Product-Service Systems as Enabler for Sustainability-Oriented Innovation: The Case of Osram’s Off-Grid Lighting

Abstract:     
Corporations increasingly subscribe to the principles of corporate sustainability, which is generally described as the integration of economic, environmental, and social dimensions. As sustainability presents a new source of ideas and visions leading to new business opportunities and competitive advantage, the role of Sustainability-Oriented Innovation (SOI) is ever more emphasized. However, developing products under the paradigm of SOI is risky: both the product’s market success and (non-economic) sustainability effects are uncertain. Product- Service System (PSS) - i.e. a combination of products and services – constitutes a significant approach to overcome some of the limitations of SOI and, additionally, can spur the diffusion of SOI. In this chapter, we use an exploratory research strategy to further investigate the links between SOI and PSS. We present a case study on off-grid lighting in Kenya and analyzes the sustainability effects on the product and PSS level. The complexity of SOI and the sustainability potentials of PSS are illustrated. Moreover, we also emphasize the role of a joint achievement of sustainability-oriented product innovations and PSS innovations.

Keywords: Sustainability-oriented innovation, corporate sustainability, Product-Service Systems (PSS), life- cycle analysis, developing nations, case study, technology

JEL Classification: O32, O31, M13

Accepted Paper Series