{"id":106,"date":"2021-07-12T21:40:10","date_gmt":"2021-07-13T01:40:10","guid":{"rendered":"https:\/\/pressbooks.library.upei.ca\/socialentrepreneurshipsustainabilitycanada\/chapter\/entrepreneurship-and-sustainability-innovation-analysis\/"},"modified":"2021-08-20T22:52:04","modified_gmt":"2021-08-21T02:52:04","slug":"entrepreneurship-and-sustainability-innovation-analysis","status":"publish","type":"chapter","link":"https:\/\/pressbooks.library.upei.ca\/socialentrepreneurshipsustainabilitycanada\/chapter\/entrepreneurship-and-sustainability-innovation-analysis\/","title":{"raw":"Entrepreneurship and Sustainability Innovation Analysis","rendered":"Entrepreneurship and Sustainability Innovation Analysis"},"content":{"raw":"
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\r\n\r\nEntrepreneurship and Sustainability<\/a> (v. 1.0) by Andrea Larson<\/span><\/a>, is licensed under a <\/span>Creative Commons<\/a> <\/span>by-nc-sa 3.0<\/a> license, except where otherwise noted. This chapter has been updated and edited by Matthew Pauley<\/a>.\u00a0<\/span>For more information on the source of this book, or why it is available for free, please see the project's home page<\/a>.\r\n\r\n<\/div>\r\n
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Entrepreneurial Process<\/span><\/h1>\r\n
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Learning Objectives<\/h2>\r\n<\/header>\r\n
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  1. Understand the constituent elements of the entrepreneurial process.<\/li>\r\n \t
  2. Gain appreciation for how the elements fit together to form a whole.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n
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      In this chapter, we examine how entrepreneurial ventures combine the classic entrepreneurial process with sustainability concepts. This combination encompasses design approaches and corporate competencies that generate new offerings that achieve revenue growth and profitability while enhancing human health, supporting ecological system stability, and contributing to the vitality of local communities. This chapter shows the interconnections across sustainability, innovation, and entrepreneurship to give the reader greater understanding of a current global phenomenon: the search for new products, technologies, and ways of conducting business that will replace the old with designs intended to help solve some of society\u2019s most challenging issues.<\/p>\r\n

      When products are designed and business strategies are structured around systems thinking that is associated with sustainability, the outcome, as in any system composed of interacting and interdependent parts, emerges as larger than the sum of its constituent elements. So we should keep in mind, as we dissect the entrepreneurial process into its core elements, that we do so for analytics\u2014first to understand the individual parts and then to see how they come together. Once that picture is clear, the reader will have gained new insights into what entrepreneurs active in the sustainability innovation space actually do.<\/p>\r\n

      Remember sustainability, innovation, and entrepreneurship are terms used to represent a wide range of ideas, depending on the context. However, just because they have come into common use and have been interpreted broadly does not mean they cannot be defined in focused and practical ways to help guide entrepreneurial individuals in business. Individuals and companies are, in fact, implementing sustainability designs and strategies through the use of innovative initiatives. At the present time, these three terms\u2014sustainability, innovation, and entrepreneurship\u2014are our best and most accurate descriptors of what is happening in the marketplace. No one term covers all the ground required. In the following sections, we examine entrepreneurial process and then discuss sustainability concepts to explain how the parts merge to create a holistic picture.<\/p>\r\n

      Entrepreneurial activity can seem mysterious for those not familiar with the phenomenon. US culture has created heroic myths around its most famous entrepreneurs, reinforcing the idea that entrepreneurship is about individuals. As a result, many people believe those individuals are born entrepreneurs. In fact, it is more accurate to talk about entrepreneurship as a process. More frequently than not, a person becomes an entrepreneur because she or he is compelled to pursue a market opportunity. Through that activity\u2014that process\u2014entrepreneurship unfolds. A typical story of entrepreneurship is one in which the entrepreneur is influenced by his or her engagement with favourable conditions, circumstances in which an idea comes together successfully with a market opportunity. An individual has an idea or sees a problem needing a solution and generates a way to meet that need. A new venture is started and, if successful, an ongoing business created. Thus entrepreneurship\u2014the creation of new ventures as either new companies or initiatives within larger organizations\u2014is about the process of individuals coming together with opportunities, resulting in specific customers being provided with new goods and services.<\/p>\r\n

      For this discussion, entrepreneurship is not constrained to starting a company. While that definition is commonly assumed, entrepreneurship and entrepreneurial innovation can occur in a variety of settings, including small or large companies, nonprofit organizations, and governmental agencies. Entrepreneurship emerges under widely diverse circumstances, typically in response to new conditions and in pursuit of newly perceived opportunities. We focus here not on the average new venture set up to compete under existing rules against existing companies and delivering products or services comparable to those already in the market. Rather, our focus is on entrepreneurial innovators who forge new paths and break with accepted ways of doing business, creating new combinations that result in novel technologies, products, services, and operating practices\u2014that is, substantial innovation.<\/p>\r\n

      In that regard, our approach is aligned with entrepreneurship as defined by twentieth-century economist and entrepreneurship scholar Joseph Schumpeter, who pointed out that change in societies comes because of innovation created by entrepreneurs. His emphasis was on innovation and the entrepreneur\u2019s ability through innovation to generate new demand that result in significant wealth creation. Peter Drucker, a 20th and 21st century scholar of entrepreneurship, echoed similar ideas many decades later. Entrepreneurship is innovative change through new venture creation; it is the creation of new<\/em> goods and services, processes, technologies, markets, and ways of organizing that offer alternatives intending to well meeting people\u2019s needs and improving their lives. Innovation encompasses the creative combination of old and novel ideas that enables individuals and organizations to offer desired alternatives and replacements for existing products and services. These innovative products and ways of doing business, typically led by independent-thinking entrepreneurial individuals, constitute the substitutions that eventually replace older products and ways of doing things. Sustainability entrepreneurship and innovation build on the basics of this accepted view of innovation and entrepreneurship and extend it to encompass life-cycle thinking, ecological rules, human health, and social equity considerations.<\/p>\r\n

      Understanding entrepreneurial processes and the larger industrial ecosystem at work requires that we break down the subject matter into separate pieces and then recombine them. The pieces need to be examined on their own merit and then understood in relation to one another. We start with understanding the entrepreneurial process and move to examining the elements of sustainability innovation. Each piece is a necessary, but not sufficient, part of the puzzle.<\/p>\r\n

      Remember the mental exercise required in the following discussion is useful not only as an analytic approach for entrepreneurs or investors but also to set out core business plan elements. Business plans require elaboration on the market opportunity, a thorough understanding of what the entrepreneur brings to the business and the qualifications of the management team, and a clear articulation of the product or service offered and why a customer would purchase it. The business plan also must discuss the resources needed to launch the business and the market entry strategy proposed to establish early sales, lock in reliable suppliers, and provide a platform for growth. Thus, learning and applying the analytical steps discussed in this section has direct synergies with writing a business plan.<\/p>\r\n\r\n

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      Analysis of Entrepreneurial Process<\/span><\/h2>\r\n

      Successful entrepreneurship occurs when creative individuals bring together a new way of meeting needs and a market opportunity. This is accomplished through a patterned process, one that mobilizes and directs resources to deliver a specific product or service to customers using a market entry strategy that shows investors financial promise of building enduring revenue and profitability streams. Sustainability adds to the design of a product and operations by applying the criteria of reaching toward benign (or at least considerably safer) energy and material use, a reduced resource footprint, and elimination of inequitable social impacts because of the venture\u2019s operations, including its supply-chain impacts.<\/p>\r\n

      Entrepreneurial innovation combined with sustainability principles can be broken down into the following five key pieces for analysis. Each one needs to be analyzed separately, and then the constellation of factors must fit together into a coherent whole. These five pieces are:<\/p>\r\n\r\n