Sustainable construction is circular construction. But how do established construction companies make the switch to a circular business, without shooting themselves in the foot during the process? And what are the do's-and-don'ts for start-ups? In a unique co-creation process, entrepreneurs from the Flemish construction world sought and found support for the development and roll-out of a customised circular business model.
If the construction sector is to become radically more sustainable, in terms of both energy and raw materials consumption, the current linear way of working (the 'take-make-dispose' model) will have to be replaced. This implies a circular approach, using as few new raw materials as possible and keeping products - and the components and materials that go into them - in circulation for as long as possible.
But that is easier said than done. For many companies and businesses, it is far from clear how they can put a circular business into practice - without sacrificing profitability. The circular economy is a hot topic today, and it is a trend that will continue when the European Commission rolls out its Green Deal,' explains Helen Versluys of Möbius, which advises companies on the circular economy. So it is not surprising that circular building is also receiving a lot of attention. Unfortunately, it is not in line with the classic linear business model in the construction sector. Established companies do not always know how to make money with circular concepts such as adapted design, change-oriented construction and selective waste streams'.
Moreover, despite their often innovative and fresh image, start-ups don't have an easy ride. Versluys: 'Start-ups often focus too much on their product alone, as a result of which they lose sight of the market and go under.’
Unique co-creation process
In order to familiarise both established companies and start-ups with the world of circular construction, VITO, together with Möbius and Camp C, the Centre for Sustainability and Innovation in the Construction of the Province of Antwerp, set up the 'Building a Circular Campine' project in early 2019. A unique co-creation process was rolled out within the project, in which the participating companies went further into the opportunities of circular construction and how to capitalise on them via a suitable business model. It turned out to be a success, even in times of corona: at the end of last year, the third edition of the project was completed, bringing the total number of participants to 25. The project was supported by a grant from the European Regional Development Fund worth €111,924.62.
Each programme consists of an introductory inspiration session, followed by three content-related workshops. In these workshops, we focus on various aspects of circularity, explains Anse Smeets from VITO. First, we work with the participating companies to find out how they can create circular value, and what strategies are feasible in this regard. Then we study the value proposition: how can the needs of their customers be met? After all, circularity alone cannot be the only selling point. Finally, we shed light on the circular value network: which partners are needed, what are the preconditions for implementing the circular business model (e.g. legal and financial) and what obstacles are involved?'.
Companies often have basic ideas about circular construction, but they don't know yet how to turn them into a detailed model', explains Sofie Torfs from Camp C. 'We try to remedy this with this co-creation process. At the end, participating entrepreneurs have a clear picture of the strategies for circular value creation that offer potential within their specific context. They have learned which business models allow them to implement these strategies while generating value for the client, but they are also aware of the focus points in order to realise them'.
Diverse field of participants
VITO is responsible for coordinating the co-creation process, and takes care of the organisational and administrative aspects. Smeets: ‘The process is based on the structure of the circulator framework that we developed at VITO.’ In addition, VITO also arranged the content of the sessions. At the end of last year, this resulted in two interesting guides: an extensive manual for organising a co-creation process, and a manual on circular construction (available online via the link below).
Which (types of) companies are interested in circular construction? With three co-creation processes to their credit, the organisers have expertise in this regard. The participants were very diverse,' explains Smeets. We had established companies such as Willemen Groep and Eurodal, but also young companies such as Bao Living and Circomat. There is also a wide range of activities: from traditional construction companies to large building principals and interior designers. This rich mix ensured a good balance during the sessions'.
During the three previous processes, we observed that companies often equate circular construction with offering a service instead of a product - the so-called 'as-a-service' model. But even this model cannot be implemented overnight. It requires a completely different way of doing business, because instead of delivering a product, you remain responsible for it,' explains Torfs. 'So you have to factor in maintenance and repairs. Moreover, the income only comes in very sporadically, for example via subscription fees. And customers also often get cold feet, especially in the construction sector. Indeed, the Flemish prefer the idea that they own something'. Finally, the legal framework and financing channels are not yet perfectly set up for use rather than ownership.
'If your company switches to as-a-service, it is important that you also take away all the hassle for the customer,' explains Versluys. But that means that you have to work together with other companies. Take, for example, the circular idea of a facade-as-a-service. This involves a lot of different companies. So a construction company will have to work closely with a window installer'. But there also needs to be good cooperation within (large) companies. It is crucial that everyone is on the same wavelength in the company, from the work floor to management,' highlights Torfs. 'Circular construction requires a different approach to products and services, to materials, to waste, etc. In short, to the whole business'.
