Navigating complexity: systems thinking insights on deploying the PSS for circular economy housing

Housing drives Australia's material footprint, energy demand and greenhouse gas emissions. Transitioning to a Circular Economy (CE) can decouple housing development from resource consumption and emissions. The Product-Service System (PSS), an integrated offering of products and services, offers promise for a CE by emphasising functionality over ownership. However, its implementation in housing remains complex, affected by a range of interrelated factors. This study adopts a qualitative systems science approach to explore these complexities in Australia. A Causal Loop Diagram (CLD) is developed from multiple data sources and refined through two Group Model Building (GMB) workshops with a diverse group of 13 key stakeholders. The CLD reveals six categories of interrelated factors affecting PSS deployment for CE housing: (1) cost of PSS deployment, (2) appetite for funding the PSS, (3) perceived risk, (4) client demand, (5) effective collaboration, and (6) profitability of the business-as-usual (BAU). Given this, an action framework is developed, including nine recommendations calling for action at both the housing supply chain and operating and institutional stakeholder levels to drive such a systemic change. This study contributes to the understanding of the dynamics of PSS implementation in housing, helping diagnose the challenges in scaling the PSS within the sector and offering recommendations for its successful integration.