Sustainable entrepreneurship: principles and practices

Sustainable Entrepreneurship

The purpose of this essay is to summarize and criticize the article "Sustainable Entrepreneurship and Sustainability Innovation: Categories and Interactions" by Stefan Schaltegger and Marcus Wagner that was published in journal Business Strategy and the Environment in 2011. What we find in the article more and more is that the market itself is becoming an engine for change. This is exactly what the goal of social entrepreneurship has been since the beginning.

Sustainable entrepreneurship has its roots in the innovative concept of sustainable development that grew out of the environmental and conservation movement of the 1970s. Since that time, the public (as well as increasingly stock holders now) are increasingly viewing major corporations as properly playing roles as players in the effort to provided entrepreneurship in a sustainable framework propose a framework to position sustainable entrepreneurship in relation to sustainability innovation. This is a type of responsible corporate citizenship behavior is becoming increasingly normative and is one that can not any longer be ducked in environmental or social contexts. The strength of the article is that it does not underestimate or distort the role of companies in society and properly fits the powerful capabilities of the private company as engines of social change in a framework of social responsibility

The framework of the article builds upon a modern type of sustainable entrepreneurship and develops it by including social and institutional entrepreneurship. This is approach is speaking about the application of the entrepreneurial approach towards meeting societal goals and towards changing market contexts and then relates it to sustainability innovation. Only in this way will it be possible to make sustainable entrepreneurship actually work, for only by innovating can the grand objectives of sustainable entrepreneurship be achievable (Schaltegger and Wagner 2011 pp. 222-223).

The framework provides a reference for managers to introduce sustainability innovation and to pursue sustainable entrepreneurship. Methodologically, the paper develops an approach of qualitative measurement of sustainable entrepreneurship and how to assess the position of a company in a classification matrix. The degree of environmental or social responsibility orientation in the company is assessed on the basis of environmental and social goals and policies, the organization of environmental and social management in the company and the communication of environmental and social issues. The market impact of the company is measured on the basis of market share, sales growth and reactions of competitors (ibid. p. 223).

Increasingly, management within companies have themselves been the drivers of sustainable entrepreneurship and development as these companies realize the public demand for such responsible corporate behavior. Innovations such as the Internet, cars and computers have had a much deeper impact upon the planet than have political initiatives by governments. Therefore, it is these non-governmental actors that increasingly have to be become involved in social change. In market systems, sustainable development is increasingly seen as requiring sustainability innovation. Entrepreneurs who are able to achieve environmental or social goals with their superior products or processes find that they are successful with the public in the marketplace of mainstream customers that seek out these products and services by "voting with their pocketbooks." Such "voting" at the checkout counter is increasingly becoming more important than and influential than actual voting at the polling place does election time. What the article points out is that market innovations that drive sustainable development do not occur by accident. Rather, they are created by business leaders who include them in the core of their business activities. Such actors and companies make environmental progress a core of their businesses can so that they can be called sustainable entrepreneurs. They thereby generate new products, techniques, services and organizational modes that are found to substantially reduce environmental impacts and thereby increase the quality of life for the public (ibid).

The article is an exciting approach to capitalist development in that it finds conditions under which sustainable entrepreneurship and sustainability innovation emerge spontaneously and can practically work. As the study points out, one of the classical things that capitalism does is to "creatively destroy." It is this ability to destroy what is old and does not work and build and impose what is new and does is the primary benefit of capitalism. What sustainable entrepreneurship has done is to apply this as a positive force in realizing the field's lofty goals where public government initiatives have failed to achieve them. The article conducts an extensive literature review to accomplish just this task (ibid. pp. 223-225).

However, until now, there has not been one universally recognized definition of what sustainable development is. Such research and definitions have implications for theory and practitioners in that it clarifies which firms are most likely under specific conditions to make moves towards sustainability innovation. The article does this by defining sustainable entrepreneurship as the realization of sustainability innovations that are aimed at the mass market and that provide benefit to the larger part of society. This is of course driven by stakeholder (namely consumer) demands for environmentally and socially responsible products and services. What sustainable entrepreneurship essentially does is to bridge the gap between individual consumer stakeholder demands and the individual manager's entrepreneurship in the marketplace to make sure that these concerns are carried out. Further, what we find is that sustainable entrepreneurship surpisingly extends the goal of corporate influence beyond simple market success to actually initiating societal change and in changing market conditions and regulations to bring about social change. Therefore, the market itself is being employed to make up responsible social change (ibid. pp. 225-226).

The article presents a theoretical framework upon how this methodology is carried out. Bottom line, sustainable entrepreneurship is based upon action carried out by management in a sustainable fashion. This is especially the case as seen in the environmental area. Increasingly, it is seen as emerging from the area where such demands for sustainability and social responsibility meet individual consumer market choices. This has forced even large firms to become cognizant of such consumer demands and to incorporate them into their product and service design. In this way sustainable entrepreneurs engage their "dynamic capabilities" that allow them to react more quickly to unanticipated or other short-term changes in the marketplace