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Entrepreneurs both contribute to environmental crises like climate change but also have an important role to play in addressing these issues through innovation. Sustainable entrepreneurship involves operating businesses that consider environmental and social impacts. The document discusses various opportunities for entrepreneurs in areas like renewable energy, conservation, and sustainable food and water solutions to address climate change challenges.

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Why does the earth matter to entrepreneurs?
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Chapter 3 Entrepreneurship and sustainable development
Objectives 1. To appreciate the role of entrepreneurship in challenging and urgent times 2. To classify the types of climate change effects on entrepreneurs as well as the opportunities hat arise within the AsiaPacific context 3. To review important concepts in climate change economics that impact entrepreneurial activity 4. To appreciate the various emerging frameworks in entrepreneurial ecology
But first What on Earth does climate change possibly have to do with entrepreneurship? We can't solve problems by using the same kind of thinking we used when we created them Albert Einstein ?
Entrepreneurship as if the planet mattered Theres no avoiding it. Our planet is suffering climate change Increase in greenhouse gases Fluorocarbons depleting the ozone layer Acid rain and air pollutants Shortages of freshwater resources Overfishing, habitat destruction and pollution in the marine environment Crop loss and grazing depletion due to desertification and erosion Rapid population growth and migration, burgeoning mega-cities, and ecological refugees Cutting down the worlds tropical forests, leading to erosion and flooding Mass extinction of species and the associated loss of genetic resources Threats to human health from exposures to chemicals in production processes, products and Consumption activities Melting sea ice in the Arctic
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Why does the earth matter to entrepreneurs? For centuries, entrepreneurs have been free to exploit the environment with impunity without thought of sustainability Rainforests are cut down and burned off by small- and large-scale entrepreneurs. Asian cities choke for weeks during Indonesias burning season. Thousands of Indonesians are employed and many entrepreneurial families are coming out of poverty because of the enterprise.
Entrepreneurs contribute to the planetary crisis Negative Entrepreneurs are continuously disturbing the Earths balance. It is no exaggeration to say that entrepreneur like Henry Ford (l) and Thomas Edison (r) played major roles in contributing to our current dilemma and an entrepreneur (perhaps one who commercialises hydrogen autos) can help ease the problem.
Entrepreneurs in times of crisis Innovative ideas emerge during times of crisis. Recessions clean the slate through creative destruction and create lasting, positive change. 50% of the fast-growing and largest companies of today were founded during times of crisis. Launching a new company does not actually put companies at a disadvantage as many may suspect. The rate of entrepreneurship actually went up during the GFC. Crises act as a good cold shower for the economic system, releasing capital and labour from dying sectors and allowing newcomers to recombine them in imaginative new ways. In the Chinese language, the word "crisis" is composed of two characters, one representing danger and the other, opportunity.
Now we are engaged in a great climate war Entrepreneurs take share of the responsibility for global warming, but they are also agents of change who may help to turn the situation around. Climate change is the greatest and widest-ranging market failure ever seen. Fixing climate now (2007) would cost about 1 per cent of Gross Domestic Product (GDP) per year. Doing nothing, say many economic models, would cost the world the loss of 5 per cent GDP per year now and forever, says the report. Business logic is music to our ears: The benefits of strong, early action on climate change outweigh the costs. Economics of Climate Change 2007 (Stern Report) Sir Nicholas Stern, The Economics of Climate Change 2007
Stern update: Better Growth, Better Climate (2014) There is no need to choose between fighting climate change or growing the worlds economy. Business can create growth and reduce their carbon emissions. Innovation and investment make it possible to tackle climate change at the same time as improving economic performance.
Opportunity space Deep analysis of entrepreneurship opportunity space in climate change
Opportunity space Replace at 2nd pages Deep analysis of entrepreneurship opportunity space in climate change
Already reported: extreme precipitation, damaging cyclones, sea level rise, extreme temperatures, drought and acidification of the ocean. Climate change impacts in Asia
Already reported: extreme precipitation, damaging cyclones, sea level rise, extreme temperatures, drought and acidification of the ocean. Climate change impacts in Australia
Now What entrepreneurial innovations can you imagine that could help solve the climate change crisis? ?
Planetary problems that entrepreneurs face today Energy Water Food Biodi- versity Popul- ation
Population and entrepreneurship World population today is 7.3 billion Each year we add population the size of Egypt! At the dawn of agriculture, about 8000 B.C., only 10,000 years ago, the population of the world was approximately 5 million, about the size of todays metropolitan Sydney.
Population opportunities for entrepreneurs Ageing dental care, hearing aids orthopaedics and cardiology. nostalgia products food preparation labour-saving technologies regenerative medicine age-related drugs Youth recruitment fashion cheap cars environmental products media and gaming creative and education communications devices Overpopulation drinking water waste management air and water pollution fighting infectious diseases improving food varieties renewable energy family planning
Planet faces a severe water crisis. Though water is scarce, the crisis is actually one of water governance caused by the ways in which we mismanage water rather than supply. Impacts Waterborne disease Polluted environment Sanitation Industry and irrigation. Engineering entrepreneurs developed aqueducts and artificial lakes Agri-preneurs have created high-yielding crops and animals that consumed astonishing amounts of water, called embodied water. 15 500 litres of water to make 1 kg of beef Water and entrepreneurship
Opportunities for hydro-preneursnot! Business opportunities exist in: drinking water and sanitation water embedded in production collection, storage and transportation Desalination toilets conservation (reduction in use). (Avoid bottled water!)
Biodiversity and entrepreneurship
Biodiversity opportunities for entrepreneurs
Major changes in where and when food is produced on the planet's surface. Agriculture is responsible for nearly one-third of global greenhouse gas (GHG) emissions. Wheat in Northern Europe; Wine in Norway Wealthy countries like the UK, Germany and Canada may well have warmer, wetter growing conditions, while other regions (such as developing countries in the tropics) are likely to suffer droughts and floods. Food and entrepreneurship
Summers in 20812100: Likelihood they will be the warmest on record
Australias food security in doubt Temperatures have become so extreme that BOM added incandescent purple for temperatures over 50 degrees Australians are the highest emitters of CO2.
Entrepreneurs and fossil fuels Think about the entrepreneurial inventions that depend on fossil fuels. airplanes, cars, electrical power plants, paper, plastic, rockets, steam engines, steel and electric lights. 85% of energy met by fossil fuels. 23 tonnes of plants to produce each litre of petrol you pump into your ute.
Climate change economics for entrepreneurs Entrepreneurs need to know some basic principles of climate change economics The field looks at how economic activity ( including entrepreneurial activity) that affects the environment. Climate change economics seeks economic solutions to minimise harm to the environment allowing maximum economic benefit Example: Pollution as market failure.
Climate change economics -- Tragedy of the commons Examples: Resource-based problems over- irrigation, habitat destruction, over-fishing and traffic congestion. Each shepherd wants to put as many sheep as possible onto common land even if the land is damaged as a result. Where there is potential for individual profit, activity must be regulated.
Climate change economics -- Incentives Sometimes entrepreneurs are unable to act sustainably Why should they take costly sustainable actions when the competitors do not? Entrepreneurial sustainability may be punished rather than rewarded.
Climate change economics -- Prisoners Dilemma Two suspects are arrested by the police, who have weak cases against both of them. They hold the suspects in separate cells and tell each that if they inform on the other, they will get leniency. If not, they are told, they will get harsh prison terms.
Climate change economics -- Peak resource theory A peak curve applies to any resource that can be harvested faster than it can be replaced. 2012: Peak oil 2025: Peak water 2025: Peak coal 2020: Peak gas 2035: Peak uranium
Entrepreneurs must evaluate economic impact of their activities. Physical risks: Weather-related events Reputation risks: Threats to a company's brand value. Competition risks: If companies do not take measures to reduce climate risks they are competitively disadvantaged. Regulatory risks: Climate change seen as serious market failure Litigation risks: Greater regulation leads to more litigation. Climate change economics -- Risk analysis
A 50-year-old Bangladeshi grandmother on the coastline, with a life expectancy of 37, has a slender chance of living to 2050. But the sea is rising. She is more likely to ignore risks of the sea rise. But her 10-year-old granddaughter today has a life expectancy of 61 years. Climate change economics -- Social discount rate
The Brundtland Report (1987) Sustainability defined as Meeting the needs of the present generation without compromising the ability of future generations to meet their needs. Markets are both the cause and the potential solution to the sustainability puzzle For the entrepreneur, opportunities are inherent in market failure. Entrepreneurial ecology: Sustainability defined
Entrepreneurial ecology: Sustainable entrepreneurship Industrial entrepreneurship (IE) Extraction of scarce resources with little regard to their replenishment Global distribution without regard to distance Rampant construction without regard to environmental consequences No concern for net improvement in the physical and social universes. Waste was not a design consideration. Sustainable entrepreneurship (SE) Think ecologically about the biosphere Consider the waste embodied in products Take into account the living dimension of the products and services that we produce. Business opportunities to end poverty and hunger, improve health and education, make cities more sustainable, combat climate change, and protect oceans and forests.
Entrepreneurial ecology: Theoretical frameworks Natural capitalism Cradle-to-cradle design Economic gardening The Natural Step Industrial metabolism Natural advantage of nations Lean manufacturing Ecology of commerce Triple Helix University-based entrepreneurship ecosystem A framework helps us identify relationships. Field of sustainable entrepreneurship is just developing. Candidate frameworks that bring entrepreneurship into the realm of climate change theory.
Econosphere Sociosphere Biosphere In the econosphere and surrounded by the biosphere Entrepreneurial ecology: Where do entrepreneurs operate?
Biosphere Sociosphere Econosphere Planet Climate & energy Water, soil, flora & fauna Atmosphere & topography People Human enterprise Knowledge, labour & capital Opportunity and value Profit Entrepreneurs operate here Business environment Entrepreneurial factor conditions (+) Negative entrepre- neurship Positive entrepre- neurship (0) (-) How are entrepreneurs connected to Earth, people and the economy connected?
Increasing demand Demand for resources and eco-system services Declining supply Resources and ecosystem services Sustainable supply Sustainable demand Sustainable future Margin for action is narrowing The present The future Entrepreneurs must help us travel through the funnel Entrepreneurial ecology: Sustainable future
Key concepts (close your books) 1. How can entrepreneurs turn climate change into an opportunity? 2. What does sustainable entrepreneurship mean? ?
Key concepts Entrepreneurship and crisis Entrepreneurs help us into crisis, and are the key to addressing the crisis. Entrepreneurship and climate change Potential for positive and negative impacts A key role in addressing population, water, biodiversity, food and energy. Entrepreneurial ecology Improvement through sustainable entrepreneurship.

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2.pdf

  • 1. Why does the earth matter to entrepreneurs?
  • 4. Objectives 1. To appreciate the role of entrepreneurship in challenging and urgent times 2. To classify the types of climate change effects on entrepreneurs as well as the opportunities hat arise within the AsiaPacific context 3. To review important concepts in climate change economics that impact entrepreneurial activity 4. To appreciate the various emerging frameworks in entrepreneurial ecology
  • 5. But first What on Earth does climate change possibly have to do with entrepreneurship? We can't solve problems by using the same kind of thinking we used when we created them Albert Einstein ?
  • 6. Entrepreneurship as if the planet mattered Theres no avoiding it. Our planet is suffering climate change Increase in greenhouse gases Fluorocarbons depleting the ozone layer Acid rain and air pollutants Shortages of freshwater resources Overfishing, habitat destruction and pollution in the marine environment Crop loss and grazing depletion due to desertification and erosion Rapid population growth and migration, burgeoning mega-cities, and ecological refugees Cutting down the worlds tropical forests, leading to erosion and flooding Mass extinction of species and the associated loss of genetic resources Threats to human health from exposures to chemicals in production processes, products and Consumption activities Melting sea ice in the Arctic
  • 8. Why does the earth matter to entrepreneurs? For centuries, entrepreneurs have been free to exploit the environment with impunity without thought of sustainability Rainforests are cut down and burned off by small- and large-scale entrepreneurs. Asian cities choke for weeks during Indonesias burning season. Thousands of Indonesians are employed and many entrepreneurial families are coming out of poverty because of the enterprise.
  • 9. Entrepreneurs contribute to the planetary crisis Negative Entrepreneurs are continuously disturbing the Earths balance. It is no exaggeration to say that entrepreneur like Henry Ford (l) and Thomas Edison (r) played major roles in contributing to our current dilemma and an entrepreneur (perhaps one who commercialises hydrogen autos) can help ease the problem.
  • 10. Entrepreneurs in times of crisis Innovative ideas emerge during times of crisis. Recessions clean the slate through creative destruction and create lasting, positive change. 50% of the fast-growing and largest companies of today were founded during times of crisis. Launching a new company does not actually put companies at a disadvantage as many may suspect. The rate of entrepreneurship actually went up during the GFC. Crises act as a good cold shower for the economic system, releasing capital and labour from dying sectors and allowing newcomers to recombine them in imaginative new ways. In the Chinese language, the word "crisis" is composed of two characters, one representing danger and the other, opportunity.
  • 11. Now we are engaged in a great climate war Entrepreneurs take share of the responsibility for global warming, but they are also agents of change who may help to turn the situation around. Climate change is the greatest and widest-ranging market failure ever seen. Fixing climate now (2007) would cost about 1 per cent of Gross Domestic Product (GDP) per year. Doing nothing, say many economic models, would cost the world the loss of 5 per cent GDP per year now and forever, says the report. Business logic is music to our ears: The benefits of strong, early action on climate change outweigh the costs. Economics of Climate Change 2007 (Stern Report) Sir Nicholas Stern, The Economics of Climate Change 2007
  • 12. Stern update: Better Growth, Better Climate (2014) There is no need to choose between fighting climate change or growing the worlds economy. Business can create growth and reduce their carbon emissions. Innovation and investment make it possible to tackle climate change at the same time as improving economic performance.
  • 13. Opportunity space Deep analysis of entrepreneurship opportunity space in climate change
  • 14. Opportunity space Replace at 2nd pages Deep analysis of entrepreneurship opportunity space in climate change
  • 15. Already reported: extreme precipitation, damaging cyclones, sea level rise, extreme temperatures, drought and acidification of the ocean. Climate change impacts in Asia
  • 16. Already reported: extreme precipitation, damaging cyclones, sea level rise, extreme temperatures, drought and acidification of the ocean. Climate change impacts in Australia
  • 17. Now What entrepreneurial innovations can you imagine that could help solve the climate change crisis? ?
  • 18. Planetary problems that entrepreneurs face today Energy Water Food Biodi- versity Popul- ation
  • 19. Population and entrepreneurship World population today is 7.3 billion Each year we add population the size of Egypt! At the dawn of agriculture, about 8000 B.C., only 10,000 years ago, the population of the world was approximately 5 million, about the size of todays metropolitan Sydney.
  • 20. Population opportunities for entrepreneurs Ageing dental care, hearing aids orthopaedics and cardiology. nostalgia products food preparation labour-saving technologies regenerative medicine age-related drugs Youth recruitment fashion cheap cars environmental products media and gaming creative and education communications devices Overpopulation drinking water waste management air and water pollution fighting infectious diseases improving food varieties renewable energy family planning
  • 21. Planet faces a severe water crisis. Though water is scarce, the crisis is actually one of water governance caused by the ways in which we mismanage water rather than supply. Impacts Waterborne disease Polluted environment Sanitation Industry and irrigation. Engineering entrepreneurs developed aqueducts and artificial lakes Agri-preneurs have created high-yielding crops and animals that consumed astonishing amounts of water, called embodied water. 15 500 litres of water to make 1 kg of beef Water and entrepreneurship
  • 22. Opportunities for hydro-preneursnot! Business opportunities exist in: drinking water and sanitation water embedded in production collection, storage and transportation Desalination toilets conservation (reduction in use). (Avoid bottled water!)
  • 25. Major changes in where and when food is produced on the planet's surface. Agriculture is responsible for nearly one-third of global greenhouse gas (GHG) emissions. Wheat in Northern Europe; Wine in Norway Wealthy countries like the UK, Germany and Canada may well have warmer, wetter growing conditions, while other regions (such as developing countries in the tropics) are likely to suffer droughts and floods. Food and entrepreneurship
  • 26. Summers in 20812100: Likelihood they will be the warmest on record
  • 27. Australias food security in doubt Temperatures have become so extreme that BOM added incandescent purple for temperatures over 50 degrees Australians are the highest emitters of CO2.
  • 28. Entrepreneurs and fossil fuels Think about the entrepreneurial inventions that depend on fossil fuels. airplanes, cars, electrical power plants, paper, plastic, rockets, steam engines, steel and electric lights. 85% of energy met by fossil fuels. 23 tonnes of plants to produce each litre of petrol you pump into your ute.
  • 29. Climate change economics for entrepreneurs Entrepreneurs need to know some basic principles of climate change economics The field looks at how economic activity ( including entrepreneurial activity) that affects the environment. Climate change economics seeks economic solutions to minimise harm to the environment allowing maximum economic benefit Example: Pollution as market failure.
  • 30. Climate change economics -- Tragedy of the commons Examples: Resource-based problems over- irrigation, habitat destruction, over-fishing and traffic congestion. Each shepherd wants to put as many sheep as possible onto common land even if the land is damaged as a result. Where there is potential for individual profit, activity must be regulated.
  • 31. Climate change economics -- Incentives Sometimes entrepreneurs are unable to act sustainably Why should they take costly sustainable actions when the competitors do not? Entrepreneurial sustainability may be punished rather than rewarded.
  • 32. Climate change economics -- Prisoners Dilemma Two suspects are arrested by the police, who have weak cases against both of them. They hold the suspects in separate cells and tell each that if they inform on the other, they will get leniency. If not, they are told, they will get harsh prison terms.
  • 33. Climate change economics -- Peak resource theory A peak curve applies to any resource that can be harvested faster than it can be replaced. 2012: Peak oil 2025: Peak water 2025: Peak coal 2020: Peak gas 2035: Peak uranium
  • 34. Entrepreneurs must evaluate economic impact of their activities. Physical risks: Weather-related events Reputation risks: Threats to a company's brand value. Competition risks: If companies do not take measures to reduce climate risks they are competitively disadvantaged. Regulatory risks: Climate change seen as serious market failure Litigation risks: Greater regulation leads to more litigation. Climate change economics -- Risk analysis
  • 35. A 50-year-old Bangladeshi grandmother on the coastline, with a life expectancy of 37, has a slender chance of living to 2050. But the sea is rising. She is more likely to ignore risks of the sea rise. But her 10-year-old granddaughter today has a life expectancy of 61 years. Climate change economics -- Social discount rate
  • 36. The Brundtland Report (1987) Sustainability defined as Meeting the needs of the present generation without compromising the ability of future generations to meet their needs. Markets are both the cause and the potential solution to the sustainability puzzle For the entrepreneur, opportunities are inherent in market failure. Entrepreneurial ecology: Sustainability defined
  • 37. Entrepreneurial ecology: Sustainable entrepreneurship Industrial entrepreneurship (IE) Extraction of scarce resources with little regard to their replenishment Global distribution without regard to distance Rampant construction without regard to environmental consequences No concern for net improvement in the physical and social universes. Waste was not a design consideration. Sustainable entrepreneurship (SE) Think ecologically about the biosphere Consider the waste embodied in products Take into account the living dimension of the products and services that we produce. Business opportunities to end poverty and hunger, improve health and education, make cities more sustainable, combat climate change, and protect oceans and forests.
  • 38. Entrepreneurial ecology: Theoretical frameworks Natural capitalism Cradle-to-cradle design Economic gardening The Natural Step Industrial metabolism Natural advantage of nations Lean manufacturing Ecology of commerce Triple Helix University-based entrepreneurship ecosystem A framework helps us identify relationships. Field of sustainable entrepreneurship is just developing. Candidate frameworks that bring entrepreneurship into the realm of climate change theory.
  • 39. Econosphere Sociosphere Biosphere In the econosphere and surrounded by the biosphere Entrepreneurial ecology: Where do entrepreneurs operate?
  • 40. Biosphere Sociosphere Econosphere Planet Climate & energy Water, soil, flora & fauna Atmosphere & topography People Human enterprise Knowledge, labour & capital Opportunity and value Profit Entrepreneurs operate here Business environment Entrepreneurial factor conditions (+) Negative entrepre- neurship Positive entrepre- neurship (0) (-) How are entrepreneurs connected to Earth, people and the economy connected?
  • 41. Increasing demand Demand for resources and eco-system services Declining supply Resources and ecosystem services Sustainable supply Sustainable demand Sustainable future Margin for action is narrowing The present The future Entrepreneurs must help us travel through the funnel Entrepreneurial ecology: Sustainable future
  • 42. Key concepts (close your books) 1. How can entrepreneurs turn climate change into an opportunity? 2. What does sustainable entrepreneurship mean? ?
  • 43. Key concepts Entrepreneurship and crisis Entrepreneurs help us into crisis, and are the key to addressing the crisis. Entrepreneurship and climate change Potential for positive and negative impacts A key role in addressing population, water, biodiversity, food and energy. Entrepreneurial ecology Improvement through sustainable entrepreneurship.