7 days ago
The newly released report “Product-as-a-Service (PaaS) in the circular economy” identifies the challenges of the PaaS business model and highlights strategies to succeed in practice. The report also includes a methodology tailored to companies that want to move to PaaS.
At the beginning of this year, Stena Recycling and Cradlenet started a project with the target of accelerating companies' ability to shift to service-based business models called Product-as-a-Service (PaaS). PaaS has been highlighted as an enabler in the transition to a circular economy, but development is slow. The report “Product-as-a-Service in the circular economy” is based on an extensive literature and report study, and interviews with key stakeholders in the field.
The project, funded by the European Regional Development Fund through the Swedish Agency for Economic Growth, aims to improve the conditions for small and medium-sized companies (SMEs) to implement business models based on PaaS.
The report identifies 9 key challenges hindering the transition to PaaS, spanning the categories of customer acceptance, operational and capability-related costs, and financial risk. For each challenge, the report provides examples of actions to address them. It also provides a methodology.
“PaaS has been referred to as a building block of the circular economy for over 10 years, and its value-creating potential is well documented. We wanted to do something to address the 9 practical challenges that still limit SMEs from moving to PaaS so that the business model can take off in earnest. That's why we also present concrete solutions and tools to help companies accelerate their move," says Mats Linder, Head of Stena Recycling's business area Stena Circular Consulting.
“Companies are keen to move to circular and service-based business models, but they want to minimize the risk of implementing ventures that could fail. With this report, we aim to help them do this by showing what makes some companies succeed or fail in their ventures and providing simple instructions on how best to go about it. In this way, we are filling a gap that has previously been missing in the research," says Elin Bergman, COO and Deputy CEO of Cradlenet.
It is said that the PaaS model was launched by Rolls-Royce almost 60 years ago when they moved from selling aircraft engines to selling uptime. Although the model has been on the market for a long time, never before has there been a better opportunity for companies to make the transition.
“One conclusion we can draw is that today we have the digital infrastructure needed to optimize the use of products in a PaaS model. There is also a completely different awareness among companies and customers, they have realized that a circular economy is something important. It is a key prerequisite for companies to choose to change," says Mats Linder.
For more information, contact: Märta Bergfors
Stena Circular Consulting (SCC) is an international consulting business and part of Stena Recycling. SCC's mission is to support companies in their development towards sustainable circular solutions that provide both environmental and business value. SCC is the result of Stena Recycling's history in recycling and waste management. With decades of practical experience in recycling, SCC is today uniquely positioned to help companies become more sustainable through circularity.
Cradlenet is a network that works to accelerate the transition to a circular economy in Sweden through advice, knowledge sharing, environmental monitoring, events, training, opinion-forming, and networking locally, nationally and internationally. Cradlenet is a non-profit organization based in Stockholm but also has local networks in the West, South, and North. Cradlenet is a co-founder and managing partner of the Nordic Circular Hotspot, which aims to drive the circular transition in the Nordic region.