Typologies of Ecopreneurs

Gibbs noted that the interplay between external factors and the personal motivations of ecopreneurs had been used to suggest various typologies of ecopreneurs.[1] The typology proposed by Walley and Taylor was based on two axes: structural influences and personal orientation/motivation.  The structural dimension ranged from “hard” (e.g., regulation and economic incentives) to “soft (e.g., past experiences, family and friends, etc.), and the poles of the personal dimension were economic and sustainability.  Gibbs described the resulting four ideal types of ecopreneurs as follows[2]:

  • Innovative opportunists. Those who identify a green niche for economic exploitation and who are mainly influenced by hard structural factors, such as regulation.
  • Visionary champions. Champions of sustainability who seek to transform the world and whose business is founded on the basis of sustainability
  • Ethical mavericks. Influenced by soft structural drivers (e.g., past experience, networks or friends) and a sustainability orientation. These may be alternative-style businesses
  • Ad hoc enviropreneurs. These are financially driven, but influenced by soft structural drivers. They may be “accidental green entrepreneurs”

The typology suggested by Schaltegger was also based on two dimensions that measured the priority given to environmental issues on the one hand and the projected market effect of the activities on the other hand.  The spectrum on the attention to environmental issues dimension ran from “high” to “low”, and the spectrum on the market effect of the business spanned from “alternative scene” to “econ-niche” and then to “mass market”.  Schaltegger was not interested in companies that were founded mainly to engage in environmental management or administration but instead focused companies with environmental goals that were core to their business purpose and strategy.  This process led to the identification of three main types of actors, which were described by Gibbs as follows[3]:

  • Alternative actors. Market goals are not important and the business may exist to support a lifestyle. These may be counter-cultural in type and engage in non-market transactions. While the wider impact on environmental improvement is (deliberately) limited, this group may provide a seedbed for the next two types
  • Bioneers. Occupy medium-sized niche markets with customer-focused eco-products. These are often inventors with a strong R&D focus and can be found in high technology sectors, such as alternative energy sources. The markets served are big enough for economic success, but small enough to be neglected by larger suppliers, such that their direct impact is limited
  • Ecopreneurs. Actors aim to possess a large market share and to engage with mass markets. These are rarely inventors, but aim “to search for business ideas with products and services that solve environmental problems, to identify the market potential of inventions and to realize market success with them”[4]

Another approach to developing a typology was taken by Linnanen who identified the following four types of ecopreneurs based on high to low measures on two dimensions of internal motivators (“desire to change the world” and “financial drive”) [5]:

  • Non-profit business. High desire to change the world, low financial drive
  • Self-employer. Low desire to change the world, low financial drive
  • Opportunist. Low desire to change the world, high financial drive
  • Successful idealist. High desire to change the world and high financial drive

While the typologies were based on different criteria, Gill noted a number of similarities across the models.  For example, ethical mavericks are similar to self-employers, opportunists are similar to accidental green entrepreneurs, and successful idealists are similar to visionary champions.[6]

Tilley and Young explained that environmental entrepreneurs are different from economic entrepreneurs in that they “place the principal of environmental protection and/or restoration at the center of their organization” and also noted that Volery has observed that the rationale for environmental responsibility in entrepreneurship is that “there are limits to resources but none to human creativity”.[7]  Tilley and Young noted that researchers have attempted to distinguish and describe two types of environmental entrepreneurs.  The first type was described by Volery as “environment-conscious entrepreneurs” and by Isaak as “green businesses”.[8]  Environment-conscious entrepreneurs “are aware of the issues but are they do not operate in the environmental marketplace … [and] … more typically follow a business case for their environmental activities by striving for eco-efficiency in the use of resources”.  Isaak described green businesses as organizations in which entrepreneurs discover and attempt to implement the advantages of environmental innovation or marketing after their businesses have already been launched and established.  Tilley and Young noted that examples of this first type of environmental entrepreneurship could be found in all industry sectors and were actually more common than the second type described below; however, Tilley and Young argued that this group of environmental entrepreneurs has generally had limited success moving toward sustainability.[9]

The second type of environmental entrepreneur was described by Volery as “green entrepreneurs” and by Isaak as “green-green businesses”.  Tilley and Young observed that entrepreneurs falling into this type were more radical in their approach and personal value and were not only aware of the environmental issues in the environmental marketplace in which their organizations would be operating but also sought to create new businesses that from the very beginning possessed a potential for economic success (i.e., profitability).  As explained by Isaak in describing a green-green business, these types of ecopreneurs have the intention from the very beginning to design products and processes that are “green” and seek not only to make money but also to be environmentally responsible while socially transforming the industrial sector towards a model of sustainable development.[10]

Characteristics of the Ecopreneurship Business Model

 Schlange conducted field studies involving ten startup firms in Switzerland in order to gain a better understanding of the nature, motivation and drivers of “ecopreneurs” or “green entrepreneurs”.  He found that the main characteristic of these types of entrepreneurs was a strong emphasis on ecological aspects in their business vision as opposed to the traditional entrepreneurial aspiration to grow and create profits.  In addition, the methodology that he designed to select companies to be part of the field studies provided interesting insights into the preferred characteristics for the business models that are most amenable to effective ecopreneurship.  Schlange began with the traditional three stage “input-transformation-output” view of the firm and then identified indicators for each stage that reflected not only economics but also the other two dimensions of sustainability (i.e., ecology and social/ethics), a step that he believed was necessary given that “green startups” are different than other entrepreneurial ventures because of their ecological and social-ethical aspects:

·         Economics: The main indicator for the input stage was procurement, specifically the use of input factors from regional suppliers.  The indicators for the transformation stage included persistence (i.e., a clear perspective for long-term development of the company); growth potential (i.e., economic growth objectives that demonstrated an orientation toward investment in innovation); mission (i.e., a clear orientation toward sustainability orientation that had become embedded as an integral part of company’s value system); and identification (i.e., all members of the organization shared a common understanding of sustainability objectives).  The main indicator for the output stage was cooperation as evidenced by lasting relationships with local and regional partners that supported the company’s credibility as an agent of sustainability.

·         Ecology: The main indicator for the input stage was transport, specifically the use of ecologically sound transport systems.  The indicators for the transformation stage included energy (i.e., selection and use of alternative sources of energy and efficient use of energy consumed); residuals (i.e., minimizing resource throughput, avoidance of residual and waste materials); emissions (i.e., minimizing emission levels and exclusivity of toxicity); and production processes (i.e., the methods of production management used by the company are environmentally sound).  The main indicator for the output stage was the degree to which the company’s products demonstrated that an ecological product life cycle perspective had been adopted during the product development process.

·         Social/Ethics: The main indicator for the input stage was equality of rights, specifically recruitment and hiring processes that addressed gender and generational issues and provided opportunities for disabled workers.  The indicators for the transformation stage included participation (i.e., providing employees and other stakeholder a voice in establishing of business objectives and company support of community activities); personnel (i.e., active development of employees’ competences and implementation of fair rewards programs); workplace (i.e., offering safe and hazard free jobs and health programs for employees); and regional integration (i.e., proactive exchanges with the regional economy and participation/support of local/regional cultural activities).  The main indicator for the output stage was communication to stakeholders included honest and transparent reporting about the company’s business activities and progress toward sustainability goals.

One of things that stands out the from the framework outlined above is the dependence of ecopreneurs on regional actors and the important part that relationships and communications with local and regional parts and other stakeholders plays in assessing the output of the company’s business activities.  In fact, Schlange argued that the results of his field studies confirmed that ecopreneurs “are social activists who promote and conduct activities which generate social and economic values at the regional level”.

Sources: L. Schlange, What Drives Sustainable Entrepreneurs? (ABEAI 2006), https://www.researchgate.net/publication/255570580_Topic_area_9_Entrepreneurship_and_Small_Business_Management

 

This post is part of the Sustainable Entrepreneurship Project’s extensive materials on  Entrepreneurship and Sustainability and Entrepreneurship.

Notes

[1] D. Gibbs, “Sustainability Entrepreneurs, Ecopreneurs and the Development of a Sustainable Economy”, Greener Management International, 55 (September 2006), 63, 71-73.

[2] Id. at 72 (citing E. Walley and D. Taylor, “Opportunists, Champions, Mavericks . . . ? A Typology of Green Entrepreneurs”, Greener Management International, 38 (2002), 31).

[3] Id. (citing S. Schaltegger, “A Framework for Ecopreneurship: Leading Bioneers and Environmental Managers to Ecopreneurship”, Greener Management International, 38 (2002), 45).

[4] S. Schaltegger, “A Framework for Ecopreneurship: Leading Bioneers and Environmental Managers to Ecopreneurship”, Greener Management International, 38 (2002), 45, 51.

[5] D. Gibbs, “Sustainability Entrepreneurs, Ecopreneurs and the Development of a Sustainable Economy”, Greener Management International, 55 (September 2006), 63, 72 (citing L. Linnanen, “An Insider’s Experiences with Environmental Entrepreneurship”, Greener Management International, 38 (2002), 71).

[6] Id. at 73.

[7] F. Tilley and Young, “Sustainability Entrepreneurs — Could they be the True Wealth Generators of the Future?”, Greener Management International, 55 (2009), 79 (citing T. Volery, “Ecopreneurship: Rationale, current issues and future challenges” in U. Fugistaller, H. Pleitner, T. Volery and W. Weber (Eds.) Radical changes in the world – will SMEs soar or crash? (St. Gallen, Switzerland, Rencontres Conferences, 2002), 541).

[8] T. Volery, “Ecopreneurship: Rationale, current issues and future challenges” in U. Fugistaller, H. Pleitner, T. Volery and W. Weber (Eds.) Radical changes in the world – will SMEs soar or crash? (St. Gallen, Switzerland, Rencontres Conferences, 2002); and R. Isaak, “The Making of Ecopreneurship”, Greener Management International, 38 (2002), 81.

[9] F. Tilley and Young, “Sustainability Entrepreneurs — Could they be the True Wealth Generators of the Future?”, Greener Management International, 55 (2009), 79.

[10] R. Isaak Green logic: Ecopreneurship, theory and ethics (Sheffield UK: Greenleaf Publishing, 1998); and R. Isaak, “The Making of Ecopreneurship”, Greener Management International, 38 (2002), 81.

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