Innovation in the solid waste management industry: Integrating neoclassical and complexity theory perspectives

Often considered a traditional labour intensive activity, in recent years, the solid waste management (SWM) industry has been largely interested in innovation. Nonetheless, the analysis of innovations in the SW industry is frequently confined to process innovation in the disposal segment, neglecting other kinds of innovation – such as product innovation and organizational innovation – in other segments. While several economic theoretical frameworks have been developed for interpreting eco-innovation in general, a specific analysis of innovation in each segment of SWM is still missing, despite the specificities of this sector. To fill this gap, this paper shows how complexity theory can be profitably used to integrate the more traditional neoclassical approach, offering a comprehensive theoretical framework to analyse innovation in the SWM industry from both a market and firm perspective (the neoclassical approach) and from a social perspective (the complexity theory framework). Four main typologies of the SW market system, exhibiting different kinds of innovation, are outlined: (i) a “traditional” landfill-oriented system; (ii) a modern “waste-to-energy” incinerator-oriented system; (iii) a “light recycling” system with integrated solutions and a selection performance that is lower than 50%; and (iv) a “hard recycling” system.