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Reshoring Into American Eco-Industrial Clusters

As the reshoring trend is gaining strength, it is important to evaluate innovative, alternative solutions to the past industrial models. Otherwise, it might be difficult to ensure that the return of manufacturing in the US will be resilient in response to any future attempts of delocalization in serving the domestic market.

There are a few main options to choose from as the decision to reshore is being made. Companies can restart existing plants with no upgrades, partial upgrades or complete overhauls. Alternatively, they can acquire new plants either by building them of buying them.

The reshoring location will thus be at the core of the decision process. I, among many others, would prefer to see a new economy being built after the great recession, based on sustainability criteria. How can the decision on reshoring location be linked to sustainability? Through the eco-industrial cluster or park.

According to OECD’s definition, an eco-industrial park is “a cluster of companies that cooperate closely with each other and with the local community to share resources, to improve economic performance and minimize waste and pollution. The collective benefit is considered greater than the sum of the benefits companies would realize when optimizing only their individual performance”.

Eco-industrial parks are the latest and most systemic form in the evolution of sustainable manufacturing concepts and practices:

What is the difference between eco-industrial clusters and traditional industrial or technology clusters? The following are some of the characteristics of the eco-industrial clusters which make them more attractive to reshoring for the long-term:

  • Diversity of industries, providing a hedging strategy against the negative impact of the business cycle in a homogenous industrial cluster where companies are in-sync
  • Highly collaborative rather than competitive, between all entities involved, private and public 
  • Provide risk mitigation against material, energy, transportation price volatility and increase
  • Induce innovation in product design, production processes and services through the pro-active search of finding usage for all the waste or by-product streams available 
  • Create positive economic externalities through stable employment, regional sustainable development, elimination or reduction of land used for landfills, reduced regional ecological footprint with associated lower health and other social costs
  • Open to continuous expansion thought the availability of waste or by-product streams to new users

The global benchmark and the oldest eco-industrial park in continuous existence and expansion since 1961 is the Kalundborg Symbiosis in Denmark (pictured below with its 2011 structure)

Based on the experience at Kalundborg, there are five criteria for a successful industrial symbiosis. First, all projects must be economically feasible. The included members must then fit together, although can be different. Similarly, the ideological and geographical distances between members must be small. Then, members must focus on large, continuous waste streams.

In the US, the By-Product Synergy (BPS) network managed by the United States Business Council for Sustainable Development (US BCSD) has been expanding since 1997. Their stated goals are:

  • Reduced resource use – energy, water, petroleum, natural resources
  • Reduced carbon emissions resulting from the reuse of existing materials rather than use of new materials with a carbon generating extraction/production stream
  • Reduced waste to landfill and reduced processing and disposal costs of hazardous materials
  • Innovations in manufacturing discovered and developed for efficiency and productivity
  • Opportunities to address regulation issues and reduce barriers to materials exchange processes

US BCSD is planning to have 20 US cities with ongoing by-product synergy programs by 2015. These cities could make a good reshoring location for anchoring the future eco-industrial clusters.

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