Industrial Ecology and Competitiveness: Strategic Implications for the Firm

Address correspondence to: Daniel Esty Yale School of Forestry and Environmental Studies 205 Prospect St. New Haven CT, 065 1 1, USA email: daniel.esty8yale.edu whether industrial ecology can guide company strategy and efforts to enhance competitiveness. We conclude that industrial ecology thinking will often be useful for firms seeking to improve their resource productivity and thus their competitiveness.The systems perspective that industrial ecology promotes can help companies find ways to add value or reduce costs both within their own production processes and up and down the supply chain. But industrial ecology cannot always be counted upon to yield competitive advantage at the firm level. In some cases, the cost of closing loops will exceed the benefits. In other cases, regulatory requirements do not fully internalize environmental costs, and thus polluting firms may gain temporary or permanent cost advantages relative to companies that attempt to eliminate all emissions. Finally, because industrial ecology focuses attention on materials and energy flows, it may not optimize other variables that contribute to competitiveness within the 8 Copyright 1998 by the Massachusetts Institute of Technology and Yale UniverJity Corporate Setting.