Chapter 5 Entrepreneurship, Innovation, and Sustainable Business

Introduction

Today’s world faces significant challenges. This includes environmental challenges, such as climate disruption caused by man-made greenhouse gas emissions, and societal challenges, including rising income inequality and other forms of social injusticeA situation where there is unfair and unethical treatment of all and not everyone receives a fair share of society’s benefits.. There are several ways that businesses are responding to these challenges. Some organizations are accepting deteriorating environmental, economic, and social conditions and are managing through the decline by adapting to limitations. Other organizations speak to the need to make choices between what is good for the environment and society or doing what is good for the economy. However, there are also more proactive, positive responses, including ones that champion business as a force for positive societal change.

Addressing ecological and social concerns can create business opportunities that benefit both the economy and society. This is one of the core philosophies of sustainable business practices and a focus of this textbook. Sustainable businesses can help address society’s concerns while providing profit-making opportunities for business owners.

Sustainable business is in large part about changing business practices. Successful sustainable businesses are focused on the creation of new products, services, or practices that address or mitigate environmental and social concerns in new ways. Success in implementing sustainable business practices relies on entrepreneurshipThe act of starting a new business or revitalizing the business activities of an existing, mature organization. and innovationA change in a product offering, service, business model, or operations that meaningfully improves the experience of a large number of stakeholders..

Entrepreneurship and innovation are relevant in many different sustainable business contexts. They are fundamental for the success of start-up companies that are providing innovative solutions to meet environmental or social challenges. Entrepreneurship and innovation are also highly relevant for established businesses. This applies all the way up to multinational companies, such as General Electric (GE) or Microsoft, and all the way down to small- to medium-sized companies, such as Timberland, Green Mountain Coffee, Oakhurst, and Stonyfield (which are highlighted in cases in this textbook).

Companies undertake sustainability entrepreneurshipThe act of starting a new business or changing an existing business with a specific focus on a new product or service that contributes toward increasing sustainability. for a variety of reasons, including to enhance their brand name and reputation and to benefit financially by being market leaders in business practices that reduce environmental and societal impacts in their sphere of operating influence. They also engage in sustainability entrepreneurship to affect positive societal change.

This chapter provides an overview of entrepreneurship and innovation as it relates to sustainable business and specifically focuses on entrepreneurial innovators who forge new paths and break with accepted ways of doing things in new or existing businesses. The chapter begins by discussing some broader topics related to entrepreneurship and innovation and then relates these concepts in a sustainable business context.