Entrepreneurs Are Burning Earth
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Keynote. “Entrepreneurship as if the Planet Mattered”, First Indonesian Conference on Innovation, Entrepreneurship and Small Business”, Center for Innovation, Entrepreneurship and Leadership, Institute of Technology, Bandung (ITB), West Java, Indonesia July 22-23, 2009, http://www.ciel-sbm-itb.com/icies/
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Entrepreneurs Are Burning Earth
- 2. Entrepreneurs are burning Earth: Thoughts on the new entrepreneurial ecology Howard Frederick Professor of Innovation & Entrepreneurship, Unitec New Zealand, Auckland
- 3. Part 1 The environment for entrepreneurship in the Asia Pacific Chapter 1 Entrepreneurship: Evolution and revolution Chapter 2 The entrepreneurial mind-set Chapter 3 The environment, the economy and entrepreneurship Chapter 4 Ethical, environmental and social entrepreneurship Part 2 Initiating entrepreneurial ventures Chapter 5 Innovation: The creative pursuit of ideas Chapter 6 Pathways to entrepreneurial ventures Chapter 7 Legal and regulatory challenges for entrepreneurial ventures Chapter 8 Sources of capital for entrepreneurial ventures Part 3 Developing the entrepreneurial plan Chapter 9 Assessment and commercialisation of entrepreneurial opportunities Chapter 10 Marketing challenges for entrepreneurial ventures Chapter 11 Measuring performance for entrepreneurial ventures Chapter 12 Developing a sustainable business plan Part 4 Growth strategies for entrepreneurial ventures Chapter 13 Strategic entrepreneurial growth Chapter 14 Global opportunities for entrepreneurs Chapter 15 Entrepreneurial families, succession and continuity Chapter 16 Developing entrepreneurship within organisations Melbourne: Cengage Learning, 2010
- 4. How do you say entrepreneur in Bahasa Indonesia? Video available on book’s website www.learnpreneurship.com
- 5. Entrepreneurs are burning Indonesia
- 6. Human-induced climate change Entrepreneurs have exploited the environment with impunity, without any thought of sustainability
- 7. Entrepreneurs contribute to the planetary crisis
- 9. The trouble with palm oil
- 10. The true price of Fiji Water
- 11. Mitigation versus adaptation Mitigation means managing the risks Adaptation means adapting to changes
- 12. Entrepreneurs never waste a good crisis!
- 13. Entrepreneurs can be saviours of the planet Schumpeter Recessions clean the slate through creative destruction Schramm Entrepreneurs benefit from recessions: (1) explosion of creative impulse, (2) scarcity of options, (3) lower operating costs, and (4) severely hit large corporations. Innovations developed during recessons Flourescent bulb McDonalds Microsoft OS Apple PowerBook Ipod Pachauri of IPCC ‘Entrepreneurs who respond to the challenge will reap commercial success – while businesses which fail to do so face oblivion’.
- 14. An ecopreneur combines the drive and imagination of the entrepreneur with the stewardship of a conservator. Elkington and Burke (The Green Capitalists, 1989): Business can adjust its behaviour and consumers can make environmentally friendly purchase decisions. Bennett (Ecopreneuring, 1991) Opportunities waste recycling, reducing air pollution, ‘atmospheric businesses’, fuel for the planet, waterworks, safe foods, enviro-investment, and education on environment. Berle (The Green Entrepreneur, 1991) and Blue (1991) began to use terms like ‘environmental entrepreneur’, ‘green entrepreneur’, ‘eco-entrepreneur’, and ‘ecopreneur’. Ecopreneurs
- 15. Examples of ecopreneurs “not planned, but arranged or done only when necessary” (Hard) responding to market signals and government regulation (Commercial) ‘Innovative Opportunist’ sees regulations as a market niche (Social) ‘Visionary Champion’ wants to change the world (Soft) responding to people and personal networks (Commercial) ‘Ad hoc enviropreneur’ comes to the green movement more by chance. (Social) ‘Ethical Maverick’ is influenced by friends, personal networks and past experiences “an unusual person who has different ideas and ways of behaving from other people, and is often very successful”
- 16. How to travel through the ‘funnel’ Declining supply Resources and ecosystem services Sustainable supply Sustainable future Sustainable demand Margin for action is narrowing Increasing demand Demand for resources and eco-system services The present The future
- 17. Industrial entrepreneurship 1800-2000 Did not consider environment in planning and design. Focused on extraction of resources Did not prevent negative effects Entrepreneurs had a negative impact on the environment and society. Sustainable entrepreneurship from 2000+ Focus on biosphere and limiting waste embodied in products. Take into account the living dimension of the products and services that we produce. Create net positive entrepreneurial impact loops Principles of ‘entrepreneurial ecology’ The study of the interactions of living organisms (including businesses) with each other and with their environment. Doing something with the long term in mind Sum of all living matter on Earth A proportion of an entrepreneur’s product or service is returned (looped back) to nature. It can have positive or negative impacts. Every product after its useful life will be waste
- 18. Entrepreneurship’s positive and negative impacts on biosphere Unsustainableentrepre-neurship (-) (+) Sustainableentrepre-neurship
- 19. Entrepreneurship’s positive and negative impacts on biosphere Unsustainableentrepre-neurship (-) (+) We might see these concepts in an equation:SE = f (B + S + E)The elements are arranged in order of historical sequence. If we use ‘∈’ to mean embedded in or a subset of, we getSE = (E ∈ S ∈ B) Sustainableentrepre-neurship
- 20. Negative entrepreneurship Entrepreneurs undervalue biodiversity, energy, water, and materials. Rather than adding value to living materials we only aim to reduce (e.g. through recycling) the quantity of dead resources. In the end, society penalises entrepreneurs through regulation.
- 21. Positive entrepreneurship Generates positive value-adding impacts Eliminate designed waste, duplication, disposability, planned obsolescence and wasteful end purposes. Positive entrepreneurs create net positive-impact loop systems and innovations that create levers for biophysical improvements and social transformation.
- 24. The ‘economy’ is part of the larger economy of resources and ecosystems Four central strategies More effective manufacturing processes; Reuse of materials with closed loops and zero waste; A change in values from quantity to quality Investing in natural capital, or restoring and sustaining natural resources’. Natural capitalism
- 25. buaianbayi buaianbayi NOT buaianbayi kuburan A world without waste in which all materials are continuously recycled. In the natural system there is no waste and the same materials have been recycled for billions of years. Materials are conceived as nutrients and designed to circulate safely and productively. Cradle to Cradle
- 26. Economy is ‘processes that convert raw materials and energy, plus labour, into finished products and wastes’ Create eco-interdependent businesses that create a permanent waste exchange system By-product of one company becomes the raw material for another. Industrial metabolism
- 27. Entrepreneurs can help save the planet Innovation accompanies failure We are engaged in a great climate war and an economic calamity Our species has caused the mass extinction of thousands of species. Opportunities are inherent even in times of crisis, market failure, and environmental decline. Sustainable entrepreneurship takes into account the living dimension of the products and services. Entrepreneurs must seek net positive entrepreneurial impact loops with the biosphere. Conclusions
Editor's Notes
- Every year there is a burning season in Indonesia. Across the vast archipelago, swathes of rainforest are cut down and burned off by small-scale entrepreneurs and large corporations to make way for palm oil production. Thousands of Indonesians are employed and many entrepreneurial families are coming out of poverty because of the enterprise. However, the result is an environmental disaster. Indonesia’s forest clearing, the largest in the world, has taken the country to a world ranking of 14th in terms of percentages of total carbon emissions. Indonesia’s per capita emission rate has grown tenfold since the early 1970s. Fuelling the greatest entrepreneurial boom in history, Chinese CO2 emissions have grown a whopping 66.2 per cent since 2000. Around the world, economic growth and entrepreneurial activity are inextricably linked – negatively but also positive – to global warming. Andrew Fildes, ‘The Burning Season: Study Guide’, www.theburningseasonmovie.com/students-teachers/p/103.G. Marland, T.A. Boden and R.J. Andres. ‘Global, Regional, and National CO2 Emissions’, in Trends: A Compendium of Data on Global Change, Oak Ridge, Tennessee, USA: Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. Department of Energy, cdiac.ornl.gov/trends/emis/tre_ido.html.http://www.seos-project.eu/modules/world-of-images/images/22-10-toms.jpghttp://westclifftransition.files.wordpress.com/2008/02/sunrise3.jpg
- Human-induced climate change is one of the greatest challenges facing the human race in the 21st century. Since the Industrial Revolution in the late 18th and early 19th centuries, many business entrepreneurs around the world have exploited the environment with impunity, without any thought of sustainability. Entrepreneurs were the first to see the possibility that coal and gas could fuel their dreams and innovations. Before they got started, the global average temperature was about 14 degrees Celsius and the Earth’s atmosphere contained about 280 parts per million of carbon dioxide. A few degrees of temperature increase may not sound much, but the extra heat that CO2 in the atmosphere traps is enough to warm the planet considerably. That little bit per year has started melting almost every frozen part on Earth. It has already changed sea levels and seasons and been linked to more ferocious cyclones and unimaginable bushfires. Even modest temperature rises will affect hundreds of millions of people, particularly in the developing world. Much of the following is taken from the International Panel on Climate Change (IPCC), Fourth Assessment Report http://en.wikipedia.org/wiki/IPCC_Fourth_Assessment_Report; IPCC, Climate Change 2007: The Physical Science Basis. Summary for Policymaker;all available from ipcc-wg1.ucar.edu. Other materials that are very helpful include Robert Henson, The Rough Guide to Climate Change London: Rough Guides, 2007; as well as ‘A Guide to Facts and Fiction about Climate Change’, The Royal Society, March 2005, www.royalsoc.ac.uk/; F. Pearce, ‘Global Row over Value of Human Life’, New Scientist, 19 August 1995: 7; E. Masood and A. Ochert, ‘UN Climate Change Report Turns up the Heat’, Nature, 378, 1995: 119; A. Meyer, ‘Economics of Climate Change’, Nature, 378, 1995: 433; N. Sundaraman, ‘Impact of Climate Change’, Nature, 377, 1995: 472; Michael E. Mann, Raymond S. Bradley, Malcolm K. Hughes, ‘Global-Scale Temperature Patterns and Climate Forcing Over the Past Six Centuries’, Nature 392, 1998: 778–9.
- It is no exaggeration to say that an entrepreneur (Henry Ford) played a major role in contributing to our current dilemma and an entrepreneur (perhaps one who commercialises hydrogen autos) can help ease the problem. And it’s not just large companies that are to blame. Small-scale entrepreneurs have made their contribution to the planetary crisis by helping to destroy areas of rainforest. This alone is a significant contributor to climate change since tropical forests sequester (take out and store) carbon from the atmosphere. In an attempt to better themselves by increasing their standards of living, entrepreneurial families as well as large companies have cleared vast stretches of rainforest, releasing megatons of CO2 and it will take decades to restore these ‘lungs of the Earth’.
- Entrepreneurship in practiceEntrepreneurship and ecocideFor thousands of years, entrepreneurs have raped and pillaged the environment. Today we might call it entrepreneurial ecocide, namely large-scale environmentally catastrophic business activities by an entrepreneur. Ecocide is also a term for killing a species in an ecosystem to disrupt its structure and function. However, it has only recently been classified as a crime. For centuries people admired the entrepreneurial spirit that launched such ecocidal industries as whaling, the felling of indigenous forests, and the harvesting of coral reefs. Both Europeans and the Indigenous Polynesians, the Māori, carried out mass exterminations of species in the name of enterprise. One intrepid New Zealand entrepreneur solved the ‘oil crisis’ of the 1890s by killing and boiling up more than three million penguins from 1889 to 1914. New Zealand’s Joseph Hatch may go down in history as the most ecocidal entrepreneur ever. He was a man of his time – a time when entire species were brought to near extinction in the quest for profit. Hatch emigrated as a young man from London to Melbourne, Australia, where he started out with a wholesale druggist firm. Recognising his entrepreneurial talent, in 1862 the firm sent him to open a branch in Dunedin, on the South Island of New Zealand. Hatch was what we call today a ‘serial entrepreneur’. Besides operating chemist shops, he established a bone mill fertiliser plant, manufactured soap and candles, developed sheep-dip and rabbit poison, exported rabbit skins, and built railways. In the 1870s Hatch spotted a huge market niche in rope manufacturing. At the time ropes were essential for hunting, pulling, fastening, attaching, carrying, and lifting. One could say that ropes were indispensable to economic progress. Ropes needed ‘batching oil’ as a lubricant for drawing and combing the jute fibres together. Up until then rope makers relied on seal oil and whale oil from creatures that required huge industry and energy to capture. But Hatch worked out that it was much easier to catch penguins, which he rendered 900 at a time in huge digesters, resulting in one-half litre per bird. He saw his oil as an integral part of an industrial complex that was the glorious Victorian Age of Empire.Hatch gained a license from the Tasmanian government and set up shop on Macquarie Island, a bleak, inhospitable island with no sheltered anchorage about halfway between New Zealand and the Antarctic. He eventually was closed down by public protest but over nearly 30 years, from 1890 to 1919, Hatch killed about two million penguins on Macquarie Island.Hatch’s activities generated the first truly international conservation campaign. After the First World War, Antarctic explorers began to publicly criticise Hatch’s Southern Isles Exploitation Company on Macquarie Island and, in 1919, the Tasmanian government withdrew his licence. Many of the great names of the time such as Baron Walter Rothschild and H.G. Wells lined up against him. It could easily have been fur or whales to stir a global reaction, but unluckily for Hatch, saving the penguin became the vogue cause of the day. This was really the first global ecological campaign. Macquarie Island was declared a wildlife sanctuary in 1933 and in 1977 it became the first biosphere reserve in the Southern Ocean. Sources: Nigel Benson, ‘The Good Oil on Mr Hatch‘, Otago Daily Times, 10 September 2008, www.theatreview.org.nz/reviews/printreview.php?id=626; Philip Matthews, ‘The Penguin History‘, New Zealand Listener, 10 March 2007; Alan De La Mare, ‘Hatch, Joseph 1837/1838? – 1928’, Dictionary of New Zealand Biography, updated 22 June 2007. The original version of this biography was published in the Dictionary of New Zealand Biography Volume Two (1870–1900), 1993, www.dnzb.govt.nz/; Wikipedia, Licensed under the GNU Free Documentation Licence from the Wikipedia article ‘Joseph Hatch‘; Geoff Chapple, ‘Harvest of Souls: the Oil Baron of Invercargill‘, New Zealand Geographic, 74, 2005: 40–53http://www.theatreview.org.nz/reviews/printreview.php?id=626http://www.odt.co.nz/print/26319http://www.odt.co.nz/entertainment/arts/26319/the-good-oil-mr-hatchhttp://www.listener.co.nz/issue/3487/artsbooks/8320/printable/the_penguin_history.htmlhttp://www.abc.net.au/rn/scienceshow/stories/2007/1996102.htmhttp://www.latrobe.edu.au/history/staff/barta.htmhttp://www.nzgeographic.co.nz/articles.php?ID=53http://www.dnzb.govt.nz/dnzb/Essay_Body.asp?FullTxt=2H19&related=falsehttp://en.wikipedia.org/w/index.php?title=Joseph_Hatch&printable=yes
- The trouble with palm oilPalm oil is now the world’s most popular vegetable oil. However, its rapid rise to market dominance has been at a heavy environmental cost – its production is one of the primary causes of rainforest destruction in Southeast Asia. Environmental campaigners are working to regulate the industry, but time is running out, not just for the 2000 orang-utans killed each year, but for the planet itself.It has emerged that a large number of our everyday foods and other products are contributing to human rights abuses and perpetuating an environmental catastrophe that is not only causing pollution and accelerating global warming but could see the extinction of one of our closest relatives. Palm oil, valued because it is solid at room temperature, is present in everything from breakfast cereals to soap. The vast majority of the world’s palm oil comes from Malaysia and Indonesia, where the expansion of the industry has destroyed millions of hectares of rainforest.Sooner or later, we will all be confronted with the environmental impact of palm oil. Deforestation is thought to contribute to 20 per cent of the atmospheric carbon dioxide released every year. The palm oil industry is making a significant contribution to this total by burning forest to clear land. The effect is worse when peat swamps are drained and subsequently catch fire because it releases thousands of years’ worth of sequestered carbon. This has happened on several occasions during the past decade. According to some estimates, the area given over to palm oil in Indonesia alone may increase three-fold to 16.5 million hectares by 2020. Plantation companies already have concessions in large areas of forest in Aceh in Sumatra and West and Central Kalimantan in Borneo. And the governments of both countries are considering establishing an 18,000 square kilometre palm oil ‘fence’ along the Malaysian-Indonesian border in Borneo, which would cut through critical orang-utan habitat in both protected and unprotected forest and have serious implications for hydrology throughout the island.So what can consumers do about it? The obvious answer would be to boycott palm oil and any companies involved in its production and trade. Unfortunately, it isn’t that simple. For a start, even though palm oil and its derivatives are all pervasive, they are difficult to find in product ingredients lists. In most foods, palm oil is simply referred to as vegetable oil, while its derivatives have numerous names, the majority of which would be indecipherable to all but a biochemistry graduate.
- The true price of Fiji WaterThe small island nation of Fiji with its population of about 150&&000 – is now controlled by a military regime that took control via the 2006 Fijian coup d’état. With such an unstable government – people suffer while some industries prosper. One of these prospering companies is Fiji Water. Water imported into the US from the small island nation of Fiji is ranked number 2 in bottled waters. France, of course, is number 1.Today, about one-third of Fiji’s people lack access to clean drinking water, leading to incidents of typhoid and other water-related diseases.The irony of these statistics is that Fiji Water exported about 130 million liters of Fiji water in the past year. To present a ‘green face’ to the world – Fiji Water returns a token amount of money to bring clean water to certain areas of Fiji. However, according to a recent BBC investigation, the Fiji capital of Suva has an undependable water system with failing infrastructure.And, let’s not overlook the ‘transnational’ power Fiji Water wields over the relatively powerless rulers of Fiji. In early July of 2008, the Fijian government proposed a tax on bottled water in order to generate income and to help improve and conserve the island’s water resources. In a span of a couple of weeks – the government had to abort the bottled water tax because of overt economic threats by the bottled water lobby. The threats occurred when bottling companies shut down factories – stating that they would not operate under such a tax. This bottled water protest would have cost Fiji up to $3 million in lost export revenues a week. With such a big gun to their heads – the Fijian government quickly dropped their proposed tax. However, there is one vital aspect of this Fijian water debacle that rarely receives mention. And, that is the long-term environmental consequence of taking precious water and putting it inside plastic bottles. Freshwater on volcanic islands is rare due to the porous soils and rocks that make up such islands. Therefore, any freshwater that is found on a volcanic island is valuable because it supports tropical ecosystems and usually flows out into the ocean rather quickly. Freshwater is the most precious liquid on Earth. Through the alchemical miracle of our hydrologic cycle – freshwater is naturally manufactured by nature and temporarily stored on land. And, only a small fraction of freshwater, about one-hundredth of one-percent, is readily available for human use. The key to the success and sustenance of all life is the energetic flow of water through our biosphere. When precious freshwater flows from land and mixes with our world’s saltwater – there is a magical explosion of life along the so-called ‘coastal zone.’ This explosion of coastal life is vital to the foundation of the food chain for our oceans. When we pump freshwater from any volcanic island, such as we find in Fiji – we remove a vital life-giving force from that region of our global ocean. In fact, Fiji Water brags about how remote the Fijian Islands are – and thus capitalizes on the purity of Fiji water. However, this remoteness is what makes Fijian freshwater all the more valuable to the local people, their tropical ecosystems, and the oceanic ecosystems that have evolved in that region over millions of years. Therefore, each time we see a bottle of Fiji Water – let’s consider the true price of that bottle to our living world of today and of the future. Hopefully, we will see the price that reaches far beyond the money in our pockets. Source: © 2009 Independent Media Institute. All rights reserved. William E. Marks, ‘The True Price of Fiji Water’, AlterNet, 2 October 2008, www.alternet.org/story/101207/
- There would seem to be only two solutions to our dilemma – mitigation or adaptation. Mitigation means managing the risks of climate change by reducing greenhouse gas emissions and there are considerable market opportunities in so doing. The other alternative is adaptation to climate change, which means adapting to changes in temperature, sea level, storm patterns and so forth. There are also considerable competitive and commercial advantages in this solution. Either way, entrepreneurs stand to gain.
- How can we stop this environmental catastrophe? It’s not rocket science. In fact, most of the technologies we need already exist, developed by entrepreneurs and inventors in the last quarter century. We need rapid, sustained, and dramatic cuts in CO2 emissions in advanced countries, coupled with large-scale transfer of clean energy technology to China, India and the rest of the developing world. What we need is a commitment to take what we already know how to do and somehow spread it to every corner of every economy in the world. Bill McKibben, ‘Carbon’s New Math’, National Geographic, October 2007: 35. Business as usual is dead and green growth is the answer to both our climate and economic problems. Again, who is best positioned to commercialise existing innovations and create new technologies? It’s the entrepreneurs! Why? Because entrepreneurs ‘don’t waste a good crisis’. Capitalism is in crisis and natural resources are declining, yet we have is opportunity to rebuild the world in a way that carries on adding value and making wealth, but that actually has social and environmental solutions at its heart. It is entrepreneurs who recognise opportunities where others see chaos or confusion. They are the aggressive catalysts for change within the marketplace. They are the Olympic athletes challenging themselves to break new barriers, the long-distance runners dealing with the agony of the last few kilometres, the symphony orchestra conductors transforming different skills and sounds into a cohesive whole, and top-gun pilots continually pushing the envelope of speed and daring. Donald F. Kuratko, ‘Entrepreneurial Leadership in the 21st Century: Guest Editor’s Perspective’, Journal of Leadership & Organizational Studies, 13 (2007) : 1-11.
- In the new world of climate change, they could well be the saviours of our planet. Entrepreneurs are the heroes of today’s marketplace. They start companies and create jobs at a breathtaking pace. Entrepreneurship is a wellspring of economic growth, social renewal and personal development and history has repeatedly demonstrated that new entrepreneurial ventures are the way to bolster a flagging economy. Economic and planetary problems can only increase entrepreneurs’ willingness to stop working for someone else and do something good for themselves and others by starting their own business. Entrepreneurship during times of crisisSome of the most innovative ideas have emerged during times of crisis. Just because credit markets dry up and global warming accelerates, the spirit of innovation does not hibernate. If the most famous theoretician of entrepreneurship, Joseph Schumpeter, were alive today, he would say that recessions ‘clean the slate through creative destruction and create lasting, positive change’.Here are some headlines: ‘The stock market is down 50 per cent’, ‘Banks are in trouble and have curtailed lending’, ‘Widespread industrial bankruptcies predicted’, ‘Unemployment rising fast’. It all sounds so familiar, but those headlines aren’t from today. They are from 1974! Then, as now, those who once thought they had the answers came to realise their assumptions were flawed. Yet opportunity emerged from that crisis as people with creative solutions and the skill to implement them stepped forward and developed new ways to access capital, combine resources, and commercialise their innovations. Over the next two years the markets recovered strongly. That skill in finding new opportunities when things look bleak is called entrepreneurship. During the Great Depression, General Electric introduced the fluorescent light bulb, which has twice the lifespan of incandescent lighting but uses half the power. Ray Kroc opened the first McDonald’s during the Eisenhower recession. During the Vietnam War and the 1973 Oil Crisis, Bill Gates and Paul Allen formed Microsoft. During the Reagan recession of the early eighties, Microsoft introduced Word. During the First Gulf War, the World Wide Web and Apple PowerBook debuted. When the Dotcoms Crash and 9/11 Attacks took place, the iPod came to the market. Indeed, 18 of the 30 companies that make up the Dow Jones Industrial Average were launched in recessions or in bear stock markets. As VivekWadhwa of Duke University and Harvard Law School has pointed out, ‘the pioneers who launched these firms (and others) during the darkest of times [have] less competition, lower costs, ease of recruiting employees, and less pressure to expand … Out there in garages throughout the country are entrepreneurs right now who are building the companies that will help lift our economy out of this recession’.Crisis leads to innovative thinking. The creativity process often happens when our knowledge thresholds are reached and there is a failure in systems to cope. During those periods of bleak crisis you can either sit back and do nothing and sink further into the morass or you can step back, think of a solution, and meet peoples’ needs. It is amazing that humans have clever inbuilt navigation systems such as the new GPS in cars. When we take a wrong turning we are advised to reroute (‘When possible, make a u-turn’). That rerouting is an innovation – a method untried before.When recession rears its ugly head to sap the spirit of an economy it is entrepreneurship that infuses vigour back into the economy and society. That’s what economist Carl Schramm has observed on the implications of growth and recovery from recession in a business cycle. Schramm lists four reasons for this: (1) explosion of creative impulse that leads to innovations, (2) scarcity in available options, (3) lower operating costs, and (4) severely hit behemoths (large corporations).Michael Milken, ‘Letter from Michael Milkin’, nd., www.milkeninstitute.org/emails/mmgcletter/index.html.Carl Schramm and Robert E. Litan, ‘The End of American Capitalism? Has The Government “Bailout” Been So Large That Capitalism’s Founding Principle Is Now Irretrievably Lost?’, The American: The Journal of the American Enterprise Insitute, 6 February 2009, www.american.com/archive/2009/february-2009/the-end-of-american-capitalism/article_print.Carl Schramm, cited in Praveena Sharma, ‘In a Recession, Entrepreneurs Hold the Key to a Fast Recovery’, 23 December 2008, www.3dsyndication.com/showarticle.aspx?nid=DNBAN993.Economies around the world have been repeatedly revitalised because of the efforts of entrepreneurs as it’s the passion and drive of entrepreneurs that move the world of business forward. They challenge the unknown and continuously create the future. It is their savings, investment and innovation that lead to development. They are the ones who can alleviate poverty by contributing to economic growth and job creation. Long after we have forgotten about the economic crisis, we shall be living with the consequences of global warming. We need to innovate our way out of this crisis. Climate change is the great challenge of our time and the stakes could not be higher for entrepreneurs. There are huge rewards for those that embrace innovation to lead the transition to a low-carbon emission economy. Entrepreneurs must unleash a wave of creativity not seen since the Industrial Revolution. They must be at the forefront of the fight against climate change. ‘We have to start thinking out of the box’, say RajendraPachauri, Nobel Prize winner and chair of the Intergovernmental Panel on Climate Change. ‘Entrepreneurs who respond to the challenge will reap commercial success – while businesses which fail to do so face oblivion’.Martin Wright, ‘We Have to Start Thinking Out of the Box’, Green Futures, 9 January 2009, www.forumforthefuture.org/greenfutures/articles/Pachauri_interview.
- The literature highlights the role that entrepreneurial individuals and organisations play in the transformation toward sustainability.The term ‘ecopreneurship’ is a combination of two rather dissimilar words: ‘ecological’ and ‘entrepreneurship’. An entrepreneur sometimes strives for success by exploiting market opportunities regardless of the consequences. This may be seen as inconsistent with the need to conserve the planet and prevent environmental damaged cause by market forces. But an ecopreneur combines the unrelenting drive and imagination of the entrepreneur with the stewardship of a conservator. A good review of the literature includes: J. Adeoti, ‘Small Enterprise Promotion and Sustainable Development: An Attempt at Integration’, Journal of Developmental Entrepreneurship, 5(1), 2000: 57+; S. Alvord, L. Brown and C. Letts, ‘Social Entrepreneurship and Societal Transformation’, Journal of Applied Behavioral Science, 40(3), 2005: 260–82; A. Anderson, ‘Cultivating the Garden of Eden: Environmental Entrepreneuring’, Journal of Organizational Change Management, 11(2),, 1998: 135–44.; S. Barrios and D. Barrios, ‘Reconsidering Economic Development: The Prospects for Economic Gardening’, Public Administration Quarterly, 28(1), 2004: 70–101; R. Beveridge and S. Guy, ‘The Rise of the Eco-Preneur and the Messy World of Environmental Innovation’, Local Environment, 10(6), 2005): 665–76; A. Coman, ‘Education and Entrepreneurship: Drivers For Sustainable Development’, Human Systems Management, 27(3), 2008): 255–60; E. Crals and L. Vereeck, ‘The Affordability of Sustainable Entrepreneurship Certification For SMEs’, International Journal for Sustainable Development & World Ecology, 12(2), 2005: 173–83; S. Dixon and A. Clifford, ‘Ecopreneurship – A New Approach To Managing the Triple Bottom Line’, Journal of Organizational Change Management, 20(3), 2007: 326–45; T. Gliedt and P. Parker, ‘Green Community Entrepreneurship: Creative Destruction in the Social Economy’, International Journal of Social Economics, 34(8), 2007: 538–53;. R. Isaak, ‘The Making of the Ecopreneur’, Greener Management International, 38, 2002: 81–91; I. Katsikis and I. Kyrgidou, ‘The Concept of Sustainable Entrepreneurship: A Conceptual Framework and Empirical Analysis’, Academy of Management Proceedings, 3–8August 2007, Philadelphia, US; P. Keogh and M. Polonsky, ‘Environmental Commitment: A Basis For Environmental Entrepreneurship?’ Journal of Organizational Change Management, 11(1), 1998): 38+; P. Kyro, ‘To Grow Or Not To Grow? Entrepreneurship and Sustainable Development’, International Journal for Sustainable Development & World Ecology, 8(1), 2001: 15+; A. Larson, ‘Sustainable Innovation through an Entrepreneurship Lens.’ Business Strategy and the Environment, 9(5), 2000: 304–17; J. Montana and B. Nenide, ‘The Evolution of Regional Industry Clusters and their Implications for Sustainable Economic Development: Two Case Illustrations’, Economic Development Quarterly, 22(4), 2008: 290–302; J. Quinn, ‘Next Big Industry: Environmental Improvement’, Harvard Business Review, 49(5), 1971: 120–31; C. Rovins, ‘Incubating Firms at an Ecocomplex’, Business, 27(2), 2005: 20–2.; M. Schaper. ‘The Essence of Ecopreneurship’, Greener Management International, 38, 2002: 26–31; A. While, A. Jonas and D. Gibbs, ‘The Environment and the Entrepreneurial City: Searching For the Urban “Sustainability Fix” in Manchester and Leeds’, International Journal of Urban & Regional Research, 28(3), 2004: 549–69.Ecopreneurship has become a concept in business research since the start of the 1990s. Elkington and Burke in their book, The Green Capitalists, argued that environmentalism is in entrepreneurs’ best long-term interests as resource depletion and transportation congestion reduce profits. Important to the ‘green capitalist’ argument is that business can adjust its behaviour and that consumers can make environmentally friendly purchase decisions. Steven Bennett’s Ecopreneuringfocussed on opportunities for innovative entrepreneurs to create growth-oriented eco-businesses such as waste recycling, reducing air pollution, ‘atmospheric businesses’, fuel for the planet, waterworks, safe foods, enviro-investment, and education on environment.They, together with Berle and Blue, began to use terms like ‘environmental entrepreneur’, ‘green entrepreneur’, ‘eco-entrepreneur’, and ‘ecopreneur’. In the late 1990s, Andersen’s 1998 book, Enviro-Capitalists, investigated what it takes to be a successful entrepreneur in the environmental arena. Most interesting are the entrepreneurial histories of three famous early American environmentalists: James John Audobon (1785–1851), John Muir (1838–1914), and Aldo Leopoldo (1887–1948). John Elkington and T. Burke, The Green Capitalists, Victor Gollancz, London, 1989.S. J. Bennett, Ecopreneuring: the Complete Guide to Small Business Opportunities from the Environmental Revolution, New York: Wiley, 1991. G. Berle, The Green Entrepreneur: Business Opportunities That Can Save the Earth, Blue Ridge Summit: Liberty Hall Press, 1991.J. Blue, Ecopreneuring: Managing for Results, London: Scott Foresman, 1991.
- Researchers Liz Walley and David Taylor put the various definitions of ecopreneur into a ‘typology of green entrepreneurs’ (see Figure 4.3). Obviously there is a lot of overlap but it’s instructive to look at the four ‘ideal types’. The vertical axis is the ‘orientation’, namely whether the ecopreneur is oriented toward ‘economic’ profit or toward non-profit ‘sustainability’. The horizontal axis refers to the two types of structural influences. ‘Soft’ influences here mean people and personal networks. ‘Hard’ influences refer to concrete market incentives and signals as well as government regulation. These two axes result in four types. Moving clockwise, at the upper right are the ‘Innovative Opportunists’ who, for example, see government regulations on recovering chloro-fluorocarbons (CFCs) as a market niche for a business recycling refrigerators. Also on the hard side is the ‘Visionary Champion’ type of ecopreneur. This is the kind of person (for example, Anita Roddick, producer of natural skin and hair products) who starts a business to ‘change the world’. On the softer side is the ‘Ethical Maverick’, who is influenced by friends, personal networks and past experiences rather than by some vision to change the structural of the world. These would be the alternative lifestylers who set up businesses on the fringes of society (such as a craft exchange or a vegetarian cafe). Finally, we have the ‘ad hoc enviropreneur’ who comes to the green movement more by chance. For example, a producer of organic pork may just be serving a market need rather than some philosophical trend. In actuality, many aspiring entrepreneurs are simply ad hoc enviropreneurs seeking to find opportunities in a carbon-constrained world. These people depend on their ability to find products and services that hedge against physical climate risk, perhaps mitigate regulatory costs, or improve/repair corporate reputations through green business. These are the numerous, non-ideological savvy entrepreneurs who seek to manage climate risk in the supply chain, invest in low-carbon activities, and innovate new technology that sells while improving the planet. Here we find the business of climate change entrepreneurs who seek competitive advantage on a warming planet rather than being driven by climate change ideology. E.E. (Liz) Walley and D.W. (David) Taylor, ‘Opportunists, Champions, Mavericks...? A Typology of Green Entrepreneurs’, Greener Management International, 38, 2002: 31–44.
- In the era of industrial entrepreneurship, from the 19th century through to the new millennium, entrepreneurs were not obligated to consider the environment in their planning and design. They focused on extraction of scarce resources with little regard to their replenishment, on global distribution without regard to distance, on rampant construction without regard to environmental consequences, and on supply-chain shortcuts without regard to equity. Entrepreneurs were not normally oriented towards the prevention of negative effects, to the reversal of degradation, or to net improvement in the physical and social universes. In the age of industrial entrepreneurs, waste was not a design consideration. In the end these entrepreneurs had a negative impact on the environment and society. Now, in the age of sustainable entrepreneurship, we need to think ecologically about the biosphere and to consider the waste embodied in products. We need to move beyond simplistic input–output analysis without regard to the consequences and to apply new concepts that take into account the living dimension of the products and services that we produce. In essence, we need to create net positive entrepreneurial impact loops because the biosphere is linked to the sociosphere and the econosphere. These entrepreneurial impact loops can trigger effects that can amplify the degradation or the restoration in the biosphere. This section has been influence by Janis Birkeland, Positive Development, Earthscan, 2008; and German Advisory Council on Global Change, World in Transition: Conservation and Sustainable Use of the Biosphere, Earthscan, 2001.
- sustainable entrepreneurship is the intersection of the sociosphere, the econosphere with the biosphere.The biosphere consists of all of the living and non-living things on Earth. The sociosphere consists of all the people in a social system, all the roles they occupy, and all their patterns of behaviour, all their inputs and outputs relevant to other human beings, and all the organisations and groups they belong to. The econosphere consists primarily of the segment of the sociosphere that is organised through exchange, especially commodity exchange, where the exchange is mediated through prices. Australian researchers Diesendorff and Hamilton defined the econosphere as ‘the total capital stock, that is, the set of all objects, people, organisations, and so on, which are interesting from the point of view of the system of exchange’. From a material point of view, we see objects passing from the biosphere into the econosphere in the process of production, and we similarly see products passing out of the economic set as waste as their value becomes zero.For the most part this is an uneven exchange: Entrepreneurs extract a resource from the Earth and return it in devalued form, hence the plus and minus arrows in the diagram. These definitions are derived from Kenneth E. Boulding, Economics as a Science, New York: McGraw-Hill Book Company, 1970: 1, 11. Mark Diesendorf and Clive Hamilton, eds. Human Ecology, Human Economy: Ideas for an Ecologically Sustainable Future, Sydney: Allen & Unwin, 1997.Kenneth E. Boulding, ‘The Economics of the Coming Spaceship Earth’. in H. Jarrett (ed.), Environmental Quality in a Growing Economy, Essays from the Sixth RFF Forum, Baltimore: Resources for the Future/Johns Hopkins University Press, 1966: 3–14, reprinted in Boulding, Beyond Economics: Essays on Society, Religion, and Ethics. Ann Arbor: University of Michigan Press, 1968: 273–87.
- sustainable entrepreneurship is the intersection of the sociosphere, the econosphere with the biosphere.The biosphere consists of all of the living and non-living things on Earth. The sociosphere consists of all the people in a social system, all the roles they occupy, and all their patterns of behaviour, all their inputs and outputs relevant to other human beings, and all the organisations and groups they belong to. The econosphere consists primarily of the segment of the sociosphere that is organised through exchange, especially commodity exchange, where the exchange is mediated through prices. Australian researchers Diesendorff and Hamilton defined the econosphere as ‘the total capital stock, that is, the set of all objects, people, organisations, and so on, which are interesting from the point of view of the system of exchange’. From a material point of view, we see objects passing from the biosphere into the econosphere in the process of production, and we similarly see products passing out of the economic set as waste as their value becomes zero.These definitions are derived from Kenneth E. Boulding, Economics as a Science, New York: McGraw-Hill Book Company, 1970: 1, 11. Mark Diesendorf and Clive Hamilton, eds. Human Ecology, Human Economy: Ideas for an Ecologically Sustainable Future, Sydney: Allen & Unwin, 1997.Kenneth E. Boulding, ‘The Economics of the Coming Spaceship Earth’. in H. Jarrett (ed.), Environmental Quality in a Growing Economy, Essays from the Sixth RFF Forum, Baltimore: Resources for the Future/Johns Hopkins University Press, 1966: 3–14, reprinted in Boulding, Beyond Economics: Essays on Society, Religion, and Ethics. Ann Arbor: University of Michigan Press, 1968: 273–87.
- Up until the present, some entrepreneurs have greatly undervalued the biodiversity, ecosystems and means of survival that nature provides, including resources such as energy, water, free space and materials. We have not valued nature as a living ecosystem. Rather than adding value to living materials we only aim to reduce (e.g. through recycling) the quantity of dead resources. In the end, society has to implement complex regulations, incentives and tools to penalise entrepreneurs or to encourage them to reduce waste and mitigate the effects of negative entrepreneurship. What positive entrepreneurship can do is generate positive impacts through value adding and eliminating designed waste, duplication, disposability, planned obsolescence and wasteful end purposes. Positive entrepreneurs create net positive-impact loop systems and innovations that create levers for biophysical improvements and social transformation.
- Up until the present, some entrepreneurs have greatly undervalued the biodiversity, ecosystems and means of survival that nature provides, including resources such as energy, water, free space and materials. We have not valued nature as a living ecosystem. Rather than adding value to living materials we only aim to reduce (e.g. through recycling) the quantity of dead resources. In the end, society has to implement complex regulations, incentives and tools to penalise entrepreneurs or to encourage them to reduce waste and mitigate the effects of negative entrepreneurship. What positive entrepreneurship can do is generate positive impacts through value adding and eliminating designed waste, duplication, disposability, planned obsolescence and wasteful end purposes. Positive entrepreneurs create net positive-impact loop systems and innovations that create levers for biophysical improvements and social transformation.
- Natural capitalStock of natural ecosystems that yields a flow of goods or services into the future.Natural capitalismNatural Capitalism is a book written by Paul Hawken, Amory Lovins and Hunter Lovins in 1999 that recognises this essential relationship between the Earth’s valuable resources and the business environment.Cradle-to-cradle designThe idea that at the end of life any product can be turned into something else to close the cycle so that ultimately there is no waste.Economic gardeningGovernment support to encourage local economic development. The intention is to encourage the growth of local firms rather than to attract an influx of new businesses and industries.The Natural StepA scientifically-based methodology, developed in Sweden, for developing a sustainable system.Industrial metabolism (IM)Collection of physical processes that convert raw materials and energy, plus labour, into finished products and wastes. MudaAny activity that consumes resources without creating value for the customer.Ecology of commerceBased upon Paul Hawken’s book by the same name (1994), the concept means the environmentally destructive aspects of many current business practices along with businesses adopting new practices to promote environmental restoration.
- Natural capitalStock of natural ecosystems that yields a flow of goods or services into the future.Natural capitalismNatural Capitalism is a book written by Paul Hawken, Amory Lovins and Hunter Lovins in 1999 that recognises this essential relationship between the Earth’s valuable resources and the business environment.Cradle-to-cradle designThe idea that at the end of life any product can be turned into something else to close the cycle so that ultimately there is no waste.Economic gardeningGovernment support to encourage local economic development. The intention is to encourage the growth of local firms rather than to attract an influx of new businesses and industries.The Natural StepA scientifically-based methodology, developed in Sweden, for developing a sustainable system.Industrial metabolism (IM)Collection of physical processes that convert raw materials and energy, plus labour, into finished products and wastes. MudaAny activity that consumes resources without creating value for the customer.Ecology of commerceBased upon Paul Hawken’s book by the same name (1994), the concept means the environmentally destructive aspects of many current business practices along with businesses adopting new practices to promote environmental restoration.
- Natural capitalismNatural Capitalism: Creating the Next Industrial Revolution is a 1999 book co-authored by Paul Hawken, Amory Lovins and Hunter Lovins. The authors view the world’s economy as part of the larger economy of natural resources and ecosystem services that sustain it. Only through recognising this essential relationship between the Earth’s valuable resources and the business environment can entrepreneurs gain advantage and prosper. According to the authors the next industrial revolution depends on the espousal of four central strategies: (1) the conservation of resources through more effective manufacturing processes; (2) the reuse of materials as found in natural systems on biological models with closed loops and zero waste; (3) a change in values from quantity to quality, for example, shifting from the sale of goods (e.g. light bulbs) to the provision of services (illumination); and (4) investing in natural capital, or restoring and sustaining natural resources’. Amory B. Lovins, L. Hunter Lovins, and Paul Hawken, Natural Capitalism – Creating the Next Industrial Revolution, Boston: Little, Brown & Company, 1999; See also ‘A Road Map for Natural Capitalism’, Harvard Business Review, 85(7/8), 2005: 172–83; Pierre Desrochers, ‘Natural Capitalists’ Indictment Of Traditional Capitalism: A Reappraisal’, Business Strategy and the Environment 11(4), July 2002: 203–20; Ellen Drew, ‘How Natural Capitalism Triggers Change’, in Business 26(5), September 2004: 24–8; Damian Finbar White, ‘A Green Industrial Revolution? Sustainable Technological Innovation in a Global Age’, Environmental Politics 11(2), 2002: 1.
- In the book Cradle to Cradle by William McDonough and Michael Braungart, the authors envision a world without waste, a world without poisons, and a world in which all materials are continuously recycled. It already exists. We call it nature. In the natural system there is no waste and the same materials have been recycled for billions of years. The new industrial revolution is all about absorbing the lessons we should have learned from nature long ago. The key to sustainability is making the market work for the environment instead of against it. The industrial application of cradle-to-cradle design creates a cycle for industrial materials. Like the Earth’s nutrient cycles the flow of materials eliminates the concept of waste (cradle-to-cradle, rather than cradle-to-grave). Each material in a product is designed to be safe and effective, as well as to provide quality resources for subsequent generations of products; in other words, materials are conceived as nutrients and designed to circulate safely and productively. Eric Roston, ‘New War on Waste’, Time South Pacific (Australia/New Zealand edition), 2 September 2002: 48; Ken Webster, ‘Changing the Story: ‘Cradle-to-Cradle’ Thinking as a Compelling Framework for ESD in a Globalised World’, International Journal of Innovation and Sustainable Development 2(3–4), 2007: 282–98.
- Let us take the word ‘industry’ to mean a ‘balanced, quasi-stable collection of interdependent firms belonging to the same economy’. The word ‘metabolism’ usually refers to the internal processes of a living organism that are necessary for the maintenance of life. Using a biological analogy, industrial metabolism(IM) was first proposed by Robert Ayres as ‘the whole integrated collection of physical processes that convert raw materials and energy, plus labour, into finished products and wastes’. Just like a living organism, industrial metabolism deals with the integration of physical processes that convert raw material, energy, and labour into finished products and wastes. Labour input and consumer output act as the human components. Both industrial metabolism and ecological metabolism are examples of dissipative systems, which are self-stabilising in a stable state. A manufacturing enterprise or firm may also be described as a self-organising entity, and the concept of industrial metabolism again applies. IM focuses on developing networks of industries that create eco-efficiencies and are eco-interdependent. They create a permanent waste exchange system where the by-product of one company becomes the raw material for another. R. A. Eblen and W. Eblen, Encyclopedia of the Environment, Boston: Houghton Mifflin Company, 1994.R. Ayres and L. Ayres. Industrial Ecology: Towards Closing the Materials Cycle, Cheltenham, UK: Edward Elgar Publishing, 1996; R. Ayres, ‘Industrial Metabolism: Theory and Policy’, in R. Ayres, UK Simonis, (eds), Industrial Metabolism: Restructuring for Sustainable Development, Tokyo: United Nations University Press, 1994: 3–20. See also SangwonSuh and Shigemi Kagawa. ‘Industrial Ecology and Input-Output Economics: An Introduction’, Economic Systems Research 17(4), December 2005: 349–64; Reid Lifset, ‘Probing Metabolism’, Journal of Industrial Ecology 8(3), 2004: 1–3. W.G.B. Smith, ‘Eco-Accounting: How Industrial Ecology Can Pay Double Dividends For Business’, Journal of Business Administration & Policy Analysis 27–29, January 1999: 337–63; Peter L. Daniels, ‘Approaches for Quantifying the Metabolism of Physical Economies: A Comparative Survey, Part II: Review of Individual Approaches’, Journal of Industrial Ecology 6(1), 2002: 65–88.
- ConclusionEven during crisis, entrepreneurial people with creative solutions can step forward to help save the planet and generate economic prosperity. Innovation sometimes happens when we see failure in the system. Schumpeter appreciated these ‘cold showers‘ in our economy that release new waves of creativity. Today we also are engaged in a great climate war and an economic calamity, but to entrepreneurs, ‘perseverance in adversity’ is music to our ears. As King George VI told the British people during World War II, ‘Keep Calm and Carry On’. Our Asia-Pacific region accounts for over 60 per cent of the world’s total population. From Asia’s mega-cities down to the Pacific Islands, the effects of climate change are significantly damaging ecosystems. We are facing a severe water crisis, especially in safe drinking water and sanitation. Agriculture is responsible for one-third of toxic emissions. Our species has caused the mass extinction of thousands of species. The greatest damage to biodiversity has been done by entrepreneurs in the rainforests. Some of the world’s most successful entrepreneurs, innovators and inventors are responsible for the planet’s utter dependence on fossil fuels. Sadly, resource depletion and overpopulation are both products of the enterprising spirit. The article then looked more deeply at entrepreneurial ecology. Research evidence argues that opportunities are inherent even in times of crisis, market failure, and environmental decline. Yet from the 19th century, industrial entrepreneurship took for granted the extraction of scarce resources without regard to consequences. Entrepreneurs greatly undervalued the biodiversity and ecosystems. Sustainable entrepreneurship that takes into account the living dimension of the products and services. Entrepreneurs must seek net positive entrepreneurial impact loops with the biosphere. Positive entrepreneurship eliminates designed waste, duplication, disposability, planned obsolescence and wasteful end purposes. Positive entrepreneurs create net positive-impact loop systems and innovations that create levers for biophysical improvements and social transformation. Certain conceptual frameworks help us look at entrepreneurial ecology. Natural capitalism looks at the larger economy of natural resources and the ecosystem. Cradle-to-cradle design shows how to create a world without waste. Economic gardening seeks to avoid irreversible damage to, or depletion of, available resources. The Natural Step puts this all together in principles for sustainability and busienss. We can even imagine an entrepreneurial metabolism that bring together Earth’s physical processes with human enterprise. Some countries actually seek the ‘natural advantage of nations’. They aim to identify and classify resources which are commonly wasted and create an ecology of commerce. Entrepreneurship is central to this transformation.