IIIEE Master’s Theses 2003:10 Industrial Symbiosis: A Closer Look on Organisational Factors A study based on the Industrial Symbiosis project in Landskrona, Sweden Jan-Erik Starlander Supervisors Murat Mirata Mikael Backman Thesis for the fulfilment of the Master of Science in Environmental Management and Policy Lund, Sweden, October 2003 The International Institute for Industrial Environmental Economics ⎯⎯⎯⎯ Internationella miljöinstitutet ⎯⎯⎯⎯ © You may use the contents of the IIIEE publications for informational purposes only. You may not copy, lend, hire, transmit or redistribute these materials for commercial purposes or for compensation of any kind without written permission from IIIEE. When using IIIEE material you must include the following copyright notice: ‘Copyright © IIIEE, Lund University. All rights reserved’ in any copy that you make in a clearly visible position. You may not modify the materials without the permission of IIIEE. Published in 2003 by IIIEE, Lund University, P.O. Box 196, S-221 00 LUND, Sweden, Tel: +46 – 46 222 02 00, Fax: +46 – 46 222 02 10, e-mail: [email protected]. Printed by KFS AB, Lund. ISSN 1401-9191 Industrial Symbiosis: A Closer Look on Organisational Factors A study based on the Industrial Symbiosis project in Landskrona, Sweden Acknowledgements I would like to express my gratitude to all people who allowed me in some way or another to write this thesis and thus explore the realm of Industrial Ecology and help society to take one more, tiny little step in the direction of sustainable development. First of all, I would like to thank my main supervisor and friend, Murat Mirata, who notably helped me find my way back to the path when I had lost sight of it, and who I spent lots of good times with, even when relentlessly commuting with the bus and train between Lund and Landskrona, or biking under the rain of the Swedish summer to interview companies. I also would like to thank Mikael Backman, my second supervisor, without whom the Industrial Symbiosis project in Landskrona probably never would have happened. I hope I will one day be able to convince both company managers and civil servants in the same way as he has done with the companies in Landskrona. Thank you to Benoît Duret, from Auxilia, who gave me very useful insights into the reality of Eco-Industrial Developments in North America and on Industrial Symbiosis in general, during a record-long phone discussion of four hours. A big thank you also to Noel Brings Jacobsen, from Øresund Environment, who has provided me with insights on the Industrial Symbiosis network in Kalundborg, for which he has been working for several years as a project manager. I would like to thank the Swedish Business Development Agency, NUTEK, that financed the project in Landskrona, as well as all the companies involved in the project. It fills me with optimism for the future, when I see company managers showing that they care and are ready to explore new paths towards more sustainable entrepreneurship. Thank you also to the Municipality of Landskrona and more especially to Claes Nilsson from the Office for Trade and Industry (Utvecklingsstiftelsen) and to Högni Hansson and Charlotta Barthelson from the Environmental Department. I was especially proud to meet and discuss with Högni, who has been one of the characters in Sweden making the single-biggest contribution to preserving this beautiful country’s environment. I hope that my own work will have somewhat helped to make Industrial Symbiosis cross the Öresund, and that soon Sweden will count several Landskrona. It has been a long summer sitting inside when outside the sun was shining, and I therefore also want to thank my friends from batch 8 and all IIIEE staff who stayed in Lund during the summer for their involuntary support. Thank you to the IIIEE and especially to Lars Hansson for a great Master programme and what will probably remain one the best years in my life. Finally, of course, I would like to thank my parents who have, through the year, supported me financially and with their love, and who have certainly contributed in many ways in triggering my love of nature and my will to work to preserve and improve our environment and our quality of life. Thank you all. iii Industrial Symbiosis: A Closer Look on Organisational Factors A study based on the Industrial Symbiosis project in Landskrona, Sweden Abstract Private companies, more and more, address their environmental impact through increasingly sophisticated internal environmental work. The concept of Industrial Ecology (IE) and its local/regional application, Industrial Symbiosis (IS), indicate that there is potential for further improvements in the environmental performance of companies at their interorganisational interfaces. Besides improving their environmental performance, companies may also achieve competitive advantage through IS networking. Despite these benefits, the number of IS networks is still limited. This may, to some extent, be due to the fact that although IE literature has extensively analysed the technical aspects of IS networking, softer organisational issues are not sufficiently understood and taken into consideration. This study, based on action research methodology, analyses organisational factors influencing the outcome of IS networking. It is based on an IS project launched in May 2003 as a Swedish pilot project in the Municipality of Landskrona (Sweden), with the support of the Swedish Business Development Agency (NUTEK). The project involves 19 companies and the Municipality of Landskrona. The analysis of the factors influencing the companies’ decision to engage in IS networking and the actual outcome of networking builds upon a review of IE, management and organisational literature. These factors are tested in the context of the Landskrona project, notably in order to outline factors that appear to be specific to a Swedish context. The main factors outlined as influencing the companies’ decision to engage in IS networking are institutional pressure, access to critical resources, increased efficiency and costs savings, and interorganisational learning. More specific to Landskrona, and possibly to Sweden, is the perceived need by companies for increased local networking in general. The major organisational factors influencing the outcome of IS networking are alignment with business reality, environmental maturity and commitment of the actors, existing institutional platforms and linkages, communication and trust, coordination and public/private partnerships. Keywords: industrial ecology, industrial symbiosis, networking, organisational theory v Industrial Symbiosis: A Closer Look on Organisational Factors A study based on the Industrial Symbiosis project in Landskrona, Sweden Executive Summary Private companies more and more address their environmental impact through increasingly sophisticated internal environmental work. The concept of Industrial Ecology (IE), and its local/regional application Industrial Symbiosis (IS), on the other hand, indicate that there are potentials for further improvements of the environmental performance of companies at the interorganisational interfaces. Besides improving their environmental performance, companies may also achieve competitive advantages through IS networking. Despite these benefits, the number of IS networks is still limited. This may to some extent be due to the fact that although IE literature has extensively analysed the technical aspects of IS networking, softer organisational issues are not sufficiently understood and taken into consideration. This thesis therefore examined the following main research questions: • What are the organisational factors that have major influence on the development and operation of Industrial Symbiosis networks? • How can the coordination bodies help provide the right set of organisational factors to facilitate networking? In order to answer these questions, the author chose an action research methodology, analysing a specific IS project in its early stage of development. In order to draw lessons and implications for IS networking in general, the study of this case was framed in relation to IE, management and organisational theory, through a literature review of these fields. Management and organisational literature were reviewed because IE has not sufficiently addressed the organisational factors having an influence on IS networking, and these fields can inform it on these factors. Existing IS network projects were also reviewed to assess past experience with these organisational factors. To answer the first research question, the author also analysed the main factors influencing companies’ decision to engage in IS networking. The main outlined factors are institutional pressure, access to critical resources, increased efficiency and costs savings, and interorganisational learning. The three last factors correspond to the objective of gaining competitive advantages through IS networking. However, it appears that the potential of IS networking to provide companies with competitive advantages should not be exaggerated. The main motivation for companies to engage in IS networking remains institutional pressure. Major organisational factors influencing the outcome of IS networking are identified to be alignment with business reality, environmental awareness and maturity of the actors, existing institutional platforms and linkages, communication and trust, commitment of the actors to the network, coordination and public/private partnerships