reluctance to circular business models – the case of light as a service

Session
WE.3.A || Business Models for a Circular Economy

Authors
Rex, Emma; Kron, Ulrika

Abstract
The circular economy does not only require new product designs but also business models that provide enough incentives for both suppliers and customers to shift to more circular practices. Selling “light as a service” is a classic example of a service-based business model that could enable a more circular economy. However, despite a growing interest to become more circular, there is still hesitation among customers to change the way they meet their need for light. In an ongoing project, we explore this reluctance and seek to identify obstacles and driving forces for large customer organizations to buy “light as a service”. An interview study was made to identify current perceptions and practices among the broad range of stakeholders involved in the supply and demand of lighting in Sweden; lighting manufacturers, suppliers of light as a service, light designers and architects, private and public customers, collaborative bodies and sector organizations. The focus was on indoor lighting e.g. offices and schools in large customers (municipalities and property companies). 20 semi-structured interviews were made and results from the interviews were presented and discussed in a subsequent stakeholder workshop to validate results and add complementary perspectives. The results show a broad range of factors affecting the stakeholder’s attitudes and actions towards light as a service, from uncertainties in legal and technical liability to expectations on increased wellbeing and productivity among users. The preliminary analysis points to the importance of reducing uncertainties and creating trust between actors in the business ecosystem to decrease barriers to change. It also seems like extending the value proposition and increase the emphasis on social and/or environmental benefits (e.g. through enhanced light ergonomics and increased resource efficiency) is key for light as a service to become competitive to traditional business models.