new business models in the wood construction towards 2030 · 2017-06-29 · new business models in...

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New business models in the woodconstruction towards 2030Anne Toppinen1, Miska Sauru1, Sami Berghäll1 & Minna Autio2

Department of Forest Sciences1; Department of of Economics andManagement2, University of Helsinki, Finland

2nd New Business Models Conference, Graz, 21.6.2017

Funded by Finnish Innovation agency Tekes/Käpy-project

www.helsinki.fi/yliopisto 27/11/2016 2

Global view - positive signs regarding woodenmultistory construction (WMC):


In EU, construction accounts for about 50% ofextracted materials and energy consumptionThe total energy consumption in constructioncould be decreased about 40%, totalgreenhouse gas (GHG) emissions 35%, andthe use of extracted materials 50% (Herczeget al., 2014)Increase in the use of renewable wood inindustrial construction supports sustainabledevelopment and transition to bioeconomythrough substitution and carbon storageBut: business model related research in thebioeconomy context lacking very much(Hansen 2016)

The role of construction sector insustainable development andbioeconomy

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• A rapid growth in the market shares of WMC construction in Nordic countries:

• Finland: the market share of WMC of all new MC apartment starts from 1% (2010) to 6%(2015) (statistics by Puuinfo Oy / WoodInfo Ltd); Sweden, current share >10 %; localtargets to reach 50%

• Drivers for the growth: bio-economy, investments, regulation (Hurmekoski et al. 2015),development of more advanced business models (Brege et al. 2014; Brege and Lessing 2015).

• Bosman and Rotmans (2016): bio-built environment based on wooden buildings andconstruction materials is among the key activities to promote implementation of Finnishbioeconomy strategy!

WMC in the Nordic countries –research findings

Stern (2014)


Business modelblock

Description

ValueConfiguration

Describes the arrangement of activities andresources.

Core Competency/Capability

Outlines the competencies necessary toexecute the company’s business model

Partner NetworkManagement

Portrays the network of cooperativeagreements with other companiesnecessary to efficiently offer andcommercialize value

Infrastructure management partof business model: by Osterwalder et al.(2005), Mokhlesian and Holmen (2012) with emphasis on SDLby Vargo and Lusch (2004)

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Analysis of the results and final feedback to thepanelists

3rd Delphi round interviews

2nd Delphi round questionnaire

1st Delphi round interviews

Literature review and indentification of researchobjectives

Design of the 1st interview round and assembly ofthe panel on experts

Feedback to the first round panelists

Formulation of the 2nd round questionnaire based onthe 1st round interviews

Analysis of the 2nd round results, feedback andformulation of a 3rd round interviews

Our approach - three-stageexpert Delphi process during2016-17 in FIN and SWE:• 18 interviews• 17 structuired online

questionnaires filled• 16 interviews


Id Statement Likelihood(%)

Desirability(%)

5

By 2030, we will sell and buy more woodconstruction products and services throughopen online platforms, such as online shopsor professional digital networks.

Low 0 0Medium 12 29

High88 71

10 By 2030, prefabrication will be the mainoperating logic, with less on site building

Low 0 6Medium 0 6High 100 88

39By 2030, we will have more standards, openaccess platforms and public data banks forthe wood construction businesses to use.


40In 2030, the best business model is tocontrol a bigger part of value chain thantoday.


RESULTS: Aspects with valueconfiguration – high confirmityamong experts

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Id Statement Likelihood(%)

Desirability(%)

8By 2030, there will be many experiencedprofessionals both buying wooden buildingsolutions as well as selling them.

Low 12 6

Medium 6 18

High 82 76

31Small companies will lack the money andknowhow to develop more competitive andadvanced wooden building solutions.


33By 2030, organizational cultures will be moreprone to co-operation and strategic alliancesbetween different organizations.


34 By 2030, a building process from start tofinish will be significantly shorter than today.


RESULTS: Capability view – roleof SMEs in the network?

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• Some support to the Service-Dominant-Logic (statement 33, even thoughthere the reactions are more divided).

• Sustainability? - the foreseen rise of prefabrication could benefitsustainability orientation of WMC via material efficiency; also lightness ofmaterial, carbon storage…

• Resident view? - ”Those increasing needs of customers … especially thesemould problems, people are more and more aware these issues, and thereis need for healthier buildings” Executive from building industry, 1 yearof experience, Fin; ”As a matter of fact, the most influential things arehealthiness of wood, what wood makes to indoor air … if we can provethose effects, … the positive influence of wood” Managing director fromwood industry association, 23 years professional experience, Fin

Interpretation?

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• Networked structures, co-operation (also with competitors), the necessity ofstandards, issues with the complexity and time consuming nature ofconstruction projects, large operators taking control of a bigger part of the valuechain, hybrid building solutions, online marketplaces, and even developmenttowards new business ecosystems within the WMC were mentioned

• But limited coherence between the respondents:• “It could be [that in the future] we will see competitors as partners. One manufactures the walls

and the other manufactures the flooring.” Executive from wood industry, 22 years ofexperience, Finland;

• “It is more and more important to find strategic alliances” Executive from wood industry, 11years of experience, Sweden;

• “We will not do this validation [of wood based building solutions], that needs to be undertaken bythe wood industry itself.” Executive at a builder company, 26 years of experience, Finland.

RESULTS - partnernetwork?

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• addressing indoor air quality with the use ofrenewal materials a primary channel for thediffusion of WMC over intrinsic motivationtowards sustainable bioeconomy: Healthybuildings, healthy people!

• transforming business models towardssustainability calls for strengthening positiveimage of WMC especially among largelyneglected stakeholder group, residents.

• orchestration of partner networks andcapabilities, including residents as end-usersas a part of actor-to-actor network– alliancemodel to share risks seen attractive

Conclusions

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• Bosman, R. & Rotmans, J. 2016. Transition Governance towards a Bioeconomy: A Comparison of Finlandand the Netherlands. Sustainability 8: 1017.

• Brege, S., Stehn, L., and Nord, T. 2014. Business models in industrialized building of multi-storey houses.Construction Management and Economics 32: 208–226

• Lessing, J. & Brege, S. 2015. Business models for product-oriented house-building companies – experiencefrom two Swedish case studies. Construction Innovation 15(4): 449-472.

• Herczeg, M., McKinnon, D., Milios, L., Bakas, I., Klaassens, E., Svatikova, K. and Widerberg, O. 2014.Resource efficiency in the building sector. Final report for DG Environment. ECORYS and CopenhagenResource Institute.

• Hurmekoski, E., Jonsson, R. and Nord, T. 2015. Context, drivers, and future potential for wood-frame multi-story construction in Europe. Technological Forecasting and Social Change 99: 181–196.

• Osterwalder, A., Pigner, Y. & Tucci, C. 2005. Clarifying Business Models: Origins, Present, and Future of theConcept. Communications of the Association for Information Systems. Vol 16:1.

• Mokhlesian, S. & Holmen, M. 2012. Business model changes and green construction processes.Construction Management and Economics 30: 761-775.

Key literature:

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new business models in the wood construction towards 2030 · 2017-06-29 · new business models in...

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