Entrepreneurs are burning Earth:

Thoughts on the new entrepreneurial ecology

Howard FrederickProfessor of Innovation & Entrepreneurship,

Unitec New Zealand, Auckland

Melbourne: Cengage Learning, 2010

Part 1 The environment for entrepreneurship in the Asia Pacific

• Chapter 1 Entrepreneurship: Evolution and revolution • Chapter 2 The entrepreneurial mind-set • Chapter 3 The environment, the economy and

entrepreneurship • Chapter 4 Ethical, environmental and social

entrepreneurship Part 2 Initiating entrepreneurial ventures

• Chapter 5 Innovation: The creative pursuit of ideas • Chapter 6 Pathways to entrepreneurial ventures • Chapter 7 Legal and regulatory challenges for

entrepreneurial ventures • Chapter 8 Sources of capital for entrepreneurial

ventures Part 3 Developing the entrepreneurial plan

• Chapter 9 Assessment and commercialisation of entrepreneurial opportunities

• Chapter 10 Marketing challenges for entrepreneurial ventures

• Chapter 11 Measuring performance for entrepreneurial ventures

• Chapter 12 Developing a sustainable business plan Part 4 Growth strategies for entrepreneurial ventures

• Chapter 13 Strategic entrepreneurial growth • Chapter 14 Global opportunities for entrepreneurs • Chapter 15 Entrepreneurial families, succession and

continuity • Chapter 16 Developing entrepreneurship within

organisations

How do you say entrepreneur in Bahasa Indonesia?

Video available on book’s website

www.learnpreneurship.com

Entrepreneurs are burning Indonesia

Human-induced climate change Entrepreneurs

have exploited the environment with impunity, without any thought of sustainability

Entrepreneurs contribute to the planetary crisis

Entrepreneurial ecocide

The trouble with palm oil

The true price of Fiji Water

Mitigation versus adaptation Mitigation

means managing the risks

Adaptation means adapting to changes

Entrepreneurs never waste a good crisis!

Entrepreneurs can be saviours of the planet

Schumpeter• Recessions clean the slate

through creative destruction Schramm

• Entrepreneurs benefit from recessions: (1) explosion of creative impulse, (2) scarcity of options, (3) lower operating costs, and (4) severely hit large corporations.

Innovations developed during recessons• Flourescent bulb• McDonalds• Microsoft OS• Apple PowerBook• Ipod

Pachauri of IPCC• ‘Entrepreneurs who respond

to the challenge will reap commercial success – while businesses which fail to do so face oblivion’.

An ecopreneur combines the drive and imagination of the entrepreneur with the stewardship of a conservator.

Elkington and Burke (The Green Capitalists, 1989): • Business can adjust its behaviour and consumers can make

environmentally friendly purchase decisions. Bennett (Ecopreneuring, 1991)

• Opportunities waste recycling, reducing air pollution, ‘atmospheric businesses’, fuel for the planet, waterworks, safe foods, enviro-investment, and education on environment.

Berle (The Green Entrepreneur, 1991) and Blue (1991) • began to use terms like ‘environmental entrepreneur’, ‘green

entrepreneur’, ‘eco-entrepreneur’, and ‘ecopreneur’.

Ecopreneurs

Examples of ecopreneurs (Hard) responding to market signals

and government regulation• (Commercial) ‘Innovative

Opportunist’ sees regulations as a market niche

• (Social) ‘Visionary Champion’ wants to change the world

(Soft) responding to people and personal networks• (Commercial) ‘Ad hoc enviropreneur’

comes to the green movement more by chance.

• (Social) ‘Ethical Maverick’ is influenced by friends, personal networks and past experiences

“an unusual person who has different ideas and ways of behaving from other people, and is often very successful”

“not planned, but arranged or done only when necessary”

Increasing demandDemand for resources and eco-system services

Declining supplyResources and ecosystem services

Sustainable supply

Sustainable demand

How to travel through the ‘funnel’

Sustainable future

Margin for action is narrowing

The present The future

Industrial entrepreneurship 1800-2000• Did not consider environment in planning and design. • Focused on extraction of resources • Did not prevent negative effects• Entrepreneurs had a negative impact on the environment and

society.

Sustainable entrepreneurship from 2000+• Focus on biosphere and limiting waste embodied in products. • Take into account the living dimension of the products and

services that we produce. • Create net positive entrepreneurial impact loops

Principles of ‘entrepreneurial ecology’

The study of the interactions of living organisms (including businesses) with each other and with their environment.

Sum of all living matter on Earth

Every product after its useful life will be waste

A proportion of an entrepreneur’s product or service is returned (looped back) to nature. It can have positive or negative impacts.

Doing something with the long term in mind

Biosphere

SociosphereEconosphere

Biosphere

Sociosphere

Econosphere

• Physical environment• Climate & energy• Water, soil, flora & fauna• Atmosphere & topography

• Human enterprise• Government & infrastructure• Knowledge, labour & capital• Opportunity and value

• Business environment• Entrepreneurial factor

conditions• Efficiency enhancers• Entrepreneurs operate here

(+)

Unsustainableentrepre-neurship

(-)

Sustainableentrepre-neurship

Entrepreneurship’s positive and negative impacts on biosphere

Biosphere

SociosphereEconosphere

Biosphere

Sociosphere

Econosphere

• Physical environment• Climate & energy• Water, soil, flora & fauna• Atmosphere & topography

• Human enterprise• Government & infrastructure• Knowledge, labour & capital• Opportunity and value

• Business environment• Entrepreneurial factor

conditions• Efficiency enhancers• Entrepreneurs operate here

(+)

Unsustainableentrepre-neurship

(-)

Sustainableentrepre-neurship

Entrepreneurship’s positive and negative impacts on biosphere

We might see these concepts in an equation:SE = f (B + S + E)

The elements are arranged in order of historical sequence. If we use ‘ ’ to mean embedded in or a subset of, we get∈SE = (E S B)∈ ∈

Negative entrepreneurship

Entrepreneurs undervalue biodiversity, energy, water, and materials.

Rather than adding value to living materials we only aim to reduce (e.g. through recycling) the quantity of dead resources.

In the end, society penalises entrepreneurs through regulation.

Positive entrepreneurship • Generates positive value-

adding impacts • Eliminate designed waste,

duplication, disposability, planned obsolescence and wasteful end purposes.

• Positive entrepreneurs create net positive-impact loop systems and innovations that create levers for biophysical improvements and social transformation.

A framework provides a blueprint that converts abstraction into order, allows prioritisation of valuables or issues, and helps identify relationships.

Frameworks for an entrepreneurial ecology

The field of sustainable entrepreneurship is only just beginning.

Some outstanding candidate frameworks that are beginning to emerge.

Natural capitalism Cradle-to-cradle design Economic gardening The Natural Step Industrial metabolism Natural advantage of nations Lean manufacturing and the seven wastes Ecology of commerce

Frameworks for an entrepreneurial ecology

The ‘economy’ is part of the larger economy of resources and ecosystems

Four central strategies• More effective manufacturing processes; • Reuse of materials with closed loops and zero

waste; • A change in values from quantity to quality• Investing in natural capital, or restoring and

sustaining natural resources’.

Natural capitalism

buaian bayi buaian bayi NOT buaian bayi kuburan

A world without waste in which all materials are continuously recycled.

In the natural system there is no waste and the same materials have been recycled for billions of years.

Materials are conceived as nutrients and designed to circulate safely and productively.

Cradle to Cradle

Economy is ‘processes that convert raw materials and energy, plus labour, into finished products and wastes’

Create eco-interdependent businesses that create a permanent waste exchange system

By-product of one company becomes the raw material for another.

Industrial metabolism

Entrepreneurs can help save the planet Innovation accompanies failure We are engaged in a great climate war and an

economic calamity Our species has caused the mass extinction of

thousands of species. Opportunities are inherent even in times of crisis,

market failure, and environmental decline. Sustainable entrepreneurship takes into account the

living dimension of the products and services. Entrepreneurs must seek net positive entrepreneurial

impact loops with the biosphere.

Conclusions