From volumes to values? Exploring market contraction in the context of finite and renewable resources (2027-2028)

This two-year research project funded by the Handelsbankens forskningsstiftelser (grant number P26-0425) is an exploratory study into a market phenomenon to which our understanding remains very limited: market contraction.

The transition to a sustainable society is intensifying demand for both finite and renewable resources (e.g., forests, minerals), which impose hard constraints on how much and how fast markets can grow. Finite resources are depleted over time, while renewable resources are bounded by ecological regeneration rates. As demand across industries outpaces sustainable supply—often with multiple markets competing for the same inputs—continued volume-based growth becomes structurally impossible, forcing some markets to shrink.

This shift is already visible in resource-dependent sectors such as forestry and critical minerals, where firms increasingly operate under conditions of stable or declining material availability. Market contraction in these contexts is therefore not a temporary downturn but a structural outcome of resource constraints.

Despite its growing relevance, market contraction remains underexplored in marketing and management research, which largely assumes continuous growth. This project addresses that gap by delineating the phenomenon—what it entails, how it unfolds, and which actors are involved—thereby laying the foundation for future research on strategies for firms and policymakers operating in shrinking markets.

For further information, please contact:
Hans.Kjellberg@hhs.se or Kaisa.Koskela.Huotari@hhs.se.