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Of Aluminium, Recycling and the Homeless: A case study of technology driven social inclusion

András Nemeslaki, National University of Public Service

László Duma, Corvinus University of Budapest

Introduction

Our paper has four main motives through presenting a case study and describing how

complex technology innovations might create better and more sustainable environment in

our cities.

The first motive comes from our professional background as researchers and university

professors in information systems: we seek to explore the development of ICT artefacts,

business models and diffusion of technology based innovations. Coming from this motive we

present a unique, cutting edge technology innovation – the so called Reverse Vending

Machine and New Returpack Control Information System - in the area of aluminium

packaging recycling. We describe how an effective business model is also incorporated by

creating a mutually effective motivation both for the stakeholder companies and to the

government for achieving their particular objectives.

The second motive stems from some of our concerns about our local environment as devote

citizens. We, and our families, are very closely tied to the capital of Hungary, Budapest, one

of the most beautiful and culturally richest cities of Europe. Not only through our everyday

life but also through family histories we have witnessed how the ecological footprint of our

modern lifestyle and consumerism has increased the burden on our city. The implication of

the recycling model enabled by the technology based innovation has several spillover

implications on Budapest, such as city logistics, jobs creation, product tax repayment and

improvement of quality of life. This last element has been observed within the most

peripheral social group in Budapest, the homeless, which in our opinion one of the most

intriguing impact of the case generating the third motive to record or narrative.

Probably, the largest gap in digital divide for creating information societies exists between

the groups of the rich and the poor. This is even more true in Central and Eastern Europe,

where not only the transitions during the last 20 years have pushed several unfortunate

social groups on the verge of poverty but also during the last years of global and European

economical hardships, the widening of social gaps have grown in many ways. While the

estimated number of homeless people in Hungary was around 3500 in 1993 by 2010 this

number had nearly tripled reaching over 9000 individuals. In our case study we show that

around 50% of the customers come from this group, and by their contribution with an

average of 2-3000 cans per person per day homeless are not only key engines of keeping the

recycling model operational but during collection process they improve their lives

significantly by enjoying the benefits of the business model.

Finally, the fourth consideration of presenting our case study is a potential theory

enhancement in the field of IS research, or specifically an elaboration on how institutions and

human agency construct structure on a broad social level through technology innovation. In

our opinion this is of high value for theorizing information societies, since the notion of

duality of technology (Orlikowsky, 1992) and adaptive structuration theory (DeSanctis, and

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Pole, 1994) are widely used in organizational setting, but there are few contribution of these

theories in broad societal context (Jones, Karsten, 2008). Similarly, to Wiebe Bijker´s classic

studies of social construction of technology in the cases of bicycle, Bakelite and the

fluorescent lightbulb (Bijker, 1997) – which similarity is not accidentally echoing in the title

of our paper – we present how the technology enabled aluminium packaging recycling

process constructs an institution for social inclusion and by doing so improving the quality of

life and greener economy in Budapest.

The aluminium can and recycling

Aluminium cans are widely used for the consumption of beverages although in different

ratios compared to other alternatives. In Central and Eastern Europe which is the broader

geographical region of our case study Hungarians buy 750-800 million aluminium cans

annually from which 600 millions contains beer. Compared to this, in Romania and in

Bulgaria for instance 60% of beer consumption is from PET bottles which situation on the

other hand is inconceivable in Slovakia or the Czech Republic. Slovaks and Czechs drink

mainly draft and bottled beer, just like the consumers in Germany or the Benelux countries.

In Hungary draft and bottled beer consumption totals up to 60% leaving a quite impressive

market to drink beer from metal cans of which 95% are aluminium.

Aluminium cans have become premium means of beer consumption from the 1970 not only

from economic reasons but also due to interesting cultural attitudes as well. Cans, before the

Berlin wall came down, were kind of a symbol of the free market, the classic products of

western capitalism, demonstrating the attractiveness of market economies through their

famous brands such as the Pepsi and Coke products in non-alcoholic beverages, and as other

global brands like the Dutch, German and American beer products in the alcoholic beverages.

For generations of young people behind the Iron Curtain, therefore, leading brands of soda

and beer delivered in aluminium cans were much more then just drinks: they symbolized

market choice, freedom, and all attractiveness what consumer society could offer. In many

Hungarian families we still find large collection of cans of all sorts, and to each of them a

story is attached; where and when it was purchased, what special adventures were attached to

them, quite often how they were smuggled through communist border guards to show of

before friends at home.

Recycling aluminium cans have several good reasons from technology point of view. The first

and foremost reason is that aluminium is considered as an “energy battery”; it takes

tremendous energy to convert the raw bauxite to alumina and from that to the metal form of

aluminium. This energy input is basically stored in the metal which can be re-melted in

furnaces basically unlimited times with relatively low level of new energy input. As a

comparison, the wide spread plastic PET bottle can only be recycled 2-3 times, while a

regular bottle may turn 50 times during its lifecycle. The second reason, which we would like

to highlight, is the flexibility of its recycle. Ideally, the best would be to produce new cans

from the scrap ones, because the alloy structure is makes it to one of the most expensive type

of aluminium products, but as it is quite often the case, molten aluminium frequently travels

to manufacturing facilities for getting processed into something very different than cans

(engine block, car wheels, machine parts etc.).

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The economical and institutional background of aluminium packaging recycling is more

challenging then the technology side. Government has established a centralized institution,

the so called environmental product fee or ecology-tax (eco-tax), attempting to motivate

manufacturers (brewers in our case) to take sustainability issues into maximum

consideration. In the case of aluminium 1 Euro/kg is the eco-tax to be paid which translates

into 1,5 Eurocents for an 0.5 litre can, 1 Eurocent for a 0.33 litre and only 0,003 Cents for a

Nespresso can. According to existing Hungarian regulations those manufacturers who are

able to recycle more than 17% of their sold cans, are eligible for eco-tax refund and up to 65%

they are eligible for proportional refund from the government. As a general framework, this

regulation motivates brewers to recycle, and also has the policy intention to bring the

Hungarian government closer to European Union regulations for fulfilling recycling quotas.

While, as we see, there is a high level regulation institution on the policy level for motivating

recycling, there had been no, or just very little, motivation for citizens and customers to bring

back empty cans to the authorized collection points. In Hungary there is no deposit on

aluminium cans, and at the same time there are quite strict regulations for the metal

collection firms for handling recycling metal because of frequent vandalism ruining public

metal equipment and objects. Basically, only for the sheer purpose of crime prevention and

governmental transparency in the value chain of recycling special collection and treatment

points were implemented which regularly have to authorized and coordinated by the so called

National Waste-management Agency (NWA).

The intense competition between the market leaders of Hungarian beer production have

deepened the challenges of effective aluminium recycling as well. In case of the breweries

75% of the sold beer cans are shared by these three leading companies (Heineken - NL,

Dreher - HU and Borsodi - HU). On the second place we find the dynamically growing sales

of energy drinks, and on the third position the non-alcoholic beverage leader - Coca-Cola.

When we look at the simplified ROI based on the eco-tax refund and the cost of collection, it

looks economically justified that attention of the brewers were more focused on recycling

regular glass bottles since it had offered much better returns. Namely, the deposit fee for a

regular bottle always have been around 7,5 Cents and for this amount about 80% of bottles

have been returned. Bottles contain no eco-tax, can be re-used, refilled many times during

their life cycle, and this makes the whole endeavour much more feasible than to embark on

the low margin recycling of cans which are in most cases squished, broken, or damaged –

come in unrecognizable form which brewer they originate from – so even the keystone

element of tax refund is often technologically challenged.

This situation has changed drastically, when Returpack Ltd. appeared on the Hungarian

market with a technology innovation and new business model for aluminium can recycling in

2009. In the following section we describe the technology and information system.

Technology innovation and the role of information systems in aluminium

recycling

The central technological artefact of the Returpack aluminium can recycling model is the so

called Reverse Vending Machine (RVM) as we show it in 1. Figure. As the name suggests, the

RVMs are collection points in the form of an inverse “vending machine” where users input

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the empty cans. They consist of standard and several innovative and patented features which

places the RVMs into the high-tech category, basically, a world leader in its product range.

1. Figure. RVM in use

RVMs not only consume small places (around 1 square meter) while able to hold 9000

aluminium cans since they execute a 1:12 ratio pressing, but most importantly, they have a

complex automatic built in aluminium recognition sensor system. They receive cans not only

in their intact cylinder shape, but in any form and condition. RVM identifies manufacturer

and can types, also filters out non-metal and non-aluminium materials. Even in extreme

cases, if a tennis shoe or tune sandwich is being inserted, the RVMs automatically handle the

vandalism by diverting the object to the exit slot, closing and protecting the aluminium

pathway. If it is necessary, after an easy software initialization process the vandalised RVM is

operational again.

2. Figure Aluminium cans before inserting and after vacating from RVMs in a pressed form.

RVMs are not only collection points, aluminium can scanners, press machines and storage

areas but also complex info-communication technology (ICT) devices. They are equipped

with M2M (machine-to-machine) communication enabled by fixed IP address SIM cards.

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Through the network of Hungarian Telecom using a GSM modems and the SIM cards these

machines are connected to a complex information system – Returpack Information and

Reporting System (RIRS).

RIRS is built on the communication and networking capability of the RVMs and not only

ensures monitoring, high quality maintenance, real time status reports, but by doing this all

enables Returpack to function as the integrator between government policy and business

collaboration for keeping the aluminium recycling circulating. Since Returpack business

model is seamlessly intertwined with RIRS, and also the objective of our analysis is

stimulated by the IS implications, we will symbolize RIRS with Returpack itself, as it is seen

in 3. Figure

RVM and IS

BREWERY

Share onTax RefundFt

GOVERNMENT

Data Collection andReporting onCan Recycling

Real Time CommunicationAnd Data Analysis

3. Figure. The Core of the Returpack Recycle Model

Returpack together with the manufacturer of RVMs owns the patent for the reverse vending

machines and the information system which connects and manages the operation, planning

and data reporting of the collection status. The technology configuration has enabled

Returpack to create a contractual agreement with the three leading breweries (Borsodi,

Dreher and Heineken) to orchestrate a fully functioning recycling circulation where both the

upstream collection process (on the left side of 3. Figure) is motivated and the recycle of cans

or re-circulating of aluminium is also ensured in the downstream part (shown on the left side

of 3. Figure). This configuration, henceforth, provides regular reports on can recycling both

for the breweries and for the NWA – that is to the Hungarian government. On the basis of

these reports, which contain the number of collected and recycled cans of each brewery

separately, eco-tax refunds are paid to each of the partners and this revenue is shared with

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Returpack as the main source of its income. The information flow is indicated with dotted,

the money flow with dashed, and the aluminium can flow with continuous lines.

Conceptually, the system was tested in 2010 using 2009 as a pilot run. The three breweries

invested in 24 RVMs and Returpack tested the collection, operation and recycling of cans.

The results were very promising: in the period of March-December 2010 100.000

cans/month were collected totalling up to 28,4 tons of aluminium. Also the clearing-house

concept was working flawlessly: based on the RVMs´ special can recognition feature and the

RIRS reporting capability the three breweries and the government authority had received

timely and accurate numbers of cans collected from each particular manufacturer, so product

tax refund could be calculated and filed to the government. One important spill-over effect of

the successful pilot run was the official acceptance of Returpack as trustworthy clearing

house on aluminium recycling which has become beneficial both for the breweries (they did

not have to report individually on recycling efficiency) and also for the authorities (who

suddenly started to receive impressive numbers of reused aluminium tonnage). This special

inter-organizational B2G operation started to serve as an obligatory passage point creating an

interpretation between government policy and business model operation.

Implications of the Returpack model on creating smarter – in this context more inclusive,

resource savvy, and better quality – environment is described in the next section by opening

up the upstream and downstream “clouds” in Fig. 3. Figure This also further refines the

business model and the role of ICT innovation.

Better and smarter environment from the garbage: collection at the retailers

and intelligent city logistics for recycling

In order to ignite and reinforce the process of collecting and returning used cans to the RVMs

the Returpack model resulted in a unique construction of technology use between retailers,

consumers and legislators.

During the pilot phase, quickly turned out that easy access and hassle free, convenient

approach to the machines was critical: they had to be installed in places of natural customer

traffic. This had been the point when retailer chains came into the blue print of the business

model. According to legislation all retailers operating in a larger area than 200 square meters

are obliged to run bottle return services, if they are selling refundable bottle products. The

retailers have not been allowed to build in any margins into this service, as a matter of fact,

they could not have even enforce the customers to repurchase in the stores for the returned

value. Consequently, any kind of return service has been a mandatory chore and a potential

managerial problem issue for retail management. Contrast to this, Returpack, could offer a

free, clean and environmentally attractive solution for the retailers by basically appearing as

an outsourcer of their return-business. Returpack only required place (size of vending

machine) and regular electrical current. In return, however, it offered regular maintenance,

timely vacating, and extra revenue from the collection. In order to make this work, Returpack

had to extended the core of the clearing-house model, and initiate further collaborations and

functionalities in the upstream and downstream processes of aluminium can recycling. All

of these functions were enabled by the technology features of the RVMs and the

communication and data processing capabilities of RIRS.

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4. Figure. shows the key elements of the Returpack model extension both on the upstream

(returning used cans) and the downstream (vacating RVMs and organizing the logistics of

collection) phase. First we examine the upstream, then the downstream part this model

extension and their implications.

4. Figure. Up- and downstream extension of the core Returpack Model

The installation of RVMs was not only attractive for retailers because of the free

maintenance, small place and getting rid of a critical management problem, but very

importantly they provided extra revenue source for the retailers. This opportunity was

enabled by the printing capability and built in communication features (M2M and GSM

modem) of the RVMs. The routine of returning the recycled cans (shown in Fig. 1. Figure),

according this, was finished by a print slip voucher for which the particular retail store

offered re-purchase possibilities, which later were cleared by Returpack based on the

transaction reports shared by the retail (dotted and slashed lines in 4. Figure). From this

point of view RIRS has served as an inter-organizational information system, because it has

not only generated report, but in some cases (like with Auchan, the French retail chain) there

was a direct business-to-business connection between the servers of the organizations, so the

impact of transactions were cleared electronically.

While technologically this is a creative and smooth solution, economically it had shown some

difficulties and risk. As we shown earlier in the case of regular glass bottles the economics has

worked fine: for 7,5 Cents more than 80% of glass bottles have been regularly returned. This

is very different in the case of cans, since the price for a can is ten time less coming up to only

0,7 Eurocents (2 HUF) which is not a real motivation for the beverage consumers.

Regardless, the pilot in 2010 had shown that the RVMs placement at the retailers was

working, people returned aluminium cans in large numbers partly because of the

convenience factor of the upstream process, the easy utilization of the refund value. One of

the most interesting and far reaching unintended consequences of the business model had

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turned out the dominant appearance of homeless in the city collection. We symbolize this

phenomenon by separating the consumers of beverages from the collectors: as Returpack

interviewees have told us, more than 50% of can returns have been realized not from the

actual consumers, but by the specialized collectors.

The Returpack-Retail-Voucher-Clearing configuration has constructed a vital and lively can

collection model in Hungary, especially in the big cities. In 1. Table we summarize the

effectiveness of the Returpack collection system and innovation. By 2012 there are 180 RVMs

installed into the operation of the 8 retail chains basically creating an unprecedented, close to

60 times, growth in tonnage collection.

1. Table. The key numbers of the Returpack aluminium can recycling model in Hungary

2010 2011 2012

Number of RVMs (units) 24 57 180

Recycled aluminium quantity (tons/year) 28,4 400 1700

Recycled quantity (cans/month) 0.1

millions

0.3

millions

9.0

millions

Number of retail partners 4 8 8

In 5. Figure we show the new landscape of Hungary with the 180 RVMs. We can see the

concentration in the capital area, Budapest but also in some smaller cities like Debrecen,

Miskolc, Sopron, Pécs and Szeged. As we will argue in the next section, the Returpack model,

through this new landscape has been the trigger with its innovation of a new form of social

inclusion and lifestyle for homeless collectors and also for the institutions supporting them.

5. Figure. Can collecting Reverse Vending Machines in Hungary

6. Figure drills down into Budapest and using the Google Earth mapping shows the spread of

can collection locations in Budapest and its surroundings. Given the fact, that the capital of

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Hungary is not only the main Hungarian metropolis, but that with its close to 2 million

inhabitants it is also a major European city, we are convinced that the system implication is

further reaching then just within the borders of Hungary. The concrete challenge in this

regard is the planning, organization and management of vacating, collecting and delivering

the huge amount of scrap aluminium from the RVMs, through the cities to the special

treatment plants. This leads us to the downstream part of the Returpack model extension

shown in the right side of 4. Figure.

6. Figure. Reverse Vending Machines in the Greater Budapest area

RIRS offers many functions as an infrastructure for an effective enabler on the downstream

phase. On the most operative level monitoring, maintenance and the timely schedule of

vacating is the most essential. Each RVM is plotted on Google Maps with an appropriate

colour code indicating its status. In the RIRS dispatching centre dispatcher might intervene

from distance to the operations of each machine.

On a higher level RIRS analyses real time data and feeds it to a forecasting algorithm for

route planning and tour management. Given the pattern of historical can returns and the

status of the storage space logistical tours can be initiated, routed and organized. In Budapest

for instance logistical can collection tours are initiated at 85% capacity of RVMs while in a

further location they are initiated at already 70% capacity level because of longer travelling

times.

Planning of the vacating times, routing and the management of the actual aluminium

transportation happens based on continuous data analysis resulting from the communication

with RVMs. Returpack has been operating three specially designed trucks with 8 drivers, 20

hours a day, three shifts in “drinking” seasons. The vehicles are specially designed for several

reasons: a) to be able to access places in the city centres, c) could be driven by the most

widely possessed driving licence in Hungary, d) being able to load the trucks by one person

(1000-1300kg) with a special loading lift, e) equipped with GPS for tracking and providing

capability for real time re-routing. The objective of the logistics tours is not only to vacate the

vending machines, but also to provide basic cleaning and maintenance. Given the amount of

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this time (about 10 minutes/machine) and the distance to travel each truck handles 10-15

RVMs. In Budapest this number might climb occasionally to 17 RVMs in a day.

As we depicted in 4. Figure operation in the downstream of recycling is dependent on reliable

operation of the whole communication and technology infrastructure therefore it is rather

costly and requires key management priorities. On the other hand, the extension of the

business model also generates extra revenue by the sales of scrap aluminium to the NWA

contracted treatment plants. In order to ensure the revenue stream from the downstream

process of the recycling aluminium is delivered to the bidder of the best price. Since there is a

supply-demand driven global market price for aluminium, the partners always negotiate on

some percentage of this as the deal. Regardless of the fact, that Returpack sells directly to

NWA special authorized partners, they participate on the price setting negotiations together

with the smelters they deliver the cleaned cans. As we already referred to this in the

introduction, the price is usually around 1 Euro/kg. Since from 1 kg of aluminium

approximately 60 cans are manufactured, the price of on recycled can is about 1,7 Cents.

Compared this number with the 0,7 Cents/can paid for the collection, we can conclude that

the recycling revenue is shared around 40-60% between the collector and Returpack.

7. Figure. Re-use of Used Beverage Containers

In 7. Figure we extended and actually closed the recycling process at the breweries by showing

how the used beverage containers (UBC) travel from the treatment plants, to smelters and

rolling mills where they manufactured to the form of loadable containers again.

Returpack logistical delivery feeds a major metal wholesaler as the first industrial partner in

the downstream process. From a technological point of view scrap aluminium is getting de-

ironated with a magnetic separator and consigned into containers for further delivery. From

here aluminium is travelling to a smelter or to another industrial partner for the re-use. In

the first years of operation – while Returpack itself controlled the iron separation and

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delivery to the smelter – liquid “purified” aluminium travelled to the Audi engine block

facilities in Győr (Western Hungary) and the TT-model engine block got casted partially from

recycled cans.

Recently, a technologically more feasible partnership has been created for the actual quasi-

re-use of cans to their original purpose: carrying beverages. This technological solution is

called can-to-can cycle during which collected and cleaned cans are transferred to specialized

smelters and rolling mills which handle them separately without mixing with other metals.

Such smelters are rather rare in Europe, but on the other hand their input – the UBC (Used

Beverage Container) - is more valuable since the alloy structure remains intact and used

according to its original purpose.

In Hungary, this complex industrial network of the downstream process of recycling is

coordinated by the National Waste-management Agency (NWA) who has special authorized

partners for metal handling. For cans, if and when they are fed to the proper smelter and

manufacturer, takes a couple of months at most until to re-appear in the market from the

time of their disposal.

The rounding up of the business model spreads from vacating the RVMs, transporting the

pressed cans to storages and cleaning, and finally to the place of recycling (as cans again) or

the aluminium scrap for different purposes. Three phases offer innovative solutions in these

areas: the intelligent logistics, the innovative utilization of industrial resources, and creating

a supply network to the European recycling market. By merging 3. Figure, 4. Figure and 7.

Figure we drew 8. Figure as a summary and named the complex Returpack model as

technology enabled recycling, due the immanent role of ICT in this process.

8. Figure. Technology enabled aluminium can recycling

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To discuss the most intriguing social innovation consequence of Returpack, we return to the

upstream part; how the RVMs impacted the life of the homeless in Budapest and other big

cities.

Social construction in the upstream of aluminium recycling: technology driven

inclusion of the homeless

Homeless determine life in the cities in many ways. A modern society owes both ethically and

legally to its citizens; equality, participation, human capital development and better quality of

life is a right to everyone in modern democracies. Beyond that, wide social divides damage

societies by strongly impacting the “fortunate” people – with income, jobs, shelter and safety

net as well – because quality of life, security and economic and social development is crippled

in an environment of social extremes. Central-Eastern Europe especially, in our case

Hungary, and its many cities have been tackling how to progress with the continuous

inclusion of people in the peripheries of society.

And here it is, the RVM enabled aluminium can collection model demonstrates an

unprecedented opportunity and motivation to this group of our societies not only to make a

living out of the green economy, but in our opinion much more importantly, to find a way of

life for real social inclusion.

The success of the pilot year collection was to a large extent due to the fact that it has

mobilized the homeless society. Some individuals collected 2-3000 cans daily earning around

20 Euros which as a regular income – in Hungarian price levels – provides a decent access to

get one´s life organized in terms of regular eating, clothing and shelter. In the pilot year some

of these customers got special attention, observing the new phenomena, and was not unusual

to witness major change in life style: they bought new clothes, medication, moved to better

dormitories and sometimes even got “techy” by purchasing pre-paid cell phones.

As the number of installed RVMs grew, and more retail chains have joined the clearing-house

business model increased the number of homeless who were returning cans regularly to the

vending machines. By today, several thousands of them estimated to live from the Returpack

system and by doing so enjoying the effects of green economy and literally totally making

scrap aluminium disappearing from the cities of Hungary.

Several homeless interviewees expressed, that the preference to the RVMs compared to other

channel of metal recycling wholesalers is not only economical. These people consider RVMs

as reasonable, transaction oriented and - most importantly - fair partners in their life.

Interacting with wholesalers they often face people who are raciest, excluding, and several

times taking advantage over the desperation of homeless by cheating on them with prices.

RVMs do not cheat: the vouchers do not “differentiate” collectors, offer the same amount to

everyone.

Retailers, however, are not all happy for the RVMs popularity amongst homeless. Some of the

premium retailer outlets, for instance, in 2013 have decided to end their contract with

Returpack, because homeless had literally taken the RVMs their hostage; occupied the

hallways of the machine, basically moved in as a living place. The sanitary conditions, smell,

and the sight of homeless lifestyle have been scaring away regular consumers. This tendency

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is a major challenge to the collaboration with the retailers, which potentially can be solved by

building more recycling stations on Homeless Support and Shelter Agencies (HSSA).

HSSAs, contrary to the retailers, see a major opportunity in housing RVMs and entering into

Returpack partnerships. HSSAs provide shelter, food, medical care for the homeless by using

government money. The amount of support HSSAs receive for these activities dependent on

the number of homeless people they take care of, so there is a motivation for them to attract

more into their premises. RVMs are excellent mechanism, not only to create a regular

“traffic” and, by that requesting more state budget support, while also relieving some of the

financial burdens from central authorities to homeless support.

Returpack, in its 2013 plans to spend 0.5 million Euros in “cash” for the “RVMs at the

HSSAs” project, in order to gradually reposition the homeless collections away from the

retailers to the caring homes.

Beyond all this, the complex human, machine and business agency has culminated in a

legislative institutional change proposed to the Hungarian parliament, legally recognizing the

participation of homeless in the recycling process, codify their economical reward in a high

juridical level, recognizing the emergent social-and-business structure by law.

Aluminium cans, breweries, retailers a system integrator, the homeless construct together a

sustainable flow for better living and a greener environment, while all of them enjoying not

only moral satisfaction and legal compliance but economic benefits. And this complex socio-

technical system is triggered and initiated by the active agency of technology – mechanical,

and ICT – and entrepreneurship building upon legislation opportunities.

In 2012 the central budget of Hungary collected 200mEuros in eco-tax fee part of which

contributed to covering state deficit and another part being reinvested into recycling

technologies. The Returpack system – technology innovation, business model and

construction of social inclusion of the homeless - directly and indirectly generates work for

some hundreds of people, contributes to the state budget with many million Euro VAT

payment, and also recycles valuable materials literally from the garbage into the blood

circulation of the Hungarian economy.

Theoretical implications of the Returpack case study: Transformational impact

of ICT in social setting

At this stage of our research, the main objective of our study was to present the Returpack

case of aluminium recycling, and summarise its potential implications in the field of

information system, innovation management and information society. We are interested in

what makes complex ICT based innovation work or what causes failures of their adoptions.

In the information system discipline the focus of studying these problems is ambiguous: as

Benbasat and Zmud summarized, some issues immediately associated with ICT-based

systems are under investigated while phenomena distantly associated with ICT-based

systems are over investigated, and to resolve this dilemma, they have suggested a

nomological net centred around the construct of the ICT artefact (Benbasat and Zmud,

2003). The ICT artefact can be conceptualized as a specific application (e.g., the RVM and the

IOS connecting the logistics, clearing house and reporting) designed to enable and/or

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support some routines (supporting the recycling of aluminium cans, truck fleet scheduling

etc.) in a structure (created by the consumers, retailers, homeless, government and other

actors) which is itself embedded in a context (in a business model for enabling effective

aluminimum recycling).

Furthermore, Agarwal and Lucas state that high-value and high-impact contributions for

understanding information systems success might be derived, if we look at ICT as the “glue”

that binds processes together, thereby impacting stakeholders and every aspect of

organizational – and specially in our situation – social life (Agarwal, Lucas Jr, 2005). They

introduce the concept of the transformational impact of ICT and propose research agendas to

relate powerful stories of how ICT changes the way individuals, teams and organizations

work together (Agarwal, Lucas Jr, 2005). We find that the Returpack case is such a narrative

which beyond illustrating the nomoligical net and a powerful transformational impact of

routines in the complex process of recycling, by extending organizational/business

boundaries to the broad social context which is the domain of public IT.

By taking critical realist lenses, the Returpack case can also be used to explore those

mechanisms, events, structures how the above transformational impact is working (Wynn,

Williams, 2012). In the more and more broadly used approaches of critical social theory of

information systems and technology studies there is a ongoing quest to seek for the

relationship between technology and social practice (Hackett et. al., 2008), (Mingers and

Willcocks, 2004). As we have referred at the introduction of the paper, from this point of

view our case is a supporting narrative on how institutions and human agency construct

structure on a broad social level through technology innovation. By observing and recording

data about Returpack success in terms of recycling production and business model

effectiveness we can illustrate how the enactment of different mechanisms formulate events

which instantiate a structure that in return enables social change.

Structurational theories for the explanation of ICT transformational impact

Structurational models of technology are derived from Anthony Giddens general theory of

structuration, and are considered as expected theoretical frames in information systems to

investigate the social process through which technologies are implemented, used and

institionalized (Jones, Karsten, 2008). In the centre of structurational concepts we find

structure: which is defined as a set of rules and resources organized as properties of social

systems. Systems are reproduced relations between actors or collectives, organized as regular

social practices. Social structure is constantly created through the flow of everyday practices

shaped by a mutually constitutive duality of agency and institutions.

Using the Returpack case we illustrate two elements of structuration: one where institutional

behaviour is dominating through a refined framework of technology determinism and

another where agency interactions drive structuration through mechanisms of emergent

behaviour.

Structuration through technology determinism – dominating institutionalism

In contrast with the scepticism of business information systems – where the doubt how value

and productivity has been created has have long traditions (Brynjolfsson and Saunders,

2010) – in public IT we surprisingly have an unquestioned positive attitude that IT must be

inherently good (Lips, 2012). So much so, that as some researchers found, IT development

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initiatives often looked as initiators of good governance, open democracy and “saviours” of

other problems which traditional public administration had not been able to solve (efficiency,

process integration, one-stop service etc.) (Bannister, Remenyi, 2003). The notion of e-

government has been a comfortable excuse for public administration to delegate the

responsibility for modernisation and innovation in government operations and also to blame

inadequate project management, technology configuration or lack of IT supplier commitment

for failures in achieving expected policy results (Bekkers, 2012), (Lips, 2012). Advanced ICT,

according to this view, is treated in the technology determinist paradigm, as a special form of

normative and history shaping artefact, so complex itself that public control over its use can

only be achieved by strong policies, well defined deliverables and clear cut interfaces between

the technology policy making organizations.

In the broad church of science technology studies technology determinism is being treated as

an essentialist view to the society-technology relationship, taking a very extreme and one-

sided viewpoint on social history. Social shaping readers intend to counterbalance this with

delineating arguments form technology bias towards social bias to analysing this

relationship. Going back, however, to our starting point defining the ICT artefact as the

centre of our investigation we have to admit relevance of technology bias which harmonizes

with the normative nature of the e-government studies. By using a refined framework of

technology determinism suggested by Wyatt (Wyatt, 2008), the Returpack case demonstrates

how ICT enabled transformation can be explained by mechanisms of structuration.

In 2. Table we took Wyatt´s four refined categories of technology determinism - the

justificatory, the descriptive, the methodological and the normative – and illustrated each of

them with observations in our Returpack case.

2. Table. Illustration of mechanism in the Returpack case using technology determinism based on (Wyatt, 2008)

Types of technology determinism (Wyatt, 2008)

Technological progress (independent from society) equals social progress – “common sense” explanation

Returpack Case Illustrations

Justificatory Actors ideal picure about the progress provided by technology. Expression of power.

EU and Hungarian policies Recycling policy Social inclusion policy

Legistlative initiatives Eco-tax refund policy Metal recollection, NWA Selective recycling

Descriptive Recognized but does not have strong enough explanatory power

Technology is developed independently of social forces

RVM innovation by engineers

Technology causes social change

Process of aluminium recycling Behaviour of homeless changes Homeless care center change

Limited autonomy of science and technology in determining economic developments

Business model change Economic rationality of actors Harmonizing with international systems

Methodological Understanding the place of technology in history

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Types of technology determinism (Wyatt, 2008)

Technological progress (independent from society) equals social progress – “common sense” explanation

Returpack Case Illustrations

Look to the technologies available to societies

ICT opportunities benchmarking

Momentum Complex systems like IOS and logistics systems provide a driver for growth

Society is determined by technology in use

Technological frames and interpretive flexibility for each social group is triggered by technology innovations along the recycle process.

Normative Autonomous technology so complex that is no longer amenable to social control.

Decoupling of technology from political accountability

Entrepreneurial agency The role of social capital Self sustaining business model

Triumph of technological rationality

The rationality of RVMs is more inclusive then the original human interface at the collection points

By using the observations of the Returpack case organized in 2. Table we find some strong

explanation on how transformation mechanisms work through a refined view of technology

determinism and institutional influences.

Structuration through emergency – dominating agency

Emergent behaviour is formulated through mechanisms which are ways how things happen

due to the interactions of actors (Wynn and Willams, 2012). Constructs of emergency for

instance can be described by the use of Actor-Network Theory (Latour,2005) which

inherently treats technology and human actors symmetrical. Stabile working structures

emerge therefore as a mechanism of human-machine interplay where flexible routines

influence flexible technologies. Leonardi describes the alteration of technology and routine

interactions as imbrication of agencies where for instance new technology is constrained by

old routines or new routines generate new features of technology, (Leonardi, 2011). Material

agency influences emergent behaviour by its feature set are both constraining and enabling at

the same time. Symmetrically, human agency can also be contrained by several features of

institutional, cultural constraints or path-dependency.

The Returpack case is a good illustration in the public domain for several emergent actions

resulting from enactment of mechanisms. In 3. Table we illustrate two sets of agency

imbrications – or duality – using IS structuration terms (Orlikowsky, 1992.) – between ICT

– human, and ICT – business agencies.

3. Table. Illustration of emergent imbrication mechanisms int he Returpack case based on (Leonardi, 2011)

HUMAN Agency Imbrication mechanisms MACHINE Agency Collector – user High-level policy enabling Functionality set Easy access User empowerment Interface Essential needs Social inclusion Neutrality

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BUSINESS MODELL Agency Imbrication mechanisms MACHINE Agency Trustworthy clearing house Inter-orginizational processes Connectivity Logistics Full system integration Aluminium feature set Economic rationality Low-cost model of recycling M2M communication HUMAN Agency Imbrication mechanisms BUSINESS MODEL Agency Social capital Entrepreneurial agility Stakeholder alignment Homeless lifestyle Social entrepreneurship Aluminium recycling Engineering background Competition through innovation Innovativeness

In our opinion this is of high value for theorizing information societies, since the notion of

duality of technology (Orlikowsky, 1992) and adaptive structuration theory (DeSanctis, and

Pole, 1994) are widely used in organizational setting, but there are few contribution of these

theories in broad societal context (Jones, Karsten, 2008). Similarly, to Wiebe Bijker´s classic

studies of social construction of technology in the cases of bicycle, Bakelite and the

fluorescent lightbulb (Bijker, 1997) – which similarity is not accidentally echoing in the title

of our paper – we present how the technology enabled aluminium packaging recycling

process constructs an institution for social inclusion and by doing so improving the quality of

life and greener economy in Budapest.

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