Green, lean and growing – How ecopreneurs in New Zealand are starting, managing and growing green businesses

Dr Jodyanne Kirkwood & Dr Sara Walton Centre for Entrepreneurship & Department of Management, University of Otago.

SUMMARY This paper’s main research objective is to understand more about ecopreneurs in New Zealand with respect to the way they start, operate and manage their businesses. We conducted mail survey, where 350 questionnaires were sent out in 2011, and 84 were returned, making a 24 percent response rate. This paper reports on the motivations for starting their ecopreneurial business, the key green aspects of the product or service that the ecopreneurs product/sell as well as the key greening of the organisation. Most ecopreneurs had plans to grow the business in the future but are careful not to sacrifice the environment for profits. We conclude that these ecopreneurs start and run their businesses relatively similar to entrepreneurs in general, except they prioritise the environment over profits whenever is practical, and are conscious of doing the best they can to lessen their impact on the environment. Keywords – ecopreneurs, sustainability, environmental entrepreneurship, start-up, growth.

Contact details of corresponding author Jodyanne Kirkwood, Centre for Entrepreneurship, University of Otago, PO Box 56, Dunedin, 9054, New Zealand. +64 3 470 3536. [email protected]

INTRODUCTION

Ecopreneurship began to receive some research attention in the late 1990s (Anderson, 1998; Keogh & Polonsky, 1998; Pastakia, 1998), but even in the latter stages of the last decade, it was noted as being a field that is still in its infancy (Cohen & Winn, 2007). The number of ecopreneurs is growing, and is predicted to grow further with micro ecopreneurs exploiting opportunities in new niche markets that emerge (Holt, 2011). The growth in ecopreneurs’ numbers is apparently due to a number of reasons, including changes in lifestyles to focus more on organic food production, slow food movement, fair trade, recycling initiative and the like. The businesses that are in these industries are no longer seen as being on the “fringes of the market place” as they may have been previously (Holt, 2011 pg 248).

At first glance, entrepreneurship and environmentalism may seem to have little in common. Indeed, some would suggest they could be seen as “intrinsically hostile” (Anderson, 1998 pg 135).

In fact, early work on sustainability tended to see business as a primary cause of

environmental degradation (York & Venkataraman, 2010).

However, ecopreneurs have

emerged as a way of offer solutions to such environmental problems.

There has been

recognition in these prior studies that ecopreneurs may act as important change agents with respect to the environment (Anderson, 1998; Gibbs, 2007; Keogh & Polonsky, 1998; Pastakia, 1998).

Entrepreneurs have therefore been identified as a way to give

environmentalism substance and may be a vehicle for social change as they are both about values and attitudes (Anderson, 1998) and commitment (Keogh & Polonsky, 1998). Some researchers have recently proposed that entrepreneurs may be able to “supplement, or surpass, the efforts of governments, NGOs and existing firms to achieve environmental sustainability” (York & Venkataraman, 2010 pg 449). This does seem to be the case, with ecopreneurs being able to set out to create a paradigm shift within their chosen industry (Kearins, Collins, & Tregidga, 2010), and indeed manage to do so with a relatively small amount of resources (Kirkwood & Walton, 2010b).

This may be related to Rodgers

conclusion from a three company case-study that the ecopreneurs may in fact require a higher tolerance to risk-taking than other entrepreneurs, due to the emerging nature of many of the sustainability-related industries they are engaged in (Rodgers, 2010).

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One way of creating environmental change is for entrepreneurs to start businesses to do so. When someone founds a new business they have the ability to shape their company from the outset (Schaltegger, 2002).

Their personal values “strongly influence the development of

the business and the opportunities they might go on to exploit” (Kearins & Collins, 2012 pg 81). These ecopreneurs therefore do not have to ‘go green’ as preexisting companies do if they want to become more sustainability focused (Bansal & Roth, 2000; Schaper, 2002). However, recent research has proposed that both small and large businesses have a key role to play in transforming industries towards a more sustainable future.

They posit that

“Emerging Davids” and “Greening Goliaths” can co-exist and in fact operate at different ends of the spectrum, where the small “Davids” have strong goals and vision regarding sustainability, often their growth is stalled, hence their breadth of impact can be relatively limited. However, “Greening Goliaths”, while not necessarily holding such environmental motives, have the market power and finances to be able to reach a wider audience (Hockerts & Wustenhagen, 2010).

Holt agrees, and points out that some of the earliest ecopreneurs

have built extremely large and influential businesses that have been able to “promote their environmental and social values” (Holt, 2011 pg 248).

While there has been a surge in interest on ecopreneurs, there is still a relatively small body of empirical research in the field. It is no surprise therefore that most researchers have studied ecopreneurs by way of case studies. Case study research is useful in addressing research which has explanatory questions such ‘how’ and ‘why’ questions (Yin, 1984). Authors to date have focused primarily on single case studies (Dixon & Clifford, 2007; Kearins & Collins, 2012), or small samples of between one and six ecopreneurs (Kearins et al., 2010; Pastakia, 1998; Schaltegger, 2002).

The largest sample within this case study

research would appear to be the authors’ prior study of ecopreneurs in New Zealand (Kirkwood & Walton, 2010b). Given the prior focus on small samples, we saw a need to extend our overall understanding of ecopreneurs and we developed a survey that aimed to give us a broad understanding of ecopreneur and the type of business they run, as well as how they go about running the business. Our four main research questions are therefore as follows:

1) To understand why ecopreneurs started their business. 2) To understand the green features of the products/services and ventures that ecopreneurs are involved in. 3

3) To understand how ecopreneurs make decisions in their business. 4) To understand what ecopreneurs plan for the future.

First, it is important to clarify our definition of who an ecopreneur is. This is the focus of the following section.

DEFINING ECOPRENEURS

As the notion of an ecopreneur is very much in its infancy the conceptualisation of an ecopreneur is wide-ranging and it is important at the outset to be careful about definitions used for this study. It is acknowledged that there is no single definition of what constitutes an ecopreneur (Dixon & Clifford, 2007).

Others have used differing terms such as

enviropreneurship or environmental entrepreneurship (Hendrickson & Tuttle, 1997; Keogh & Polonsky, 1998) and green entrepreneur (Walley & Taylor, 2002). At is most basic the term is a combination of the words ‘entrepreneurship’ and ‘ecological’ (Schaltegger, 2002). We adopt a definition of ecopreneurs as being: Entrepreneurs who found new businesses based on the principle of sustainability (based on ideas from Walley & Taylor, 2002 and Isaak, 1998). There are two main components to this definition. First, there are many different definitions of what constitutes an entrepreneur (see, for example Carland, Hoy, Boulton, & Carland, 1984; Gartner, 1990), and no consensus definition has been settled on. The definition used in this study focuses on the founding role but others would suggest that innovation is a requirement to being an entrepreneur (Schumpeter, 1934).

Therefore, we define an

entrepreneur as someone who is the founder of a new for-profit business. The study is particularly focused on people who start a business with pre-existing green values. These types of ecopreneurs have been referred to as ‘green-green’, and one of the classic examples of these businesses was Anita Roddick’s The Body Shop (Issak, 2002). Our interest is in these business founders, as they have the ability to “constitute and shape the ‘face’ of their company” (Schaltegger, 2002 pg 47). This is important not only at start-up but in the ongoing operation of the company (Schaltegger, 2002).

Founders have been the emphasis

in only a few other studies of ecopreneurs (Kearins & Collins, 2012).

We contrast our

definition of ecopreneurs as being ‘green-green’ with the notion of an intra-ecopreneur within

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a corporation or an existing entrepreneur who chooses to go ‘green’.

In Issak’s

conceptualisation, these types of businesses are referred to as ‘green businesses’ (Issak, 2002). This greening of businesses is an area is where much of the prior research has been directed at exploring (Bansal & Roth, 2000; Schaper, 2002).

The second aspect to the definition is that the business should be sustainable. Defining sustainability is also an ambitious task; the concept is highly contested and ambiguous being used. It is also in danger of being used everywhere for everything – which could render the term meaningless (Lele, 1991). The most commonly used definition of sustainability has its origins with the Brundtland report “Our Common Future” – development that meets the needs of the present without compromising future needs (Brundtland Commission, 1987). While this definition is oft quoted and seems to fit nicely with how sustainability might want to be thought of, when it comes to enacting what sustainability might mean there are often issues (Jacobs, 1999). Our definition of an ecopreneur is therefore relatively broad but given the limited research on ecopreneurs, this is justifiable. It is not however as narrow as some researchers, who include the requirement of having social drivers as well as environmental and business goals (Dixon & Clifford, 2007). For some it is strongly linked to the greening of an existing business (Issak 1998) and for others ecopreneurship is related to sustainability, which adds social dimensions such as justice and equity into the construction of the business (Jacobs, 1999).

LITERATURE REVIEW

The research base of the ecopreneur field is still relatively limited. There are two main types of research that has been published to date. The first is empirical research that focuses primarily on a small number of case studies of ecopreneurs. The second strand to the ecopreneurship literature is the conceptual papers, which have focused on developing typologies and theories of ecopreneurs. The conclusion of both types of research is that more research needs to be done to understand ecopreneurs further.

This literature review will

discuss both types of research, beginning with the findings of the empirical work.

Motivations for becoming an ecopreneur

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A review of the entrepreneurship literature leads us to conclude that an individual’s motivation to become an entrepreneur is often complex and multi-faceted (Marlow & Strange, 1994; Shane, Kolvereid, & Westhead, 1991). Motivations for entrepreneurship have often been seen to revolve around four main drivers: a desire for independence; monetary motivations; factors related to family; and factors related to work (Carter, Gartner, Shaver, & Gatewood, 2003; DeMartino & Barbato, 2003).

Researchers have called for further

investigation into whether (and if so, how) ecopreneurs differ in their motivations than entrepreneurs in general (Gibbs, 2007).

Like entrepreneurs in general, motivations for ecopreneurship appear also be multi-faceted (Kirkwood & Walton, 2010b). One of the key distinguishing features of ecopreneurs is their strong ethical reasoning (Linnanen, 2002). Usually the ecopreneur has a ‘raison d’etre’ that exceeds their desire for profits and often this is associated with making the world a better place to live (Linnanen, 2002). Indeed ecopreneurs are often position as ‘crucial change agents (Walley & Taylor, 2002) or “a critical force in enabling the world to change its path” (Cohen & Winn, 2007, pg 46). Thus, their motivations for making a difference and the role they play in doing so through ‘displacing unsustainable means’ (ibid) means that for sustainability they play an important transitional role. For the ecopreneur, though, the ethical reasons are often not the only reasons for developing the business, but may be in fact the only key difference between motivations of ecopreneurs and entrepreneurs (Kirkwood & Walton, 2010b).

Cohen and Winn’s (2007) research concluded the motivation of the ecopreneur could be to fill a market need. Such market needs have arisen as a result of market imperfections – imperfections that produce environmental degradation (Cohen & Winn, 2007) or as a response to the market failing to deal with negative externalities (Pastakia, 1998). Our prior study of 14 New Zealand ecopreneurial businesses also concluded that seeing a gap in the market and exploiting that opportunity was a key motivating factor in starting their ecopreneuerial business (Kirkwood & Walton, 2010b). Additionally, ecopreneurs have been found to be motivated by a desire for independence but appeared to be less focused on making money when compared to prior research of entrepreneurs in general (Kirkwood & Walton, 2010b). In summary, it would appear that ecopreneurs have a range of motivations for starting their businesses, and they appear to be a mix of social, environmental and commercial (Kirkwood & Walton, 2010b; Pastakia, 1998; Walley & Taylor, 2002). 6

Managing the business - balancing dual goals

Other researchers have focused on exploring how ecopreneurs actually manage their businesses once they are established (Kearins et al., 2010; Kirkwood & Walton, 2010b). This is perhaps where many ecopreneurs face the most challenges (Kirkwood & Walton, 2010b). There are potentially strong tensions between the business viability and maintaining the ideals (social and environmental) of the individual entrepreneur (Dixon & Clifford, 2007). While it is clear from the research outlined above that ecopreneurs start their businesses with their green values at the forefront, it is often difficult to maintain this delicate balance of running a for-profit business with strong sustainability goals (Kirkwood & Walton, 2010b).

One of the significant operational aspects of an ecopreneurial business is that it seemingly manages to balance opposing forces of environment and economy. Recent research on three ecopreneurs in New Zealand showed that at times it was required that the entrepreneur “separate business concerns from nature and prioritize them” (Kearins et al., 2010 pg 536). Additionally, the three entrepreneurs in the case studies all had various extents to which they built business opportunities from nature and interacted with nature (Kearins et al., 2010). That is, it appears that every entrepreneur is different in the way they manage the business with respect to balancing the dual goals of the environment and the business (Kirkwood & Walton, 2010b).

One avenue explored by Keogh and Polonsky (1998) has been to consider the commitment of ecopreneurs as change agents. They suggest that it is the commitment to the environment which drives the ecopreneur in their business activity and indeed creates the boundaries of the vision for the business. As the ecopreneurs constitute the face of their companies (Schaltegger, 2002), their role in maintaining commitment as a key mechanism in balancing the business with the environmental, must rest with them. However, it is also that commitment to the environment which is seen as one of the barriers to an ecopreneurial business (Linnanen, 2002). Linnanen also suggests this is because the financial community find the environmental commitment (or ethical motivations) confusing in a business sense as they are not seen as objective or rational in a business sense. Thus the balance between the

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ethical vision/environmental commitment and the business is extremely important in the image construction or perceptions of ecopreneurial organisations.

This may also be why many ecopreneuerial businesses have not seen a great amount of growth, or in a number of cases, have failed. Holt tracks environmental businesses 20 years after their start-up and found that one-third of the businesses had failed, some 11% had been purchased by another company (eg The Body Shop was purchased by Loreal). However, what is interesting to note is that many of the companies appeared to have experienced difficulty in the expansion stage of their business (Holt, 2011). Some had gone bankrupt but been able to trade their way out, or others had basically stayed as “mom and pop” type businesses (30% of the sample). While Holt’s data does not allow us insights into why the ‘failures’ occurred, it may indicate the difficulties in balancing the dual goals that ecopreneurs appear to have (Holt, 2011).

Interestingly, Kearins et al found that one of their case companies actually reduced its impact on nature by retrenchment rather than growing, so this may corroborate Holt’s longitudinal study pointing to potential issues around growth of ecopreneuerial businesses (Kearins et al., 2010). Indeed, Kearins et al suggests that growth is not as important as gaining wider acceptance of the founder’s vision.

In other case-based research, the current authors

concluded that growth was not seen as an inevitable outcome of the ecopreneurs, and actually meant that there were many more decisions to make around areas such as hiring of staff (who potentially don’t share the same values), but also in logistical issues such as manufacturing and exporting goods. These areas created many environmental issues that ecopreneurs often felt very strongly about, and would not compromise at the expense of growing the business (Kirkwood & Walton, 2010a). Rodgers also concluded that the “quantity” of growth was not so much of a concern to ecopreneurs than the quality of the growth and its related impact on others (Rodgers, 2010).

There has not been a great deal of research on the growth stages within ecopreneurs, but Kearins & Collins offer extensive insights into one company’s growth to the point of being approached to sell the company to a larger player in the market (Kearins & Collins, 2012). Phoenix Organic drink producer sold the company to Charlie’s (a juice company), a company that seemingly operates in a traditional entrepreneurial model rather than ecopreneurs. Ironically, in 2012 Charlie’s was purchased by a larger international company called Asahi 8

group (www.charlies.co.nz, 2012). The conclusions of this study point to the importance of ecopreneurs to look to what they have achieved in the business, as well as their personal life choices, and also the potential financial reward (often ecopreneurs may be working for little money) for their hard work. In the case of the founders of Phoenix, it allowed them a chance to go into other ecopreneuerial ventures, while living comfortably with their finances from the sale (Kearins & Collins, 2012). In summary, there is some thought that ecopreneurs may represent a new model of enterprise (Kirkwood & Walton, 2010b; Rodgers, 2010), but this proposition is one that needs to be further researched.

Typologies of Ecopreneurs

While the empirical literature discussed above highlights some of the experiences of small numbers of ecopreneurs, others have begun to focus on theory development within the emerging field. At present this strand of the extant literature tends to consist of a number of papers describing various typologies or differing types of ecopreneurial businesses.

While the discussion so far in this literature review implies that all ecopreneurs are relatively similar, this is clearly not the case. People have many different goals and approaches, even within the sub-group of ecopreneurs (Keogh & Polonsky, 1998).

At its most simple,

ecopreneurs have been divided into two groups based on their objectives (social and commercial) but conclude that these boundaries may be blurred (Pastakia, 1998). Others have proposed there are a greater number of typologies of ecopreneurs and these are reviewed next. The usefulness of these typologies has been questioned by some, who suggest little is known about whether ecopreneurs can shift between categories over time (Gibbs, 2007). However, the typologies seem to be about providing a more precise definition of ecopreneurship through recognizing that different modes of operation occur. One of the simplest and most referred to classifications of ecopreneurs is Isaak’s ‘green’ and ‘green-green’ businesses. The green business There are three key typologies explaining the varieties of ecopreneurship (Linnanen, 2002; Schaltegger, 2002; Walley & Taylor, 2002). These have axis including desire to make money or change the world (Linnanen, 2002); hard or soft structural influences and economic or sustainability orientation (Walley & Taylor, 2002); priority of business goal and market effect of business (Schaltegger, 2002). The typologies produce types of ecopreneurs like the “ad hoc environpreneur”, the “ethical 9

maverick”, “visionary champion” and “innovation opportunist” (Walley & Taylor, 2002). Or the non-profit business, self-employer, successful idealist or opportunist (Linnanen, 2002). The typologies are based on personal experience, examining limited numbers of businesses or literature searches and are generally offered as frameworks for further research (see for example Walley & Taylor, 2002).

METHOD As noted earlier in the paper, the research on ecopreneurs, of which much is about defining or constructing typologies of, often involves single site case studies or small numbers of multiple sites, from which exploratory conclusions are formed. As yet there has not been a large scale survey examining who ecopreneurs are, their background and how they operate. To develop a better picture and extend our current work with ecopreneurs in New Zealand we completed a nationwide survey. We wanted to develop some of the findings and test, for example, ecopreneurs’ commitment to the environment. The questionnaire consisted of 42 questions, developed from conclusions of our previous qualitative study, as well as from the extant literature in the field. For the first part of the study the key questions in the survey intend to understand how the founders of the ecobusinesses make sense of some of the key concepts of business practice (ie success, growth and business). This is to see if ecopreneurs are redefining what business might mean to them and their business. The second part of the study aims to investigate operational aspects of developing and maintaining an ecopreneurial business venture. These include barriers and supports to the business and also a consideration of the key policies and how they facilitate ecopreneurial business activity. The final part of the questionnaire used the ‘New Ecological Paradigm’ (Dunlap, Van Liere, Mertig, & Jones, 2000) to examine the ecological orientation of ecopreneurs to cross reference other responses and to allow us to compare findings with international data in this area. The first step was to develop a database of ecopreneurs in New Zealand. The criteria for identifying ecopreneurs were important. As noted in the definition we outlined earlier, we stipulated that ecopreneurs have a green product or service and operate the venture in a green way. We intended to send the survey to as many eco-businesses as possible, as such a loose 10

definition of ecopreneurs was used in an attempt to capture as many potential ecopreneurs as possible. Thus, we relaxed our initial requirement that the person had to have founded the business themselves.

Casting a wider net also gives us the possibility of gaining a large

number of responses, and allows us to get a good understanding of ecopreneurs operating in New Zealand. Getting the names and addresses of ecopreneurs involved researching on the internet (for example through sites such as www.ecobob.co.nz), directories like ‘The Business Who’s Who’ and from using publications like Organics NZ. An exhaustive search was completed through Google using various terms to find businesses that fitted the criteria. In the end we had a database of 350 companies meeting the criteria that we could send the survey to. We felt that this was capturing the breadth of ecopreneurs in New Zealand.

We were particularly interested in the founders of the business, and it was the founders who letters were addressed to capture in our survey. This is because the founders have the ability to “constitute and shape the ‘face’ of their company”, which this is important not only at start-up but in the ongoing operation of the company (Schaltegger, 2002 pg 47). Consequently, our questionnaire was addressed to individuals when possible but we did not exclude those who responded who were not founders of the business.

The questionnaire was accompanied by a single cover page outlining the goals of the study and an information sheet about the research. We obtained ethical approval for the research from the Management Department of the University of Otago, and added a comment that by filling in the survey participants acknowledged that we would use the data anonymously. A freepost envelope was also included for respondents to send back their completed questionnaire. To help encourage the questionnaire completion we developed a blog site upon which we posted information about ecopreneurs and our case study research to act as a sharing resource for ecopreneurs. We have added to this as results have become available. Participants were offered the chance to go in the draw for their choice of a Trade Aid gift voucher for themselves, or an Oxfam Unwrapped Farmer Pack gifted in their name. We also emailed all participants as a reminder with the questionnaire after three weeks and then once more before closing off the return date. This proved useful and resulted in a number more being returned.

In total 84 questionnaires were returned. This has a response rate of 24% which may be a little low for a questionnaires, but typical response rates for small business mail surveys 11

average around 30% (Dennis, 2003). Small business research has been noted as having particularly poor response rates (Curran & Blackburn, 2001). We were initially surprised by this low response rate as we expected ecopreneurs to be willing to share information. Our previous participants for the qualitative exploratory work had been excited by our research and very willing to participate. We also did receive favourable comments on the questionnaires about the fact that we were doing the survey. However, time is a big factor for entrepreneurs who are plenty busy enough just managing their venture(s). Plus, we also wondered if many did not see themselves as ecopreneurs and thus self-selected not to participate.

DISCUSSION OF RESULTS

First, some demographics of the sample are important as context for the findings. Two-thirds of the sample was male. The majority of respondents are married (almost three-quarters) and have children (72.6%). Just over three-quarters (76%) are tertiary qualified and the respondents have an average of 18 years business experience. Most started the business themselves (88.1%), while the remainder either purchased or inherited the business. The ecopreneurs often had owned more than one business (three on average). Most of the firms are partnerships with two business owners (57.1%).

The remaining 42.9% started the

business themselves. This high level of partnering up with another person may be a good strategy. We concluded in our previous research that those with a business partner found the business easier to run - particularly when partners had good business acumen (Kirkwood & Walton, 2010b). The firms on average employ 5.27 people. However, this is skewed by a few businesses employing a large number of people, while most respondents employ only themselves (ie. they were sole traders). The average number of years in operation is just under ten years. We asked participants to classify the approximate annual turnover of the business that they were reporting on in this study. Almost two-thirds of the businesses (64.3%) had a turnover of over $100,000 per annum (14.3% of these were over $1 million). There were some businesses that were turning over less than $40,000 per annum (22.6%).

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The industries covered all areas with the majority in manufacturing and retail (40.5%). Other industries represented were building (16.7%), consulting/education (14.3%) and agriculture/viticulture/food production (11.9%). The ecopreneurs considered their businesses to be primarily national (47.6%), followed by international (30.9%) and a smaller amount were regionally focused (21.4%).

Motivations for starting the business

Over three-quarters (78.6%) of respondents had a specific idea prior to starting the business. The remaining 20.2% started with the desire to own a business first, and then looked for ideas and opportunities (1 person did not complete this question). Three key motivating factors featured in over two-thirds of the ecopreneurs surveyed, as shown in Table 1 below.

Table 1: Factors that influenced decision to start business

Percentage To get satisfaction in work

75.0

Being my own boss

66.7

Seeking a new challenge

64.3

Had a new service or product idea

54.8

Making more money

41.7

Combining work and private life

41.7

Other

34.5

Suited family life

33.3

Want to make a living from a hobby

23.8

Avoiding unemployment

15.5

Family tradition

5.9

* participants could select more than one option.

The main factor motivating these ecopreneurs to start their businesses was to gain job satisfaction (75%).

The other two primary motivations were that they wanted to be their

own boss and were seeking a new challenge. Forthly, there were participants who had an 13

idea and saw an opportunity to start a business from that. There is a large percentage (35%) of participants who selected ‘other’ for this question and wrote comments about their motivations. These comments offer good insights into the thoughts of the participants, and some are illustrated here. Their comments mostly reflect participants placing emphasis and further explanation of what is a complex process - starting a business. For example participants described the new challenge they were seeking or the identification of a gap for the new product or service. However, the majority of the comments (in total 20% of all participants) were philosophically based comments; usually related to respondents wanting to improve environmental outcomes of their industry (“doing fashion better” participant 47) or making a contribution to the environment (“want to sell a green product to protect our environment” participant 73). We had deliberately not included a tick box for environmental passion as we wanted to see how participants would interpret the question and leave them to add comments in the ‘other’ section if they felt strongly. It was not surprising to see the green philosophical comments here.

When comparing the results of this study to prior work on ecopreneur and entrepreneurs generally, some fairly consistent patterns are shown.

Firstly, job satisfaction is often

discussed as important in motivating people to start businesses (Kirkwood, 2004). In earlier work on ecopreneurs’ motivations, we found this not to be a factor that was discussed as being very important. The results of the current study perhaps are linked to the earlier finding that most of the sample had decided to start a business prior to having a specific idea and hence were what we call “pulled” into entrepreneurship. This is considered an important factor in motivations for entrepreneurship, as those who are ‘pushed’ into entrepreneurship by factors such as economic necessity or losing their job or extreme job dissatisfaction seem to have less success in the long term (Amit & Muller, 1995).

Most frequently,

independence-related motivators are found to be a universal factor in people choosing entrepreneurial careers (Pinfold, 2001). In our prior case-study research on ecopreneurs, we found this featured as an important motivator (Kirkwood & Walton, 2010a).

In the current

study it can be shown by the factor “be your own boss”, which ranks highly on motivating factors for these participants.

In wider research on entrepreneurs, many studies have found making money to be a highlevel motivator (Kirkwood, 2004).

Earlier qualitative research by the present authors has

found ecopreneurs tended to have a lower prioritisation of money (ie. were happy to ‘make a 14

living’ rather than having strong profit motives). This has also been found to be the case in associative entrepreneurs, where financial achievement was less important than factors such as independence (Cato, Arthur, Keenoy, & Smith, 2008). This seems also to be the case in the current study, with monetary motivations being rated by under half of the sample as a key motivating factor for them. In summary, it would appear that the participants in the current study show very similar motivations for becoming entrepreneurs as do previous research on entrepreneurs generally, as well as specific studies on ecopreneurs. Perhaps the only key difference is the ranking of the motivating factors, but the percentages shown in Table 1 are all relatively high, and clearly participants are motivated by more than one factor, which is consistent with prior research on entrepreneurs (Marlow & Strange, 1994; Shane et al., 1991) and ecopreneurs (Kirkwood & Walton, 2010a).

The Business

Once in business, it is interesting to explore how the ecopreneurs saw their business overall and we wanted to find out what they thought the unique selling point of their business was. However, first, it is useful to refer to Table 2 below, which shows what respondents believed to be their businesses “unique selling point”.

Table 2: Businesses unique selling point

Percentage Quality research and development

33.3

Organic/quality eco materials and product

27.4

Brand name

20.2

Staff service and expertise

16.7

Did not answer

7.1

Sustainable/green design

2.4

Other

2.4

Alternative resource use facilitation

1.2

* participants could choose more than one option

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It is perhaps surprising to note that one-third of participants believed that their business had good quality research and development as being their unique selling point.

The second

highest ranking unique selling point was related to the ‘green’ product, but the next two points – brand name and staff service and expertise are generic and could be describing any business. This corroborates our earlier research which suggested that ecopreneurs may not be highly different from other entrepreneurs in many respects (Kirkwood & Walton, 2010b).

Green aspects of the product or service

The key green aspects of the product or service include; not resulting in harmful by-products or toxic materials, being organic, having minimal packaging and biodegradable. The key greening of the organisation included; recycling, reusing, waste minimisation, energy conservation & greening the supply chain. The green aspects are illustrated in Table 3 below.

Table 3: Green aspects of product/service Percentage Doesn’t result in harmful by-products

70.2

Doesn’t contain toxic materials

67.9

Organic ingredients/contents

61.9

Minimal packaging

57.0

Less polluting than comparable non-green product/service

57.1

Biodegradable

54.8

Can be fully recycled on disposal

52.4

Green design principles

50.0

Reusable or recyclable packaging

48.8

Uses less energy than comparable non-green product/service

47.6

Recycled content

46.4

Free from resources from environmentally sensitive areas

46.4

Minimal transportation

33.3

Improves energy efficiency

32.1

Can be returned for reusing/recycling

32.1

Made from recycled contents

30.9

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Creates or uses alternative forms of energy

30.9

Other

29.8

Contains fair trade ingredients

27.4

Product can be repaired

16.7

The concentrations of the highest results are in areas of modification to products and services. That is it seems that the products the ecopreneurs are offering are perhaps traditional products in a greener version. This is indicated by the high number of results for aspects that is about the ingredients of the product and service as compared to those further down the list in terms of popularity which would involve more fundamentally changing the product or service to be quite different from an non-green version in the market. The ‘other’ category was used by approximately 30% of participants and results in here included varied aspects such as; “Training people about the principles of sustainability” (#8), “healthier” (#26) and “enables our clients to manage resources in an ecological sustainable manner” (# 62).

Green activities of the company

While there are often obvious areas within the product/service that are green, the way a company operates is often more invisible to customers, but is nevertheless very important to the overall greenness of the business. Table 4 summarises the results of the activities the companies engaged in.

Table 4: Green activities of company Percentage Reuse where possible

72.6

Recycling programme

71.4

Waste minimisation & targets

63.0

Have environmental policy

45.2

Supply chain engagement with green issues

42.9

Energy conservation through technological changes

42.9

Energy reduction programme & targets

39.3 17

Water minimisation & targets

32.1

Carbon measurement e.g. footprints

34.5

Carbon reduction & targets

27.4

Undertake a life cycle analysis

27.4

Measure ecological footprint

22.6

Have an environmental management system

21.4

Other

21.4

Undertake an energy audit

19.0

Produce triple bottom line/sustainability CSR reports

14.3

There are three key areas that the majority of ecopreneurs are operating their companies under.

These are reusing, recycling and waste minimisation.

Interestingly, very few

companies are involved in energy auditing or producing TBL reports. This is probably due to the size of the companies that the ecopreneurs operate. The majority of the ventures are SMEs and the average number of employees is 5.27 people with the mode being 1 person. Thus we are dealing with small ventures with a lack of infrastructure, expertise and capital to utilize on developing EMS, TBL or carbon footprints.

Decision making practices Of the survey participants, 60.7% felt there wasn’t a tension between making a profit/return on investment and the environment.

The remaining 39.3% believed there was a tension

between the two issues. Table 5 indicates the results around decision making practices.

Table 5: How decisions are reached when environmental aspects conflict with business rationales

Percentage Consider the reputation of the (eco) business carefully

66.7

Will favour the environment if minimal cost involved

45.2

Environmental commitment overrides all other factors

30.9

Compromise both business & environmental aspects

23.8 18

Will favour the environment if no cost involved

21.4

Other

14.3

Business reality overrides all other factors

11.9

We were interesting in exploring whether ecopreneurs would sacrifice revenue for ecological concerns.

Most respondents (80.9%) indicated they would sacrifice revenue for their

ecological concerns, while 15.5% said they wouldn’t (three respondents did not complete this question). Table 5 shows how respondents made decisions if conflict arose between profits and the environment.

Many comments were made from participants around this table. Some comments showed participants who fervently stated a position of not compromising for philosophical thinking, for example “the only way to start to change the current economy into something which is sustainable etc, is to prioritise community over outrageous profits” (#7) and “This is wrong thinking. There is no question of compromising here” (#28). Others noted that they needed to make a profit to have a business - “money is not the main focus but very important” (#27) and “it is important to keep the business going” (#49). A small number commented on the tensions involved - “if it compromised ability to run the business but it is against the ideals I live & work by so doesn't quite equate” (#1). In general though the results support our earlier findings that the balance that ecopreneurs have in terms of economy-environment is through a strong commitment to the environment (Walton & Kirkwood, 2009).

Growth intentions

Table 6 illustrates what the main growth intention of the ecopreneur was over the next three years.

Table 6: Business plans for the next 3 years Percentage Expand

69.0

Maintain current status

22.6

Diversify

5.9

Downsize

1.1 19

Did not answer

1.1

Close/Sell

0

As can clearly be seen here, most planned to grow the business. Expansion was on the plans for almost 70% of the sample. Results from another question showed that most plan to enable this growth by adding a new product or service and develop new markets (such as export markets or new regions within New Zealand). Almost three-quarters felt their customer base would expand. In terms of what types of help the ecopreneurs believed they would need in order to achieve their goals – they felt expert staff, capital and technological or IT support would be useful resources. Indeed, one person commented that a crystal ball would be useful too and we would have to agree!

These growth intentions are particularly encouraging as entrepreneurs’ growth objectives, aspirations and intentions have been found to be paramount to whether their business grows or not (Kozan, Oksoy, & Ozzoy, 2006; Massey et al., 2006). In short, new businesses do not automatically become large businesses (Sexton, 1989). An entrepreneur makes a deliberate choice of whether to grow his or her business or not (Kolvereid & Bullvag, 1996; Morris, Miyasaki, Watters, & Coombes, 2006; Smallbone, Leigh, & North, 1995; Wiklund, Davidsson, & Delmar, 2003).

The prior litearture on entrepreneurial growth indiciates three

key factors that influence entrepreneurs growth - factors around the entrepreneurs personality and characteristics (Baum, Locke, & Smith, 2001; Kolvereid & Bullvag, 1996), and organisational characteristics (Kolvereid & Bullvag, 1996). What this generally refers to is that while entrepreneurs may desire growth, there are skills required to do so (Davidsson, 1989).

The third common point discussed with respect to business growth is external

influences in the marketplace for example (Wiklund & Shepherd, 2003). Prior research on growth aspirations and achievement in New Zealand showed that entrepreneurs basically ‘chose’ to grow – most of those that wanted to grow did, while those that didn’t aspire growth, generally didn’t grow (Kirkwood, 2009). While our findings in the current study are growth aspirations, it will be interesting to revisit the ecopreneurs after three years to see how they have done with respect to their growth intentions. They also appear to confirm that growth is a choice that entrepreneurs make, and by and large they are in control of whether the business grows or not.

Indeed, research described in the literature review showed

several ecopreneurial businesses growing into quite large businesses and oftentimes these 20

businesses are purchased by larger companies looking to enter the ‘green’ market (eg. The Body Shop).

CONCLUSION

Our research is the largest sample of ecopreneurs that we have been able to locate and therefore offers a good opportunity to make some conclusions from that may be somewhat more generalisable than the results of prior case-study based research. Our limited number of responses do not allow a great deal of statistical analysis but the descriptive statistics presented here are a small step to adding to our limited knowledge of ecopreneurs and the way they run their businesses.

On the whole, the business life-cycle of these ecopreneurial businesses appears remarkably similar to those of entrepreneurs in general. We were surprised by this as our previous qualitative research led us to ponder whether ecopreneurs potentially represented a new form of business model that could not be captured by the general entrepreneurial theories on factors around motivations, decision making in business and growth aspirations of entrepreneurs.

The results of the current study have made us rethink this entirely, as the

findings here show 84 ecopreneurs starting, running and potentially growing their businesses in relatively similar manner.

Thus, we conclude from the results presented here that there are many similarities between ecopreneurs and traditional entrepreneurs. It does seem that these ecopreneurs are able to run their business in a green way without really challenging entrepreneurship and current economic systems. This was supported by the ecopreneurs’ perception of the main ‘selling point’ of their business being non-green specific factors. This bodes well for those wanting to become ecopreneurs – it appears possible to do so with minimal change from the ‘norm’ of either working in an existing business or running an entrepreneurial venture.

Thus, the

barriers to entry for those wanting to become ecopreneurs seem relatively small. However, as noted in prior research, there may be greater risks due to the smaller potential market and the newness of many eco-products or services (Rodgers, 2010).

However, if we look deeper then can see that there are some fundamental differences around the greening of the business and the non-sacrifice of environmental values. However, our 21

survey asked hypothetical questions how much money participants would be willing to sacrifice the environment for. While this gives us an indication of their intentions, it is important that further research be conducted on specific scenarios where ecopreneurs have faced such decisions – this would be best done via more qualitative research. Our conclusion is that ecopreneurs have a passion for the environment and it is this passion that sets them apart from other entrepreneurs. Entrepreneurs in general often speak of having passion for something (generally a product or service) when starting their business (Kirkwood, 2004). Thus, in the case of ecopreneurs, their passion is a rather wider-ranging one – the environment – and this is what guides them in their decision making within the business. This passion for the environment does not appear to exclude any ‘typical’ entrepreneurial actions, such as planning on growing their business. Ecopreneurs should therefore be taken seriously by policy makers as they operate businesses that contribute to the economy in terms of taxes, employment as well as having growth aspirations for the future (such as exporting, growing the number of employees) and have the added benefit of helping to protect the environment in many different ways. Thus, there seems to be some lessons we learn from ecopreneurs – they seem to be living a lifestyle which balances their skills as businesspeople, with their passion for the environment. It seems they may offer a win-win scenario for the economy and the environment, as well as enabling the ecopreneur to fulfill their own personal goals.

While our study contributes further research to the emerging field of ecopreneurship, there is still a long way to go before we fully appreciate and understand this sub-group of entrepreneurs. Future research is recommended on delving more deeply into the decision making practices of ecopreneurs in order to more fully appreciate the ways in which they balance the environment with the need to create revenue.

There are some limitations of this study. There was a relatively low response rate, and we do not know if the respondents are a good representation of ecopreneurs in New Zealand. Perhaps the low response rate might be explained by the people who received the survey not perceiving themselves as an entrepreneur and therefore did not respond. We expect that the low response rate is partially due to the high number of compulsory surveys that are required from various government departments in New Zealand.

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