SI.20.006 – Harnessing the potential of digital servitization for distinctive sustainability benefits

Route: Smart industry

Cluster question: 053 What are the features of a circular economy and how can we achieve it?

Servitized organisations are increasingly confronted with two contemporary trends. First, the trend of digital transformation (DT) is leading servitized organisations to progress toward digital servitization, i.e., the uptake of new digital technologies for the purpose of expanding their service business through the provision of digital services embedded in a physical product. Second, the trend towards incentivizing producers to produce less and in other ways to achieve customer outcomes while reducing the environmental impact of the whole system leads to the ‘dematerialization’ of supply chains and requires organisations to develop access-based business models that lead to sustainable value chains. These developments offer opportunities and challenges. Investing in digital product-service systems and their platforms may help organisations to pursue resource efficiency and extended product lifespans by providing new solutions, while closing the loop by fostering multiple product lifecycles (e.g., reuse, remanufacturing and recycling). However, many organisations struggle to earn the returns expected from investments in services and digital assets, and to servitize in a sustainable way, especially in collaboration with suppliers and other stakeholders. Challenges include defining and sharing service value (including sustainability aspects, balancing risk and rewards, and ensuring transparency, data sharing, and integration of digital systems. Consequently, how digital servitization may lead to sustainability as a distinctive benefit is an important research avenue with significant practical implications. The overarching goal of this research is to investigate what mechanisms and strategies regarding digital servitization enable the realization of distinctive sustainability benefits for key stakeholders, mainly firms, customers and society at large. The research comprises achieving economic viability through novel business models and unlocking environmental benefits through closed loop strategies.

Keywords

(Digital) servitization, circular economy, Digital Transformation, sustainability

Submitter

Organisation Tilburg University (TiU)
Name Prof. Dr. W. (Wendy) van der Valk
E-mail w.vdrvalk@tilburguniversity.edu
Website https://www.tilburguniversity.edu/staff/w-vdrvalk