Circular Transformation of Industries 2025

Capacity sharingArchetype 3 As capacity-sharing solutions reinvent the business model, they should be tightly aligned to the business strategy. New product sales and long-running service contracts still generate the largest share of manufacturers’ profits today. While those business models are unlikely to disappear, new circular business models are emerging, unlocking lucrative new markets. Capacity-sharing solutions, such as product-as-a-service and pay-per-use, reinvent the business model by increasing usage frequency and often retaining ownership of products. These models de-emphasize the sale of physical goods and focus on the outcome that customers want. While some disrupters have already proven the viability of sharing models, established businesses can struggle to adopt these new business models as they face structural challenges. They often have long-standing profit pools to defend, capital-intensive assets for which they must maximize returns and a legacy of marketing the value of ownership. Yet, there are examples where legacy players have successfully managed to bridge the transition of their capital structure to establish sharing models. Capacity-sharing solutions are especially welcomed by industries with products that involve high cost and complexity of ownership, which have low utilization and where technology must be kept up to date. This is particularly true in industries such as consumer technology hardware, heavy industry, aerospace and defence, and machinery, where such solutions are particularly advanced. In aerospace, for example, fixing a broken engine can take around six months, but owning spare engines is expensive. Airlines, therefore, often pay a fee to draw spare parts from a shared regional pool rather than owning stock outright. The businesses surveyed said they expect a positive impact from capacity-sharing solutions three years from now, but the size of the impact varies significantly depending on product usage behaviour. GHG emissions: When capacity-sharing solutions increase a product’s utilization and even increase its useful lifespan, these solutions can reduce GHG emissions. By sharing products among many users, a reduced number of products is required to satisfy customer demand. Additionally, the company manufacturing the product has high product expertise, so can maintain the product better and extend its lifespan. While there are fewer products in circulation with capacity-sharing models, the manufacturers must retain ownership until the end of life. They must document end-of-life emissions and their negative impact on their own Scope 1 emissions. Resilience: Retaining asset ownership can increase resilience as it gives businesses control to better predict demand, manage resources and respond to disruptions. Capacity-sharing models increase financial resilience, when recurring revenue streams provide a more stable and predictable income compared to one-off sales models. Businesses operating capacity-sharing solutions can stabilize demand for resources through production load balancing, even during periods of low equipment sales. This can enhance supply-chain resilience, improve supplier relationships and increase price stability through long-term supply contracts.3.1 The value of employing capacity-sharing solutionsHigh-tech company Trumpf, for example, has introduced a pay-per-cut business model, where customers pay a fee for each metal part cut, instead of purchasing the machine. Trumpf addresses the challenge of transforming its capital structure and owning a large fleet of machines by partnering with an insurer, which finances the machines and bears the investment risk. Circular Transformation of Industries: Unlocking Economic Value 19