Ways to scale circular innovations
in the construction sector
The Circular Economy means reducing waste, prolonging use, recycling and upcycling. Circularity in construction consists of implementing circularity from the start in any project, and at every stage in the life cycle of a built object: raw materials, design and production, use optimisation, reuse, recycle. This provides a very rich spectrum of opportunities for ventures with innovative solutions.
At the moment, the focus of most ventures is on “design and production”, i.e., constructing new buildings with circular materials and for longevity, as well as on “use optimisation”, i.e., maintaining and adapting the building for continued, optimal use. We found relatively few examples of ventures with innovative solutions for recycling and reusing construction materials. Currently, most ventures are selling a product, but the trend leans towards more “Product-as-a-Service” models.
The number of start-ups that are active within the real estate construction sector is relatively small (about 3% of the total), with these numbers decreasing even further when we delve into the circular economy: we found just 28 firms active in circularity in construction in the Netherlands in the scale-up phase.
Scaling a venture is difficult in general. Only about a quarter of those firms that expand beyond 10 employees also manage to expand beyond 50 employees. At the same time, it is not more difficult to scale within real estate construction or in circularity than other sectors. In other words, it’s hard, but not excessively so.
Similar to animals adapting to a harsh environment, successful scale-ups in circular construction are perfectly equipped to overcome their challenges:
- The management teams are persuasive storytellers
- They ensure their circular solution has an attractive business case for the customer
- They address the tenants’ needs upfront
- They are gifted collaborators, capable in navigating the complexity of the value chain
- They are adaptive and opportunistic
These are appealing characteristics to be associated with. We hope that the many actors in the real estate sector seek out these scale-ups to partner with, invest in and support. After all, it is collaboration that defines this sector.
Read the full report to find out more about circularity in construction, its unique challenges and success factors, and for some examples of companies leading the way in the industry.
This research report is part of Circular@Scale – an accelerator program aiming to rapidly transform the built environment in the Netherlands by helping circular scale-ups and their business partners to reach true scale.
Initiated by ScaleUpNation and Powered by Meaning, Circular@Scale brings together circular scale-ups, landmark co-creators, commissioners, and other partners in order to accelerate the move towards a circular construction industry. The program consists of four workstreams: Research, ScaleUpCircular, Circular landmarks, and Circular contracting. Circular@Scale is sponsored by the Goldschmeding Foundation, InvestNL, and Innovation Quarter.
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