Sustainable Entrepreneurship: An Emerging Pattern for ...Sustainable entrepreneurship is considered...

Paper Number: ICHUSO-115

Proceedings of 14th International Conference on Humanities and Social Sciences 2018 (IC-HUSO 2018)

22nd-23rd November 2018, Faculty of Humanities and Social Sciences, Khon Kaen University, Thailand

Sustainable Entrepreneurship: An Emerging Pattern for Entrepreneurship

Nguyen Van Dai1, Nguyen Q. Anh2 and Trinh Mai Van3

1,3 National Economics University, Vietnam

2 Vietnam National University, Vietnam 1 E-mail: [email protected], 2 E-mail: [email protected], [email protected],

3 E-mail: [email protected]

Abstract

This article discusses recent scholarly research that bridges two fields of the

sustainable development and entrepreneurship, namely “sustainable entrepreneurship”,

with also highlighting existing theoretical framework to study the field. It also aims to

illustrate the new emerging trend regarding sustainable entrepreneurship in contemporary

Vietnam.

Keywords: Corporate Social Responsibility, Entrepreneurship, Sustainable Development,

Sustainable Entrepreneurship

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1. Introduction The role of business in society has been more perceived by public perception as well

as the enterprises per se. Enterprises not only focus on their profit-maximizing process, but also

launch different activities that contribute to tackling social and environmental issues. The

evolution in the enterprises’ behaviors and concerns partly results from global challenges of our

time such as global warming, climate change, ecosystem degradation, poverty and

impoverishment, threatening the life at all levels (Smith, 2003; Carroll and Shabana, 2010).

Since 1990s, responsibilities regarding environmental and social factors other than

pursuit of profit-making have appeared in business decision making of enterprises of any size

(Del Baldo, 2014). Dynamics of innovation process and job creation are boosted through

entrepreneurship (OECD, 2011). Entrepreneurs and their enterprises may play a critical role in

strengthening the sustainability of economic-commercial ecosystem. Of which are the SMEs

(small and medium sized enterprises) whose interest in sustainability in doing business will, in

turn, contribute to sustaining community and society as a whole.

The term ‘green entrepreneur’ is used as a way to feature start-ups on the basis of

sustainability towards natural environment (Allen & Malin, 2008; Farinelli, Bottini, & Akkoyunlu,

2011; OECD, 2011; Walton & Kirkwood, 2010). In the context of transition economies, it is still

strange to or, at least, under-researched by academia despite the fact that enterprises towards

sustainability are playing more and more important roles in meeting the growing needs in terms

of job opportunities, especially for marginalized people as well as community-based benefits and

environmental aspects (Kronenberg & Bergier, 2012). Green entrepreneurship in Bosnia and

Herzegovina, for instance, successfully shows lesson learnt for other countries in transition

through success stories of start-up activities based on community-based resources and benefits

(Silajdžić, Kurtagić, & Vučijak, 2015)

It is safe to say that sustainable entrepreneurship is not a new but emerging

phenomenon across the globe in which it targets a closer link between enterprises’ economic goal

and their social and environmental impacts (Zu, 2014). Sustainable entrepreneurship is

“characterized by some fundamental aspects of entrepreneurial activities which are less oriented

towards management systems or technical procedures, and focus more on the personal initiative

and skills of the entrepreneurial person or team to realize large-scale market success and societal

change with environmental or societal innovations” (Schaltegger & Wagner, 2011). Accordingly,

beyond the scope and level of previously researched terms related to entrepreneurship, sustainable

entrepreneurship are defined as a process in which business opportunities (ventures) are

discovered through the contribution to such 3 pillars of sustainable development as economic,

social and environmental impacts (Schaltegger & Wagner, 2011; Young & Tilley, 2006)

Research objectives

Objectives of the paper are presented as two fords: Firstly, it aims to review a concept

that bridges two fields of the sustainable development and entrepreneurship, with also providing

the theoretical framework to study “sustainable entrepreneurship”. Secondly, two case studies are

analyzed to illustrate the new emerging trend in entrepreneurship in Vietnam.

Theoretical framework

Each form of sustainability-oriented entrepreneurship is different from others due to

ultimate goal, means and motivation entrepreneurs pursue and the pattern each type of

sustainability-oriented entrepreneurship follows to have impacts on social/environmental

conditions.

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Table 01: Characterization of different kinds of sustainability-oriented entrepreneurship

Ecopreneurship Social

entrepreneurship

Institutional

entrepreneurship

Sustainable

entrepreneurship

Core

motivation

Contribute to

solving

environmental

problem and

create economic

value

Contribute to

solving societal

problem and

create value for

society

Contribute to

changing

regulatory,

societal and

market institutions

Contribute to

solving societal

and

environmental

problems through

the realization of

a successful

business

Main goal

Earn money by

solving

environmental

problems

Achieve societal

goal and secure

funding to achieve

this

Changing

institutions as

direct goal

Creating

sustainable

development

through

entrepreneurial

corporate

activities

Role of

economic

goals

Ends Means Means or ends Means and ends

Role of non-

market goals

Environmental

issues as

integrated core

element

Societal goals

as ends

Changing

institutions as core

element

Core element of

integrated end to

contribute to

sustainable

development

Organization

development

challenge

From focus on

environmental

issues to

integrating

economic issues

From focus on

societal issues to

integrating

economic issues

From changing

institutions to

integrating

sustainability

From small

contribution to

large contribution

to sustainable

development

Source: Schaltegger & Wagner, 2011

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There exist differences among types of entrepreneurship with which entrepreneurs set

up a number of business conditions and goals at the beginning and throughout their business

activities. Sustainable entrepreneurship is the most holistic form that attempts to tackle the

problems outside the direct sphere of enterprises. (Schaltegger & Wagner, 2011)

Figure 01: Model of sustainable entrepreneurship

Source: Young & Tilley (2006)

Building on the model introduced by Dyllick & Hockerts (2002), Young & Tilley

(2006) created a more comprehensive model of that focuses on 3 criteria of sustainable

entrepreneurship. The advancement of this model can be presented through the introduction of

‘sustainable entrepreneurship’ component. The pole of ‘sustainable entrepreneurship’ is achieved

by satisfying all other sub-poles of economic, social and environmental entrepreneurship in which

each one has its own sub-criteria to meet. In other words, it cannot gain sustainable

entrepreneurship only by pursuing either of the above poles. Sustainable entrepreneurship is

considered a ‘means’ for sustainable development that derives from entrepreneurial perspective.

More clearly, the relationships between sustainable entrepreneurship are described as

follows:

Firstly, the link between sustainable entrepreneurship and environmental sustainability

is reflected in both ways in which on the one hand, business activities do not place more burden on

environment and on the other hand, environmental sustainability needs to be strategically included

in enterprises’ decision-making process.

Secondly, inter-generational economic benefits, including welfare of the current

generation and prosperity of future generations, need to be taken into account in business strategy

of enterprises.

Thirdly, sustainable entrepreneurship takes into consideration for (i) social

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responsibility that requires that all effects on community and more broadly, society and

environment, positive or negative, have to be reflected through enterprises’ business strategy and

(ii) social well-being of future generations (also known as futurity) is necessarily included in

enterprises’ pursuit.

2. Methodology

This study is built on the key concepts review combining application of a case study

approach in which the latter helps make a case for a new promising emerging trend in

entrepreneurship in Vietnam.

Data collection methods

The desk study is based on secondary data from various sources, which will be described as

follows:

Reports

Data related to business activities/results of two selected enterprises released on their

websites

3. Results

Table 02: Brief Description of Enterprises

Mekongplus Co. Ltd EcoLink Co. Ltd

Introduction Founded in 1994, Mekong

Quilts is seen as a ‘social

enterprise' by itself towards

local community-based

benefits on the basis of local

community’s female

participation.

Ecolink Co. Ltd., have been set up in August

2004 by a group of traders and development

consultant, with the purpose of promoting

organic and fair-trade agriculture as a

differentiated way of branding Vietnamese

tea internationally, and to increase the

awareness and consumption of organic

products domestically.

Vision Develop in a way that brings

out sustainable employment

into poor women.

To be a reliable producer in organic and fair

trade food industry in Vietnam and

worldwide.

Mission Create sustainable

employment for under-

privileged women in remote

and rural areas of Vietnam and

Cambodia.

Improve quality of life reaching from upland

ethnic minority farmers to our end

consumers

By building up supply chains of certified

organic and fair trade Vietnamese natural

tea/herbal/spices

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- Improve societal welfare of

local community.

Business

model

- Growing local material

- Creating patchwork,

piecing and intricate

stitch details by

handcrafting

techniques and selling

handcrafted products to

target customers of

tourists

Farming

Processing

Marketing

Sales and Distribution

Source: British Council, CIEM, & NEU, 2016

Table 03: Description of 3 sustainability poles

Mekongplus Co. Ltd EcoLink Co. Ltd

Economic

perspective

Offering economic opportunity

for rural women through job

creation.

Microcredit provision.

High-quality unique products

ensure a stable and high price

Providing consultancy service for

Vietnam organic industry.

Trading/exporting green tea and black

tea in international market.

Job creation for thousands of local

people.

Social

perspective Poverty reduction in local

communities

All profit generated from

business activities will go back

to serve the community's

benefit including children

education, health and hygiene

advancements

Till 2016, EcoLink Co. Ltd has set up

various farmer groups; recruited 800

local farmers households, while 80%

of those being within ethnic minority

groups in Northern Vietnam

Capacity building for local farmers

through technical training courses

As committed, 7-15% of total annual

profit made by EcoLink will go back

to serve farmers’ benefit

Environmental

perspective

Providing training sessions of

agriculture farming techniques

Using local environment-

friendly materials (bamboo,

Using environment- friendly, bio-

organic fertilizer and insecticide for

farming.

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water hyacinth and papier

Mache

Sources: Synthesized by authors

On the economic side, the point in common of these enterprises is job creation for local

groups/residents focusing more on the poor or poor women. Job creation is made through the

livelihood-introducing and training activities funded by the enterprises. Further, these two

enterprises have attempted to ensure its economic purposes to serve the business operation.

For the social pole, these enterprises significantly help to improve income and thus

substantially reduce poverty via stable employment generation. Additional social values, created

through local participation of ethnic groups living in mountainous areas, are mentioned in the case

of ECOLINK. In addition, education and health care training activities provided by Mekong Plus

benefit local people by improving knowledge and physical health status that lead to a long-term

effect in local community’s life.

The environmental protection is also clear because they use local raw materials in an

environment-friendly way. Less chemical fertilizer or insecticide is expected to minimize the

negative effects on ecosystem. Also, training provision of agricultural techniques towards

protecting the environment have positive impacts on natural environment in an indirect way.

In short, these enterprises are the good examples of ensuring all three poles of

sustainability at the same time. In other words, that demonstrates that the sustainability of the

business journey from start-up to the current situation may contribute to ensuring the sustainability

of all three sustainability pillars in sustainable development.

4. Discussion and Conclusion

According to Nguyen et al. (2012) and Nguyen et al. (2018), social enterprises have

been developing, even before Vietnam’s economic Reform in 1986. The characteristics of social

enterprise in Vietnam have embedded in various forms ranging from women union, associations of

people with disabilities, community-based groups for disadvantaged children. More recently, a

number of social enterprises in Vietnam have transformed into a new emerging form that is featured

with core-value creation towards environment, more community-based ownership-sharing

participation.

Purely

profit <-------------------------------------------------------------------------------> Purely

social

benefit

Traditional

enterprises

Enterprises

with CSR

Social

enterprises

Income

generating

unit inside

NGO

Traditional

NGO

Source: British Center for Social Enterprise

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Distinguished from other forms of entrepreneurship, sustainable entrepreneurship has

been emerging as a fertile ground for entrepreneurs to discover the business opportunities. In

Vietnamese context where the majority of enterprises that are categorized as one of the forms of

social enterprise, social-responsibility enterprises, and so on, ECOLINK and Mekong Plus are the

good cases that provide strong evidence of an emerging business model for entrepreneurs to learn

and apply. Sustainable entrepreneurship lies in the strongly interactive relationship between

selected enterprises per se and the community. In a wider perspective, sustainability of

entrepreneurship is built on the basis of meeting all 3 social, economic and environmental

standards. Again, sustainable development is achieved through the values that enterprises create

and also the critical factors enterprises make good use of.

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