ASU Center for Organization Research and Design

Eight Types of Product–Service System: Eight Ways to Sustainability? Experiences From Suspronet

by Arnold Tukker

Jul 13, 2004

Function-oriented business models or product–service systems (PSSs) are often seen as an excellent means for achieving 'factor 4'. SusProNet, an EU network on PSSs, showed a more complicated reality. At least eight different types of PSS exist, with quite diverging economic and environmental characteristics. The economic potential of each type was evaluated in terms of (i) tangible and intangible value for the user, (ii) tangible costs and risk premium for the provider, (iii) capital/investment needs and (iv) issues such as the providers' position in the value chain and client relations. The environmental potential was evaluated by checking the relevance of certain impact reduction mechanisms (e.g. more intensive use of capital goods, inherent incentives for sustainable user and provider behaviour etc.). Most PSS types will result in marginal environmental improvements at best. The exception is the PSS type known as functional results, but here liability and risk premium issues, amongst others, need a solution.

Eight Types of Product–Service System: Eight Ways to Sustainability? Experiences From Suspronet