A three-day training course on eco-industrial clusters was held at ADBI from 2 to 4 December 2013. Some 32 senior officials from government ministries of industry and environment and local governments representing 14 economies of the Asian region participated in the workshop, along with two observers. This training program looked at the sustainability challenges that industrial clusters face and discussed strategies for transforming industrial clusters into eco-friendly economic zones. The specific objectives of the manual based learning course were to: (i) demonstrate the potentials of transforming small and medium-sized enterprise (SME) clusters into eco-friendly economic zones; (ii) identify policy constraints and formulate strategies for boosting cluster-based innovation systems; (iii) illustrate successful examples of doing eco-businesses within industrial clusters; (iii) and cultivate leadership for inclusive and sustainable development of urban fringe areas. The course was organized as a series of thematic sessions designed to have different modes of training: (i) plenary sessionintroducing the concepts and theories of industrial clustering; (ii) learning modules based on case studies and practical examples with worksheets; (iii) field visit to understand the necessary and sufficient conditions for eco-industrial cluster (EIC) formulation; (iv) and group discussions for developing credible EIC development strategies and leadership qualities. In total, eight modules as embedded in the ADBI Prototype Training Manual were delivered in a structured and interactive way.
Allure of Industrial Clusters and Regional Competiveness
- In recent years cluster strategies have become a popular economic development approach among state and local policymakers and business strategists. The foundation of a regional economy is a group of interconnected industrial operations for an environmental cause, not a collection of unrelated firms that neglect environmental threats. An industry cluster is a group of firms, and related economic actors and the institutions that are located near one another and that draw productive advantage from their mutual proximity and connections.
- A cluster focused SME developmental approach is a strategic way to maximize a region's economic strengths, face environmental challenges and identify realistic business ways to reshape the understanding of how to build integrated environmental and economic strategies for local wealth creation. Most of the countries in Asia are struggling to cope with the negative impacts of industrial clustering. Inspired by the theory of industrial ecology and business competitiveness, eco-towns or eco-industrial parks are frequently promoted in many localities as a strategy for reducing the environmental burden of clustered industrial activities in a way that is consistent with economic development. Yet the reach of those eco-approaches is limited to traditional manufacturing industries concentrated in urban areas. For countries still focusing on manufacturing they are good models to follow.
- For other countries looking beyond simple manufacturing and which are turning to the adoption of new kinds of industries, it is the urban fringe areas, the zones of transitions that begins with the edge of residual green space, that offer an opportunity for equitable growth. These areas are already used as sites for new industries that want equal access to raw materials as well as to urban markets. However, rather than just co-existing, these companies could become interconnected, sharing resources and achieving economic, social, and environmental success. Transforming industrial clusters into eco-industrial clusters is one of the essential steps to sustainable regional development.
- Essentially an EIC aims at efficiently using local resources, discarded materials and byproducts that are otherwise termed as waste, while achieving equitable development targets. Successful EICs are made up of enterprises that constantly seek inter-firm networks, not only to conserve resources, but also to look for all types of innovations that bring wealth to the community. The benefit of EIC also includes enhancing social capital and employment opportunities. By setting high norms for sustainability, firms and communities in a cluster can seek joint actions for environmental sustainability and economic development.
Strategies for Enhancing the Sustainability Potential of Industrial Clusters
- The key foundations of EICs, as can be learned from regional experiences are inter-firm networks, enabling technologies, social capital, and public policy support. It is important that these infrastructures be created simultaneously with new industries, and not after environmental problems have already developed, as has been done in the past.
- Inter-firm networks shall be the main strategy to make existing clusters environmental friendly. Integrated policy guidance, focused business leadership with clear objectives, and good market orientation are essential for the success of such inter-firm networks to evolve. Although inter-firm networks have many alluring environmental attributes, which can address some short comings of "command and control system" or "end of the pipe" approaches, they alone are not the panacea. Multiple strategies need to be implemented.
- EICs are the better targets for rapid diffusion of best environmental technologies and practices because of their capacity and capability for coordination among firms. But they take a long time to achieve the mark, if not accompanied by regional and national level environmental oversights, integrated policy guidance, and timely financial assistance. Effective policy coordination at national levels is needed. The potentials are high for bottom up strategies like inter-firm networks, but they have to be accompanied by social capital creation. It takes several years of cluster based continuous consultation processes, supportive knowledge networks, and capacity building activities to create the necessary momentum to enable inter-firm networks, eco-innovations, and new business strategies to become a reality within a cluster.
- Regional experiences show that vibrant businesses operating within EIC have the potential to create quality jobs. EICs offer an important market niche for the constituent SMEs to position themselves as progressive, innovative, and sustainable. Because of high social capital, barriers are low in local industrial clusters to commercialize new eco-products, services, ideas, and business models.
Eco-Industrial Clusters as an Inclusive Business Development Model: Policy Implications
- The business case studies and transformation strategies presented the fact that SMEs operating within the clusters can significantly increase their impact on the local economy by: (a) aligning their programs and services where there are common interest and locational advantages; (b) delivering the eco-products and absorbing eco-services as market oriented interventions; (c) focusing their financial needs and environmental management systems as cluster based, rather than unrelated individual companies.
- EICs in urban-rural fringe areas can have a unique environmental approach to wealth creation. It showed a vision in which SME clusters in disinvested neighborhoods could achieve greater self-sufficiency and create wealth for themselves if there are strong policy supports that make technology flow into the cluster with innovative financial mechanisms. However, country experiences also indicate that permeation of such eco-initiatives into clusters located in inner regions tend to be slow unless accelerated by the government through infrastructure, institutional and policy support.
- Generally speaking, EICs require strategic policy interventions to make them effective as building blocks for sustainable regional development. But the nature of policy intervention depends on which type of industrial clusters, either emerging or existing, holds the greatest potential from the integrated environmental and economic planning standpoint.
- It is difficult for public policy to create new EIC clusters deliberately. Instead, policymakers should promote and maintain the enabling conditions. Public policy measures that can support EIC could originate from three main policy streams: industrial policy that inspires innovation and technology development, environmental policy that focuses on resource conservation and emission reduction, and regional development policy that seeks to stimulate necessary infrastructure investment.
- Current institutional frameworks and policies that favor the development of EICs in most of the Asian countries are fragmented and uncoordinated, not as a result of negligence, but due to inconsistent understanding on the presence and strategic importance of EICs. Changes in policy orientation are essential to promote the EIC as a new model for sustainable regional development. Joint efforts that cut across industrial, environmental, and regional development policy streams that favor co-operative, multi-stakeholder, and often location specific approaches are needed to unleash the full potential of eco-industrial clusters.
This training program will focus on the sustainability challenges that industrial clusters face and the socio-economic benefits of eco-innovations that are occurring within the industrial clusters. The training course will help policymakers develop a strategic approach in dealing with environmental, economic, and social issues facing businesses at the local level.
As competition increases within an ever more globalized world, the appeal of industrial clusters not only remains strong but has become even more urgent. Policymakers in developed and developing countries are searching for ways to create new industrial clusters, sustain existing ones, and revive those that are losing vigor.
Industrial clusters are geographic concentrations of small and medium-sized enterprises that draw productive advantages from their mutual proximity and connections. These industrial clusters could be transformed into eco-industrial clusters (EIC) when the inter-firm networks are established to share resources such as human resources, energy, information, materials, and water. Pushing such eco-approaches is a crucial element of resource recovery for the industrial clusters in urban centers. These approaches also offer the firms operating in the clusters the prospect of competitive growth. Based on the concepts of industrial ecology and business competitiveness, eco-industrial clusters seek to reduce waste and pollution as well as create green jobs, attract service providers, and generate local wealth.
This innovative approach is visible across a number of Asian countries. Addressing the environmental and poverty concerns raises critical questions for EIC-based development planning. On the other hand, many do not have a sound understanding of the potentials of EICs in the context of regional wealth creation.
- Demonstrate the potentials of transforming industrial clusters into eco-friendly economic zones.
- Formulate strategies for boosting cluster-based innovation systems.
- Illustrate successful examples of eco-businesses within industrial clusters.
- Improved capacity of officials for integrated environmental and economic planning.
- Increased numbers of trainers in EIC policies.
- Strengthened network among EIC operators, practitioners, policymakers, and experts.
- Updated materials for training course.
Participants will include city government officials and senior officials from Bangladesh, Cambodia, PRC, India, Indonesia, Lao PDR, Malaysia, Mongolia, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Thailand, and Viet Nam.
How to register
Participation is by invitation only.
Actively participate in discussions and share views and experiences with other participants. Collaborate with fellow participants to prepare a country report.
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