NACETEM

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Eco-Innovation in Production: Transforming Manufacturing

through Advanced Sustainable Technologies

Maruf Sanni, PhD

Deputy Director
National Centre for Technology Management
Federal Ministry of Innovation, Science, and Technology,
Nigeriaat the
Presentation
2024 Business Administration Short Course
Toward Sustainable Futures: Innovative Strategies for Responsible Production and Consumption
Business Administration Department at Universitas Diponegoro, Semarang, Indonesia
Date: Tuesday, 22th October, 2024
NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Presentation Outline
• Background
• Emergence of Sustainable Manufacturing Practices
• Treatment of Environmental Pollutions
• Eco-innovation Dimensions
• Evolution of Eco-innovation Technologies
• Case Studies
• Challenges to implementing Eco-innovation Technologies
• Future technology directions for sustainability-oriented enterprises
• Concluding Remarks
• ***Intermittent light exercises

NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Background

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Human activities are consuming resources equivalent to 1.7 Earths
annually (Global Footprint Network, 2023).

⚫ Driven by growing populations, industrial expansion, and increased

consumption patterns, particularly in high-income countries.

⚫ Global material extraction has tripled since 1970, reaching 100 billion
tonnes of raw materials in 2017, with only a small fraction being recycled
(UNEP, 2020).

⚫ Unsustainable extraction depletes non-renewable resources and leads to

land degradation, water shortages, and increased greenhouse gas
emissions etc.
3 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Background
⚫ To reach the goal of sustainability, eco-innovation has been suggested
as an effective mechanism and solution to help enterprises to reduce
negative impacts on environment.

⚫ With the advance of technology, the scope of eco-innovation becomes

larger and complicated.

⚫ Very few articles discussed the evolution of technologies involving

eco-innovation

4 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Background
⚫ Eco-innovation is an important pathway towards sustainable development in
the business sector (Eun Kyung et al., 2015).

⚫ Eco-innovations has become a more significant aspect in management

theory and business practice

⚫ “Eco-innovation is the production, assimilation or exploitation of a novelty in

products, production processes, services or in management and business
methods, which aims, throughout its lifecycle, to prevent or substantially
reduce environmental risk, pollution and other negative impacts of resource
use (including energy)” (European Commission, 2008, p. 4, as cited in:
Carrillo-Hermosilla et al., 2010, p. 1074).
5 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM
Typology of Eco-innovation

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Eco-innovation can be explained on the basis of three key concepts: its target,
mechanism and impact (OECD, 2009):
⚫ Targets are:
⚫ products (both goods and services);
⚫ processes, such as a production method or procedure;
⚫ marketing methods, referring to the promotion and pricing of products, and
⚫ other market-oriented strategies;
⚫ organisations, such as the structure of management and the distribution of
responsibilities; and
⚫ institutions which include broader societal areas beyond a single company’s
⚫ control such as broader institutional arrangements as well as social norms and
cultural values.
6 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM
Typology of Eco-innovation

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Mechanism: methods by which the change in the eco-innovation target takes
place or is introduced
⚫ technological or non-technological in nature
⚫ modification, such as small, progressive product and process adjustments;
⚫ redesign, significant changes in existing products, processes, organisational
⚫ structures, etc.;
⚫ alternatives, introduction of goods and services that can fulfil the same functional
needs and operate as substitutes for other products; and
⚫ creation, comprising the design and introduction of entirely new products,
processes, procedures,
⚫ and organisational and institutional settings

7 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Typology of Eco-innovation

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Impact: Eco-innovation’s effect on environmental conditions, across its life cycle

⚫ It depends on the combination of the innovation’s target and mechanism

⚫ It could be incremental environmental improvements or complete elimination of

environmental harm.

⚫ “Factor” which is used to describe technological performance with respect to

energy and resource efficiency (Weizsacker et al., 1998). E.g. A Factor 2

improvement in CO2 emissions, for example, denotes a 50% reduction, all things
being equal.

8 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Typology of Eco-innovation

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Typology of Eco-innovation

Source: OECD, 2009

9 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Typology of Eco-innovation

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Conceptual relations between sustainable manufacturing and
eco-innovation

Source: OECD, 2009

10 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Emergence of Sustainable Manufacturing Practices

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Manufacturing industry accounts for over 37% of total global final energy
use.

⚫ Manufacturing and industrial activities account for around 24% of global CO₂
emissions, primarily from the combustion of fossil fuels for energy and
industrial processes like cement, steel, and chemical production (IEA, 2023)

⚫ Energy efficiency improvements in manufacturing could reduce global

energy consumption by up to 25% by 2040 if advanced technologies and
practices are implemented (UNIDO, 2020).

⚫ This emphasizes the need to alter patterns of production and consumption

11 so NACETEM…Managing
as not to put further
Technologypressure
for Sustainableon the planet
Development © NACETEM 2024
 NACETEM

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Treatment of Environmental Pollutions
⚫ “the solution to pollution is dilution”, dispersing pollution in less harmful or less
apparent ways (UNEP and UNIDO, 2004).

⚫ “end-of-pipe” technologies or solutions

Source: OECD, 2009

12 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Treatment of Environmental Pollutions

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ “anticipate and prevent”; : shift from conventional pollution control to a more
proactive approach

⚫ Shift towards earlier stages in the industrial process, i.e. the source of pollution:
Cleaner Production
⚫ Cleaner Production: Housekeeping, process optimization, raw material
substitution, new technologies, new product design (Ashford, 1994)

Source: OECD, 2009

13 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM
Treatment of Environmental Pollutions

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ “doing more with less”, i.e. producing more goods and services while using
fewer resources and creating less waste and pollution (EC, 2005).

⚫ Eco-efficiency “the delivery of competitively priced goods and services that

satisfy human needs and bring quality of life while progressively reducing
environmental impacts of goods and resource intensity throughout the entire life
cycle to a level at least in line with the Earth’s estimated carrying capacity”
(WBCSD, 1996):

Source: Black Hills

Energy, 2023
14 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM
Treatment of Environmental Pollutions

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Switching towards better environmental performance through reduced material
flows, more integrated approach to sustainable manufacturing

⚫ The increasingly blurred demarcation of manufacturing and services (Mont,

2002)

⚫ Product-service system (PSS): Focuses on the delivery of consumer utility and

product functionality. Consumers purchase the service and not the product itself.

⚫ The costs of product maintenance, retirement and replacement are internalised

for the producer’s profit maximization objective

15 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Treatment of Environmental Pollutions

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Closed-loop production: “closing” of the material resource cycle. Components
that exist in the system are reused, remanufactured or recycled in some way.

Source: OECD, 2009

16 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM
Eco-innovation Dimensions

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Several different eco-innovation dimensions were developed to determine
eco-innovation indices

⚫ European Commission has 5 dimensions for 16 indicators: eco-innovation

inputs, eco-innovation activities, eco-innovation outputs, resource efficiency, and
socio-economic outcomes

⚫ Eco-innovation index with four factors: capacity, supportive environment,

activity, and performance (Jo et al., 2015).

⚫ Eco-innovation index with four dimensions: design, user, product service, and
governance. (Carrillo-Hermosilla et al., 2010)

17
⚫ The
NACETEM…Managing Technology for Sustainable
scope of eco-innovation could Development
include policy side, supply side, ©and demand
NACETEM 2024
 NACETEM
Eco-innovation Dimensions

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Source: OECD, 2009

18 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Evolution of Eco-innovation Technologies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Original concept of eco-innovation was mainly focused on product and process.
of eco-innovation; followed by equipment and management systems, new market
creation, organization composition and institution.

⚫ Four major evolution of eco-innovation technologies (Kuo & Smith, 2018):

Green/sustainable product development stage (stage 1: from 1990s to
2000s)
Business model integration stage (stage 2: from 2000s to 2010s)
Green marketing and sustainable consumption stage (stage 3: from 2010s to
current), and
Hybrid model construction and optimization stage (stage 4: from current to
19 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM
Evolution of Eco-innovation Technologies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Green/sustainable product development: To lower environmental impacts by
redesigning products to be environment-friendly
Product strategies

Design innovation

Lean/green manufacturing and management

Dynamics for sustainable transition

Value co-creation

Impact measurement

20 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Evolution of Eco-innovation Technologies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Business model integration dimension: To lower environmental impacts by
redesigning products to be environment-friendly. Involves constructing networks and
collaboration with suppliers
Development of a closed loop supply chain

Measurement of sustainable supply chain

Supplier management of sustainable supply chain

Corporate social responsibility.

Supply chain risk evaluation

Optimization of supply chain

New opportunity in supply chain models

Specific industry implementation

21 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Evolution of Eco-innovation Technologies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Green marketing and sustainable consumption dimension: Sustainable
consumption is seen as seen as a social behavioral change

Green marketing strategies: Includes 4Ps (product, place, price, and promotion)

Green marketing development: including stakeholder, institution, resource, and industrial marketing and
purchasing (IMP)

22 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Evolution of Eco-innovation Technologies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Hybrid model construction and optimization dimension

⚫ With the advance of technology, the scope of eco-innovation continues to grow.

⚫ A hybrid model is required to integrate design, evaluation, operation methodologies, modeling

techniques, and other sustainability issues

⚫ Many organizational theories (complexity theory, ecological modernization theory, information

theory, institutional theory, resource-based view, resource dependence theory, social network
theory, stake-
holder theory, and transaction cost theory) have been adopted and integrated into sustainable
supply chains

23 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Ecocement manufacturing technology
⚫ Established by Taiheiyo Cement Corporation in Japan in1997.

⚫ Made primarily from incineration ash, sludge, and other waste materials generated by incinerating

waste from our daily lives at treatment plants.

⚫ In July 2002, it was certified as the Japanese Industrial Standards (JIS R 5214).

⚫ Ecocement was one of the winners for the global 100 eco-tech award

24 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ EcoWorx carpet backing technology:

Established by Shaw Commercial in the US in 1999.

⚫ Their products are 100 percent polyvinyl chloride (PVC)-free and

⚫ 100 percent recyclable, with high performance of sustainability at no additional cost

25 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Envac as established by Envac Centralsug in Sweden in 1961.
⚫ They developed an automated vacuum collection system to transport waste at high speeds
through
an underground network of pipes to centrally located waste transfer station.

⚫ The NH Green Hotel project was developed in partnership with Siemens in Spain in
2008.

⚫ To enhance the rational use of energy sources.

⚫ NH hotel operates its hotel business with the ambition of leading the responsible behavior,
creating shared value at an economic, social and environmental level

26 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

An application of product-service systems
• InterfaceFLOR, offers carpet rotation and replacement services instead of selling
carpets.
• This PSS is part of a broader initiative called “Mission Zero” through which the
company aims to eliminate all forms of waste
• Using the model to take back old carpets for what they call “re-entry”
• Recycled materials can be used for new carpets to decrease the use of virgin
petroleum-based raw materials.
Source: InterfaceFLOR website, www.interfaceflor.com.

27 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Remanufacturing and PSS
• Remanufacturing is a practice that can reduce environmental impacts while increasing revenue.
• Caterpillar has collection mechanisms that maximises remanufacturing possibilities.
• It embraced the idea as an integral part of its business model
• Using financial incentives for customers to return equipment after the end of its life
• It remanufactures components for a fraction of the original cost while keeping attractive profit margins
even if the remanufactured products are sold at discount prices with the same warranties as new
products.
Source: Gray and Charter (2006), Remanufacturing and Product Design, Centre for Sustainable Design, Farnham.

28 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

An Eco-industrial Park

• The eco-park began when Gyproc located its facility in Kalundborg in 1970 to take advantage of the butane gas
available from the Statoil refinery.

• Surplus heat from the power plant is used to heat about 4 500 private homes and water for fish farming

• Fly ash is supplied for production of cement.

• Process sludge from fish farming and Novo Nordisk is supplied to nearby farms as fertiliser.

• Novo Nordisk also supplies farms with surplus yeast from insulin production for pig food.

• The Statoil refinery supplies pure liquid sulphur from its desulphurisation operations to a sulphuric acid producer
(Kemira).

Source: Industrial Symbiosis Institute website www.symbiosis.dk;

Gibbs (2008), “Industrial Symbiosis and Eco-industrial Development: An Introduction”, Geography Compass, Vol. 2, No. 4.

29 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

BMW
• Leipzig plant in Germany is powered by wind turbines
• Company committed to using 100% renewable energy in its global production facilities.
• Focuses on the lightweight design of its vehicles using recycled aluminum and carbon fiber.
• Shifts to green energy and resource-efficient production reduces carbon emissions and energy consumption
across its operations.

Patagonia
• Patagonia's Worn Wear program encourages customers to repair, reuse, and recycle their clothing.
• Use organic cotton and recycled polyester in their products, reducing reliance on virgin materials.

30 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Tesla
Tesla is not only an automotive company, but also an energy innovation company: Tesla solar panel, Solar Roof, Tesla
Powerball

Tesla's design thinking has a deep understanding of customer needs and desires.

Identified the misconceptions and barriers surrounding electric vehicles: limited range, lack of charging infrastructure,
and better performance.

Aerodynamic Design: Sleek, aerodynamic shapes to minimize air resistance (drag). Retractable door handles help reduce
wind resistance, reduces energy consumption at higher speeds.

Low Rolling Resistance Tires: Uses specially designed low-rolling-resistance tires, which require less energy to keep
moving.

Regenerative Braking: Regenerative braking systems convert the kinetic energy lost during braking back into electricity
to recharge the battery.

Efficient Electric Motors: Tesla's electric motors are highly efficient, reducing energy loss due to internal friction.
31 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM
Case Studies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

Edible Water/Edible Water Bottle

Ooho is a seed-based capsule

Created by skipping Rocks Lab, now Notpla

https://youtu.be/KppS7LRbybw

32 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Future technology directions for sustainability-oriented enterprises

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Internet of things (IoT) and sustainability: Used in mobile taxis to quickly respond

to customer needs, employed in manufacturing to reduce energy consumption during design,

production, and service process (Lanza et al., 2015).

⚫ Cloud computing and sustainability: By using cloud computing model in mobility and

transportation management systems, managers can reduce the total cost of provided services for
residents (Nowicka, 2016)

⚫ Smart factories and sustainability: showed that 3D printing could reduce carbon emissions

(Gebler et al. 2014)

⚫ Big data and sustainability: used to help enterprises understand their sustainability performance

⚫ Artificial intelligence and sustainability: Used to forecast energy consumption and optimize the

energy systems (Mat Daut et al., 2017)

33 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM
Challenges to implementing Eco-innovation Technologies

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Innovative environmental technologies do face significantly higher barriers than

are present in other fields (ELI, 1998).

⚫ Cost: Expensive eco-innovative technologies and

⚫ Additional cost of taking up social responsibility

⚫ Decline of private venture capital for environmental technologies

⚫ Lack of technological know-how (Triguero et al. 2013)

⚫ Environmental regulations

⚫ Risk aversion (Sanni, 2020)

34 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024

 NACETEM
Concluding Remarks

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

⚫ Changing consumers' behavior to be sustainable is important for a successful product design or

business model.

⚫ Enterprises must innovate to exploit technological opportunities and market dynamics

⚫ Introduction of government-backed investment fund

⚫ With eco-innovative product designs, business models also need to be revamped

⚫ Circular economy has been implemented in several governmental policies, with Japan and

Europe at the forefront

⚫ Design for bottom of pyramid (BOP): The total number of global BOP consumers is four

billion.

⚫ The concept of sharing and pooling, peer-to-peer based services: E.g. Uber's ride-sharing

revolution
35 NACETEM…Managing Technology for Sustainable Development © NACETEM 2024
 NACETEM

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT

NACETEM…Managing Technology for Sustainable Development © NACETEM 2024