Modern society calls for a new strategy in order to stimulate the change in current production and consumption patterns. This is demanding due to the fact that population is increasing, therefore consumption raises, and therefore environmental burden increases. The strategy that suits this changing pattern is focused on ‘dematerializing’. This strategy holds that economies are reducing the material flows in production and consumption, creating products and services that provide consumers with the same level of performance, but with an inherently lower environmental burden. In these economies, the role of manufacturers shifts producing products towards provision of services, and this is called the functional economy. In a functional economy the consumer pays for the use of a product instead of for the product itself.

In order to minimize environmental impact of consumption, and therefore achieve sustainability, selling a function of a product instead of the product itself is an effective strategy. In elaborating the functional economy is often referred to a service economy, where services have an increased share within the manufacturing industry. Therefore an important system in a functional economy is the product-service system. In these systems it is possible to meet customer needs by providing a function of a product (a service) instead of providing the product itself. This way it comes of major interest of manufacturers to provide products in a well-functioning state, in order to decrease cost for maintenance and (re)use. This will increase sustainability of products and therefore lowers the environmental burden of society its production and consumption patterns.

Functional economy – A reply to the increasing environmental burden of society’s production and consumption patterns, by shifting from a manufacturing economy towards a service economy, where companies provide consumers with the function of a product instead of the product itself.