Circular building and new business models: What opportunity for the contractors?

Social and political forces are advocating the need to shift towards circular economy, defined as a restorative and regenerative economic system where resources are retained and reused and which should replace the current linear economy of take, make and dispose. This is a radical change for the construction sector which has for a long time considered the management of waste as not been part of the tasks of the industry. Demolishing and recycling activities, usually considered as low value work, now received a renewed attention and construction companies are slowly developing new business propositions to include the reuse of waste. Building on the ongoing discussion on green business models, following Teece, we define business model as a 'model' which represents the organisational and financial 'architecture' of a business and includes implicit assumptions about customers, their needs, and the behaviour of revenues, costs, and competitors. Instead of focusing on innovation as an internal process, we understand this development as a dynamic process stretching outside company boundaries. Building on a longitudinal study of construction companies (2017-2020) active in the southwest part of Sweden, we propose to give an insight in how these companies are engaged in developing new business propositions focusing on circular economy, how these propositions have emerged and how they could be transformed in new businesses. The empirical material draws on a qualitative study of 11 companies gathering interviews with 35 practitioners, five sites visits and three observations of meetings and workshop. Our contribution aims at informing how the companies, investing in the dynamic processes of business models, can support innovation in the construction industry and participate to the development of circular economy but also to document what are the main challenges they face in doing so.