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Leveraging AI for Sustainable PSS: Co-Evolution of Capabilities and Business Models

In: Sustainable Product-Service Systems

Author

Listed:
  • Arun Madanaguli

    (Luleå University of Technology, Department of Social Sciences, Technology and Arts)

  • David Sjödin

    (Luleå University of Technology, Department of Social Sciences, Technology and Arts
    USN Business School, Department of Business, History and Social Sciences)

  • Vinit Parida

    (Luleå University of Technology, Department of Social Sciences, Technology and Arts
    USN Business School, Department of Business, History and Social Sciences
    University of Vaasa, School of Management)

Abstract

AI capabilities and PSS have both garnered attention in recent years as important developments in the trend toward more sustainable business models. This chapter uncovers how organizations can explore these trends to achieve sustainability values. We draw on the emerging literature on AI capabilities and take a capability-as-bundles-of-routines view to come to an understanding of the “DNA” of an organization out of which AI-enabled servitization business models can develop. Further, we take a capability development perspective and draw on Levitt’s diamond as an underlying guide to structure the routine bundles into capabilities. We uncover four AI capabilities and their constituent routines that are crucial for sustainable PSS—people, task, technology, and structure. Moreover, we present a framework to conceptualize the integration of AI through the three stages of AI initiation, AI integration, and AI consolidation. The findings of the chapter are synthesized into an evolutionary framework for AI-enabled sustainable PSS business models. The framework shows that, as organizations move from AI initiation to AI consolidation, AI routines become more and more integrated into organizational activities to guide value creation, delivery, and capture activities. The managerial and academic implications are discussed further.

Suggested Citation

  • Arun Madanaguli & David Sjödin & Vinit Parida, 2026. "Leveraging AI for Sustainable PSS: Co-Evolution of Capabilities and Business Models," Springer Books, in: Marko Kohtamäki & Rodrigo Rabetino & Vinit Parida & David Sjödin & Tim Baines & Ali Ziaee Bigdeli (ed.), Sustainable Product-Service Systems, pages 151-166, Springer.
    • Handle: RePEc:spr:sprchp:978-3-032-07765-3_9
    DOI: 10.1007/978-3-032-07765-3_9
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