‘Demand pull’ government policies to support Product-Service System activity: the case of Energy Service Companies (ESCos) in the UK

Hannon, Matthew J, Foxon, Timothy J and Gale, William F (2015) ‘Demand pull’ government policies to support Product-Service System activity: the case of Energy Service Companies (ESCos) in the UK. Journal of Cleaner Production, 108 (Part A). pp. 900-915. ISSN 0959 6526

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Abstract

Product-Service Systems (PSSs) constitute a family of service-based business models designed to satisfy
our societal needs in an economically and environmentally sustainable manner. To date however PSS
application has remained niche due to a variety of critical barriers. This paper explores how ‘demand
pull’ national government policies could support PSS activity by addressing these barriers and cultivating
market demand. Lessons are drawn from a case study of how regulatory, economic incentive, informative
and procurement policies have supported Energy Service Company (ESCo) activity in the UK; a sub-set of
the PSS family focused on energy service provision. Subsequently five policy recommendations are
presented to support PSS activity: (1) balancing economic incentives and regulatory disincentives; (2)
promoting indirect policy support; (3) redesigning existing market structures; (4) promoting locally-led
PSS activity; and (5) creating stable policy frameworks. The paper warns however that national government
policy cannot easily address all PSS barriers, such as customer preferences, international developments,
technological progress and inherent business model weaknesses, pointing to the need for
other complementary solutions. Furthermore, other governance actors beside national government could
also implement PSS supporting policies.

Item Type: Article
Keywords: Product Service System (PSS) Sustainable business model Government ‘demand pull’ policy Energy Service Company (ESCo) Innovation system
Schools and Departments: School of Business, Management and Economics > SPRU - Science Policy Research Unit
Subjects: H Social Sciences > HD Industries. Land use. Labour > HD0028 Management. Industrial Management > HD0060 Social responsibility of business
H Social Sciences > HD Industries. Land use. Labour > HD0028 Management. Industrial Management
J Political Science > JF Political institutions (General) > JF0020 General. Comparative government
Depositing User: Timothy Foxon
Date Deposited: 23 Oct 2015 11:10
Last Modified: 07 Mar 2017 21:32
URI: http://sro.sussex.ac.uk/id/eprint/57317

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