SPM9539: Economy, Ecology and Technology of Networked Industrial Complexes
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1 SPM9539: Economy, Ecology and Technology of Networked Industrial Complexes Week 1 course 1: course introduction From Analysis to Shaping Industrial Clusters Dr.ir. Gerard P.J. Dijkema Associate Professor TBM a g.p.j.dijkema@tudelft.nl Source: September 9, Faculty Vermelding of Technology, onderdeel organisatie Policy and Management Energy & Industry Group
2 The object of this course Understanding / shaping industrial networks Using a variety of perspectives Core perspective: industrial or business cluster What is it? September 9,
3 A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. September 9,
4 Source: September 9,
5 Course objectives Students learn to: 1. Understand and apply system theory and system analysis tools on the performance, evolution, dynamics and development of large-scale industrial complexes or business clusters 2. Understand and apply theories on innovation, economics and ecology of global business and their implications for specific industrial markets, industrial sites and transition. 3. Analyse and understand the role of various stakeholders involved in the transition management, and to synthesize and operationalise economic, technology and policy-oriented theories, methods and tools. September 9,
6 Course agenda Lectures (subject to change) Week Subject Case-examples 1 Introduction: cluster views Various 2 Cluster Economy and Typology Westland 3 Location Factors & Site selection Rotterdam 4 Industrial Parks and Eco-Industrial Parks in China TEDA, DDA 5 Stakeholders, Institutions & Regulatory Regimes Westland vs. CostaDue 6 Industrial Ecology - Bringing Clusters into Being Kalundborg vs. Dinteloord 7 Action-Oriented Industrial Ecology MVII and CostaDue 8 Transition management Paper and Board Literature and Assignments each week 2-3 scientific papers to read and digest each week an individual assignment to be completed September 9,
7 The assignments during the course During this course you will complete one assignment each week; together, these will provide a basis for the final written report. These assignments will help you: Understand the implications of theories discussed. Formulate a personal view on networked industrial development. Understand the problems that are encountered when various viewpoints collide. Find viewpoints other than those discussed in class in the available, reputable literature. September 9,
8 Assignment 1 Choose a particular type of industry or cluster and a locale. Do you have access to sufficient information on this industry/locale?? Create a first image/ systemic description of your cluster by answering these questions What kind of companies are part of this cluster (construction, production, research & development, engineering & consultancy services, transport, financing, marketing etc.) What are the characteristics of this industry? (physical, economic, technological, knowledge, other) What phase is this cluster in (initial, booming, mature, decline)? Boundary of your cluster (geographic, activity, other) September 9,
9 Assignment 1 (continued) Choose a particular type of industry or cluster and a locale. Find three distinct definitions of a cluster in the scientific literature (beyond the definition cited from Wikipedia) and make a choice for the best definition for your particular chosen industry. Could you improve the definition for your industry of choice? What characteristics of the chosen industry/locale are interesting with respect to options for (regional) clustering? September 9,
10 Industrial clusters / locales Examples Agro-Food Industry NL Food Valley Wageningen NL Flower Sector Greenhouse horticulture- NL Flower Sector Greenhouse horticulture- NL Sake Industry, Japan Offshore Industry NL Container Transhipment R dam High Tech (electronics?) Eindhoven NL Lindholm Science Park Goteborg, SE Leiden Bioscience Park, NL Petrochemicals R dam,singapore, Norway Biomass/Bioproducts Eemsdelta NL EnergyValley NL Natural Gas Industry NL Renewable Energy Cluster Colorado, US Solar Energy Spain, NL Wind Energy NL, DK Waste & Recycling sector, NL September 9,
11 Industrial clusters / locales 2012 Motorcycle Industry, Catalonia, Spain Coffee Industry Daklak, Vietnam Agro-Food Industry, Gelderland, NL Offshore Industry Singapore, Indonesia Maritime Cluster, NL Rotterdam Container Port NL Groningen Seaports, NL Fibre reinforced composites, NL Technopolis, Delft, NL Leiden Bioscience Park, NL (2) New Anglia Partnership, UK Petrochemicals R dam (2) Cubatao Industrial Cluster, Brazil Houston Oil and Gas, US Houston Petroleum, US Petrochemical Cluster Part, Iran Chemical Complex Tarragona, Spain Paper and Board Industry, Norway Bioethanol clustrer, Brazil Wood pellet, Ontario, Canada Biogas cluster NL Shanghai Baoshan Industrial Zone, China CSP in the US Solar Valley Mittel-Deutschland Wind Energy DK September 9,
12 Clusters, complexes why care? Source: September 9,
13 Clusters, complexes why care? Source: September 9,
14 Clusters, complexes why care? September 9,
15 Production factors are local, competition is global Survival, prosperity requires leveraging the combination of local resources, infrastructure knowledge September 9,
16 System analysis in networks Current Performance: Input/output analysis: Mass balance. Energy balance. Money input / output. Human resources. Feedstock Utilities Current Structure Participants, roles Network structure Types of relationships Formal and informal power / authority Character and Culture Investment & Operating Cost Revenues Salaries A chemical Cluster G.P.J. Dijkema, Process System Innovation by Design, 2004 Skilled Labour Waste Know-how Emissions Products System Surroundings September 9,
17 Designing or shaping networks? Design / Development / Shaping / Evolution Attention for: Design of what? How to change structure and content Strategies for growth and competitiveness? Path dependence and lock-in effects. (Im)possibilities for future development. Possible supply chain integration & extension. September 9,
18 Theoretical background Development, management and evolution of industrial regions can be viewed from various perspectives: Regional economics. Industrial ecology. Traditional cluster perspective (Porter). Location theory (Witlox). Clusters as Socio-Technical Systems (Complex Adaptive Systems) Business Economics perspective (individual companies). These points will be discussed throughout the course. You will be asked to read articles and comment on them! September 9,
19 Stakeholder background WHO play a role in the development of networked industries? WHAT are the positions of the various identifiable actor positions? HOW can this be used to influence the structure or design, development or operational management of networked industries? September 9,
20 Industrial region interaction Companies: Investments, Jobs, Universities: Research, Industrial Region Policy interaction: National Legislature, European Union, Trade agreements (GATT, WTO) etc. September 9,
21 Industrial region interaction Companies: Investments, Jobs, Universities: Research, Industrial Region Policy interaction: National Legislature, European Union, Trade agreements (GATT, WTO) Types of industrial regions: Pure agglomeration (The average company park). Industrial complex (Chemical industry in Rotterdam). Social network (Silicon valley). September 9,
22 Industrial region interaction Key characteristics (dominant internal relationships): Pure agglomeration : none. Industrial complex : materials Social network : information. September 9,
23 Industrial region: structure Industrial facilities Company A Industrial Region Company C Company B September 9,
24 Industrial region: structure Industrial facilities Connected by physical infrastructure Company D Company A Industrial Region Company C Company B September 9,
25 Industrial region: Socio-Technic View Industrial / Production facilities Connected by physical infrastructure Evolves because of DECISIONS made by actors Physical Network Actor Network Physical Network Actor Network Socio-Technical Network everything is connected September 9,
26 Industrial region: Socio-Technic View Evolves because of DECISIONS made by actors Actors respond to external change Physical Network Actor Network Physical Network Actor Network Socio-Technical Network Ecologic Environment Economic Environment everything is connected September 9, G.P.J. Dijkema, IEEE SoSE, 2007; Adapted from I. Bouwmans
27 Industrial region: Socio-Technic View Evolves because of DECISIONS made In response external change Regulatory Environment Physical Network Actor Network Institutions Physical Network Actor Network Socio-Technical Network Ecologic Environment Economic Environment everything is connected September 9, G.P.J. Dijkema, IEEE SoSE, 2007; Adapted from I. Bouwmans
28 Industrial region: Socio-Technic View Evolves because of DECISIONS made In response external change Technology Options Regulatory Environment Innovation Physical Network Actor Network Institutions Physical Network Actor Network Socio-Technical Network Ecologic Environment Economic Environment everything is connected September 9, G.P.J. Dijkema, IEEE SoSE, 2007; Adapted from I. Bouwmans
29 socio-technical systems view Material / Energy / Data Exchange Decisions on: Social & Economic Transactions Development Ownership Technical Network Operation Social Network Culture <Institutions> Regulatory Regime External World September 9, G.P.J. Dijkema and L. Basson, J. Ind. Ecology, 13, 2009, p.157
30 Industrial region: structure Industrial Region Internal aspects that may influence structure: (Size and number of) existing companies: Is there one large company? Are they aware of the cluster? Do they care? Physical geography (geographic characteristics): Near river / sea? Flat or mountainous? September 9,
31 Importance of networked industries In Technical and Social Network Regional importance: Reinforces regional economy? More jobs? Attractive investment climate? Comparative advantages? Business importance: Exchange of by-products, energy, waste Increased (sustainable) competitive advantage? Faster product development & innovation? More sustainable production? September 9,
32 Networked industries perspective Different approaches: Types of clusters. Stakeholders. Regulatory regimes. Theories. Course focus by: Pre-selecting cluster types. 2 stakeholders perspectives. Dutch regulatory regime Selection of applied theories. September 9,
33 Perspectives: Regional Development Agency (RDA) Concerned with (long term) prosperity of the region. Should focus on issues as: Regional competitiveness Job security Environmental issues Infrastructure investments Implements the regulatory framework Could be in charge of attracting new industry September 9,
34 Perspectives: Company Primarily concerned with long term continuity of it s (economic) activities. Focuses on getting a sustainable competitive advantage: Chooses the best (geographical) location to invest. Searches for an environment that enhances innovation. Can have the means to invest in a region, thereby enhances the economy of that region. September 9,
35 Company perspective Interaction: 3 Layer Model Long term investment decision product / capacity portfolio Short term supply/demand feedstock / product markets product delivery plant operation September 9, E.J.L. Chappin and G.P.J. Dijkema, IEEE SoSE, 2007
36 Cluster = a network Links What is exchanged? What types of links? Nodes What (type) of activities or What roles September 9,
37 Cluster = a network Links What is exchanged? tangible: materials, goods, energy, money intangible: services, information, knowledge, money What types of links? physical social (contractual, membership, your network Nodes What (type) of activities an ecosystem with niches! primary producers, secondary, service companies, market or What roles producer, knowledge provider, decision-maker, service company, machine manufacturer, EPC company, infrastructure etc. September 9,
38 Distinct types of clusters Pure agglomeration. Company park. Shopping mall. Industrial complex. Base (petro) chemical production sites (Rotterdam, Delfzijl, DSM). Industrial steel producers (Hoogovens, metal park Delfzijl). Social network. Bioscience park (Leiden). Electronics development (Philips labs High Tech Campus). September 9,
39 Example of chemical cluster Source: September 9,
40 Example of metals cluster Source: September 9,
41 Specific characteristics of clusters September 9, Source: IBR 11 (2002), p. 650.
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