Building a Greener Future: Harnessing Digital Technologies for Sustainable Buildings How the ESCP STAR Center and Borderstep Institute are Pioneering Innovative Business Models in Building Automation
At the heart of ESCP Business School’s commitment to sustainability is the ESCP STAR Center – Sustainability Transformation and Applied Research. Dedicated to translating cutting-edge research into practical solutions, the STAR Center fosters research transfer, offers tailored executive education programs, and develops customized research activities for corporates. By bridging academic insights with real-world applications, the ESCP STAR Center works to empower organizations to integrate sustainable practices and advance environmental, social, and economic performance.
Reflecting the timeless wisdom that “knowledge is power, but wisdom is applying it,” ESCP Business School has formed an exciting academic alliance with the Borderstep Institute for Innovation & Sustainability. This collaboration, initiated on 1 September 2024, is more than an exchange of ideas—it is a joint commitment to research, transfer activities, and impactful action. With Florian Lüdeke-Freund, Founder of the ESCP STAR Center, stepping into the role of Senior Research Fellow at Borderstep, the partnership will spearhead the exploration of sustainable business models, fostering innovative solutions for both industry and society.
Advancing Energy Efficiency Through Digital Building Technologies
A recent joint underscores the pressing need to address climate change by harnessing the power of digital technologies in the building sector. It reveals that buildings are major contributors to energy consumption and CO₂ emissions—especially older residential properties that often operate far below the energy efficiency standards of modern construction. Digital building technologies, and in particular building automation, offer a pathway to significantly reduce energy use by enabling comprehensive energy monitoring, advanced control systems, and smart energy management practices. These innovations not only promise environmental benefits but also present new opportunities for cost savings and improved operational efficiency.
Through a meticulous qualitative research approach that combined 21 expert interviews with AI-enhanced analysis, the study identifies a robust set of 21 business model patterns. These patterns are classified into primary and secondary models that cover the spectrum from technology sales and subscription-based software solutions to innovative financing approaches such as hardware-as-a-service and performance-based contracting. The categorization—further differentiated by product-, usage-, and result-orientation—provides a detailed roadmap for how housing companies can better integrate and finance the adoption of digital building technologies.
One of the critical challenges highlighted in the study is the so-called “user-investor dilemma.”
One of the critical challenges highlighted in the study is the so-called “user-investor dilemma.” In many cases, the initial investments required for the adoption of building automation are borne by property owners, while the ultimate benefits (e.g., reduced energy bills) accrue to tenants. This mismatch in incentives can hinder the deployment of otherwise beneficial technologies. The research suggests that innovative business models, such as leasing, subscription-based approaches, and contracting solutions, can create a more balanced framework. By sharing risks and aligning financial returns with energy savings, these models provide a practical solution that incentivizes both the adoption and the effective use of digital technologies in the building sector.
Finally, the study concludes with a set of actionable recommendations for industry stakeholders and policy makers. It advocates for a re-examination of financial incentives, the refinement of regulatory frameworks, and the promotion of interoperability through standardization. By fostering strategic partnerships and investing in education and training, stakeholders can overcome market fragmentation and accelerate the diffusion of digital building technologies. In doing so, they pave the way for a more resilient and sustainable urban infrastructure, where technological innovation and environmental stewardship go hand in hand.
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