Benefits for all parties of an industrial ecosystem

Industrial symbiosis allows technology, services and energy to circulate between companies, enabling unforeseen possibilities. Susanna Perko, Senior Specialist at Finnish Prime Minister’s Office takes a look at the synchronicity between industrial symbiosis and the industrial internet, and the opportunities they bring.

Industrial symbiosis means mining other companies’ by-products, waste and surplus materials to be resourced for greater efficiency. A study conducted by the Finnish Innovation Fund Sitra in 2014 showed that 86% of companies working in an industrial symbiosis have made savings in operational costs. One third of companies have also saved jobs and given their business performance a boost – all thanks to circulating raw materials.

Other areas that have benefited from industrial symbiosis are the reduction of carbon emissions and an increase in material and energy efficiency. Susanna Perko highlights the added value that industrial symbiosis brings.

“On the business side it is seen that products become services when they are connected together inside an ecosystem, and this opens up all kinds of business opportunities. Business models are modified so that manufacturers get their raw material back, and all material can be kept inside the financial process accumulating more value, instead of following a linear chain of producing, consuming and waste management. The focus should not only be on recycling as such, but higher value should be generated from the process. The aim should be on circulating value to the max”, Perko declares.

According to Perko, there is a clear synchronicity at work between industrial symbiosis and the industrial internet.

“Resulting from structural changes in industries at the moment, we see the industrial internet as holistic logic or a new management system, in which companies of different sizes from different fields engage in a symbiotic process. The new approach involves making big decisions. If you are dependent on raw material provided by somebody else, you have to be sure that the material is available at appointed times and that the costs and quality are consistent. These things are critical from a business point of view.”

In Perko’s view, instead of simply being an accompanying partner to industrial symbiosis, the industrial internet will, in fact, be a logical cure for supply chain issues, which may arise in a closed industrial ecosystem.

“Industrial internet allows better monitoring of the material streams, which can be massive. Hardware will be very solid and material streams of different sizes can be optimized. This will aid industrial symbioses to succeed and take them to a new level, because a new kind of digital intelligence will be making it all work. At the moment, some automation can be found inside individual companies or between two actors in a very deep symbiosis, but the next step will make it possible for a whole industrial mycelium. When the whole process is under constant surveillance, any kind of anomalies can be detected and everything can be put under control immediately.”

Leveling the field for progress

Towards the Circular Economy (2013), a report conducted by the Ellen McArthur Foundation, claims that the material savings resulting from circular economy – the foundational business model for industrial symbiosis – can amount to as much as 700 billion dollars in global consumer goods manufacturing. No wonder industrial symbiosis appeals to companies of all sizes.

“Cost is naturally the biggest driver, because companies always find it easier to base decisions on how much it means in euros. General increase in efficiency and performance are also up there as well as getting a better overview of the whole operational process. If it once was about managing a single product, plant or company, the change is taking it towards the management of a complete value chain”, Susanna Perko explains and continues by stating that a large-scale evaluation of governmental processes is also called for.

“In terms of legislation, there are no direct limits to symbiosis itself at the moment, since it is a very recent idea, but there are numerous laws controlling its different processes, waste for example. Sitra is driving for the founding of a dedicated governmental actor in Finland to handle all matters connected to industrial symbiosis. Not necessarily a get-all-your-service-from-a-single-door procedure, but a clear help for the entrepreneur in matters related to the subject.”

According to Perko, considering industrial symbioses – usually connected to resource efficiency – to be some kinds of isolated processes is not reasonable either.

“Instead of simply focusing on waste management and recycling, seeing them as some kind of a separate system from the basic economic system, we should look at the whole picture and see how new services connected with smart technologies influence these issues heavily.”

Susanna Perko worked at Finnish Innovation Fund Sitra until December 2014. She was a part of a team building a multi-stakeholder platform for Finnish companies to accelerate industrial symbiosis and circular economy. Susanna Perko now works as Senior Specialist at Finnish Prime Minister’s Office.

For further reading: Towards the Circular Economy (2013) by the Ellen MacArthur Foundation http://www.ellenmacarthurfoundation.org/business/reports

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