03JEI00002 1726-2135/1684-8799  2003 ISEIS www.iseis.org/jei.htm Journal of Environmental Informatics 1 (1) 7-20 (2003) doi:10.3808/jei.200300002 Assessment of Environmental Impact of Production Processes in Industrial Districts Using Input-output Modeling Techniques V. Albino 1 and S. Kühtz 2* 1 DIMEG, Politecnico di Bari, 182 Viale Japigia, Bari 70126, Italy 2 DIFA, Universit della Basilicata, Cda Macchia Romana, Potenza 85100, Italy ABSTRACT. An industrial district is a group of firms housed in a limited geographic area and specialized in one or more stages of a given production cycle. The concentration of firms in a limited area characterizes unique environmental problems in conjunction with local communities that need to be carefully assessed. This paper presents an assessment of the environ- mental impact of industrial districts that is carried out using an input-output accounting model in connection to relevant materials and energy flows within an industrial district. Resources used, wastes produced and energy consumed in the system of concern are quantified by the input-output accounting model to provide invaluable information for both private and public managers leading to meet the sustainable development goals in local communities. Also, information for screening the technologies in conjunction with recycling, re-use, and recovery strategies can be drawn. Two case examples, related to the Italian industrial districts of Sassuolo and Matera, in North and South Italy, have been analyzed using such input-output accounting model as a tool. Keywords: Input-output techniques, enterprise input-output, industrial district, environmental assessment 1. Introduction Clusters are geographic concentrations of intercon- nected firms and institutions operating in a particular economic field. In the globalization era they remain competitive industrial systems throughout various geo- graphic, cultural, and institutional proximity. This kind of economic impact has been widely recognized by many developing and developed countries around the world (OECD, 2000; Porter, 1998). Clusters provide companies with special access, closer relationships, better informa- tion, powerful incentives, and other advantages that are difficult to get from a distance. As pointed out by the Organization for Economic Co-operation and Development (OECD), clusters of firms and inter-firm networks seem suitable to enhance the competitiveness of small and medium enterprises in the global economy. In particular, firms that operate in related lines of business are generally located in physically close proximity (OECD, 2000). So location remains critical in terms of competition in local business and turns out to be a dominant force that shapes regional economic develop- ment. Clusters are now widespread in developed and developing countries and different size, technological level, and network organization characterize different cluster models (Becattini et al., 1992; Piore and Sabel, 1984; Shridharan and Manimala, 1999). Indeed, cluster development policies have proliferated in central and peripheral regions of many metropolitan areas with chang- ing and versatile philosophies in response to the role of economic development in government agency. An indus- trial cluster can contain a small or large number of enter- prises, as well as small and large firms in different propor- tions. Clusters have been studied by early regional development literature (Isard and Vietorisz 1955; Isard et al. 1959) and analysed since then with input-output matri- ces (Isard and Schooler, 1959). Clusters and networks can allow small firms to combine advantages of small scale with several of the benefits of large scale. Then, member- ship of clusters and networks can enhance the productivity, rate of innovation and competitive performance of firms (OECD, 2000). Some clusters, such as Silicon Valley, are characterized mainly by technology-based companies that collaborate with local institutions such as universities (Saxenian, 1999). Other clusters, such as many of Italys industrial districts, are comprised principally of small and medium enterprises. Unfortunately, even in advanced economies, this kind of cluster pattern of economic geography can deteriorate the local quality of life as a result of higher environmental impact because of its centralized pattern. * Corresponding author: kuhtz@unibas.it The successful operation of some classical industrial districts (ID) is becoming an exemplary model in eco- nomic development. They are normally characterized by an agglomeration of small and medium-sized firms lo- cated in a specific geographic area and specialized on one or more phases of a production process (Becattini, 1989). 7