1
Opening the green box: from entrepreneurship to sustainability,
how human motivation guides this promising relationship.
Thesis MSc. in Business Administration – Leadership and Management Track University of Amsterdam
Author: Emma Johanna Marja Brouwer, 11268182 Supervisor: Dr. Nesrien Abu Ghazaleh
Date: June 23, 2017 Version: Final version
2 Statement of originality
This document is written by Emma Brouwer who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
3 Table of contents Abstract ... 5 Introduction ... 6 Literature review ... 8 Entrepreneurship ... 8 Sustainability ... 10
Entrepreneurship and sustainability ... 11
Inside the green box: entrepreneurial motivation ... 14
Environmental motivational components ... 16
Economic motivational components ... 17
Social motivational components ... 18
The triple bottom line motivation ... 19
Methodology ... 22
Research design, strategy and sample ... 22
Participant recruitment and selection ... 23
Research instrument, data collection and analysis ... 24
Results ... 26
The relationship between entrepreneurship and sustainability ... 26
The economic system and market failures ... 30
Environmental motivation ... 33
Economic motivation ... 34
Social motivation ... 36
Additional motivation ... 38
Sustainable entrepreneurship today ... 42
Discussion ... 45
Contributions and implications ... 49
Limitations and future research ... 49
Conclusion ... 51
4
Appendix 1 ... 56
Interview protocol ... 56
Appendix 2 ... 58
5 Abstract
Entrepreneurship is often put forward to help move global economic systems towards sustainability. Yet, a major research gap is still present on how the transition towards
sustainability develops. The purpose of this qualitative research is therefore to open the ‘green box’ between entrepreneurship and sustainability by looking in depth into entrepreneurial motivation. This paper tries to answer the following question: Why do entrepreneurs focus on sustainability? Based on nine in-depth interviews, findings suggest that sustainable entrepreneurs are motivated by a combination of environmental, economical, social and ideological
motivational concepts. Furthermore, findings indicate that the context of the 21st century serves as a trigger for sustainable entrepreneurship. Based on these results, a new conceptual model is introduced which opens the green box and encompasses why entrepreneurs focus on
sustainability.
6 Introduction
Sustainable development is one of the most prominent topics of our time as the vitality and sustainability of our economic systems quickly diminishes. This is a consequence of the largely unsustainable economic system which results from the negative effects of industrialization and economic growth (Dean & McMullen, 2007). Within this context, entrepreneurship is often put forward to help move global economic systems towards sustainability. More specifically, the obstructions in environmentally and socially relevant market failures represent entrepreneurial opportunities. By improving the efficiency of markets, entrepreneurial action then adds to sustainability (Cohen & Winn, 2007; Hall, Daneke, & Lenox, 2010; Schaper, 2016).
The idea of entrepreneurship serving as a panacea for many social and environmental problems remains promising. To date, little research has been done on how this process unfolds (e.g., Dean & McMullen, 2007; Hall et al., 2010). Literature has been insufficient concerning the nature of entrepreneurship’s role in the adoption of sustainability. Thus, even though society witnesses a growing emphasis on sustainability and entrepreneurship, a major research gap is still present on how the transition towards sustainability develops (Dean & McMullen, 2007; Hall et al., 2010).
To analyze the relationship between entrepreneurship and sustainability, a typical ‘black box approach’ is often referred to in research: the input (i.e. entrepreneurship) and output (i.e. sustainability) are known, but the internal structure is not understood (i.e. black box) (Wiener, 1961). The black box in this research was renamed the green box since sustainability is often associated with the colour green (Doug Sereno, 2014). Today, the green box between
entrepreneurship and sustainability is still closed. Insights in this green box requires related questions like how, and to what extent entrepreneurship holds the potential to promote sustainability (Hall et al., 2010).
7 The aim of this study is therefore to open the green box between entrepreneurship and sustainability. Looking in depth at entrepreneurial motivation as an individual-level factor will help gain insights in this process. Previous studies have focused on motivation (e.g., need for achievement, self-efficacy, and goal setting) as a crucial factor that influences the entrepreneurial process (S. Shane, Locke, & Collins, 2003). However, little research has been done on why entrepreneurs are motivated to adopt a sustainable orientation (Hall et al., 2010; Seelos & Mair, 2004; S. Shane et al., 2003). This study therefore tries to answer the following question: Why do entrepreneurs focus on sustainability? The results contribute to the ongoing development and our general understanding of entrepreneurship and sustainability by providing a foundation for future research in both areas. Moreover, the results of this study contribute to the emergence of the field around entrepreneurship and sustainability and are of importance to both the social and business area.
This research is divided in four sections; the academic literature is first used to gain more insights in the concepts of entrepreneurship, sustainability and entrepreneurial motivation. In addition, hypotheses are formed. Secondly, the methodology of this study is discussed and is followed by a results section. Subsequently, the discussion, practical implications, limitations and suggestions for future research are proposed. Finally, a conclusion is drawn.
8 Literature review
Entrepreneurship
Conceptualizing entrepreneurship brings us back to France in the 17th and 18th centuries. The term “entrepreneur” originated in the field of economics, meaning “a person who
undertakes”. The French economist Jean Baptiste Say expands this translation by adding the concept of value creation to it; “the entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield” (Dees, 1998, p. 2). A more enhanced and more influential definition of entrepreneurship is later presented by Schumpeter (1934). He defines entrepreneurs as leading innovators or change agents who create new combinations within the existing economic system. Today, both definitions of entrepreneurship still serve as the theoretical base of entrepreneurship (Dees, 1998) and are therefore both used in this research to define entrepreneurship.
A related, more modern view on entrepreneurship is presented by Martin and Osberg (2007) who link entrepreneurship with the concept of opportunities. They describe
entrepreneurship as “the combination of a context where an opportunity is situated, a set of personal characteristics required to identify and pursue this opportunity, and the creation of a particular outcome” (Martin & Osberg, 2007, p. 31). Other researchers consider the presence, exploitation and pursuing of opportunities, as well to be central in the current definition of entrepreneurship (Cohen & Winn, 2007; Drucker, 2014; Martin & Osberg, 2007; S. Shane & Venkataraman, 2000; S. A. Shane, 2003). With the field of entrepreneurship still emerging, it is no surprise that entrepreneurship is characterized by a proliferation of definitions (Shepherd & Patzelt, 2011). Even though literature reveals many definitions and a precise term is still absent, it is agreed that entrepreneurship includes three main components: opportunities, enterprising individuals and resourcefulness (Seelos & Mair, 2004; S. Shane & Venkataraman, 2000).
9 The process of entrepreneurship is presented by Shane (2003) and involves several
activities. According to Shane (2003), the entrepreneurial stages are; the identification and
evaluation of opportunity, the decision whether or not to exploit it, the efforts to obtain resources, the process for organizing those resources into a new combination, and the development of a strategy for a new venture. In this process, changes in the business environment are often a source of entrepreneurial opportunities. These changes are a result of the continual state of disequilibrium in which mainstream businesses, institutions and governments operate. For example, changes in technology or in the market signal an opportunity to entrepreneurs who use this change as a foundation to their innovative business models (S. A. Shane, 2003; Shepherd & Patzelt, 2011). The potential market for entrepreneurs therefore consists of unsolved problems, or an unmet need or want, which can be found in all sectors of society. The creative use of resources and an innovative approach help entrepreneurs to transform the status quo into a future
opportunity (Schaper, 2016).
An example of an unsolved problem is the degradation of our environment. These environmental failures are a result of market imperfections which represent opportunities for entrepreneurs. Moreover, these market failures motivate entrepreneurial action and can lead to the enhancement of sustainability (Cohen & Winn, 2007; Dean & McMullen, 2007; Schaper, 2016). Therefore, entrepreneurs who focus on sustainable development (i.e. sustainable
entrepreneurs) can play a critical role in the eventual adoption of sustainability. Their leading role helps give guidance and motivation to other businesses (Schaper, 2016). Sustainable
entrepreneurship is a new emergent typology of entrepreneurship (Figure 1) and exists of, and besides alternative forms of entrepreneurship such as social, environmental and economic entrepreneurship (Tilley & Young, 2006). Since the focus of this research is on the relationship between entrepreneurial action and sustainability, a section on the phenomenon sustainability will
10 follow. After this, the relationship between entrepreneurship and sustainability will be explained. Additionally, the alternative forms of entrepreneurship (social, environmental and economic) are discussed.
Sustainability
On September 25th 2015, the United Nations published 17 sustainable development goals to end poverty, protect the planet, and ensure prosperity for all. The 17 goals are to be achieved before 2030 and will help transform the world into a more sustainable one by serving as a guideline for all governments (Keesstra et al., 2016). This transformation is highly urgent since the vitality and sustainability of our economic systems is diminishing. Commonplace reports of global scale effects include climate change, ozone depletion, and destruction of biodiversity. These effects go together with localized problems such as air pollution or toxic wastes in groundwater (Patzelt & Shepherd, 2011). Both global and local effects are governed by a largely unsustainable economic system due to the substantial negative effects of the past decades’ industrialization and economic growth (Dean & McMullen, 2007).
Today, sustainability awareness is growing. The unsustainable economic system is now slowly changing and corporations take on sustainable directions from policy makers and public pressure (Cohen & Winn, 2007; Dean & McMullen, 2007; Hall et al., 2010). Although this transition towards sustainability is a positive one, greater progress may occur when the system is actively changed. This requires a change in both formal and informal institutions that will
transform the value and belief systems in society into behaviour that enhances sustainability (Schaltegger & Wagner, 2011). In 1987, The World Commission on Economic Development proposed sustainable development as a development which includes behaviour “that meets the needs of the present without compromising the ability of future generations to meet their own
11 needs” (Brundtland & Khalid, 1987, p. 29). Consistent with the definition of sustainable
development, Patzelt and Shepherd (2011) emphasize that the natural and communal
environment are important to sustain for future generations. This is also known as the “triple bottom line” where social and environmental objectives are placed on equal footing with economic objectives (Cohen & Winn, 2007; Hall et al., 2010; Tilley & Young, 2006). Thus, sustainable development is the holistic integration of economic gain (e.g., employment,
consumption), social gain (e.g., quality of life, population health) and environmental gain (e.g., diminished air pollution, reduction of waste) for the society (Patzelt & Shepherd, 2011). This definition is used in this research since it defines sustainability in the most holistic way.
The transformation towards sustainability is dependent on sustainability innovation and entrepreneurs who break existing products, market structures, production methods and
consumption patterns to replace them with superior environmental and social products or services (Schaltegger & Wagner, 2011). Also, researchers claim that entrepreneurial action holds the capacity to slow the environmental degradation and can address social challenges (Cohen & Winn, 2007; Patzelt & Shepherd, 2011). Since the transition towards sustainable development seems heavily dependent on entrepreneurial action, the next paragraph will elaborate on the relationship between entrepreneurship and sustainability.
Entrepreneurship and sustainability
Cohen and Winn (2007) explain the relationship between entrepreneurship and
sustainability by exploring the role that market imperfections play in the creation of sustainable entrepreneurial opportunities. They highlight four types of market imperfections that represent entrepreneurial opportunities for the introduction of innovative business models. The first market imperfection is the inefficient resource utilization of firms. Production processes are often
12 inefficient, consumers lack the appreciation of recycling, and a strategic vision of business
leaders is absent. This leads to significant waste in our economic system. Negative externalities such as pollution or species extinction, are presented as the second market failure and
additionally contribute to an unsustainable economy. Thirdly, a flawed pricing mechanism is described. This means that the true value of exhaustible natural resources is inadequately
determined. A more sustainable economic system would assign accurate value to natural capital. Information asymmetries account for the fourth market imperfection and occur when individuals hold different information with respect to markets, resources and opportunities. This fourth market failure as well results in unsustainable production and consumption patterns. Furthermore, these four market imperfections establish the foundation of sustainability by enabling
entrepreneurial rents as well as the improvement of social and environmental conditions. Then, the triple bottom line can be approached and leads to the adoption of sustainability (Cohen & Winn, 2007).
Dean and McMullen (2007) also elaborate on market failures when explaining the relationship between entrepreneurship and sustainability. They argue that imperfect markets inherent in the economic system, stimulate entrepreneurial behaviour. In their research the literature on welfare and environmental economics, as well as on entrepreneurship are combined to explain the process towards sustainability. Five categories of market failures are introduced that yield opportunities for sustainable entrepreneurs (which are; inappropriate government intervention, public goods, externalities, monopoly power and imperfect information). On the other hand, scholars on entrepreneurship imply that market imperfections go hand in hand with entrepreneurial opportunities. Because of these findings, Dean and McMullen (2007) conclude that “environmentally relevant market failures represent opportunities for simultaneously
13 This conceptualization provides a deeper understanding on how entrepreneurs can contribute to sustainability.
Additionally, Hockerts and Wüstenhagen (2010) emphasize the influential role of entrepreneurs in the transition towards sustainability. They propose that an industry’s
transformation towards sustainability is dependent on entrepreneurs who pursue sustainability-related opportunities. These entrepreneurs, or new entrants initiate innovation and stimulate disruptive sustainability innovation. Eventually, larger incumbent firms react to the activities of new entrants and will follow in the adoption of sustainability activities. Market incumbents are less progressive but due to their broader reach, the adoption of sustainability is taken to a higher level. Therefore, progress in the process towards sustainability is dependent on the interaction between entrepreneurs and market incumbents (Hockerts & Wüstenhagen, 2010).
A synthesis of the literature clearly indicates a call for entrepreneurial action when it comes to sustainable development. Therefore, the following hypotheses are formed:
Hypothesis 1: The process towards sustainability is enhanced by entrepreneurship
Hypothesis 2: Market failures within the economic system stimulate sustainable entrepreneurial behaviours
The potential of entrepreneurship to create a more sustainable society requires further attention as it may enable the current system to change. A change that is highly urgent and necessary since the current developments make it harder for future generations to meet their own needs (Hall et al., 2010). In order to stimulate such change, the underlying mechanisms that lead to sustainable behaviour need to be identified. To further analyze how sustainable oriented
14 behaviour develops from entrepreneurship, we turn to the literature on entrepreneurial
motivation.
Inside the green box: entrepreneurial motivation
In recent years, literature on entrepreneurship has focused on different characteristics that help explain the entrepreneurial process. Examples are social networks, personality traits,
previous business experience and the influence of opportunities (Carland, Hoy, Boulton, & Carland, 1984; Cohen & Winn, 2007). Even though these results have improved our
understanding on the entrepreneurial process, Shane et al. (2003) argue that it ignores a critical component; the role of human motivation. In addition to Shane et al. (2003), other researchers also emphasize the role of motivation as crucial to understand the complete entrepreneurial process (Germak & Robinson, 2014; Kuratko, Hornsby, & Naffziger, 1997; Zahra, Gedajlovic, Neubaum, & Shulman, 2009). An explanation for this can be found in Psychology, where
researchers have shown that motivation influences many aspects of human behaviour. Regarding entrepreneurship as a process, motivation then influences the transition from one stage of the entrepreneurial process to another (S. Shane et al., 2003).
However, Shane et al. (2003) also argue that human motivation alone is an incomplete explanation for entrepreneurial action. They argue that external factors also play a role, for example government restrictions or the presence of capital. Yet, with the external factors being static or relatively constant, the role for human motivation is critical. Thus, Shane et al. (2003) propose a model which includes the most common motivational mechanisms used by previous researchers that influence the entrepreneurial process. These mechanisms are: need for
15 self-efficacy. Shane et al. (2003) argue that these motivational concepts influence the
entrepreneurial process.
However, when entrepreneurs focus on sustainability (i.e. sustainable entrepreneurs), other motivational concepts may underlie the entrepreneurial process as their primary focus is to serve the triple bottom line (balancing environmental resilience, economic health and social equity) (Gibbs, 2006; Patzelt & Shepherd, 2011; Schaper, 2016). Patzelt and Shepherd (2011) also recognize this and state that current explanations are insufficient to model the recognition of opportunities for sustainable development. Additionally, Tilley and Young (2006) argue that sustainable entrepreneurship is a new type of entrepreneurship and therefore needs to be distinguished from the conventions of environmental, economic and social entrepreneurship. Their model (Figure 1) suggests that sustainable entrepreneurship derives from these three poles of entrepreneurship. Each pole or type of entrepreneurship, includes different values that
motivate entrepreneurial behaviour and activity (Tilley & Young, 2006).
Since sustainable entrepreneurship serves the triple bottom line and therefore logically flows from environmental, economic and social entrepreneurship, the following sections will elaborate on these three areas and their corresponding values that motivate sustainable entrepreneurial action.
16
Figure 1. The sustainable entrepreneurship model by Tilley & Young (2006)
Environmental motivational components
Environmental entrepreneurship narrows its focus towards the protection of the environment and the conservation of natural resources (Hockerts, 2006). Environmental
entrepreneurs resolve environmental degradation through the creation of new products, services and markets (Thompson, Kiefer, & York, 2011). A motivation to do so is found in the concept of perceived personal threat (Patzelt & Shepherd, 2011). Perceived personal threat relates to a psychological and physiological state of well-being that is threatened as a consequence of natural and communal environmental degradation. An environmental state where resources are depleted can lead to both psychological and physiological health problems (Patzelt & Shepherd, 2011).
17 When individuals perceive that nature is declining and their physical and psychological well-being is threatened, motivation to direct attention towards sustaining the environment more likely arises (Patzelt & Shepherd, 2011). Therefore, the following hypothesis is formed:
Hypothesis 3a: Perceived personal threat as a consequence of environmental degradation motivates sustainable entrepreneurship
Next to environmental entrepreneurship, economic and social entrepreneurship appear to form the base of sustainable entrepreneurship (Tilley & Young, 2006). In order to understand the motivational concepts of sustainable entrepreneurship, the next section therefore elaborates on economic entrepreneurship and its motivational concepts.
Economic motivational components
In the 19th century, the prevailing perception of an entrepreneur is as a business owner starting up and growing a successful, competitive, innovative and profitable venture. In this way, the traditional or economic entrepreneur strives to maximise private value (Thompson et al., 2011). This type of entrepreneurship has a recognisable objective economic unit of measurement in the form of monetary value. Moreover, a cost-benefit analysis can be used during the decision-making process in order to reach the most desirable economic outcome (Tilley & Young, 2006). Personal economic gain is of importance for recognizing opportunities and thus central within entrepreneurship (Patzelt & Shepherd, 2011). Financial profits for the entrepreneur also serve as a driving force to direct attention towards sustainable development. Specifically, research indicates that sustainable entrepreneurs are more often affiliated with market-driven enterprises and the increasing alignment between economic motivations and social and environmentally sustainable
18 outcomes (Cohen & Winn, 2007; Dean & McMullen, 2007). However, Patzelt and Shepherd (2011) assume that sustainable entrepreneurs are motivated by more than just personal economic gain. Gains for those other than the entrepreneur (i.e. non-personal gains), perhaps additional, is what distinguishes sustainable development from purely economic opportunities (Patzelt & Shepherd, 2011). Therefore, the next hypothesis is formed:
Hypothesis 3b: Non-personal economic gains in addition to personal economic gains motivate sustainable entrepreneurship
The concepts of entrepreneurial motivation within environmental and economic entrepreneurship are now identified. The last step is to further analyze the motivational concepts within social entrepreneurship since this type of entrepreneurship is also part of sustainable entrepreneurship (Tilley & Young, 2006). Therefore, the next section elaborates on how motivational concepts within social entrepreneurship contribute to sustainable entrepreneurship.
Social motivational components
Social entrepreneurs identify and exploit opportunities to create social value. Therefore, the creation of social value rather than wealth creation is central within social entrepreneurship (Hockerts, 2006). To create social value, Santos (2012) reasons that other-regarding behaviour, as opposed to self-interested behaviour, motivates social entrepreneurship. This altruistic motive and the desire to help others are also recognized by other scholars (Mair & Noboa, 2003; Thompson et al., 2011; Zahra et al., 2009). Additionally, Patzelt and Shepherd (2011) introduce the concept of altruism as a key driver in the process towards sustainability. Altruism (i.e. empathy and sympathy) relates to behaviour that focuses on improving the welfare of others.
19 Individuals are then motivated to find sustainable opportunities that develop benefits for others (Patzelt & Shepherd, 2011). Therefore, the following hypothesis is formed:
Hypothesis 3c: Altruism motivates sustainable entrepreneurship
To sum up, the previous sections identified how motivational concepts within environmental, economic and social entrepreneurship stimulate sustainable entrepreneurship. However,
sustainable entrepreneurs build value with a combination of environmental, economic and social goals (Tilley & Young, 2006). Therefore, the following section elaborates on why and how the motivational concepts of these three types of entrepreneurship are combined within sustainable entrepreneurship.
The triple bottom line motivation
Sustainable entrepreneurship derives from three types of entrepreneurship (Figure 1), resulting in a focus on the triple bottom line. However, fulfilling the three separate goals of sustainable development does not achieve sustainable development. This then suggests that social entrepreneurs or environmental entrepreneurs are in fact sustainable entrepreneurs (Tilley & Young, 2006). Focusing on the separate goals of sustainable entrepreneurship will result in “a mentality that focuses on maximising efforts only towards the individual elements of sustainable development and not maximising efforts towards sustainable development” (Tilley & Young, 2006, p. 9). Therefore, an indication of twelve elements is proposed (Figure 1) that need to be implemented and realised in order for the entrepreneurial activity to be sustainable. In other words, sustainable entrepreneurship is the sum of all the twelve elements operating in unison that logically flow from the three entrepreneurship poles. Sustainability therefore cannot be achieved
20 by only subscribing to any of the economic, social or environmental entrepreneurship poles. The relationship between these three poles and sustainable entrepreneurship is the only route to fulfilling sustainable development (Tilley & Young, 2006).
In addition, Patzelt and Shepherd (2011) propose that a combination of motivational components within entrepreneurs influence sustainable development. In their model, altruism, perceived personal threat as a consequence of environmental degradation and economic gains, are proposed as part of the key motivational components. These three motivational drivers can be drawn back to the values within the three entrepreneurial poles that underlie sustainable entrepreneurship according to Tilley and Young (2006). More specifically; perceived personal threat as a consequence of environmental degradation could be linked to environmental entrepreneurship, economic gains could be linked to economic entrepreneurship and lastly, altruism could be linked to social entrepreneurship (Patzelt & Shepherd, 2011; Tilley & Young, 2006).
Since environmental, economic and social aspects are inextricably intertwined within sustainable entrepreneurship, a combination of these motivational components is expected to be the driving force, motivating entrepreneurial behaviour towards sustainability. Thus, the
following hypothesis is formed:
Hypothesis 4: A combination of environmental, economic and social motivational components underlie the entrepreneurial process towards sustainability
To conclude, this theoretical framework shows how literature on entrepreneurship, sustainability and entrepreneurial motivation is useful for understanding the process of entrepreneurial action towards sustainability. However, entrepreneurship and sustainable
21 development are both emerging areas. Therefore, the basic themes of sustainable development and entrepreneurship remain disjointed and much of the literature is more prescriptive than descriptive (Hall et al., 2010). Moreover, the conceptual framework of motivational
characteristics that influence sustainable development by Patzelt and Shepherd (2011) has not been empirically tested to our knowledge. Therefore, it can be argued that there is a research gap when it comes to reasons why entrepreneurs adopt sustainability as their prime focus (Patzelt & Shepherd, 2011). To gain further insights aforementioned reasons why, a qualitative research is conducted. The following section includes the method section.
22 Methodology
Research design, strategy and sample
Since the field of entrepreneurship and sustainability are both emerging with little conducted research, an explorative approach is required (Hall et al., 2010; Neuman, 2016). The design of the explorative approach is best suitable in a new area that hasn’t been studied before (Neuman, 2016). Above this, an explorative approach enhances the ability to gain further insights and enables deeper understanding of the phenomenon (Saunders & Lewis, 2012; Yin, 2009). In order to answer the research question, a qualitative data collection method in the form of
semi-structured interviews was chosen (Appendix 1). This way, insights are provided that a
quantitative methodology could not possibly offer. Saunders and Levis (2012) additionally argue that a qualitative approach and open-ended questions are more suitable for finding reasons and answers to the question why. Other researchers argue that a qualitative research investigates the why and how, not just what, where, when (Bryman & Bell, 2015).
As a sampling frame, Dutch sustainable entrepreneurs that operate in the fashion industry were selected. The choice for one industry was to ensure that all entrepreneurs operate in the same industry to avoid unnecessary differences between sustainable entrepreneurs in the sample. Moreover, it can be assumed that the entrepreneurs have had to make similar choices and have faced similar issues. Fashion is chosen as an industry since this sector’s environmental, economic and social impact is one of the highest (De Brito, Carbone & Blanquart, 2008). More specifically, the three axes of sustainable development (environmental, economic and social) are of particular sensitiveness within the fashion industry. Firstly, in the environmental domain, the fashion industry intensively uses chemical products and natural resources which results in a high
environmental impact. This causes the fashion industry to be the second most polluting industry, after the oil and gas industry. Secondly, in the social domain, the fashion industry mostly relies
23 on penurious labour conditions during the clothing production process. Lastly, in the economic domain, an economic growth of the clothing industry in Europe is present since production is often moved to the Far East countries (De Brito et al., 2008). Taken together, this study selected Dutch sustainable entrepreneurs who serve the triple bottom line (balancing environmental, economic and social objectives) and work in the fashion industry as a sampling frame.
Participant recruitment and selection
The research sample was selected from the population of Dutch sustainable entrepreneurs who operate in the fashion industry. Since the total population of this specific group is unknown, a non-probability sampling technique was applied (Saunders & Lewis, 2012). Then, a purposive sampling strategy was used to select the best suitable participants from this specific population (Neuman, 2016); Dutch sustainable entrepreneurs who operate in the fashion industry and have integrated sustainability into their core business. The findings of Cohen and Winn (2007) together with the theoretical definitions of entrepreneurship and sustainability, were used to distinguish which enterprise operated in a sustainable way. Cohen and Winn (2007) present numerous examples of innovative entrepreneurial opportunities that create new technologies or business models in various sectors. Since the focus of this research is on the motivation of the entrepreneur who established the company, another selection criteria was that the founder needed to be available for the interview.
The participants were found with the help of online platforms specialized in sustainable entrepreneurship. The main Dutch online platform for sustainable entrepreneurship is MVO Nederland, a platform set up by the ministry of Economic Affairs (www.MVOnederland.nl). The information provided by this platform together with information from the entrepreneur’s website was used to assess whether the enterprise was sustainable or not. A second way to find
24 participants was with the use of reputational or snowball sampling (Neuman, 2016). At the end of each interview, the participants were asked if they knew other sustainable entrepreneurs working in the same sector. This recruitment strategy resulted in 23 sustainable enterprises who were contacted by email. The email included the purpose of the research, an explanation of the
interview and the question to collaborate in the research. Eight founders of sustainable enterprises responded via email and were willing to participate. When entrepreneurs did not respond by email, a phone call was made. This resulted in another respondent. The other 14 sustainable entrepreneurs were not willing or able to participate in this research due to varying reasons such as being too busy or because they were already participating in other research studies. The
resulting sample of nine individuals was between the ages of 25 and 59, 44 percent female and 89 percent working in the fashion industry for 1 to 5 years. A more descriptive overview of the nine entrepreneurs and their enterprises can be found in Appendix 2.
Research instrument, data collection and analysis
The primary data was obtained through in-depth semi-structured interviews. This way, new questions could be added and some questions could be eliminated depending on the answer given by the participant. Above this, semi-structured interviews enable probing for further clarification of answers (Neuman, 2016). Additionally, handwritten notes were taken during the interviews. The topic list (Appendix 1) was based on the theoretical framework and included a set of predetermined questions which made up the basic structure of the interview. The topics were; general personal information, entrepreneurship, sustainability and entrepreneurial motivation (environmental, economic, social). The first topic included questions that identified personal information such as age, work experience and a description of the enterprise. The second topic covered all questions regarding entrepreneurship and sustainability. Here, participants were asked
25 to define the concepts of entrepreneurship and sustainability and to comment on a possible
relationship between entrepreneurship and sustainability. Additionally, questions were asked that identified crucial factors that influenced their choice to start a sustainable enterprise. The last topic covered questions on entrepreneurial motivation. Here, participants were asked about their environmental, economic and social motivational concepts. Questions identified what the motivational concepts included, why they were important and how these concepts contributed to their entrepreneurial motivation in general to focus on sustainability.
Each interview was recorded and took mostly place at the enterprise or at the
entrepreneur’s office. Secondary data such as the company’s website was used to get an overview of the enterprise. In total, nine interviews varying from 45-70 minutes were transcribed in order to analyse the data. Before analyzing the data, the transcripts were sent for approval and
verification to the participants in order to detect errors. After approval and verification, the first step was to code the data in different themes that were used in the interview (open coding). The codes were then ordered and put together in different categories (axial coding). This resulted in a structured overview where findings can be compared. Lastly, selective coding was applied where connections between the categories were uncovered (Saunders & Lewis, 2012).
26 Results
Based on the data of nine semi-structured interview transcripts, the following section gives an overview of the findings. When filtering the most important codes, seven major themes occur. These seven themes contributed to the answer of the hypotheses and additionally to the research question: Why do entrepreneurs focus on sustainability?
The analysis started with a description of (1) the relationship between entrepreneurship and sustainability, and was followed by (2) the economic system and market failures. Thereafter, the motivational concepts of the sustainable entrepreneurs were divided in four types: (3)
environmental motivation, (4) economic motivation, (5) social motivation and (6) additional motivation. Finally, the last theme was clarified: (7) sustainable entrepreneurship today.
The relationship between entrepreneurship and sustainability
Hypothesis 1: The process towards sustainability is enhanced by entrepreneurship
“So it [entrepreneurship] always starts inside [intrinsic] and that is why I do believe that entrepreneurs will make the world a better place. That is entrepreneurship.” Clearly, this
respondent sees a relationship between entrepreneurship and sustainability. All other entrepreneurs recognized and emphasized this relationship as well by referring to specific characteristics that belong to entrepreneurs rather than to large incumbent firms. These characteristics enable entrepreneurs to adopt and enhance sustainability and vary from being flexible and small, to being able to start sustainable from scratch and remaining close to their customers. All nine entrepreneurs stated that for larger incumbent firms to be(come) sustainable is much more difficult than for entrepreneurs. Some even said it will be nearly impossible for incumbents to completely adapt sustainability in their core business. An explanation for this was
27 given in the following arguments: incumbents often have fixed budgets, need to cope with
existing stakeholder’s expectations, are further removed from their customers and above all, don’t know how to change or the consequences of the change will be too drastic. One entrepreneur illustrated the inability of market incumbents to become sustainable with the
following statement: “Well, big implies slowness. For example, if you want to revolve a container
ship, this will be harder than with a tiny speedboat.” To conclude, results suggest that specific
characteristics belonging to entrepreneurs rather than to market incumbents enable entrepreneurs to adopt and enhance sustainability. Therefore, Hypothesis 1 is accepted.
Even though all respondents agreed that entrepreneurs are the ones who enhance the process towards sustainability, five respondents appointed a crucial role in this process to the market incumbents as well. The respondents stated that alone, their enterprises have little
influence compared to market incumbents like ZARA or H&M: “They [market incumbents] can
reach the bigger audience and thus can have more impact. So if they become sustainable, we will all become sustainable so to say.” Sustainable market incumbents are therefore seen as needed in
order to truly progress the transition towards sustainable development. Some entrepreneurs suggested that since a full adaptation of sustainability seems too hard, market incumbents should incorporate some features of sustainability. Since the market incumbent’s reach is bigger, this as well will result in a bigger impact than small enterprises have alone.
While the role of market incumbents is described as necessary and accelerating during the process of sustainable development, the role of the entrepreneur is positioned as a crucial starting point of the process. Table 1 shows that all nine respondents mentioned entrepreneurs to be the initiators of the process. Entrepreneurs are then described as the ones who dare to take the lead, who want to try or invent, create ideas and thereby showing others that it is possible to do sustainable business. Market incumbents will react with sustainable action since they see the
28 potential market for sustainability which has been discovered by entrepreneurs. Three
respondents mentioned a second role for the entrepreneur: as a consultant to the market
incumbents. Once they understand the need for sustainability, entrepreneurs give advice in how to change. They work together and help each other grow. This collaboration seems inevitable to one respondent: “They [market incumbents and entrepreneurs] need each other. It’s just like the
forest; you need the big tree in order to protect the little shrubs at the bottom. If you didn’t have the big tree, the shrubs would die. If you didn’t have the shrubs, the big tree would die. They go together.”
Analyzing the first theme resulted in two actors that enhance the transition towards sustainability: entrepreneurs and market incumbents. However, a third player in this process is pointed out as well: the customer. Four respondents explicitly argued that the customers, being the ones that consume, hold extensive power and responsibility in the process of sustainable development: “It’s really about, if the customers make themselves heard, then things will really
change.” Moreover, it is said that changing the world can only be done when the customer who
normally shops at H&M and ZARA is involved. The customers should therefore make the connection to sustainability and once they have done so, further progress is expected.
To conclude, examining the data on the first theme showed that all respondents recognized the relationship between entrepreneurship and sustainability. This relationship is explained with several characteristics that entrepreneurs rather than market incumbents hold, which enable entrepreneurs to adopt and enhance sustainability. As such, Hypothesis 1 is
accepted. Three different players in the transition process towards sustainability were identified: entrepreneurs, market incumbents and customers. Entrepreneurs are viewed as the crucial starters of the process and as consultants, whereas the market incumbents are seen as accelerators during the process. Lastly, the customer was presented as the one who holds the power and
29 responsibility to take sustainable development to the next level. Table 1 provides an overview of the different actors and their roles in the transition towards sustainable development, along with sample comments.
Table 1. Actors and their roles in the process towards sustainability
Actors Roles Frequency of
respondents
Exemplary quotations
Entrepreneur Initiator 9 “So yes I agree that today, it has to come from the smaller companies that start from scratch. They show that it can be done.”
Consultant 3 “Now they [market incumbents] call him [entrepreneur], if he please could tell them what to do because they’re lost.”
Market incumbent
Accelerator 5 “Most people would not recognize it [cork], but tomorrow, should H&M start using cork, the whole of Netherlands would be on it just because H&M said so.”
Customer Booster 4 “But you change the world involving
people who normally go to H&M and ZARA, that is the majority.”
30 The economic system and market failures
Hypothesis 2: Market failures within the economic system stimulate sustainable entrepreneurial behaviours
All nine entrepreneurs identified certain market failures in the fashion industry which resulted in market gaps. Each entrepreneur then used these market failures to start their enterprises in order to bridge the gaps. Table 2 shows that four different market failures were mentioned that served as a starting point: inefficiencies, externalities, flawed pricing mechanisms and lastly, an overall failing fashion industry. Therefore, Hypothesis 2 is accepted.
The label inefficiencies covers inefficient production processes that lead to significant waste: “it’s a linear economy, we use the raw material, make the product and then we throw it
away.” Several respondents argued that nowadays market incumbents produce as much as
possible since a higher quantity of orders results in a minimal production price. Above this, respondents said to live in a society of abundance where people renew their wardrobe every month. This leads to a production process which goes together with significant waste, abundance and oversupply. Moreover, respondents claimed that such a production process is not longer in control by these large firms as producers don’t know what, how much or where they produce. Three entrepreneurs discovered the potential to reduce waste through recycling or up cycling and built their enterprises around it.
The second market failure is externalities. Negative externalities occur when a third party incurs the costs resulting from the production or consumption of clothes without receiving equivalent benefits (Cohen & Winn, 2007). The following examples of negative externalities were named: water pollution, runoffs from textile dying processes, toxification of land used for cotton farming and unethical treatment of workers. Pollution as an externality was mentioned the
31 most, two respondents even recalled that the fashion industry is the second most polluting
industry on earth due to the extensive use of pesticides, insecticides and chemicals. One respondent argued that pollution also heavily occurs on the transport side since most of our clothes are made in Bangladesh or India and need to be transported back to Europe. Two respondents said that even though several audits are nowadays done in order to reduce the
negative externalities, these audits are for the most part unreliable. All nine entrepreneurs created opportunities with their enterprises to reduce the negative externalities by using organic or ecological fabrics, fair trade production methods or non toxic dye.
Flawed pricing mechanisms is the third market failure which incorporates the
undervaluing and under pricing of natural resources (Cohen & Winn, 2007). Natural capital such as oil, gas or water is valued as infinitely plentiful in the marketplace, resulting in inaccurately priced clothing. One respondent stated that it is not possible to buy a T-shirt for the same price as a cup of coffee: “Believe me, I did all the calculations and every time a new collection comes up,
I just can’t imagine how they get to those prices. Well I know that if you have high quantities, of course prices will drop. But this low, how it’s being sold now, well I honestly don’t understand, it is not possible, I do understand it but it is just not possible.” Another respondent mentioned on
the same comparison of equally priced coffees and T-shirts: “If you think about how a cotton
plant needs to grow, to be harvested and cleaned, spun, knitted, transported, cut, well the whole idea of what comes with it and then to be sold for five Euros is just weird.” Four entrepreneurs
exploited the market imperfection of flawed pricing mechanisms by using transparent prices in their businesses. Consumers are informed on the prices of the production process, fabrics, wages and transportation which are all incorporated in the final price.
The final market imperfection is an overall failing fashion industry. Four entrepreneurs explicitly stated that inefficiencies, externalities or flawed pricing mechanisms are all part of a
32 larger whole which is a failing fashion industry. One respondent said: “We’re part of a incorrect
system. Actually, the whole system needs to collapse or needs to make place for a new system. At the moment we are in a system which doesn’t work properly. Well, it’s just too crazy that it is so hard for us to stop and think about how things need to be correct.” The respondent then
continued on how sustainability is now presented as an argument to sell even more. This all happens within a system which clearly doesn’t work properly. Another respondent stated that it is almost as if everyone is doing business without having an actual plan that balances the needs of humanity.
The four market failures within the fashion industry all represented opportunities for the creation of profitable new ventures. As such, Hypothesis 2 is accepted. Some entrepreneurs started their enterprises around one specific market failure whereas other entrepreneurs built their enterprises around several market failures. Table 2 provides an overview of the nine
entrepreneurs who identified several market failures which served as a source of entrepreneurial opportunity.
Table 2. The identification and exploitation of market failures per entrepreneur Entrepreneur Identified market failures Exploitation of market failures 1 Externalities, inefficiencies, flawed
pricing mechanisms, failing fashion industry
Recycling, European produced, transparent pricing
2 Externalities, inefficiencies, externalities, flawed pricing mechanisms
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3 Externalities Organic, fair-trade
4 Externalities, failing fashion industry Organic, home produced 5 Externalities, failing fashion industry Organic, European produced 6 Externalities, inefficiencies, flawed
pricing mechanisms
Recycling, up cycling
7 Externalities, flawed pricing
mechanisms, failing fashion industry
Vegan, fair-trade
8 Externalities Vegan
9 Externalities, inefficiencies Recycling
Environmental motivation
Hypothesis 3a: Perceived personal threat as a consequence of environmental degradation motivates sustainable entrepreneurship
The third theme is on environmental motivation where entrepreneurs were questioned how the environment influences their motivational drivers. Only four entrepreneurs included the environment when discussing their motivational drivers. In general, all four entrepreneurs feel motivated to sustain the environment the best way possible through their businesses: “It’s just,
you live on this earth, everything the earth gives you, everything you wear, you take, you consume, belongs to the earth. So why would you not treat it with the most of respect? The way you respect your own mother must be the way to respect Mother Earth, simply because it is everything.” The environmental motivation of one entrepreneur consisted of the damage that
34 things that we have to avoid if we want to live rather than survive. Another respondent mentioned physiological health problems as a consequence of the toxic indigo and pesticides that are used in the production process of clothing. He believes that the next step for humanity will be the need for knowledge of what we wear on our skin and how bad this can be for our health. He compared this development with the food industry by saying that this industry is 10 or 15 years ahead of the fashion industry; people nowadays already want to know what they exactly eat. Lastly, one respondent was motivated by the urgent environmental state we are in right now: “Well, we only
have one planet. We are looking for another exoplanet, and in the next 60 years we will probably have moved humanity to a different planet. But for now we have to cope with this one. And well, with the current population growth and the way people in new developing countries want to live according to Western standards, we cannot maintain this situation. So there’s a need to become more sustainable.”
Only four entrepreneurs explicitly mentioned the environment as one of their motivational drivers. However, perceived personal threat was not reported. Therefore, Hypothesis 3a is not accepted. Varying other environmental drivers were named, from an urgent environmental situation to health problems as a consequence of harmful components in clothing. Finally, the interviews provided evidence that all four entrepreneurs aim at sustaining the environment with their enterprises without feelings of personal threat as a consequence of environmental
degradation.
Economic motivation
Hypothesis 3b: Non-personal economic gains in addition to personal economic gains motivate sustainable entrepreneurship
35 When the entrepreneurs were asked about their economical motivation, three categories occurred within the data: personal gains, non-personal gains and economic gains as the need for existence. Only three respondents illustrated how their enterprises contribute to personal
economic gains. Buying a house or basic stuff, travelling and to live a simple life were the examples mentioned by these entrepreneurs. In total, four entrepreneurs explained that their businesses resulted in economic gains for others. By paying their staff, these entrepreneurs enable others to build up a living as well. Some entrepreneurs went beyond paying their staff and
explained how their business was not just for them, but also as a financial reward for society. One respondent even went beyond personnel and society, by saying that the planet should profit as well from his business: “Of course, it has to be win on all sides. I’ve once heard of a
win-win-win-win situation, … We’re used to win-win situations when we do business, so we can help each other, but the third win would be the community around us and the fourth win is the planet that we live on. So that is something I would strive for, moreover, it is something I strive for.”
One entrepreneur mentioned that all parties in the supply chain should earn a fair wage, rather than one party.
Eight entrepreneurs claimed that financial profits are needed in order to survive on the long term. Therefore, the interview data provided strong evidence that entrepreneurs mostly view their economic motivation as needed in order to sustain: “It’s crucial to have a business that is
financially sound, otherwise you can’t survive so you have to make money.” Their enterprises
have to be profitable businesses cases, should be feasible and are truly about traditional
entrepreneurship, whether they like it or not. The economy is portrayed as something that has to be dealt with and money is seen as a crucial means to hold the right of existence. Moreover, half of the entrepreneurs said that their enterprise is not really about the money: “I’m not doing this to
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something else. That is absolutely not our goal.” Two other respondents stated their income to be
very low or to be living on minimum wage, becoming rich was also not their main goal. To summarize, the data suggested that economic motivation drives all respondents. Moreover, both personal and non-personal economic gains were mentioned. As such, Hypothesis 3b is accepted. However, most of the respondents argued that it’s not really about the money for personal gains or non-personal gains. They reported the money to be needed to sustain their businesses on the long run. Three respondents reported examples of personal economic gains like buying a house or going on vacation. The enterprises have to be financially sound but are not there to provide a luxurious lifestyle for the entrepreneurs. Economic gains for others are reported in different ways: employees, society, the planet and everyone involved in the supply chain.
Social motivation
Hypothesis 3c: Altruism motivates sustainable entrepreneurship
Reviewing the data demonstrated that all nine entrepreneurs reported to be motivated by the desire to create social value, or in other words, to develop benefits for others with their businesses. One entrepreneur elaborated on the creation of social value: “You have to create
social impact. So it’s not just about preventing problems, of course that’s great, but you also have to add something. You have to leave something positive behind, give something extra back. So it’s not just about reducing emissions, because by this you won’t resolve the climate change problem, you have to add something extra.”
The data showed four different actors that can be labelled as “others” to develop benefits for: customers, workers, the network of the entrepreneur and the society. Firstly, customers were mentioned by a respondent as one of the reasons why she initially started her enterprise. The
37 advice to customers and the reactions of her customers enabled her to keep up: “It’s a pleasure to
see that people are genuinely happy with their high quality basics. So people think and know, o great, it’s produced in Europe, it’s made of a living wage rather than a minimum wage. This transparency that we can show, people really appreciate that. And in the end, that’s what we do it for.”
The second actor that was mentioned was the workers in the supply chain. Six
entrepreneurs emphasized that together with a fair living wage instead of a minimal wage, fair working conditions are viewed as equally important. Health insurance, empowerment or in general being fair to people, were reported examples that entrepreneurs feel responsible for. The interest in who made their clothes and under what conditions, are crucial standards on which no entrepreneur wanted to give in: “This all leads back to my initial motivation which is that I
wanted to create a product or brand that needs to be correct. If this product becomes a success, then tomorrow I can decide to produce everything in Bangladesh to make more money. Well firstly then people can tackle my whole concept but secondly, that was never why I started this in the first place.”
The third actor resulting from the data is the network of the entrepreneur. This theme was brought up by two respondents who explained that their network consists of fashion bloggers, other sustainable entrepreneurs and shops. The social value is created within the network by collaboration between the different actors in the network. These actors may have different views on sustainable entrepreneurship but collaboration often results in new ideas that additionally create social value. The varying actors help each other grow and support each other’s businesses within the network.
Lastly, developing benefits for the society served as a driver for two respondents: “To
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share. … So the business I have is not just for me, it is also a reward for society. Both financially and socially. It’s more than coming for the shop, there’s a lot more benefits to reach.” One other
respondent explained that collaboration rather than exploitation within the society will lead to a higher quality of welfare in societies. Creating just this was reported as her driver and motivated her to do business in a sustainable way.
To conclude, analyzing the data on social motivational components explained how all entrepreneurs are motivated to create benefits for others with their business. As such, Hypothesis 3c is accepted. Instead of a joint actor to create social value for, the nine respondents labelled four different actors: customers, workers, the network of the entrepreneur and the society. Most of the entrepreneurs stated to feel responsible to develop benefits for the workers in the supply chain during the production process.
Additional motivation
Hypothesis 4: A combination of environmental, economic and social motivational components underlie the entrepreneurial process towards sustainability
Combining the results of the previous three motivational concepts indicate that sustainable entrepreneurship is motivated by a combination of environmental, economic and social motivational concepts. This is also shown in Table 3 which provides a complete overview of the motivational concepts within sustainable entrepreneurship. Therefore, Hypothesis 4 is accepted. Besides environmental, economic and social motivational components, three additional factors were mentioned by the respondents. These additional factors appear to be of great
39 were mentioned by all nine respondents when asked about their motivations to start a sustainable enterprise.
The first factor was the drive to bring change. A striking similarity between all nine respondents was that they unanimously mentioned this theme. The drive to change the world was mentioned equally as often as the drive to change the fashion industry. Five respondents
mentioned changing the world to be part of their motivation: “To drive change, to change the
world. To leave the world in a better state than when you entered it. That is always our motto, and Gandhi’s motto; be the change you wish to see in the world. So that’s maybe number one of the things that drives me. That is what I want to do in life.” Other entrepreneurs elaborated on
changing the world by saying that their enterprises are used as a source for good and should lead as an example for the rest of the world. Additionally, one entrepreneur said that his enterprise should enable his sons to live in a better world since his business model showed that a circular economy can be profitable.
The drive to change the fashion industry was mentioned by five entrepreneurs. They explicitly argued that the way this industry currently operates has to change. Moreover, the production processes that are expedited in order to get new trends to the market as fast and cheaply as possible (i.e. fast fashion) have to stop. With their enterprises, respondents compete with the larger market incumbents like ZARA and H&M and hope to destroy these firms: “Yes,
well that certainly gives me a lot of motivation, to beat such an industry. Just because it’s an industry that doesn’t fit in our age of time.” Even though they do understand that their influence
might be minimal due to their size, being able to have any kind of influence is enough for these entrepreneurs. They believe that a fashion revolution can start with something small such as their enterprises. One respondent recalled the creation of awareness around consumer behaviour in the fashion industry as her major driver to change this industry. She hopes to show consumers with
40 her products that unfair business principles are really unnecessary in the fashion industry, looking fashionable in vegan, fair trade clothing is also an option.
The second additional motivational factor reported by three respondents was the need for identification with the product they sell or produce. They argued that they need to be able to identify with the product as well as the story behind the product. Most market incumbents
produce and sell clothing that is not in line with the respondent’s principles or view on the world, the entrepreneurs therefore started their own sustainable enterprises.
The third additional motivational factor was having a passion for fashion. Three
entrepreneurs said that their love for fashion enabled them to wake up every morning and get to work. However, they explicitly argued that their love for fashion had to go together with their sustainability principles. Thus, working in a market incumbent operating in the fast fashion industry was not an option for them and hence they started their own enterprise.
To conclude, synthesizing the interview data revealed three important additional
motivational components next to environmental, economic and social drivers: bringing change, the need for identification with the product and the passion for fashion. The drive to bring change was reported by all respondents in two ways; to change the world and to change the fashion industry. When these three drivers are combined with the data on environmental, economic and social motivation, the motivation of nine sustainable entrepreneurs is revealed in Table 3. Table 3 also shows that sustainable entrepreneurs are motivated by a combination of environmental, economic and social motivational concepts. As such, Hypothesis 4 is accepted. Based on these findings, Figure 2 shows a comprehensive overview of all named motivations that explain why entrepreneurs focus on sustainability.
41 Table 3. The motivation of sustainable entrepreneurship
Motivation Motivation themes Frequency of
respondents
Environmental 4
Damage of plastic 1
Psychological health issues 1
Urgent environmental state 1
General; sustaining the environment 4
Economic 9
Personal economic gains 3
Non-personal economic gains 4
Need to survive 8
Social 9
Creating social value for others 9
Additional 9
Change the world 5
Change the fashion industry 5
Identification with the product 3
Passion for fashion 3
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Figure 2. Motivational factors that influence sustainable entrepreneurship
Sustainable entrepreneurship today
Reviewing responses to the topic of sustainable entrepreneurship demonstrated a crucial finding. This interesting finding explained why nine entrepreneurs chose sustainable
entrepreneurship over other types of entrepreneurship (e.g., social, economic or environmental). An explanation for this was given in the fact that the world today is a world in which
sustainability awareness is rising. This time of age leads to a choice for sustainable
entrepreneurship for all nine respondents. In other words, sustainable entrepreneurship was, according to the respondents, the only legitimate type of entrepreneurship in today’s world. This time of age was described as one where a lot of change is going on, as a time where sustainability is high on everybody’s lists and as a time where capitalism is slowly making place for a more circular economy. One respondent clarified this time of age with a comparison to previous generations: “It’s only since the last 20 years that people started asking questions. This time is a
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up their kids in the same manner, not so long ago people started to reflect on things and started to ask questions. The fact that questions are being asked is the difference now.”
Other respondents stated that since today the information about environmental and societal worldwide problems is widespread and known, doing business in a different way than sustainable business wouldn’t make sense. A new entrepreneur therefore should always add something positive to the world instead of only taking something away. Thus, operating as a traditional entrepreneur was not even considered an option: “No it’s not possible, if you start
something new then you have to add something. Because it’s needed, there too many problems. To say, I just do regular business, there’s nothing wrong with that, well that’s actually too little, take the change to do something positive.” Next to the information being available, one
respondent argued that the amount of innovative fabrics today has grown in such an amount that the exploitation of animals and workers is not needed anymore. Therefore, starting an enterprise that operates in fast fashion is not legitimate.
In sum, all nine entrepreneurs viewed sustainable entrepreneurship as the only legitimate type of entrepreneurship. This argument was supported in two ways; the fact that the
entrepreneurs live in a time where sustainability awareness is rising as well as the available information on worldwide problems nowadays. Due to these two reasons, all entrepreneurs found it very legitimate to operate as sustainable entrepreneurs. This suggests that the context of the 21st century served as a trigger for the choice for sustainable entrepreneurship as presented in Figure 3.
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