Sustainable Product Service Systems for Base of the Pyramid Markets

In Emerging Economies such as Brazil, the importance of low-income markets will increase since billions of customers will join the market economy in the nearby future. However, increasing human well-being by providing sustainable solutions for the low-income population is particularly challenging because it requires a re-evaluation of the traditional business models in emerging economies. In fact, this challenge calls for systematic and innovative solutions that involve intensive partnerships between private companies, governments and other stakeholders of the value chain and beyond, including the final user.

Living conditions of the low-income population in emerging economies and developing countries can be improved in several ways. One of the paths towards improving their living conditions is providing access to moderns sources of energy. In addition, increasing the use of renewable energy sources is especially important in emerging economies since these countries will experience the greatest increase in energy demand and carbon dioxide emissions in the short term. Finally, policy choices and access to information about energy efficient behaviour and solutions have a significant influence on social development and adoption of environmental friendly energy sources in emerging economies and developing countries.

These new reality can be achieved by means of both sustainable technologies and changes in habits and lifestyle of consumers, favouring the efficient and rational use of natural resources, finally leading to transforming the market towards a more sustainable society. Previous research showed that the ability to provide such solutions depends on a variety of aspects, amongst those, many are commonly considered to belong to the product service system (PSS) approach.

The PSS concept consists of a systematic combination of products, services, supporting networks and infrastructure, closely involving the final users and stakeholders in the value chain. PSSs are designed to be feasible, competitive and satisfy customer needs while resulting in a lower environmental impact than traditional business models. For instance, the energy sector could benefit from sustainable PSSs, such as pay-per-use systems, home solar photovoltaic off the grid solutions for rural and urban remote areas and combinations of products and services in order to support income generation capacity and increase the affordability of electricity services in low-income communities.

Therefore, the major objective in this research is to gather and analyse theoretical and practical evidence in order to understand the challenges and opportunities of adopting sustainable PSS in the energy sector of Brazil. The main focus of the study is to explore these PSS solutions for energy efficiency and renewable energy use at household level. This study combines insights from relevant literature, case studies research and interviews with users, practitioners and experts. Based on the findings, interventions with prototypes will be carried out in sustainable product service system projects. Finally, drawing upon all these analyses, the contributions of the PSS approach will be discussed to provide a conceptual framework to design sustainable solutions for low-income markets in emerging economies.

Funding

This project has been funded by the National Counsel of Technological and Scientific Development – CNPq (Brazil), as part of the program called 'Science without Borders'.

Key Publications

• Costa Junior, J. da, & Diehl, J. C. (2013). Product-Service System Design Approach for the Base of the Pyramid Markets: Practical Evidence from the Energy Sector in the Brazilian Context. In M. Schaefer, N. Kebir, & D. Philipp (Eds.), Proceeding of International Conference on Micro Perspectives for Decentralized Energy Supply (pp. 48–51). Berlin: Technische Universität Berlin. 

Partners

• Design & Sustainability Research Centre - NDS/UFPR at Federal University of Paraná (Brazil) 
  Coordinator: Prof. Dr. Aguinaldo dos Santos, Eng.
• Federal University of Pernambuco
  Coordinator: Prof. Dr. Leonardo A. Gomez Castillo.