Functional economy and the construction sector

"Economists know the price of everything, but the value of nothing."

Oscar Wilde

The concept of functional economy is fairly recent, dating back some fifteen years, and remains the prerogative of a small circle of specialists. However, the Grenelle de l'environnement has put it in the spotlight, by including it as a prerequisite in chapter 6 of the law on environmental policy. Despite its originality, this concept deserves to be detailed, as it can shed new light on construction.

The functional economy is an economy whose customer/supplier market transactions are characterized by three specific properties:

• the exchanges between the parties are long-term. Traditionally, commercial relations reflect a one-off exchange between two players. This justifies the importance of the price, which reflects an investment. In functional economics, it's not so much the moment of the transaction that counts, but rather the creation of a link over a longer period of time, since it's a question of providing a service over a jointly agreed period.

• the contract is concluded on the basis of results to be achieved. The parties' objective goes beyond a simple exchange, and must be based on maintaining the satisfaction actually measured, in order to verify its constancy. Contractual relations are thus defined by the level of performance expected, rather than by the means employed. This obligation to achieve results, which replaces mere compliance with a technical description, is both more open, since there is no imposition of solutions, and more restrictive, since there is a guarantee requirement.

• the object of the transaction is defined by its use. In fact, the functional economy places the emphasis not on the vector of the desired service, but on its durability alone. What lies at the heart of this economy is the functionality provided to the customer by the supplier's provision of a solution for this purpose. Use takes precedence over technology.

None of these dimensions is really foreign to construction.

From this point of view, the building is an object that fulfils a large number of functions for its users, and it is from this angle that it lends itself particularly well to developments in functional economics.