Barriers to the deployment of PSS for a circular economy in housing: an institutional theory perspective

Purpose - There is an urgent call for transitioning towards a circular economy (CE) in housing. Pivotal to this transition is implementing business models aligned with CE principles, such as the ones informed by the product-service system (PSS). However, incorporating the PSS into housing to realize a CE faces significant challenges within an industry characterized by systemic rigidity and institutional inertia. This study investigates the barriers faced in deploying the PSS and its CE potential in housing. Design/methodology/approach - The authors conducted 15 semi-structured interviews with stakeholders experienced in the deployment of PSS and CE in housing projects. Analysis used deductive coding, guided by institutional theory's regulative, normative and cultural-cognitive pillars, followed by inductive coding development. Findings - Twelve key barriers emerged across three pillars, underlying the significance of not only regulative but also normative and cultural-cognitive barriers. The findings indicate that the current institutional environment impedes the establishment of legitimacy for the deployment of PSS and its CE potential in housing. Practical implications - Following the findings, a diversified institutional support system enabled by the collaborative effort of the government, managing and financing actors and industry associations is required to overcome deployment barriers. Originality/value - This study advances knowledge at the intersection of housing and circular business model innovation. It connects theory to practice by applying institutional theory to real-world barriers in deploying the PSS for a CE in housing and lays the groundwork for practical changes.