Finance glossary

What is the “usage economy” in the industrial sector and what are its advantages?

Qu’est-ce que l’économie d’usage dans le domaine industriel et quels sont ses avantages ?

The usage economy, also known as the “economy of functionality”, is an innovative economic model in the industrial sector. This innovative model is part of a drive to develop a “greener” and more “sustainable” industry. It consists of offering the use of a product rather than its possession. This is different from the traditional approach, where the emphasis is on owning assets. The aim here is to develop solutions that will be integrated into goods or services.

In this article, we will first take a closer look at the definition of the user economy, then explain how it differs from the traditional model, and finally look at the various possible advantages for manufacturers.

1. What is the definition of the usage economy?


The usage economy is an innovative business model in the industrial sector. It consists of encouraging use rather than possession, thereby enabling the development of a more circular economy. The way the economy works is no longer based on the ownership of goods. The equipment remains the property of the manufacturer throughout the product’s life cycle, and the manufacturer offers to pay users according to how the equipment is used. This model is different from leasing, because it has a sustainable development objective.

A few examples

Let’s look at two examples to illustrate the concept of the usage economy.

First, let’s take the example of Clarlight. The company offers companies lighting without having to invest in equipment, with an all-inclusive service. Clarlight’s lights perform better and last longer. They adapt to natural light and the presence of people. What’s more, these lights provide consumers with energy balances so that they can intervene quickly for maintenance. In this way, Clarlight is working to reduce the consumption of energy resources and to manage waste.

Michelin has also produced this model. The company has put in place a usage economy offer for heavy goods vehicles. The aim is to offer an economic model based on kilometres travelled instead of traditional tyre sales. These tyres are eco-designed to improve durability and performance. In addition, Michelin offers solutions that take care of the entire management of truck and bus tyre components, with the aim of saving fuel and helping drivers to drive more responsibly.

2. Who are the parties concerned by the economy of use?

The use economy has two parts:

  • Firstly, we can find companies that offer goods for use called “suppliers”. These companies manufacture and offer goods but do not sell them directly. They offer rental or subscription contracts so that customers can use their goods on a temporary basis. These companies are responsible for the maintenance and continuous improvement of their service. Their business model is based on building customer loyalty in order to generate recurring revenue.
  • Then there are the companies that use the goods: “customers” or “users”. Customers do not buy goods directly, but only access to their use. They pay for the goods on the basis of actual use, in the form of a subscription for example. This allows them to concentrate on their core business without having to update the assets and without any upfront costs.

3. What are the principles that differentiate the usage economy from traditional marketing?

Here are the differentiating principles for suppliers:

  • Corporate responsibility: this model gives responsibility to those who adopt it, as they must improve the sustainability and ecological impact of their solutions in order to increase their sales.
  • Continuous innovation: companies are constantly looking for ways to improve the usability of their products in order to reduce costs.
  • Waste reduction: products produced using the use economy model are more durable and repairable, giving companies a long-term financial advantage. It is in the interests of the user economy model to develop durability so that the good or service can be used for longer, unlike the traditional model.
  • Longer-lasting customer relationships: companies using this model aim to build customer loyalty. Good relations between them are therefore at the heart of what is at stake.

Then, for users:

  • Offering services rather than products: the user economy focuses on the creation of services associated with products, as opposed to traditional purchases. For example, subscribing to a hire service for machines gives access to support in maintaining them.
  • Pay-per-use: users pay for their product or service according to their exact usage, enabling them to manage their costs as effectively as possible. The model can be a subscription or a payment based on usage over a given period of time, for example.
  • Creating value for both parties: it is in the interests of both companies and customers to develop efficient use at optimum cost.

4. What are the benefits for industry?

Benefits for suppliers:

  • Sustainability for the environment: companies that adopt the use economy reduce their waste as well as their carbon footprint, which helps to preserve the environment.
  • Optimised resource management: companies make better use of their resources by reducing overproduction, as they can fine-tune their equipment utilisation rates.
  • Creation of new jobs: economies of use help to create jobs in services, repair and maintenance.
  • Profitability for manufacturers: subscriptions enable recurring purchases, thereby increasing their long-term viability. What’s more, additional services such as maintenance boost revenue.

Benefits for users:

  • Optimised costs: users manage their usage according to their needs, so they have better control over their budget.
  • Perpetual innovation: users get a better quality of service because suppliers are constantly innovating to ensure that their products last and are financially recurrent.


In conclusion, the user economy model is very different from the traditional marketing model, which represents a significant change for industrial products and services. The advantage is that it offers greater sustainability and efficiency for products by providing services rather than just marketing.

This new model is becoming increasingly popular and could well become the model of choice. It is vital that companies continue to propose new economic models such as the use economy in order to work towards a more sustainable future.


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