Our first sub-question is; How is the current industry situation regarding circular economy practices, visibility, and digitalization? Our findings and theoretical background reveal that it is crucial to implement CE strategies in the construction
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industry as the industry is responsible for a major part of virgin material extraction, as well as being responsible for a considerable amount of the yearly produced waste (Digitalt veikart, 2017; Circular Norway, 2020; SSB, 2021; Klima- og miljødepartementet, 2021). This implies that the level of circulating materials in the industry is too low. Our empirical findings are aligned with previous literature which states that transitioning into circular business models will reduce the amount of extracted resources, and this in turn will reduce emissions (Circular Norway, 2020; Mastos et al., 2021). The importance of this empirical finding was further supported as Klima- og miljødepartementet (2021) published their new CE strategy plan for Norwegian industry sectors in June 2021.
However, previous literature argues that an important condition for transitioning to CE business models is good supply chain visibility (Mittal & Sangwan, 2014; Korhonen et al., 2018b Demestichas & Daskalakis, 2020; Mastos et al., 2021). However, from theory and our research findings it is possible to conclude that this is difficult in construction supply chains due to the fragmented and complex structure (Cox & Ireland, 2002; Briscoe & Dainty, 2005). Further, from our findings, interviewees confirmed that the industry was struggling with obtaining optimal supply chain visibility, and that this was due to struggles with digitalization. Despite this, the interviewees had conflicting answers with regards to the level of digitalization. Some believed that the level of digitalization was sufficient as there are many new technologies available that could increase supply chain visibility. On the other hand, some interviewees found it problematic to transfer information due to the lack of standardization with regards to which data to collect, how to store, and which technologies to utilize. Some are still using manual collection, while others have adapted to more advanced systems. Even though the importance of standardization is emphasised in previous literature (Whyte, 2019; Digital Veikart 2.0; 2020; Behnke & Janssen, 2020), the conflicting answers from interviewees confirms that there is a problem with digitalization and standardization, which makes it more difficult to transfer information.
When we started this master thesis, we wanted to look into how BCT could be utilized due to the transparency and traceability the technology offers, as well as the cryptographical security that ensures immutability (Maull et al., 2017; Carlozo, 2017; Mastos et al., 2021). Because of these technological capabilities, we believed
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that BCT could be utilized as a standard technology in order to increase supply chain visibility and improve the information flow throughout the materials lifecycle. However, through our review of previous literature and expert interviews, it became evident that using BCT to store information, was not an optimal usage of the technology. We will now go through our main theoretical implications connected to the second sub-research question; What are the potential drivers, conditions, and barriers for blockchain technologies to aid circular construction supply chains?
Our findings implies that the perceived drivers for utilizing BCT in the construction industry could be split into three main parts, namely tokenization, transparency and traceability, and smart contracts. These abilities are recognized in the literature as some of the main characteristics of the technology. BCT has the ability to transform physical objects into digital assets which allows for digital twins of products and materials (Nakamoto, 2008; Francisco & Swanson, 2018; Li et al., 2019) that can provide additional information about a product and follow it throughout its life cycle. Therefore, this study implies that BCT could aid circular practices through using material passports to obtain end-to-end life-cycle information.
Further, as previous literature states, the BCT functions as an immutable ledger, where transactions that are made can provide trustworthy data for every participant in the network (Maull et al., 2017; Carlozo, 2017; Turk & Klinc, 2017). When combining this immutability with the technologies interoperability with other systems such as RFID, IoT solutions, BIM etc., BCT can provide real-time supply chain visibility (Kouhizadeh et al., 2019). Our empirical findings imply that this could therefore reduce wastage in the construction supply chain as materials are known and excess material can be circulated of correctly. Lastly, by applying BCT it could be possible to program smart contracts that activate when certain conditions are met (Tezel et al., 2020). As the technology can have authority over payments, this can provide the industry with automated processes from procurement to material tracking. Due to this, our study implies that smart contracts could be programmed to incentivise CE practices in order to reward supply chain actors when they comply with stipulated circular conditions.
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Previous literature, usually discuss challenges with implementation of BCT, however, in this study we wanted to improve the understanding of the phenomena, and therefore chose to divide challenges into conditions and barriers for BCT adaption. Therefore, conditions are mainly derived from our research findings, and this study therefor contributes with improving the understanding of aspects which must be in place before trying to implement the technology. In this study, we found that some of the conditions that must be in place in order to implement BCT for CCSC are economic incentives, regulations and more use-cases. This is because this thesis is one of the first studies addressing how BCT could aid CE practices and business models in the construction industry. There are some examples of how BCT could be used in food or retail supply chains, but this study has looked closely as how it could aid CCSC in construction.
From reviewing literature and our empirical findings, there are some barriers to overcome. Our study implies that the main barrier for applying BCT is the fact that the technology is still relatively new. There is limited knowledge of how to use and implement the technology outside of cryptocurrencies. Because of this, our study implies that BCT might not be the right technology to use in order to enable CE strategies. There are also problems connected to the ownership of the decentralized data stored on the blockchain (Tezel et al., 2020), and the fact that operating a blockchain is very resource demanding which goes against the CE principles (Kouhizadeh et al., 2019; Viriyasitavat & Hoonsopon, 2019; Niranjanamurthy et al., 2018). However, as the technology is relatively new, our research findings suggests that it is likely that these barriers will be able to be solved in the future.
We have now presented our main implications summarised from our findings and contributions to the literature, in order to be able to conclude our main research question; How can blockchain technology enable circular construction supply chains through increased supply chain visibility? Our conclusion is that BCT could contribute to increasing the supply chain visibility in the construction industry through its traceability, transparency, immutability and decentralized characteristics. Firstly, this could be done through the utilization of material passports and interoperability with other technologies. This could contribute to making the construction industry less fragmented and complex, as everyone in a specific supply chain would have the same information, reducing time and resource
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waste in supply chains. Secondly, we propose the application of blockchain enabled smart contracts with incentive systems. These contracts could have the potential to enable CCSC by incentivising construction companies to favour CE-practices in the construction process. However, as of 2021, the technology is still premature, and there is need for further research and development to facilitate for conditions and overcome barriers for BCT to enable CCSC.