Sustainable Entrepreneurship and Sustainability Innovation

Schaltegger, S. & Wagner, M. (2010). Sustainable entrepreneurship and sustainability innovation: categories and interactions. Business Strategy and the Environment 20: 222-237.

Schaltegger & Wagner (2010) create a usable framework for sustainable entrepreneurship, sustainable innovation, and sustainable business development in "Sustainable entrepreneurship and sustainability innovation: categories and interactions." The article first addresses the purpose for the research. Companies have been traditionally culprits in creating both environmental and social justice problems, necessitating regulations imposed externally. Driven solely by profit, a company will not be likely to pursue innovation or sustainability entrepreneurship unless it was profitable to do so. The authors point out that while this may be true with some organizations in some sectors, that otherwise the business environment is changing. A new framework based on current business trends is proposed by Schaltegger & Wagner (2010). This new framework is based on the fact that many companies -- and their managers -- "have been core drivers of sustainable development," (Schaltegger & Wagner, 2010, p. 223). The purpose of the article is not necessarily to find out why this is so (eg. improved ethical climates in organizational culture) but to find out how this fact can be transmuted into effective action that promotes social and environmental justice. However, the authors do suggest and assume that innovation that is sustainable is implemented because of the competitive environment. Sustainable entrepreneurship is a trend that reveals the connection between social justice, environmental ethics and corporate responsibility to shareholder value.

There are four main types of sustainability oriented entrepreneurship enterprises. The authors define "ecopreneurship" as "to earn money through contributing to solving environmental problems," (Schaltegger & Wagner, 2010, p. 223). Using the ecopreneurship framework, ecological ethics are integrated into the business model as well as its mission. Economic goals are the ends, and environmental concerns are the means to achieving that end. Social entrepreneurship is defined differently, as not being bent on profitability as much as the creation of "value for society," (Schaltegger & Wagner, 2010, p. 224). The opposite of ecopreneurship, social entrepreneurship uses economic value as a means to achieve the end of social justice goals. Institutional entrepreneurship aims to change the regulatory environment and market institutions, and may be either profit-driven or value-driven. Finally, sustainable entrepreneurship is motivated by the drive to contribute to solving both environmental and social justice problems, and creating a sustainable development business environment. Essentially, Schaltegger & Wagner (2010) show how sustainable entrepreneurship combines the best qualities of the other three types of sustainability orientated entrepreneurship enterprise activities.

The authors investigate the phenomenon of sustainability entrepreneurship in all its manifestations in order to discover meaningful trends. Those trends include which conditions are more conducive for the organic or spontaneous emergence of sustainability oriented entrepreneurship of any time. To explore the trends and their implications for policy and business, Schaltegger & Wagner (2010) offer a positioning matrix of sustainable development. One axis of the matrix is the priority of sustainability goals which can range from low priority to high. The other axis includes the effects of the business, on issues such as socially desirable effects, niche market effects mass market effects, and more global effects such as policy change. Viewed on the matrix, the differences and similarities between the types of sustainability entrepreneurship are clearer.

Sustainability entrepreneurship is an important area of research, because of the need to satisfy emerging consumer trends and shifting social norms. Ethics aside, the economics of sustainability entrepreneurship are also becoming more apparent with trends like ecopreneurship. The authors note that the research will be helpful for informing existing players on when, how, and where to embark on sustainability entrepreneurship. The research also suggests what types of sustainability entrepreneurship are most feasible in any given situation. Issues like industry life cycle and dynamic capabilities need to be taken into account. Future research will shed light on the specific issues that can foster sustainability entrepreneurship that also achieves social goals.

Critique

The Schaltegger & Wagner (2010) research is helpful in providing the promised framework for relating sustainable entrepreneurship with sustainability innovation. However, the strength of the research is in the matrix revealing the different types of sustainable entrepreneurship models. Start-ups and veteran enterprises alike can study such a matrix for cues and clues as to how to effectively launch a sustainability enterprise based on innovation. The research can be applied to progressive regulatory environments, seeking to balance the needs for greater corporate accountability with the need for economic progress. Although the Schaltegger & Wagner (2010) research seems convoluted and overly complicated at times, it does have some practical value in highlighting the points of convergence between business, social justice, and ecological ethics

It is possible that sustainable innovation refers more to the method by which stalwart companies like Deutsche Bahn embark on sustainable entrepreneurship: applying traditional business models to meeting new goals. The Schaltegger & Wagner (2010) research also shows that fresh entrepreneurs may not contend with as many obstacles as was once believed. The seemingly mutually exclusive goals of profitability and sustainability can go hand in hand. Schaltegger & Wagner (2010) might be better off injecting more than cold fact into their research, which seems oddly devoid of any ethical framework. The authors treat issues like social benefit as if it were as quantifiable as sales figures. Moreover, the current research is exploratory and theoretical in nature. An experimental research design might be helpful in future research in this specific area if it is to be of any use to policy makers.