Co-Evolution of Business Strategies in material and construction industries and public policies

Abstract

Traditionally, gravel, cement and concrete producers focus on their role as material or resource suppliers. The higher the material turnover, the higher the economic success. Hence, the business-model is in conflict with the societal goal of increased resource efficiency. Driven by stricter regulations, some companies have recently developed new business models focusing on additional services in waste-management and logistics. From a policy perspective, such diversification strategies are very interesting because they accelerate changes in economic structures that lead to increased resource efficiency. In our project, we analyse how this development could be further encouraged. We introduce the term “co-evolution” describing a process of mutual learning between representatives of public policies and business. To this end we use system dynamic modelling in combination with integrated assessment. In our transdisciplinary research approach, we collaborate closely with stakeholders in industries and public policy using group-model-building. Data is collected in case study analysis with seven different companies producing sand, gravel, cement, concrete and services in logistics, construction and waste management. Both system dynamic and assessment model are based on Material-Flow-Analysis on different scales (company and region). It proves to be a valuable tool to ensure consistency of both models as well as data quality. First results show that different policies in waste-management, resource-management and settlement development have a strong effect on decision making in material and construction industries.