Policy Brief
Eco-industrial clusters: Enhancing regional economic development through environmental linkages
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Eco-industrial clusters: Enhancing regional economic development through environmental linkages

Number 08 Series: 2008-06

Developing countries in Asia are struggling to cope with the negative impacts of concentrated industrial activities. Inspired by the theory of industrial ecology, eco-towns or eco-industrial parks are frequently promoted in many localities as a strategy for reducing the environmental burden of industry in a way that is consistent with economic development. Yet the reach of those eco-approaches are limited to traditional manufacturing industries concentrated in urban areas. For countries still focusing on manufacturing they are good models to follow.

However, for countries looking beyond simple manufacturing and which are turning to the adoption of new kinds of industries, it is the inner regions, the zones of transitions which begins with the edge of residual green space and the fringe areas making up the hinterlands between urban and rural areas that offer an opportunity for equitable growth. These areas are already used as sites for clusters of 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. The solution is to create an Eco-Industrial Cluster (EIC). Essentially an EIC aims at efficiently using local resources, discarded materials and byproducts which 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 look for all types of innovations that bring wealth to the community. The key foundations of EICs,
as can be learned from these four prototype cases in India, Japan, Thailand and Viet Nam are: inter-firm networks, enabling technologies, social capital and public policy support. It is important that these infrastructures should be created simultaneously with new industries, and not after environmental problems have already developed, as has been done in the past.

Changes in policy orientation are essential to promote the EIC as a new model for sustainable regional development. Joint efforts that cut across three main policy streams of industrial policy, environmental policy and regional development policy that favour co-operative, multi-stakeholder and often location specific approaches are needed to unleash the sustainability potentials of EICs.

Remarks: (Hayama)