Entrepreneurship, management, and sustainable development Allam ...

6

World Review of Entrepreneurship, Management and Sust. Development, Vol. 1, No. 1, 2005

Entrepreneurship, management, and sustainable development Allam Ahmed* SPRU – Science and Technology Policy Research, The Freeman Centre, University of Sussex, Brighton, BN1 9QE, UK Fax: +44 0 1273 68 5865 E-mail: [email protected] *Corresponding author

Ronald W. McQuaid Employment Research Institute, Napier University, Craiglockhart, Edinburgh, EH14 1DJ, UK Fax: +44 0 131 455 4311 E-mail: [email protected] Abstract: Successful management in the new millennium requires developing new methods and approaches to suit the challenges and opportunities of this new era of globalisation. An entrepreneurial approach is seen by many scholars and policy makers as a major option to enhance organisational performance in this era. The concept of entrepreneurship is multi-dimensional and often unclear. Various perspectives have different implications for how entrepreneurship is related to and can help promote sustainable development (SD). This introductory paper to WREMSD will attempt to explore viewpoints from around the world on entrepreneurship, management, and SD. The key objectives are to explain different perspectives on what is meant by the term entrepreneurship in a global context and to provide an overview of SD in relation to entrepreneurship. The paper argues that it is essential that research and policy development fully takes account of the differing perspectives of entrepreneurship and make explicit the particular perspective(s) that they are taking. No single definition necessarily fully captures the concept, but by being clear about our meaning of the concept and the underlying assumptions, we can progress our understanding of entrepreneurship and its relationships to SD. Keywords: entrepreneurship; entrepreneur; management; business; technology; sustainable development; production; consumption; environment; world; societies; developing and developed countries. Reference to this paper should be made as follows: Ahmed, A. and McQuaid, R.W. (2005) ‘Entrepreneurship, management, and sustainable development’, World Review of Entrepreneurship, Management and Sust. Development, Vol. 1, No. 1, pp.6–30. Biographical notes: Allam Ahmed holds a PhD in technology transfer with backgrounds in economics, management, marketing, and science. He is a Full Member and Chartered Marketer of the Chartered Institute of Marketing, UK. Ahmed has won several international awards, including the RAC College Scholarship and Book Prize for Best MBA/MSc Dissertation. He has published widely on technology transfer, management, and policy, with particular focus

Copyright © 2005 Inderscience Enterprises Ltd.

Entrepreneurship, management, and sustainable development

7

on the developing countries, in a wide range of national and international academic journals, books, etc. Allam is the founding Editor of WRSTSD and serves on the Editorial Board of five international journals in business, entrepreneurship, marketing, management, strategy, and international business. He has substantial experience of research and teaching in Africa, Europe, and the Middle East. Ahmed has consulted for several leading public and private institutions and worked with international organisations. Ronald W. McQuaid is the Director of the Employment Research Institute at Napier University in Edinburgh, UK. He specialises in local and regional economic development, employment, and transport. He received his PhD from the Harvard University, and MSc (Econ.), from the London School of Economics and his BA (Hons) from the Lancaster University, UK. He was formerly a Senior Lecturer in economics at the Napier University and prior to that was head of economic development at two Scottish local authorities, where he also served on a number of related committees across Scotland. Before that, he was a Researcher on the development of high technology industries at Reading University, a teaching fellow at the Harvard University and worked in industries in the UK and Canada. He has been a consultant on projects for the European Commission, various government departments, and third sector and private organisations in developed and developing countries. He was recently an Editor of a special edition of Urban Studies on employability.

1

Introduction “The term globalisation is much abused and definitions have become too broad” Rugman (2001, p.129)

For UK Prime Minster Tony Blair (2002), globalisation is the greatest challenge to our age, so what is globalisation? Ellwood (2001) defined globalisation as a new word that describes an old process: the integration of the global economy. Globalisation is more than just producing, marketing, and distributing goods and services throughout the world. It is a new way of thinking and the social processes in which the constraints of geography on social and cultural arrangements recede and people become increasingly aware that they are receding (Waters, 1995, p.3). For Held et al. (1999, p.6), globalisation is a process or set of processes that embodies a transformation in the spatial organisation of social relations and transactions (also see Wall and Rees, 2001, for more discussion on globalisation and international business). The global competitive environment is changing dramatically. Instead of large companies dominating international markets, with smaller businesses remaining local or regional, many small firms today have to be globally competitive, whether they enter the global arena or not. One way for small-and medium-sized enterprises to increase their global competitiveness is to form cooperative relationships with larger multi-national enterprises. Such arrangements allow small firms to reach global markets, while allowing large firms to reduce costs through greater specialisation.

8

A. Ahmed and R.W. McQuaid

Many authors also argue that entrepreneurship is largely a phenomenon of developed, industrialised countries and that, if only it could be transferred together with western management practices, can we solve the problems of underdevelopment (Scott et al., 2000, p.227). Entrepreneurship has been seen as a key to economic development in many countries across the globe for many years (OECD, 1998, 2003; UN, 2004). For instance, in the European Union’s Employment Strategies, entrepreneurship has been given a major role to increase the dynamism of economies and help employment creation and improvement (CEC, 1999, 2003). The relationship between entrepreneurship and economic growth, poverty and sustainable development (SD) is crucial for future global development, policy and research. The European Union’s ‘Gothenburg strategy’, adopted in 2001, is based upon the three complementary economic, social, and environmental pillars, recognising the inter-dependence of these factors (CEC, 2005). Entrepreneurs and entrepreneurship play important roles in today’s global business environment. Even though entrepreneurship has been an important part of society for many years, there are still many different perceptions and misconceptions about it. Birley and Muzyka (2000) argue that downsizing, restructuring and technical change, notions of traditional careers, and ways of creating value have all been challenged and individuals are increasingly wondering whether they should strike out on their own, whether their fortune would be better realised through the pursuit of opportunities that they believe they can pursue. In effect, people are depending relatively more upon their own initiative to realise success than upon the system to deliver it to them. This paper explores different viewpoints on entrepreneurship, management, and SD from around the world. The key objectives are to explain the different meanings of the term entrepreneurship, and its different perspectives and components in a global context and finally provide an overview of SD in relation to entrepreneurship. The next section considers ‘what is entrepreneurship?’ This is followed by Section 4, which considers ‘what is sustainable development?’ Section 5 sets out the conclusions in linking entrepreneurship and sustainable development.

2

What is entrepreneurship?

Entrepreneurship is an elusive concept (McQuaid, 2002a). There are a number of perspectives of what is meant by the term ‘entrepreneurship’, some of which focus upon business development aspects, while others focus upon entrepreneurial behaviour – which may be linked to activities of those in the non-commercial sectors as well as commercial sectors. For instance, entrepreneurship is often considered synonymous with ‘new firms’ and/or existing ‘small, micro and medium-sized enterprises’ (SMMEs), and/or owner-managers or in some cases ‘dynamic’ or fast growing new firms. Elsewhere entrepreneurship is seen as: having specific functions in the economy, particularly in innovation and resource allocation with entrepreneurs seen, for instance, as innovators; or as a form of behaviour, concerned with the systematic grasping of opportunities; or as a set of personal characteristics, cognitive styles, attributes or motivations (such as risk taking or being a ‘great leader’) of entrepreneurs. Often the term entrepreneurship is used loosely, covering a number of meanings. Differences in what is meant by entrepreneurship can often lead to confusion. Different perspectives on what the term means, have profoundly different policy and


9

theoretical implications. This paper does not argue that one perspective or definition is correct or better than the others. Rather the paper seeks to clarify some of its different meanings, so that when entrepreneurship is discussed in theoretical or policy circumstances, we are clear about the differing underlying assumptions and concepts being used. In the eighteenth century, the French term entrepreneur was first used by Richard Cantillon to describe a ‘go-between’ or a ‘between-taker’, whereby they bought goods at certain prices but sold at uncertain prices (as when they purchased the goods at a given price they could not be sure what price they would sell them for). So he or she bore the risk and uncertainty of a venture but kept the surplus after the contractual payments had been made. Later, the French philosopher, Jean-Baptiste Say and others widened the concept to include not only the bearing of risks, but also the planning, supervising, organising, and even owning the factors of production. The nineteenth century was a fertile time for entrepreneurial activity, as technological advances during the Industrial Revolution provided the impetus for continued inventions and innovations. It is important to recognise that much of the literature in the field of entrepreneurship is from the USA and Europe, and thus, is based upon western values and cultures. The study of entrepreneurship continues to grow as a field of enquiry and remains one of the most attractive areas of research in the management field (see Wickham, 2004). Entrepreneurship has only started to become distinct from other management studies in the past 15 years or so (Wickham, 2004, p.110). Table 1 outlines some different aspects of entrepreneurship as academic discipline. Table 1

The different aspects of entrepreneurship as an academic discipline

Aspects of discipline

Generally concerned with

Specifics of entrepreneurship research

Range of phenomena

Motivations and actions the discipline attempts to explain

Creation of new wealth and new organisations by entrepreneurs

Knowledge

The corpus of propositions about the world the discipline regards as true (or otherwise)

Propositions about entrepreneurship in academic textbooks, journal papers, etc. held by entrepreneurs and those who interact with them

Theoretical systems

Framework of explanation that connect motivations to actions

Drawn from economic, strategic, psychological, sociological and anthropological theory

Methodology

The investigations leading to new knowledge within the discipline

Positivistic vs. Anti-positivistic

Philosophical perspectives

The general world view that underpins the discipline and governs any ethical and moral assertions it makes

Entrepreneurship brings benefits and should be encouraged vs. entrepreneurship reduces human welfare and should be controlled, discouraged or inhibited

Institutional system

The human organisation within a social and economic system that coordinates he discovery of new knowledge within the discipline

Knowledge creation, co-ordination and transfer through teaching and research in universities and consulting firms and through network links to practicing entrepreneurs and their supporters

Source: Wickham (2004, p.114)

10


Audretsch (1995) and Cunningham and Lischeron (1991) discuss the difficulty of reaching a consensus about an exact definition of entrepreneurship as they argue that the term ‘entrepreneurship’ in itself has three levels of meaning. In the first level entrepreneurship refers to small firms or enterprises, in the second level it refers to new firm formation and at the third level (highest) entails innovation and a system-wide coordination of complex production (Malechi, 1997; Casson, 1990). For Malechi (1997, p.157), entrepreneurship embraces small business, innovation (particularly important to high technology) and regional and local development policy. Stevenson (2000, p.8) argues that entrepreneurship is an approach to management that can be defined as the pursuit of opportunity without regard to resources currently controlled. In this approach, Stevenson examines six critical dimensions of business practice, namely: strategic orientation; commitment to opportunity; commitment of resources; control of resources; management structure; and reward philosophy. The common themes found in the definitions of entrepreneurship include: the entrepreneur, innovation, organisation creation, creating value, opportunity taking, profit or not-for-profit, growth, uniqueness, process, flexibility, dynamic, creative, and risk taking. However, the two main issues agreed by most entrepreneurship researchers are that entrepreneurship is important and it is different from small business (Birley and Muzyka, 2000; Wickham, 2004). These themes can be put into overlapping typologies, and the remainder of this section sets out five different types of perspectives on what is meant by entrepreneurship. These are entrepreneurship as: an economic function; a form of behaviour; a set of characteristics; a small business; and as the creation of a new business.

3

Perspectives on entrepreneurship

3.1 Innovation, risk taking and resource allocation: entrepreneurship as an economic function Entrepreneurship has often been considered as having an important economic function, particularly in driving innovation and in the use and allocation of resources to take opportunities presented by changes in the external environment. In addition other functions may include risk taking or creativity (Glancey and McQuaid, 2000). Considering first the role of innovation, entrepreneurship is considered to generate innovation and changes rather than respond to them, and so causes economic development (Baumol, 1993). As Schumpeter (1942) argued, entrepreneurship leads to the implementation of new combinations of means of productions through: introducing new products and methods of production; opening new markets; gaining new sources inputs; or by changing the structure of an organisation or an industry. Acs and Audretsch (1988) argue that small and new firms are the main engines of innovation, due to the greater incentives for the people involved (including property rights) than for those in larger firms. However, a focus on innovation does not necessarily imply a focus on new or small firms, as the relationships between firm, age, or size and innovation are not clear as the literature on entrepreneurship implies. For instance, Harrison (1997) argued that larger firms dominate innovations, as they have resource and market entry advantages and are able to receive immediate benefits from innovations due to their scale and scope. Acs et al. (1999) found that in industries where market share is


11

more concentrated among larger firms, there is higher productivity growth. They suggested an Schumpeterian transition hypothesis, where perhaps certain small firms introduce radical innovations, but their impact is magnified by large firms (these large firms may have recently been small or new ones that grew or large ones that are particularly agile). In terms of resource allocation, Casson (1999) argues that the role of the entrepreneur is partly to identify persistent shocks to the environment, which will offer long-term opportunities, and then to synthesise the information and make judgmental decisions based upon it. Kirzner (1997) further emphasises the function of entrepreneurs as that of being a ‘middleman’, who is alert to and sees opportunities in the economy and uses this knowledge to gain a profit. Kirzner’s view identifies a key role for entrepreneurship as an equilibrating force by restoring markets to equilibrium through the process of price adjustment. Schumpeter conversely views entrepreneurship as a disequilibrating force that causes economic development and leads to the ‘creative destruction’ within capitalism, where some large firms, new firms, and industries destroy older ones. McQuaid (2002a) suggests a staged process starting with innovative entrepreneurial behaviour in the firms who create the catalytic Schumperterian event (such as a new technological development). This is followed by the entrepreneurial activities of identifying resulting opportunities, deciding on actions and allocating resources to take advantage of them (for example improving competitiveness through adopting new products or process innovations). Later, the opportunities presented by the innovations reduce or are exhausted, and firms focus on improving efficiency and price competition, perhaps through ‘routine’ entrepreneurship (see below), and move towards market equilibrium. At each stage there would be the need for different policies, with perhaps support for innovative start-up or more general firms or commercialising basic research and supportive ‘entrepreneurial culture’ in the first stage. In the second phase, the role of policies may be to ensure universal access to the technological or other ‘hard’ or ‘soft’ infrastructure or to help to create markets and other micro-level policies. In the final stage, the role may be to ensure a stable macro-economic environment and effective market operation. In each stage the types of policies overlap, but there needs to be integration between policies and policy actors, and a long-term perspective.

3.2 Entrepreneurial behaviour: entrepreneurship as a form of behaviour Drucker (1985, p.49) suggests that entrepreneurship is “the purposeful and organised search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation”. He continues to argue that an entrepreneur is someone who “always searches for change, responds to it, and exploits it as an opportunity” (p.25). According to this perspective, entrepreneurship can flourish in any part of the economy or society – in government, local community organisations, and NGOs, as well as in business. Clearly each of these has a significant impact upon sustainable development and management. It also acknowledges the importance of social entrepreneurs within a society in NGO and other organisations (McQuaid, 2002b).

12


This perspective points to the need for an ‘holistic’ or comprehensive view of entrepreneurship incorporating the individual(s) involved, the organisation they create or recreate and the external environment within which they operate. The OECD (2003) argues that support for existing social enterprise should essentially be the same as for profit-oriented firms (p.115). This may be broadly correct, although one needs to recognise the different motivations, operation and expertise of the board of directors, and the fundamentally different patterns of setting up such social enterprises.

3.3 The entrepreneur: entrepreneurship as a set of personal characteristics The third set of perspectives on entrepreneurship focuses upon the personal characteristics, cognitive styles, personality, and the social and institutional context in which it operates (Chell et al., 1991; Mitchell et al., 2002). Smiles (1859), wrote about many of the most famous Victorian entrepreneurs in the UK, including Josiah Wedgewood who ‘by his energy, skill and genius, established the (porcelain pottery) trade upon a new and solid foundation’, thus, providing employment and good wages to many thousands of families. According to Smiles (1859), the key psychological traits of an entrepreneur were integrity, self-learning, courage, conscientiousness, patience, perseverance, self-discipline, and self-respect. More recent psychological and sociological approaches to entrepreneurship concentrate upon: particular qualities or attitudes (Robinson et al., 1991); motivations; their being a ‘great leader’ (Hughes, 1986), or social forces (Reynolds, 1991). There are also links between entrepreneurs’ cognitive styles and how they learn or use knowledge and information and their behaviour. These approaches to the characteristics of entrepreneurs have been criticised for sometimes providing long lists of traits that when taken together would result in the description of a sort of generic ‘Everyman’ (Storey, 1994) and they sometimes ignore the circumstances, including financial and social capital or resources and other supply and demand factors, in which the entrepreneurship takes place. The study of characteristics can be useful in helping identify important policy questions. Why are certain groups or types of people over or under represented among entrepreneurs and how is this changing? It has, for instance, been argued that some groups, such as women or some minorities, have in the past been held back by institutional forces, including not being able to so easily access appropriate finance or information.

3.4 Small businesses: entrepreneurship as owner-management and SMMEs Fourth, entrepreneurship has often been considered as encompassing the role of the owner-manager of a small business. However, most new businesses are not particularly innovative (Bhide, 2000). This type of entrepreneurship can be, what is termed, ‘routine entrepreneurship’ by Leibenstein (1968, p.72), which involves the routine coordination and management of an existing business, which operates in a well established and clearly defined markets.


13

Successful small owner-managed firms may grow rapidly and change their management and ownership structures. SMMEs and the self-employed play an important role in an economy, including providing many jobs. However, an economy that can respond to technological, social, and economic opportunities to achieve more sustainable enviro-socio-economic development is likely to also incorporate the crucial dynamism, job, and wealth creation of medium and large firms and also of those small firms that grow to become larger organisations. This perspective of entrepreneurship can sometimes fail to distinguish an ‘ordinary’, routine owner-manager from one who transforms the business. New and SMMEs are important to development. Reassessments of the history of macro-economic performance during the 20th century have given greater significance to the role of new and small firms (Acs et al., 1999; Admiraal, 1996; Storey, 1994). However, divergence from some ‘optimum’ level of SMMEs in an economy (either through relatively too many, or too few SMMEs) may hinder growth (see Audretsch et al., 2002). An entrepreneurial economy is seen, by some, as one with relatively large numbers of self employed people or small businesses, although others consider innovation to be essential and Audretsch and Thurik (2004) argue it may be an economy where knowledge is the main source of competitive advantage. Further analysis is required into the how new and small firms and economic performance inter-relate with poverty and sustainability. The link between entrepreneurship and economic growth is not clear-cut and there is a need for more evidence on the relative growth of SMMEs numbers and reductions in poverty or income inequality. Also the term ‘entrepreneurship’ has wider implications. Entrepreneurial behaviour can be important for the wider economy with entrepreneurship training potentially improving the performance of employees as well as those seeking immediately to start up a business. Similarly, entrepreneurial behaviour in the social sectors may provide significant benefits to society and the economy.

3.5 New businesses: entrepreneurship as creating a new business or organisation The final, but arguably the most common, perspective on entrepreneurship is that it relates to the act or event of setting up a new business (Gartner, 1988). Here, the focus is upon looking at the process of creating a new organisation rather than its current owner or manager, or even the individual person who originally created it. This suggests that the entrepreneurial role ends once a new organisation has been created. The organisation itself may continue (perhaps to growth, maturity and decline), but the original entrepreneur takes on different roles in each stage, moving from being an innovator to the non-entrepreneurial roles of being a small business owner, or senior manager of the firm if it becomes large. Others may argue that the organisation being created need not necessarily be a private business, but could be an Non-governmental Organisation (NGO) or other organisation not aimed at profit making, of which there are many local, national, or international examples. This view has been an important component of economic development policies at the local, regional, and national levels, where encouragement of business start-ups often plays a major role. However, Binks and Vale (1990, p.19) argue that such business start-up orientated policies, if used as the exclusive means to increase employment growth, need not be synonymous with per capita income growth and may be counter-productive to wider economic development. Indeed, many developing countries

14


have large subsistence economies have high shares of employment in new and small firms, often based upon the lack of other employment alternatives rather than as a desire to start their own business. However, if there are large numbers of start-up firms, particularly in more advanced technological sectors and in non-subsistence types of employment, then it can be argued that some of them are likely to grow into large and high productivity employers. However, new business creation is only one aspect of a sustainable economic development policy. According to Tidd et al. (2005, p.532), the factors that were found to affect the likelihood of establishing a venture include: family background, religion, formal education and early work experience, and psychological profile. Similar results have been outlined by the Global Entrepreneurship Monitor research programme (GEM) (see Appendix A for more details and also www.gemconsortium.org). The sixth GEM 2004 study covers 34 countries1 from Africa, Asia, Middle East, Europe, and North and South America representing a total population of 784 million people (18–64), a labour force of 566 million and more than 90% of the world gross domestic product (GDP). Some interesting findings from this study include: •

73 million adults were engaged in entrepreneurship activities worldwide in 2004 with more involvement of young people than other groups in every country regardless of the level of GDP

•

although the relationship between age and entrepreneurship is found to be stable but the typical entrepreneurs were 25–34 years of age, with men twice likely to be involved than women

•

one adult in eleven engages in some sort of entrepreneurial activity

•

entrepreneurial activity varies significantly by geographic region, types of business, and entrepreneurial motivation

•

three in five entrepreneurs are motivated by attractive business opportunities (mostly in developed countries) and two in five motivated by necessity, mostly in developing countries

•

total entrepreneurship activity (TEA) rate is lowest for countries with per capita GDP of about US$28,000

•

no entrepreneurial activity is found in the healthcare sector, although this may reflect a narrow definition of healthcare or a limited sample

•

low-income countries have the highest level of entrepreneurial activity for all age groups, followed by high-income countries and then middle-income countries

•

of those who start up a business in high-income countries, 57% have a post-secondary degree as compared to 38% in a middle-income country, and 23% in low-income countries. More details are in Figure 1.

There are also different important issues relating to gender when it comes to entrepreneurship and entrepreneurs. Despite the dominance of male entrepreneurs, there is a tremendous growth in the number of women entrepreneurs. This has been evident in many studies such as GEM (1999–2004), Brush (2000) and others.

Entrepreneurship, management, and sustainable development Figure 1

15

Profile of entrepreneurs by education level

Source: Minniti (2004)

Brush (2000, p.14) found that there are gender differences in terms of their approaches to venture creation and entrepreneurship as outlined in Table 2. Table 2

Approaches to venture creation (male/female)

Dimension

Male

View of business

Separate economic entity

Motives

Be independent and an entrepreneur

Management style

Task oriented, transactional, command/control Competition, transactional, homogeneity Sequential, series of planned steps

Values/assumptions Venture creation process Structure Policies/practices Strategic approach Decision making Goals

Hierarchy Instrumental Cost, efficiency Analytical, fact based Economic growth/profit

Performance

Financial, economic, personal wealth

Source: Brush (2000, p.18)

Female Co-operative network of relationships Create a job, have flexibility in work and family life, respond to social issues People oriented, transformational Integration of family, work, society, reciprocity, diversity Simultaneous, construction of relationships Horizontal, network Nurturing, relational, social Quality, consumer service Intuitive, participative Economic and non-economic, social contribution Financial, equally with employee and customer satisfaction, satisfying relationships

16


Bruno and Tyebjee (1982) and Bearse (1981) outline the different dynamic factors that characterised the entrepreneurial environment to include: •

availability of venture capital; critical mass of experienced entrepreneurs; technically skilled labour force; land/facilities; supporting services; and favourable governmental policies

•

accessibility of customers; suppliers and transportation

•

proximity of universities

•

receptive population and attractive living condition

•

the levels of change/instability in the local economy; uncertainty due to unexpected events (rivalry); diversification and resources

•

degrees of fluidity in the social structure and resources

•

cultural factors.

In an attempt to outline the different regional variations, in terms of entrepreneurial and managerial challenges facing different parts of the world, WREMSD engaged its international editorial board (particularly regional editors) in an e-forum in order to identify these geographical differences/challenges. The forum involved several regions namely, North America, Sub-Saharan Africa, European Union, East Asia and Pacific, Middle East and North Africa, New Zealand and Indian Ocean Commission. Table 3 outlines the geographical differences. Table 3

Regional entrepreneurial and managerial challenges for sustainable development

East Asia and Pacific Corporate governance; corruption; financial volatility and other economic and social disruptions; capacity building, particularly in developing good quality and appropriate human resources; challenges of globalisation; enhance self-reliance for creation and sustaining competitiveness, etc. European Union Environmental protection; corporate social responsibility; corporate governance and information transparency; improvement of the quality of life, economic growth, ageing population, etc. Indian Ocean Commission Hurricanes and climate change; fragile ecosystems; more market access and better terms of trade; renewable energy; sustainable tourism; information technology; HIV/AIDS and malaria; security and vulnerabilities; poor human and institutional capacity; lack of technology transfer; poverty reduction; human rights and cultural diversity; gender equality; democracy; full and equal access of girls and boys, women and men to all levels of education, etc. Middle East and North Africa Unemployment; gender equality; weak institutional and legal framework; urban and industrial pollution; land and coastal degradation; desertification; water scarcity and quality, etc.

Entrepreneurship, management, and sustainable development Table 3

17

Regional entrepreneurial and managerial challenges for sustainable development (continued)

North America Rapid move of the Chinese and Indian economies into high tech; recent scandals at WorldCom, Enron, and Global Crossing have raised concerns about the failing corporate governance mechanisms; failure of higher education to achieve long term strategy and corporate social responsibility against profit and financial manoeuvring; sustaining higher fuel prices, etc. New Zealand Poor and deteriorating air quality in two of the major cities – Auckland and Christchurch; erosion on steeper landscapes and the visual impact of some land-use practices; degraded freshwater quality, especially from intensive agricultural land use; degraded marine environment in estuaries and harbours near main population centres; vision and framework for sustainable development; implementing, developing, monitoring and reviewing progress towards sustainability, etc. Sub-Saharan Africa Poverty; conflict prevention, peace and security; brain drain; political, economic and corporate governance; macro-economic stability; education and technical training; HIV/AIDS, malaria and health services; cross cultural and diversity management; role of women in social and economic development; development of infrastructure; agriculture and the diversification into agro-industries and manufacturing; promoting public private partnerships; encouraging an entrepreneurial, innovative economic mindset; bridging the digital divide in information and communication technologies; promoting tourism and sustainable utilisation of natural resources, etc. Source: Adopted and developed from different editorial notes (2005) by: Amoateng and Rhoades (North America), Louw (Sub-Saharan Africa), de Pablos (European Union), Foong (East Asia and Pacific), Sohail (Middle East and North Africa), El-Kafafi (New Zealand) and Juwaheer (Indian Ocean Commission)

4

What is sustainable development?

Sustainable Development (SD) also encompasses many different meanings, but the most frequently quoted definition is from the report Our Common Future (also known as the Brundtland Report). The Brundtland report (WCED, 1987, p.43) defined SD as “development that meets the needs of the present without comprising the ability of future generations to meet their own needs.” This definition has been criticised by many scholars and leading international institutions, such as the United Nations Economic Commission for Europe (UNECE) (2004), as vague since it does not specify the time horizon of future generations, gives no indication of the role of the environment and refers to the opaque concept of human needs. Accordingly, a variety of definitions of sustainability and SD are used in different contexts. In simple terms, SD refers to maintaining development over time but, so far, there are well over one hundred definitions of SD currently available in the literature (Ahmed and Stein, 2004; Pearce et al., 1989; Holmberg, 1992; Morita et al., 1993; Murcott, 1997; Elliot, 2001) providing different concepts, perspectives, concerns and solutions for SD. How they relate to each other and provide a clear understanding of our common future still remain a key question to be addressed. However, at the national level, there are several factors and conditions that need to be considered including peace, debt reduction, terms of trade, the level of foreign aid,

18


economic policy, techniques for measuring SD, the trade-offs between conflicting environmental goals, and the limited time and distance of the horizons of elected politicians. The Brundtland report recommended seven critical actions needed to ensure a good quality of life for people around the world: revive growth; change the quality of growth; meet essential needs and aspirations for jobs, food, energy, water, and sanitation; ensure a sustainable level of population; conserve and enhance the resource base; reorient technology and manage risk; and include and combine environment and economics considerations in decision-making. These recommendations remain valid today (see Sarre et al., 1991, SDCN, http://www.sdcn.org/; Earth Council, http://www.ecouncil.ac.cr/) and are a call to change our actions and to do things differently. In particular, they underscore a need to: produce differently by applying concepts of eco-efficiency and sustainable livelihoods; consume differently; and organise ourselves differently by increasing public participation while reducing corruption and perverse subsidies. According to the UN (2002a, 2002b) progress on developing the concepts of SD has been rapid since the 1980s including the Earth Summit (1992),2 the Brundtland Report and the Agenda 21. Throughout the rest of the 1990s, regional and sectoral sustainability plans were developed. A wide variety of groups, including the World Bank, have adopted the concept and given it their own particular interpretations. These initiatives have increased our understanding of what SD means within many different contexts but progress on implementing SD plans has been slow (UN, 2002a, 2002b; UNECA, 2003). Although many people originally perceived and discussed SD in relation to issues associated only with the environment (ecology, climate, water, land., etc.), now issues of social and economic sustainability are usually incorporated. SD consists of three aspects: •

economically sustainable system that produces goods and services on a continuing basis, has a manageable level of government and external debt and avoids extreme sectoral imbalances that are damaging to agriculture or industry

•

environmentally sustainable system

•

socially sustainable system, which achieves distributional equity, adequately provides social services and involves mass participation in an accountable-political system (see Harris, 2000).

However, in terms of the Third World perspective, it has been argued that the concept of SD is directly concerned with increasing the material standard of living of the poor in terms of increased food, real income, educational services, health care, sanitation and water supply, emergency stocks of food and cash, etc., and only indirectly concerned with economic growth at the aggregate national level (Barbier, 1987). For the World Bank (2003), SD is a multi-dimensional concept, which combines five key perspectives: •

Financial capital: sound macroeconomic planning and prudent fiscal management

•

Physical capital: infrastructure assets such as buildings, machines, roads, power plants, and ports

•

Human capital: good health and education to maintain labour markets


19

•

Social capital: peoples’ skills and abilities as well as the institutions, relationships, and norms that shape the quality and quantity of a society’s social interactions

•

Natural capital: natural resources, both commercial and non-commercial, and ecological services which provide the requirements for life, including food, water, energy, fibres, waste assimilation, climate stabilisation, and other life-support services.

The sustainability agenda today not only poses challenges, but also opens up significant innovation opportunities, such as new or more sustainable products and services; new or more sustainable processes; new extended markets built on exploiting a growing concern with sustainability issues; and new business models reframing existing arrangements to emphasise sustainability (see Tidd et al., 2005, for more discussion). A sustainable society is one that can persist over generations, one that is far-seeing enough, flexible enough, and wise enough not to undermine either its physical or its social systems of support (Meadows et al., 1992). Communities related to any stage of the product lifecycle (from production of raw materials through manufacture, use and disposal of the final product) are respected and enhanced economically, socially, culturally and physically (see the Lowell Center for Sustainable Production (LCSP, http://www.uml.edu/centers/LCSP/), for more details). LCSP and Hawken (1993, p.144) outline different factors that are important in order to achieve sustainable business, such as: •

replace nationally and internationally produced items with products created locally and regionally

•

take responsibility for the effects they have on the natural world

•

do not require exotic sources of capital in order to develop and grow

•

engage in production processes that are human, worthy, dignified, and intrinsically satisfying

•

create objects of durability and long-term utility whose ultimate use or disposition will not be harmful to future generations

•

change consumers to customers through education.

Many authors also argue that the concept of SD must enhance the long-term productive capacity of the resource base and improve the long-term wealth and well-being derived from alternative resource use systems, with acceptable environmental impacts (Ahmed and Stein, 2004; Pearce et al., 1989; Holmberg, 1992; Morita et al., 1993; Murcott, 1997; Elliot, 2001). According to the Lowell Center for Sustainable Production, ‘Sustainable Production’ is the creation of goods and services using processes and systems that are: non-polluting; conserving of energy and natural resources; economically efficient; safe and healthful for workers, communities, and consumers; and socially and creatively rewarding for all working people. The following principles are essentials to any sustainable production:

20


•

Products and services are: safe and ecologically sound throughout their life cycle; as appropriate, designed to be durable, repairable, readily recycled, compostable, or easily biodegradable; and produced and packaged using the minimal amount of material and energy possible

•

Processes are designed and operated such that: wastes and ecologically incompatible by-products are reduced, eliminated or recycled on-site; chemical substances or physical agents and conditions that present hazards to human health or the environment are eliminated; energy and materials are conserved, and the forms of energy and materials used are most appropriate for the desired ends; work spaces are designed to minimise or eliminate chemical, ergonomic and physical hazard

•

Workers are valued and: their work is organised to conserve and enhance their efficiency and creativity; their security and well-being is a priority; they are encouraged and helped to continuously develop of their talents and capacities; their input to and participation in the decision making process is openly accepted.

However, from these perspectives of production vs. consumption, SD is defined as the amount of consumption that can be sustained indefinitely without degrading capital stocks, including natural capital stocks. Sustainable income is hence defined as the maximum consumption in a period consistent with the maintenance of the aggregate capital stocks. However, for a flow of income to be sustainable, the stock of capital must be constant or increasing over time. Capital is hence defined to include all the productive assets available to the economy. According to the World Bank, consumption patterns on energy, water, food, manufactured goods, and services are highly skewed, and will remain so for the near future. As incomes in developing countries will need to grow, consumption in those countries will also increase with those aspirations. If subsidies, mis-pricing, and inadequate taxation of environmentally damaging products continue to provide the wrong incentives for rich-world consumers and producers, and if we add to this picture a wealthier developing world, we can expect negative consequences for both the quality of the environment and its ability to sustain further growth.

4.1 Measuring sustainable development The 1992 Earth Summit stipulated that countries at the national level and international governmental and non-governmental organisations at the international level should develop indicators of SD in order to help countries making informed decisions concerning SD (UNECE, 2004). Indicators for SD were set out by the United Nations Commission for Sustainable Development (UNCSD), UN Statistics Division, OECD, Eurostat, NGOs, and other international organisations. According to the UNECE (2004), the debate has hardly involved official statisticians and that there is still neither a definite set of indicators for SD, nor a set of sustainability indicators adopted within the framework of official statistics by any internationally authoritative body. The major challenges for the measurement of SD are the lack of a widely accepted operational definition of both SD and sustainability and the difficulties in measuring the inter-linkages of the three dimensions of SD (economic, social, environmental) are often mentioned and still not yet solved.


21

4.2 Environmental sustainability index (ESI) A set of indicators (index) recently commonly referred to is the Environmental Sustainability Index (ESI) of Yale University (Yale Center for Environmental Law and Policy, 2005) and Columbia University (Center for International Earth Science Information Network) in collaboration with World Economic Forum and Joint Research Centre of the European Commission. The ESI is a measure of overall progress towards environmental sustainability, developed for 142 and 146 countries, respectively, in 2002 and 2005. The ESI scores are based upon a set of 21 core ‘indicators’, each of which combines two to eight variables for a total of 68 underlying variables. The ESI permits cross-national comparisons of environmental progress in a systematic and quantitative fashion. It represents a first step towards a more analytically driven approach to environmental decision-making. According to the recent ESI (2002, 2005) rankings (Table 4), Finland leads the world in environmental sustainability (as it did in the 2002 ranking). The high ESI scores in 2005 of the top five countries (Finland, Norway, Uruguay, Sweden and Iceland) are attributed to substantial natural resource endowments, low population density, and successful management of environment and development issues. The USA ranks 45th (2002 and 2005), the UK’s has rank moved from 91st in 2002 to 46th in 2005, and Kuwait that stood last in 2002 was still in the lowest 10 countries in 2005, showing that a nation’s economic status does not always correspond to its ESI performance. Table 4

Environmental sustainability index (ESI) 2005 and 2002

Highest ten 2005 Country Finland Norway Uruguay Sweden Iceland Canada Switzerland Guyana Argentina Austria Lowest ten 2005 Country Yemen Kuwait Trinidad and Tobago Sudan Haiti Uzbekistan Iraq Turkmenistan Taiwan North Korea

ESI 75.1 73.4 71.8 71.7 70.8 64.4 63.7 62.9 62.7 62.7 ESI 37.3 36.6 36.3 35.9 34.8 34.4 33.6 33.1 32.7 29.2

Highest ten 2002 Country Finland Norway Sweden Canada Switzerland Uruguay Austria Iceland Costa Rica Latvia Lowest ten 2002 Country Nigeria Sierra Leone South Korea Ukraine Haiti Saudi Arabia Iraq North Korea United Arab Emirates Kuwait

Sources: Adopted from Yale Centre for Environmental Law and Policy (2002, 2005) and World Economic Forum (2002, 2005)

ESI 73.9 73.0 72.6 70.6 66.5 66.0 64.2 63.9 63.2 63.0 ESI 36.7 36.5 35.9 35.0 34.8 34.2 33.2 32.3 25.7 23.9

22


4.3 Global 100 most sustainable corporations in the world Early in 2005, a new global business ranking was unveiled at the World Economic Forum, identifying the top 100 companies that are most open to leading the way to a more sustainable world, in the sense that they stand the best chance of being around in 100 years because of their demonstrated performance and strategic ability to manage the triple bottom line (society, environment, and economy). However, the definition of a ‘sustainable corporation’ is a subject of considerable debate (see Appendix B for more details and also www.global100.org). Table 5 includes examples of the top 100 most sustainable corporations in the world by countries. Table 5

Global 100 most sustainable corporations in the world by countries

Country UK USA Germany Sweden Canada Japan Netherlands France Finland Denmark Spain Switzerland Australia Belgium Norway

No. of corporations 32 20 9 7 6 5 5 4 3 2 2 2 1 1 1

Examples BP PLC, British Airways PLC and Cadbury Alcoa Inc., Xerox Corp. and Intel Corp. Henkel, Siemens AG, Volkswagen Group Ericsson, Volvo and Electrolux Royal Bank of Canada and Enbridge Inc. Toyota Motor Corporation and Denso Corp. Philips Elec and Royal Dutch Petroleum ARCELOR, Danone and STMicroelectronics KESKO, Nokia Oyg and Nokian Renkaat Novo Nordisk Gamesa Corporacion Tecnologica SA Swiss Re and ABB Ltd Alumina Limited DEXIA TOMRA SYSTEMS ASA

Source: Adopted from (Global 100.org)

Contrary to the ESI (2005), UK and US companies ranks first and second respectively in the world. According to the report, Toyota (Japan), Alcoa (USA) and BP (UK) are the top three companies in the world receiving the highest scores and ratings overall. These three companies have been able to profit from recognising new environmental and social markets (see Appendix B for more details about these three companies).

5

Conclusions: linking entrepreneurship and sustainable development

In considering the relationship between entrepreneurship and sustainable environmental-socio-economic development, it is useful to start by first considering the implications of the different meanings of entrepreneurship. The concept of entrepreneurship is multi-dimensional and often unclear. Various perspectives have different implications for how entrepreneurship is related to and can help promote sustainable environmental-socio-economic development. It is essential that research and policy development fully takes account of the differing perspectives of entrepreneurship and make explicit the particular perspective(s) that they are taking. No single definition


23

or perspective necessarily fully captures the concept, but by being clear about our meaning of the concept and the underlying assumptions, we can progress our understanding of entrepreneurship and its relationships to sustainable development. Wealth and employment growth in many, particularly developing, countries is important, so where increased numbers of new firms and owner-managers or SMMEs help achieve this, then supporting policies may be emphasised. However, as discussed above, both relatively high and low proportions of SMMEs may be linked to low growth and inequality. Entrepreneurship as a significant source of innovation suggests that it will make a major contribution to environmental innovation, as well as to social and economic innovations that may promote sustainable development. Technology and innovation influence, and are influenced by, entrepreneurship and are important in developing new products/services and improving existing products/services, as well as doing things in a more efficient or effective way, to assist sustainable development. The technological regime has a great influence upon changes within firms, the types of firms entering an industry, and the survival of existing or new firms. It is often claimed that both large and small firms are significant engines of innovation, but in different circumstances one or other may have a relative advantage. Also important is the perspective of entrepreneurship as a form of behaviour. This can help create different appropriate ways of doing things and of doing new things that will be essential to sustainable development. Systematic search for opportunities is important for helping to ameliorate the many problems facing the globe. Fundamentally, advocates of entrepreneurship as a form of behaviour, such as Drucker (1985), argue that such behaviour can be taught, and so development is not reliant on the personal characteristics of individuals in the population. The interactions of entrepreneurship with the external environment within which entrepreneurship is practised in terms of a given place are important. An analogy is with the Upas tree in Africa, which stifles other vegetation nearby to ensure that it captures the maximum amount of rainfall around it. This has been used to describe the negative effects of older industries, such as shipbuilding, upon the development of new industries nearby. Braunerhjelm and Carlsson (1999) argue that the lack of entrepreneurship in Sweden and similar sized Ohio in the USA, is partly due to their history with its concentration of mature industries with declining employment. These mature industries are seen as holding back the growth of new SMMEs and the transition to a more modern industrial structure. These negative effects may be smaller than they first appear as statistical measurements are crude and disguise the new industries being generated within old Standard Industrial Classifications. However, as Porter (1990) suggests, there may be no ‘bad’ industries only ‘bad’ firms, so the determining effects of industrial dynamics may be overplayed. Alternatively, there may be reasons for a Upas tree effect such as an absence of a locally accessible growing market, or inadequate fund providers with experience of newer industries, or the education and training networks being less geared to the newer technologies or industries, or inadequate role models. This shows the importance of path dependency for an economy, or indeed path dependency for individual entrepreneurs based upon their personal histories and experience. Flexible, effective, and efficient local policies to support entrepreneurship and to utilise its two-way links with wider environmental-socio-economic factors is important. The OECD (2003, p.91) states that for entrepreneurship related policies, especially at the local level, it is important for ‘local flexibility in the design and implementation of

24


policy’. There is also a need to oversee and monitor local public provision to ensure that it is delivering high quality services and support (for instance in evaluating business incubators where business development, in terms of raising productivity and improving management, may be more important than short-term job creation). A key policy dilemma will be how to have policies that promote different forms of entrepreneurship in the economy and social realms, while reducing and reversing the impacts of development on the environment. There is an urgent need for strong commitment to education and training (including in entrepreneurial behaviour in its widest senses) in all countries, particularly the low-income countries, as well as to the ‘hard’ infrastructure policies often so dominant in the past. Also the national entrepreneurship environments should be strengthened in all countries with clear policies on technology transfer, tax, finance, exports, etc. Sustainable development is not just a concern of developing countries. All countries, whatever their level of development or past scientific and technological glories, must pay attention to it. It is important at every level, to develop a clear understanding for a consensus on the meaning of SD and the realities of our common future. SD is probably the most daunting challenge that humanity has ever faced, and achieving it requires that the fundamental issues be addressed immediately at local, regional and global levels. There is nothing new in the concept of sustainability as such; it is the political, social, and economic context that is of paramount importance. Sustainability requires new thinking across the spectrum of human endeavour, not merely among scientists and technologists. Economic, social, and institutional innovations must keep pace with technological innovations. SD is a multi-disciplinary process that involves all issues such as science, innovation, technology, research and development, information technology and e-commerce, economic development, health, FDI and MNCs, international debt and aid, trade, politics, war, natural disasters, population growth, terrorism, etc. In terms of the definitions of entrepreneurship and sustainable development, what is important are the meanings behind the concepts and the setting out clearly of which aspects or meanings of the concepts we are using, i.e., the content of the concepts is more important than the labels. Differing concepts are likely to direct our thinking in certain ways. However, it is not a case of one definition being ‘right’ or ‘wrong’. Rather, we should clarify, early on in any paper in this Journal, the particular meaning used, and its underlying assumptions, to allow a useful discussion and progress in the development of useful ideas. As we work toward more sustainable development, we must strive not to lose sight of the big picture and that we must think and act both globally and locally. Finally, in conclusion, we are still in search of a meaningful definition of SD, agreement on particular indicators to measure our progress, and ultimately dream of achieving SD and a world free of poverty.

References Acs, Z.J. and Audretsch, D.B. (1988) ‘Innovation in large and small firms: an empirical analysis’, American Economic Review, Vol. 78, pp.687–690. Acs, Z.J., Morck, R. and Yeung, B. (1999) ‘Productivity growth and firm size distribution’, in Acs, Z.J., Carlsson, B. and Larlsson, C. (Eds.): Entrepreneurship, Small and Medium-Sized Enterprises and the Macroeconomy, Cambridge University Press, Cambridge, pp.367–396. Admiraal, P.H. (Ed.) (1996) Small Business in the Modern Economy, Basil Blackwell, Oxford.


25

Ahmed, A. and Stein, J.A. (2004) ‘Science, technology and sustainable development: a world review’, World Review of Science, Technology and Sustainable Development, Vol. 1, No. 1, pp.5–24. Amoateng, K. (2005) Editorial Notes on North America, Personal Communication, WREMSD. Audretsch, D.B. (1995) Innovation and Industry Evolution, MIT Press, Cambridge, MA. Audretsch, D.B. and Thurik, R. (2004) ‘A model of the entrepreneurial economy’, International Journal of Entrepreneurship Education, Vol. 2, pp.143–166. Audretsch, D.B., Thurik, R., Verheul, I. and Wennekers, A.R.M. (2002). Entrepreneurship: Determinants and Policy in a European-US Comparison, Kluwers, Amsterdam. Barbier, E. (1987) ‘The concept of sustainable economic development’, Environmental Conservation, Vol. 14, No. 2, pp.101–110. Baumol, W.J. (1993) ‘Formal entrepreneurship theory in economics: existence and bounds’, Journal of Business Venturing, Vol. 3, pp.197–210. Bearse, P.J. (1981) A Study of Entrepreneurship by Region and SMSA Size, Public/Private Ventures, Philadelphia. Bhide, A. (2000) The Origin and Evolution of New Businesses, Oxford University Press, Oxford. Binks, M. and Vale, P. (1990) Entrepreneurship and Economic Change, McGraw-Hill, New York. Birley, S. and Muzyka, D. (2000) Mastering Entrepreneurship, Financial Times Mastering, Pearson Education Limited, London, UK. Braunerhjelm, P. and Carlsson, B. (1999) ‘Industry structure, entrepreneurship and the macroeconomy: a comparison of Ohio and Sweden, 1975-1995’, in: Acs, Z.J., Carlsson, B. and C. Larlsson (Eds.) Entrepreneurship, Small and Medium-Sized Enterprises and the Macroeconomy, Cambridge University Press, Cambridge. Bruno, A.V. and Tyebjee, T.T. (1982) ‘The Environment for entrepreneurship’, in Kent, C.A. et al. (Eds.): Encyclopaedia of Entrepreneurship, Prentice-Hall, Englewood Cliffs, NJ, pp.288–307. Brush, C. (2000) ‘Women entrepreneurs; the way forward’, in Birley, S. and Muzyka, D. (Eds.): Mastering Entrepreneurship, Financial Times Mastering, Pearson Education Limited, London, pp.14–18. Casson, M. (1990) Enterprise and Competitiveness, Clarendon Press, Oxford. Casson, M. (1999) ‘Entrepreneurship and the theory of the firm’, in Acs, Z.J., Carlsson, B. and Larlsson, C. (Eds.): Entrepreneurship, Small and Medium-Sized Enterprises and the Macroeconomy, Cambridge University Press, Cambridge, pp.45–78. CEC (2003) Review of the EU Sustainable Development Strategy: Initial Stocktaking and Future Orientations, COM(2005) 37 final, Office for Official Publications of the European Communities, Luxembourg. CEC (2005) The Future of the European Employment Strategy: A Strategy for Full Employment and Better Jobs for All, Office for Official Publications of the European Communities, Luxembourg, Available: http://europa.eu.int/comm/sustainable/docs/ COMM_PDF_COM_2005_0037_F_EN_ACTE.pdf. CEC (Commission of the European Communities) (1999) The European Employment Strategy: Investing in People; Investing in More and Better Jobs, Office for Official Publications of the European Communities, Luxembourg. Chell, E., Haworth, J.M. and Brearley, S.A. (1991) The Entrepreneurial Personality: Concepts, Cases and Categories, Routledge, London. Cunningham, J.B. and Lischeron, J. (1991) ‘Defining entrepreneurship’, Journal of Small Business Management, Vol. 29, pp.45–61. de Pablos, P.O. (2005) Challenges in the European Union, Personal Communication, WREMSD. Drucker, P.F. (1985) Innovation and Entrepreneurship, Heinemann, London. El-Kafafi, S. (2005) ‘Clean green New Zealand, personal communication’, WREMSD. Elliot, J.A. (2001) An Introduction to Sustainable Development, 2nd ed., Routledge, London.

26


Ellwood, W. (2001) The No-nonsense Guide to Globalization, New Internationalist, Oxford. Foong, S. (2005) Editorial Notes on East Asia and Pacific, Personal Communication, WREMSD. Gartner, W.B. (1988) ‘Who is an Entrepreneur? is the wrong question’, Entrepreneurship Theory and Practice, Vol. 12, pp.47–67. Glancey, K.S. and McQuaid, R.W. (2000) Entrepreneurial Economics, Macmillan, Basingstoke, UK and St. Martin’s Press, New York. Hancock, M. (2004) 2004 Executive Report, Global Entrepreneurship Monitor (GEM), Available: http://www.gemconsortium.org. Harris, J.M. (2000) ‘Basic Principles of SD’, Working Paper No. 00-04, Global Development and Environment Institute, Tufts University Medford, USA, http://ase.tufts.edu/gdae. Harrison, B. (1997) Lean and Mean: Why Large Corporations will Continue to Dominate the Global Economy, Guildford Press, New York. Hawken, P. (1993) The Ecology of Commerce. Harper Business, New York, p.114. Held, D., McGraw, A. and Goldblatt, D. (1999) Global Transformations: Politics, Economics and Culture, Polity and Stanford University Press, USA, p.16. Holmberg, J. (1992) Making Development Sustainable, Island Press, Washington DC. Hughes, J.R.T. (1986) The Vital Few: American Economic Progress and Its Protagonists, Oxford University Press, Oxford. Juwaheer, R. (2005) Editorial Notes on Indian Ocean Commission, Personal Communication, WREMSD. Kirzner, I.M. (1997) ‘Entrepreneurial discovery and the competitive market process: an Austrian approach’, Journal of Economic Literature, Vol. 35, pp.60–85. Leibenstein, H. (1968) ‘Entrepreneurship and development’, American Economic Review, Vol. 58, pp.72–83. Louw, L. (2005) Challenges Facing Africa, Personal Communication, WREMSD. Malechi, E.J. (1997) Technology and Economic Development: The Dynamics of Local, Regional and National Competitiveness, 2nd ed., Addison Wesley Longman Limited, London. McQuaid, R.W. (2002a) ‘Entrepreneurship and ICT industries: support from regional and local policies’, Regional Studies, Vol. 36, No. 8, pp.909–919. McQuaid, R.W. (2002b) ‘Social entrepreneurship and public private partnerships’, in Montanheiro, L., Berger, S. and Skomsøy, G. (Eds.): Public and Private Sector Partnerships – Exploring Co-operation, Sheffield Hallam University Press, Sheffield, pp.291–300. Meadows, D., Meadows, D.L. and Randers, J. (1992) Beyond the Limits, Chelsea Green Pub. Co., Post Mills, VT. Minniti, M. (2004) Characteristics of the Entrepreneur, Global Entrepreneurship Monitor (GEM), Available: http://www.gemconsortium.org. Mitchell, R.K., Smith, J.B., Morse, E.A., Seawright, K., Peredo, A.M. and McKenzie, B. (2002) ‘Are entrepreneurial cognitions universal? assessing entrepreneurial cognitions cultures’, Entrepreneurship Theory and Practice, Vol. 26, No. 4, pp.9–32. Morita, R. et al. (1993) ‘SD: its definitions and goals’, Mita Journal of Economics, Vol. 4, No. 85. Murcott, S. (1997) Definitions of Sustainable Development, Appendix A, Sustainable Living Network, Available: http://www.sustainableliving.org/index.html. OECD (1998) Fostering Entrepreneurship: A Thematic Review, OECD, Paris. OECD (2003) Entrepreneurship and Local Economic Development: Programme and Policy Recommendations, OECD, Paris. Pearce, D., Markandya, A. and Barbier, E. (1989) Blueprint for a Green Economy, Earthscan Publications Ltd. London. Porter, M. (1990) The Competitive Advantage of Nations, Macmillan, London.


27

Reynolds, P.D. (1991) ‘Sociology and entrepreneurship: concepts and contributions’, Entrepreneurship Theory and Practice, Vol. 14, pp.47–70. Rhoades, D. (2005) Editorial Notes on North America, Personal Communication, WREMSD. Robinson, P.B., Stimpson, D.V., Huefner, J.C. and Hunt, H.K. (1991) ‘An attitude approach to the prediction of entrepreneurship’, Entrepreneurship Theory and Practice, Vol. 14, pp.13–31. Rugman, A.M. (2001) ‘The illusion of the global company’, in Pickford, J. (Ed.): Mastering Management 2.0, Financial Times Mastering, Pearson Education Limited, London, p.129. Sarre, P., Smith, P. and Morris, E. (1991) One World for one Earth: Saving the Environment, Earthscan Publications Ltd, London. Schumpeter, J.A. (1942) Capitalism, Socialism and Democracy, Harper Row, New York. Scott, M., Fadahunsi, A. and Kodithuwakku, S. (2000) ‘Tacking adversity with diversity’, in Birley, S. and Muzyka, D. (Eds.): Mastering Entrepreneurship, Financial Times Mastering, Pearson Education Limited, London, p.227. Sohail, M.S. (2005) Editorial Notes on the Middle East and North Africa, Personal Communication, WREMSD. Stevenson, H. (2000) ‘The six dimensions of entrepreneurship’, in Birley, S. and Muzyka, D. (Eds.): Mastering Entrepreneurship, Financial Times Mastering, Pearson Education Limited, London. Storey, D.J. (1994) Understanding the Small Business Sector, Routledge, London. Smiles, S. (1859) Self Help, with Illustrations of Character and Conduct, John Murray, London (republished in 1996, IEA, London). Tidd, J., Bessant, J. and Pavitt, K. (2005) Managing Innovation: Integrating Technological, Market and Organizational Change, 3rd ed., John Wiley & Sons, Ltd, London. Tony Blair (2002) Prime Minister Tony Blair Speech to the Trade Union Congress, 10th September. UN (2002b) Science and Technology as a Foundation for SD, Summary by the Scientific and Technological Community for the Multi-Stakeholder Dialogue Segment of the fourth session of the Commission on SD acting as the preparatory committee for the World Summit on SD. Note by the Secretary-General. Commission on SD acting as the preparatory committee for the World Summit on SD Fourth Preparatory Session 27 May–7 June. UN (2004) Unleashing Entrepreneurship: Making Business Work for the Poor, Report of the Commission of the Private Sector and Development to the UN, Available at: http://www.undp.org/cpsd/report/index.html. United Nations (UN) (2002a) Global Challenge Global Opportunity: Trends in Sustainable Development, Department of Economics and Social, World Summit on Sustainable Development, Johannesburg, SA. United Nations Economic Commission for Europe (UNECE) (2004) Note by the ECE Secretariat, Steering Group on Sustainable Development, Second Meeting of the 2003/2004 Bureau, Conference of European Statisticians, Statistical Commission, Geneva, Switzerland. United Nations Under-Secretary General and the United Nations Environment Programme United Nations Economic Commission for Africa (UNECA) (2003) Making Science and Technology Work for the Poor and for SD in Africa, Paper prepared by the SD Division with the assistance of a senior international consultant, Mr. Akin Adubifa, January. Wall, S. and Rees, B. (2001) Introduction to International Business, Financial Times/Prentice-Hall, London, pp.19–45. Waters, M. (1995) Globalization, Routledge, London. Wickham, P.A. (2004) Strategic Entrepreneurship, 3rd ed., Pearson Education, Limited, London. World Bank (2003) World Development Report, Oxford University Press, Oxford. World Commission on Environment and Development (WCED) (1987) Our Common Future, Oxford University Press, Oxford, p.43.

28


World Economic Forum (2002) Environmental Sustainability http://www.ciesin.columbia.edu/indicators/ESI/rank.html. World Economic Forum (2005) Environmental Sustainability http://www.ciesin.columbia.edu/indicators/ESI/rank.html. Yale Center for Environmental Law and Policy, Yale University (2002) Sustainability Index. Available: http://www.yale.edu/esi Yale Center for Environmental Law and Policy, Yale University (2005) Sustainability Index, Available: http://www.yale.edu/esi.

Index,

Available:

Index.

Available:

2002 Environmental 2005 Environmental

Notes 1

Australia, Hong Kong, Japan, New Zealand, Singapore, Israel, Jordan, South Africa, Uganda, Belgium, Croatia, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Slovenia, Spain, Sweden, UK, Canada, USA, Argentina, Brazil, Ecuador, and Peru. 2 The United Nations Conference on Environment and development, the ‘Earth Summit’, took place in Rio de Janeiro (Brazil), was the largest ever international conference aiming at identifying the principles of action towards SD in the future.

Websites Earth Council Available: http://www.ecouncil.ac.cr/. Global 100 Most Sustainable Corporations in the World, Available online at: http:// www.global100.org/index.asp. Lowell Center for Sustainable Production (LCSP) Available: http://www.uml.edu/centers/ LCSP/. Sustainable Development Communications Network (SDCN) Available: http://www.sdcn.org/. World Bank, World Bank Sustainable Development Reference Guide. http:// www.WorldBankSustainableDevelopmentReferenceGuide.

Bibliography Chen, M. (2000) ‘International technology transfer’ in Tung, R.L. (Ed.): The Handbook of International Business, Part of The International Encyclopedia of Business and Management, International Thomson Business Press, London, UK, pp.347–365. Child, J. (1984) ‘New technology and developments in management organization’, OMEGA, Vol. 12, No. 3, pp.211–223. Earl, M.J. (1989) Management Strategies for Information Technology, Prentice-Hall International, London. Garfield, C. (1986) Peak Performers: The New Heroes of American Business, Avon Books, New York. Madigan, K. (2005) ‘After the housing boom- what the coming slowdown means for the economy’, BusinessWeek, April 11, pp.78–82. Middle East and North Africa (2003) World Report 2003, Human Rights Watch. Munro, D. (1995) ‘Sustainability: rhetoric or reality’, in Trzyna, T. (Ed.): A Sustainable World: Defining and Measuring SD, Published for IUCN by California Institute for Public Affairs, Sacramento.


29

National Research Council (1991) Managing Global Genetic Resources, Forest Trees National Academy Press, Washington DC. New Zealand Business Council for Sustainable Development (2005) Dedicated to Making a Difference, Retrieved on 2 May 2005, http://www.nzbcsd.org.nz. New Zealand Ministry for the Environment (2002) Findings of the Rio+10 Community Programme, Retrieved on 30 April 2005, http://www.mfe.govt.nz. New Zealand Ministry of the Environment (2001) Our Clean Green Image: What’s it Worth?, Wellington, New Zealand. New Zealand Parliamentary Commissioner for the Environment (2002) Creating Our Future: Sustainable Development for New Zealand, June, New Zealand, Wellington. New Zealand Travel and Business (2005) 100% Pure New Zealand, Retrieved on 2 May. OECD (Organization for Economic Cooperation and Development) (1990) Issues Papers: On Integrating Environment and Economics, OECD, Paris. Small Islands, Big Stakes (2005) International meeting to review the Implementation of the Programme for Action for the Sustainable Development of Small Island Developing States. UNEP (2000) ‘Overview: outlook and recommendations’, Global Environment Outlook 2000, Earthscan, London, 1999, Available: http://grid.cr.usgs.gov/geo2000/ov-e/0012.htm. US Energy Information Administration’s (EIA’s) (2005) Forecast for World Oil Prices and Production, EIA, Washington DC. World Bank (1992). World Development Report, 1992: Development and the Environment, Oxford University Press, Oxford. World Bank Report (2000) Middle East and North Africa, Regional Brief, World Bank, Washington DC.

Appendix A: Global entrepreneurship monitor (GEM) •

The Global Entrepreneurship Monitor (GEM) Stared in 1999, it is a non-profit academic research program undertaken by scholars from the Babson College and London Business School and the world’s largest single annual cross-national assessment of entrepreneurship. This GEM annual launch conference is also considered as the biggest single entrepreneurship event in the world (see www.gemconsortium.org for more details).

•

In undertaking this cross-national assessment of entrepreneurship activities, GEM uses the Total Entrepreneurial Activity (TEA Index). TEA is the sum of all entrepreneurs between 18 and 64 years, who have taken some action to create new businesses, and owner-managers of firms who have paid wages for more than three months and less than 42. TEA includes age, gender, income levels, employment status, sector, groups of countries or country, region, and locality. TEA can also be looked at in terms of opportunity entrepreneurship and necessity entrepreneurship.

•

However, unlike most studies, the conceptual model behind GEM takes a comprehensive approach and considers the economic contribution of all businesses within a country. Specifically, GEM considers that national economic growth is the result of two parallel sets of interrelated activities; those associated with established firms and those related directly to the entrepreneurial process. See Hancock (2004) for more details about GEM conceptual model and methodology, also available online (www.gemconsortium.org).

30


Appendix B: 100 Most Sustainable Corporations in the World 2005 The Global 100 was selected from Innovest’s broad research universe covering over 2000 companies mostly reflecting the large global indices such as the MSCI World, S&P 500, FTSE 350, and Eurostoxx. A company that makes the Global 100 literally means that it is part of a select group (companies whose sustainability performance falls within the top five per cent of their sector) chosen from a universe of 2000 of the world’s largest corporations. Of these 2000 companies across 53 sectors, According to the report, Toyota (Japan), Alcoa (USA) and BP (UK) are the top three companies in the world. •

Toyota Motors has developed and successfully commercialised the marquee environmental technology of the decade for the industry, the hybrid drive vehicle. Toyota has made a strong commitment to environmental management at its facilities and has engaged its suppliers in an effort to improve the eco-efficiency of its operations throughout the value chain.

•

Alcoa has distinguished itself as a leader in the metal and mining sector through its sophisticated approach to identifying and managing the material sustainability risks that it faces as a company. Alcoa’s approach to sustainability is firmly rooted in the idea that sustainability programs can indeed add financial value. This kind of forward-thinking strategy of supplying the market with the products that will help solve pressing global environmental problems is indicative of a company that sees the future, has plotted a course, and is aligning its business accordingly.

•

BP is on the leading edge on overall sustainability excellence in the oil and gas industry. BP has demonstrated leadership in resource and energy efficiency, climate change risk abatement, waste reduction and recycling, and overall environmental impact minimisation. BP investment focusing renewable energy technology; low-environmental impact products; and cross-industry R&D partnerships for new product development and commercialisation.