Exploring Space, Exploiting Opportunities – the Case for

Analyzing Space in Industrial Ecology

Authors: Frank Schiller*; Alexandra Penn*, Angela Druckman*, Lauren Basson**, Kate Royston***

* University of Surrey, Evolution and Resilience of Industrial Ecosystems, United Kingdom

** The Green House, South Africa

*** SevernNet, United Kingdom

Corresponding author

Dr. Frank Schiller University of Surrey Department of Sociology, Evolution and Resilience of Industrial Ecosystems - ERIE 37BC02 Guildford, Surrey GU2 7HX UK

Email: f.schiller@surrey.ac.uk Phone: +44 75 4065 7694

Abstract:

Industrial ecology has recognised the relevance of space in various areas of the field. In particular industrial

symbiosis has argued for proximity and the co-location of firms to reduce emissions and costs from

transport. But space is also relevant for industrial ecosystems more widely. These spatial principles have

rarely been spelled out analytically and this article does so. From economic geography we now have

frameworks and analytical tools to undertake this kind of analysis. Using the example of ports and their

hinterland we argue for spatial analyses in industrial ecology.

Keywords: geographic proximity, geography, networks, industrial symbiosis, eco-industrial park (EIP)

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Introduction

Industrial ecology has often referred to spatial closeness not least to stress the fact that

transport is a key source of emissions that should be reduced if not avoided. Yet despite

the relevance of space for biological ecosystems industrial ecology has not come to a

systemic exposition of space. In this article we suggest to draw on new economic

geography and its analytical methods to move beyond the pragmatic spatial approaches

in the field and to eventually unite the existing unrelated approaches.

In particular industrial symbiosis has emphasised the importance of space. This is

evidenced by the promotion of concepts such as ‘proximity’ or ‘co-location’ of firms in

industrial symbiosis (Graedel 1996; Chertow 2004; Fichtner, Tietze-Stöckinger, and

Rentz 2004). Exchange of industrial by-products can take place between companies if

the output of one firm’s process is suitable as an input to another one’s. Two things have

been stressed: benefits result for both companies from such cooperative exchanges

(win-win situation), and spatial proximity reduces emissions by avoiding transport, thus

usually resulting in additional savings (Chertow 2000; Lombardi and Laybourn 2012).

While in market-mediated exchanges, which concern nearly all exchanges in modern

economies, by-products can travel far the median transport distance turns out to be 32.6

kilometre for the UK (Jensen et al. 2011), a value that is remarkable similar to Shi et al.’s

finding for Tianjin in China (Shi, Chertow, and Song 2010). Some authors have thus

highlighted the social and institutional aspects associated with eco-industrial networks at

the regional level (Sterr and Ott 2004; Ashton and Bain 2012).

Besides the problem of distant by-product transports the mobility of production factors is

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another challenge. In a world of global markets it is not easy to say what might attract

companies to a particular location and make them stay. Locations are “slippery places”

that companies might decide to leave for cheaper ones (Markusen 1996). Nevertheless,

there are examples of successful and long-lasting eco-industrial areas that have built up

over decades and where industry engages in industrial symbiosis, most famously

Kalundborg (Jacobsen 2008). The serendipitous eco-industrial networks that have

emerged in those places then inspired the conscious design of eco-industrial parks that

try to encapsulate proximity by design.

Eco-industrial parks have been implemented in the USA, China, the Netherlands and

elsewhere (van Leeuwen, Vermeulen, and Glasbergen 2003; Zhang et al. 2010; Bain et

al. 2010; Chertow, Ashton, and Espinosa 2008; Gibbs and Deutz 2005). They promise to

design core principles of industrial symbiosis into new industrial installations in order to

keep emissions to a minimum. Yet these designed eco-industrial parks have seen a high

fluctuation of companies moving in and out and the key criteria for their ecological claim,

to restrict access to the park according to symbiotic fit, has often been relaxed after some

time by the park management in order to keep business in the location (Gibbs and Deutz

2007; Deutz and Gibbs 2004). The success of industrial parks is thus mixed, which may

also be a consequence of missing spatial analyses before setting them up.

In another explicitly spatial approach, Korhonen and Snäkin (2001) pointed to the central

role of particular institutions for bringing about industrial ecological networks. According

to the anchor tenant approach these initiate a cascade of by-products on which other

companies feed. Anchor tenants have typically been endorsed or been created by

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municipalities, which is not least due to the economic properties of their products or

services. These often represent economies of scale and natural monopolies. In fact, the

first economic phenomenon, economies of scale, is necessary to develop the economic

centrality of an anchor tenant in eco-industrial networks.

A broad understanding of industrial symbiosis involves dynamic aspects (Kronenberg

and Winkler 2009) where innovations are purposefully created to accommodate existing

by-products. This may comprise the design of new processes to mitigate environmental

harm, e.g. the sequestration of carbon dioxide (Brent et al. 2012) or the synthesis of

excess hydrogen to methane. The different sources and sinks are linked through

networks of actors that could be analysed spatial explicitly in order to close loops (Lyons,

Rice, and Wachal 2009).

Despite these references to space, industrial ecologists have hardly made coherent use

of economic geography in general or new economic geography in particular. Yet it also

took geography some time to come to terms with the spatial revision of economics

(Boschma 1999). For the most part of economics’ history the equilibrium focus prevented

the discipline to account for space, leaving it to geographers to describe the emerging

spatial patterns of human activity in non-equilibrium terms (classic economic geography).

This changed with the publication of Krugman’s Geography and Trade (Krugman 1991),

which established the theoretical link between equilibrium economics and space. It did so

by employing the concept of increasing returns: like space, one of economics’ red

herrings according to Arrow (2000). Krugman showed that the trade-off between

increasing returns in production and transport costs is key to explaining the location of

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economic activity in space (Krugman 1999). The geographic research arising from this

became known as new economic geography. It provided geographers with a new

theoretical point of departure for the study of space and it pointed them towards a suite of

analytical tools from complexity science that enabled to draw a more nuanced picture

than a pure economic one.

In particular spatial phenomena have been addressed as networks of economic relations

in space (Glückler 2007). This research has produced production-related analyses with

firms constituting the micro-level of analysis while the industrial network emerging from

this interaction constitutes the macro-level (Bathelt and Glückler 2005; Boschma 2008).

Primarily driven by their search for positive payoffs firms constantly seek and establish

new business ties to other firms. This suggests an endogenous evolution of the network

(Glückler 2007; Boschma and Frenken 2011). Since at the same time the ties represent

in- and outgoing flows that add to the net material stock at node level (firms) this coincides

with industrial symbiosis’ epistemic perspective (cf. Lombardi and Laybourn 2012).

Yet, industrial ecologists still have to discover this new research field. It is important to

note that according to economic geography firms do not share spatial proximity alone or

form ties only according to expected profits but firms have to be cognitively, socially,

organizationally, or institutionally proximate to be innovative (Boschma 2005), e.g. a

shared regional skill and capacity base and a coherent institutional framework may only

together contribute to eco-innovations (cf. also Miller and Ford 2007). These social

variables are familiar to industrial ecology since they are the same as those identified by

industrial ecology’s embeddedness concept (Boons and Howard-Grenville 2009). Distinct

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from this well-established approach, however, the proximity concept engages with

equilibrium economics in order to identify levers for influencing regional economic growth.

In this article we will show the potential of new economic geography for industrial ecology

by discussing a specific area: ports as hot spots for industrial symbiosis. While empirical

application will hopefully emerge more widespread in the future we focus on ports to

highlight the contemporary dynamics of transport and trade for industrial production.

The global shipping network is growing at a faster rate than the global economy (United

Nations Conference on Trade and Development 2010) and in doing so the emergent

network has developed particular properties. Network analytical studies have shown that

global shipping represents a scale free network (e.g. Kaluza et al. 2010). Scale free

networks have the same properties of network formation at any level of the network and

these are independent the network’s age (section 2). Counter to this global trend, several

authors have noticed regionalisation processes and the emergence of regional ports

systems. We discuss this in section 3 followed by looking at the corridors that emerge

between the regional ports in section 4. In section 5 we examine the opportunities for

industrial symbiosis in regard to ports and adjacent corridors as well as other bulk flows in

a globalised space. We end this paper by discussing the implications for future research

in industrial ecology.

The shipping network – global and scale-free

In the scale free network, shipping, ports represent the nodes while the connecting routes

constitute the edges. With the realisation of the network characteristic, analytical methods

were readily available to be applied. An important feature of networks is their diameter;

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that is the largest number of hops required to get from one node to another by following

the shortest route possible. Scale-free networks also cluster at different levels with the

clustering following a power-law. The scale-free property is independent of the network’s

age, function, and scope (Barabási 1999). However, the analytical nature of the network

itself does not tell us much about the economic drivers, the decision rationale of actors or

the materials being shipped. Actors decide in specific historical circumstances, which

kinds of links they make (Glückler 2007). The extension of the network thus represents an

ongoing historical process.

With the rise of multiple mass consumption markets and new regional production systems

global production and consumption has undergone profound changes (Rodrigue 2006).

So has transport providing the resources and goods for these social processes. The

expansion of the historical ports network has seen the rapid growth of a globally

integrated shipping network. This has been accompanied by, for instance, trans-shipment

hubs and free trade zones at some nodal points. These hubs have emerged due to

economies of scale, technological improvements in shipping and because new analytical

methods allowed their identification (Robinson 2002). In these ports various activities run

in parallel driven by specific supply chains of the intercontinental transport flows. These

are not functionally integrated. From the perspective of value-driven supply chain

systems the factors determining port growth seem to lie by and large outside the

governance of port authorities. In this perspective network growth is seen to emerge

entirely from the decisions of manufacturers, consumers and shipping lines elsewhere.

By placing their bet on the development of value driven supply chains, port authorities

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might overcome the uncertainties of future quasi-autonomous network growth (Robinson

2002).

Other authors have criticized this focus on external determinants pointing at the need to

understand ports within the surrounding economic geography (Ducruet, Notteboom, and

de Langen 2009a).1 On closer inspection the supply chain paradigm is not the only way

to look at global shipping. Ducruet et al. (2010) conclude in a comprehensive review a

fragmentation of empirical studies and lacking research. The authors identify four areas

that need more research. This concerns the geographic coverage of shipping networks

(e.g. global vs. regional sub-networks), the connectivity of these networks (e.g. tri-polar

organization of the global maritime), their efficiency (e.g. new trans-shipment hub), and

their complexity (e.g. hierarchical structure). Some of these research gaps have already

been addressed in recent studies, e.g. port hierarchy based on the centrality of ports in

the shipping network (Ducruet, Lee, and Ng 2010; Notteboom 2010). All four research

gaps can be addressed by means of network analysis.

From the seafront to the hinterland

The increase in global shipping has not only seen new transit ports but also

reconstruction of existing sub-networks of ports. Characteristically, large ports have a

longer spatial reach and more diverse foreland connections than smaller ports (Ducruet,

Lee, and Ng 2010). Most large ports attract a wide variety of cargoes and have to divide

1 In particular they criticise the literature on container terminal efficiency, which is often used as an indicator

of port hierarchy, for ignoring that efficiency mostly depends on the quality of hinterland connections.

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traffic flows towards smaller ports. In addition, the increasing density of global trade has

affected the landside. Ports have entered a new phase of regionalisation in which local

factors matter again for restructuring sub-networks (Notteboom and Rodrigue 2005).

Influencing factors include immediate constraints such as lack of available land for port

expansion, the given depth of a port and its waterways as well as environmental or

infrastructural limits (e.g. protected habitats or existing rail systems). In addition, the

development is usually accompanied by indirect constraints resulting from diseconomies

of e.g. heavily utilized local road and rail systems. Thus, somewhat counter-intuitively,

globalisation has also increased the importance of local factors and, with it, the relevance

of proximity.

It is evident that while generalized models such as a scale-free network might give some

indication of the challenges ahead, specific contexts constrain an immediate

transferability of insight. When it comes to comparisons between developed and

developing world, for instance, the individual development paths of port cities in the

developed world are influenced by the development of service industries (tertiarisation)

and spatially constrained ports whereas port areas in the developing world are

characterised by ongoing industrialisation (Lee et al. 2008). Globalisation and

regionalization thus go hand in hand and regional factors still matter. Considering urban

next to port hierarchy might thus be necessary to explain these developments.

Regional and local corridors

Ports are parts of spatial supply chains and their hierarchy can be explained by the

specifics of the commodities that go through them. These result in greater or lesser

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port-related activities. Daily freight transports can for instance be found in every port,

since containerized transport constitutes the vast majority of all goods shipped (Ducruet,

Notteboom, and de Langen 2009b). Containers are divided up between ports as a direct

consequence of the diseconomies of scale in large ports (e.g. lack of space, congestion,

delays, and high handling costs) and the advances of ports at new sites.

The relative homogeneity of imports in container terminal operations does not hold for all

goods. Some port activities are closely related to the agglomeration and the hinterland

surrounding ports. Agglomerations constitute commodity-specific drivers relating for

instance to cars, iron or coal (de Oliveira and Cariou 2011). They correlate to regional

specialization such as heavy- or chemical-industry and have already been studied by

industrial ecologists (Chertow, Ashton, and Espinosa 2008). Generally speaking,

industries with high transport costs are more agglomerated than light industries with lower

transport costs (Tabuchi and Thisse 2002). Other factors such as an agricultural

hinterland may come to play with regard to biomass (Sanders, Annevelink, and van der

Hoeven 2009).

Specific hinterland factors influence the expression of the hierarchical sub-networks.

These so-called hub-and-spoke systems emerge at the regional level. Ducruet, Koster,

and Van der Beek (2010) show for Europe how different hinterlands influence commodity

variety and in turn port hierarchy. High volumes of trade flows are constantly moving

through the spokes connecting hubs and adjacent ports. This has resulted in corridors

between seaport and inland terminals as a specific form of regionalisation that is

counteracting the footloose decisions of actors entrenched in the multiple value chains of

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container shipping. The corridors create the necessary margin for further growth of

container shipping. They allow sidestepping some of the local constraints by externalising

them along the corridor towards inland terminal networks (Notteboom and Rodrigue

2005, pp.301). The corridors of hub-spoke systems even cross national borders, e.g.

40% of French exports pass through Antwerp (Belgium) and connected inland ports

instead of Le Havre or Marseilles (Overman and Winters 2005). This has also been

observed elsewhere (Lee, Song, and Ducruet 2008). These emerging spatial structures

have been explained by factors such as transport prices, lead time, traffic shifts, distance

between spokes and the hub port and traffic shifts between competing ports (Notteboom

2008). Corridors are thus a direct response to fragmented global production and

consumption systems.

Tapping into symbiotic flows

Some authors have started addressing the environmental footprint of shipping and how to

reduce its ecological debt (e.g. Lai et al. 2011; de Langen and Nijdam 2007; Miola, Marra,

and Ciuffo 2011). Industrial ecologists have typically focused on the ports themselves and

their potential to contribute to sustainability through industrial symbiosis (Baas and Boons

2004; Villalba and Gemechu 2011; Royston 2011).

The point of departure for the ecological modernization of ports has been to see them as

economic complexes wherein industries operate. We know that most industrial systems

suffer from a sustainability gap and when overcoming it we usually face unspecified

contractual relationships, collective action problems, deficient incentives for cooperation,

information asymmetries, etc. These are known problems of coordinating action for

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sustainability but also generic problems of port governance (de Langen 2004).

Despite these odds some ports have succeeded in bringing different parties together and

in implementing, for instance, industrial symbiosis and waste policy in the face of a

value-driven supply chain environment (Royston 2011). De Langen & Nijdam (2007)

suggest that environmental successes such as waste collection schemes in ports can

only be implemented in the presence of “a level-playing field” since its absence would

distort competition between ports. Yet, in making this proposal they remain unspecific

about the spatial extent of the scheme. This is also true for studies showing that there is a

role for industrial symbiosis in ports (Baas and Huisingh 2008; Royston 2011). Indeed,

there has been no alignment of these new analytical methods and industrial ecology

although the field has seen related studies (Lyons 2008). Despite a lack of a scientific

explanation of the spatial factor some port authorities have already applied industrial

symbiosis by actively selecting companies that fit into the existing local industrial

ecosystem (e.g. Terneuzen, NL).

These pragmatic actions fit immediately into the logic of spatial constraints to port

development: increase the value obtained from the land by introducing symbiotic

industries! Similar opportunities should exist along the corridors and in the wider port

region. It is well known in the maritime literature that there are many volume reducing

activities in ports. This suggests that high land prices (resulting from the limited land with

direct access to waterways) offer systematic opportunities for industrial symbiosis to

create higher added-value along supply chains through co-location and cascading

resource use. De Langen (2008) argues for an active area management by port

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authorities. Adept integration of industries into the existing industrial landscape by port

authorities could thus reduce one key cost factor for companies in port areas. The existing

maritime literature strongly suggests that the relevant spatial extent for IS-facilitators’

search for symbiotic co-location opportunities will be within the hub-spoke boundary

because the differential between cost-reductions through symbiosis and potentially

higher transport costs is likely to reverse above that distance.

Drilling deeper

It could be argued that the added-value-in-supply-chains approach concerns itself only

with the intermediate phase between production and consumption of goods, paying too

little attention to the phase between mining/harvesting and processing/production

(Henderson et al. 2002). Both phases, however, constitute revenue streams for the global

shipping network and the material and energy flows they facilitate. For industrial

symbiosis the product life-cycle is already of lesser interest since the biggest

opportunities to lower the environmental footprint are generally further up the supply

chain (Clift and Wright 2000). It is therefore necessary to target the earlier resource

intensive phases. Approaching the challenge pragmatically, carbon dioxide (CO2)

intensive resources might get tackled first. According to Allwood, Ashby, Gutowski, &

Worrell, (2011) five base commodities deserve special attention in respect to their CO2

emissions. These include steel, aluminium, cement, plastic, and paper, all of which are

traded globally. Additionally, coal, mineral oil, natural gas and biomass might be

considered because these commodities constitute considerable carbon-relevant sections

of resources that are imported through harbours too.

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So far, these flows have been addressed mostly from the perspective of innovation

research (Moors, Mulder, and Vergragt 2005; Nill 2008). Yet, it would be important to

understand these base material flows from a spatial perspective too. With the growing

global trade in biomass for instance (see Bringezu, O’Brien, and Schütz 2012) it is

foreseeable that ports will become the key hubs for the import and export of bio-based

commodities (Sanders, Annevelink, and van der Hoeven 2009). They offer opportunities

since the profitability of exported biomass can for instance be increased in export ports by

(pre-)treating biomass, reducing its volume and increasing its energy content or/and

added-value. Sanders, Annevelink, and van der Hoeven (2009) also expect a

differentiation between importing and exporting ports based on global prices for

bio-commodities and existing industries (refineries and other chemical process

industries). In general, the competitiveness of biomass may be more closely related to its

space requirements in ports and their hinterland than we are currently aware off.

With regard to abiotic materials, Brent et al. (2012) have called for large-scale “carbon

solutions” that include co-located energy-intensive and carbon-intensive industries. Their

technical solution exists in sequestering carbon dioxide in silicate minerals. They

recognise that an efficient solution requires a proximate location of sources and sink.

Thus, the existing proximities in the network of raw material sites, processing plants and

(export) markets require reconfiguring to include sequestration sites. An explicit

spatial-material network analysis is likely to endorse this appraisal.

Understanding the economics behind network formation processes is important in order

to change network structures. Not only is this true for sequestration but also for the global

15

shipping network with its environmental debt. What are, for instance, the spatial effects of

an unilateral introduction of a carbon tax on shipping (Miola, Marra, and Ciuffo 2011)?

Could the network adapt to such a tax in ways that render any unilateral measure void?

Are there regional sub-networks that offer opportunities to implement measures on a

level-playing field? Or would standards such as substitution of low sulphur diesel for

bunker oil in ships or a required share of hydrogen per fleet result in replacement effects

across the network? Do (regional) port hierarchies tell us something about the chances of

specific industries, e.g. bio-based, to prosper?

New economic geography offers the analytical tools to explain the emerging patterns and

design spatially explicit solutions to arising problems.

Discussion

Research on industrial symbiosis has focused on symbiotic opportunities in win-win

solutions realising that proximity is a key factor to lowering total throughput. The presence

of park/port authorities or other facilitators increases the exploitation of industrial

symbiosis further even where economical win-win solutions already exist. Yet these

approaches build on different spatial assumptions. Eco-industrial parks can be static in

the sense that the drivers for spatial location are taken to be external to them. Explicit

spatial analyses would tell us more about where symbiotic opportunities can be expected.

Applying a dynamic spatial approach instead could assist their systematic exploration

through business offering industrial symbiosis services. Questions that arise in this

respect include:

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1. Could port authorities take on a role similar to industrial park managers

(Müggenborg 2011) based on the observation that space is highly priced in ports

and adjacent corridors?

2. Which spatial radius can symbiotic exchanges take against the background of

existing economic and regulatory drivers?

3. What spatially defined intervention(s) might support industrial symbiosis

facilitation?

4. Can industrial ecology employ new economic geography’s insights systematically

and beyond industrial symbiosis?

These questions are not altogether new to industrial ecology but the new developments in

geography offer new opportunities to explore them in greater detail and potentially in

interdisciplinary research with geographers. Based on this analysis we are suggesting

that more opportunities for industrial symbiosis are likely to exist around ports and along

the corridors of regional hub-spoke networks. Some authorities have left industrial

symbiosis to voluntarism if they have taken it into account at all. Others have actively

selected new entrants according to symbiotic fit. Given the tough competition between

ports it appears unlikely that these different strategies are just reflecting different

accidental levels of environmental motivation amongst port authorities. On the other hand

we have to consider that port authorities do not operate the supply chains and often suffer

from a lack of information to implement superior solutions for the whole network (Heaver

2006, p.19). Indeed, parts of the networks we have described are located outside their

authority. This indicates how closely linked the second and third question are – after all

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there can be good as well as bad management and policy-making. While several

examples show that there can be an active role for port authorities the social context calls

for nuanced spatial analysis in relation to the different layers of proximities. Thus, Hall and

Jacobs write “as organizational proximity between dominant port users has increased

through vertical and horizontal integration, territorially based institutional and social

proximities, especially as regards stable and shared regulatory systems, are increasingly

important” (Hall and Jacobs 2010).

Besides the focus on by-products as wasted waste we wish to emphasise that the

network analytical methods of new economic geography could be put to use for designing

sequestration and synthesis networks spatially explicit. Furthermore, they might also be

relevant to locate promising locations for eco-industrial parks.

With regard to the explanatory potential of new economic geography in industrial ecology

it might be helpful to contrast the approach with the search for “habitats” suggested by

conservation biology applied to industrial networks (Jensen et al. 2012). At present these

take the existing industrial system as material-energetic status quo, which arguably

detaches them from the powerful economic drivers bringing changes to the metabolic

system or locking it in. While the industrial habitat approach provides us with information

for industrial symbiosis it does not identify the socio-economic drivers creating the

industrial system in space; it mirrors past spatial outcomes of economic activity instead.

This may be an attractive problem description for some stakeholders; yet we believe that

the spatial approach suggested here will appeal to others while industrial ecology should

eventually carry forward the best of both.

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Acknowledgements

The partial support of the UK Engineering and Physical Sciences Research Council for

programme grant EP/H021450/1 (Evolution and Resilience of Industrial Ecosystems

(ERIE)) is gratefully acknowledged.

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