Professional Documents
Culture Documents
to entrepreneurs?
Chapter 3
Entrepreneurship and
sustainable development
Objectives
1. To appreciate the role of entrepreneurship in challenging and urgent times
2. To classify the types of climate change effects on entrepreneurs as well as
the opportunities hat arise within the Asia–Pacific context
3. To review important concepts in climate change economics that impact
entrepreneurial activity
4. To appreciate the various emerging frameworks in entrepreneurial ecology
But first
?
What “on Earth” does climate change possibly
have to do with entrepreneurship?
• Deep analysis of
entrepreneurship
opportunity space
in climate change
Opportunity
space
• Deep analysis of
Replace at entrepreneurship
2nd pages
opportunity space
in climate change
Climate change
impacts in Asia
• Already reported:
extreme precipitation,
damaging cyclones,
sea level rise, extreme
temperatures,
drought and
acidification of the
ocean.
Climate change
impacts in
Australia
• Already reported:
extreme precipitation,
damaging cyclones,
sea level rise, extreme
temperatures,
drought and
acidification of the
ocean.
Now
? What entrepreneurial
innovations can you
imagine that could help
solve the climate change
crisis?
Planetary problems
that entrepreneurs face today
Popul-
ation
Energy Water
Biodi-
Food
versity
Population and
entrepreneurship
• World population
today is 7.3
billion
• Each year we
add population
the size of
Egypt!
• At the dawn of agriculture, about 8000 B.C., only 10,000 years ago, the population of the world
was approximately 5 million, about the size of today’s metropolitan Sydney.
Population opportunities for entrepreneurs
• Overpopulation
Ageing Youth
• dental care, hearing • recruitment • drinking water
aids • fashion • waste management
• orthopaedics and • cheap cars • air and water
cardiology. • environmental pollution
• nostalgia products products • fighting infectious
• food preparation • media and gaming diseases
labour-saving • creative and • improving food
technologies education varieties
• regenerative • communications • renewable energy
medicine devices • family planning
• age-related drugs
• Planet faces a severe water crisis.
• Though water is scarce, the crisis is actually one of
Water and
water governance – caused by the ways in which we
mismanage water – rather than supply.
entrepreneurship
• Impacts
– Waterborne disease
– Polluted environment
– Sanitation
– Industry and irrigation.
• Engineering entrepreneurs developed aqueducts and
artificial lakes
• Agri-preneurs have created high-yielding crops and
animals that consumed astonishing amounts of water,
called embodied water.
– 15 500 litres of water to make 1 kg of beef
Opportunities for
hydro-preneurs—not!
• Business opportunities exist in:
– drinking water and sanitation
– water ‘embedded’ in production
– collection, storage and transportation
– Desalination
– toilets
– conservation (reduction in use).
• (Avoid bottled water!)
Biodiversity and entrepreneurship
Biodiversity opportunities for entrepreneurs
Food and
entrepreneurship
• Major changes in where and when food is produced on the
planet's surface.
• Agriculture is responsible for nearly one-third of global
greenhouse gas (GHG) emissions.
• Wheat in Northern Europe; Wine in Norway
• Wealthy countries like the UK, Germany and Canada may
well have warmer, wetter growing conditions, while other
regions (such as developing countries in the tropics) are
likely to suffer droughts and floods.
Summers in 2081–2100:
Likelihood they will be
the warmest on record
Australia’s food
security in doubt
• Temperatures have
become so extreme that
BOM added incandescent
purple for temperatures
over 50 degrees
• Australians are the highest
emitters of CO2.
Entrepreneurs and fossil fuels
• Think about the entrepreneurial inventions
that depend on fossil fuels.
– airplanes, cars, electrical power plants, paper,
plastic, rockets, steam engines, steel and
electric lights.
• 85% of energy met by fossil fuels.
• 23 tonnes of plants to produce each litre of
petrol you pump into your ute.
Climate change economics
for entrepreneurs
• Entrepreneurs need to know some basic
principles of climate change economics
• The field looks at how economic activity (
including entrepreneurial activity) that
affects the environment.
• Climate change economics seeks
– economic solutions to minimise harm to the
Example: Pollution as environment
market failure.
– allowing maximum economic benefit
Climate change economics --
Tragedy of the commons
• Examples: Resource-based problems over-
irrigation, habitat destruction, over-fishing and
traffic congestion.
• Each shepherd wants to put as many sheep as
possible onto common land even if the land is
damaged as a result.
• Where there is potential for individual profit,
activity must be regulated.
Climate change economics --
Incentives
• Sometimes entrepreneurs are
unable to act sustainably
• Why should they take costly
sustainable actions when the
competitors do not?
• Entrepreneurial sustainability may
be punished rather than rewarded.
Climate change economics --
Prisoner’s Dilemma
• Two suspects are arrested by the
police, who have weak cases
against both of them.
• They hold the suspects in
separate cells and tell each that if
they inform on the other, they will
get leniency.
• If not, they are told, they will get
harsh prison terms.
Climate change economics --
Peak resource theory
• A ‘peak curve’ applies to any
resource that can be
harvested faster than it can be
replaced.
– 2012: Peak oil
– 2025: Peak water
– 2025: Peak coal
– 2020: Peak gas
– 2035: Peak uranium
Climate change economics --
Risk analysis
• Entrepreneurs must evaluate economic impact of their
activities.
• Physical risks: Weather-related events
• Reputation risks: Threats to a company's brand value.
• Competition risks: If companies do not take measures
to reduce climate risks they are competitively
disadvantaged.
• Regulatory risks: Climate change seen as serious
market failure
• Litigation risks: Greater regulation leads to more
litigation.
Climate change economics --
Social discount rate
• A 50-year-old Bangladeshi grandmother on
the coastline, with a life expectancy of 37,
has a slender chance of living to 2050. But
the sea is rising.
• She is more likely to ignore risks of the sea
rise.
• But her 10-year-old granddaughter today
has a life expectancy of 61 years.
Entrepreneurial ecology:
Sustainability defined
• The Brundtland Report (1987)
–Sustainability defined as ‘Meeting the needs
of the present generation without
compromising the ability of future
generations to meet their needs’.
–Markets are both the cause and the potential
solution to the sustainability puzzle
–For the entrepreneur, opportunities are
inherent in market failure.
Entrepreneurial ecology:
Sustainable entrepreneurship
Sociosphere
• In the econosphere and
surrounded by the
biosphere Biosphere
• Planet
Negative
• Climate & energy
How are entrepre-
neurship Biosphere • Water, soil, flora & fauna
entrepreneurs • Atmosphere & topography
connected to ((-)
0)
• People
Earth, people (+) • Human enterprise
and the Sociosphere • Knowledge, labour & capital
• Opportunity and value
economy
connected? • Profit
• Entrepreneurs operate here
Econosphere •
•
Business environment
Entrepreneurial factor
Positive
conditions
entrepre-
neurship
Entrepreneurial ecology:
Sustainable future
Entrepreneurs Declining supply
must help us Resources and ecosystem services
Sustainable supply
travel
Sustainable
through future
the ‘funnel’ Margin for action
is narrowing Sustainable demand
Increasing demand
Demand for resources and eco-system
services
The present The future
Key concepts
?
(close your books)
1. How can entrepreneurs turn
climate change into an
opportunity?
2. What does ‘sustainable
entrepreneurship’ mean?
Key concepts
• Entrepreneurship and crisis
– Entrepreneurs help us into crisis, and are the key to addressing the crisis.
• Entrepreneurship and climate change
– Potential for positive and negative impacts
– A key role in addressing population, water, biodiversity, food and energy.
• Entrepreneurial ecology
– Improvement through sustainable entrepreneurship.