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IJEBR
16,3 What motivates ecopreneurs to
start businesses?
Jodyanne Kirkwood and Sara Walton
204 Centre for Entrepreneurship, School of Business, University of Otago, Dunedin,
New Zealand
Received September 2008
Revised February 2009
Accepted April 2009
Abstract
Purpose – Ecopreneurs are those entrepreneurs who start for-profit businesses with strong
underlying green values and who sell green products or services. This is an emerging field where
research is still in its infancy. Research has been called for to understand the factors that motivate
these ecopreneurs to start businesses – and that is the focus of this study. The aim of this paper is to
compare the findings with results of extant literature on entrepreneurial motivations.
Design/methodology/approach – This study comprises 14 in-depth case studies of ecopreneurial
companies in New Zealand in 2008. Participants were interviewed in a face-to-face, semi-structured
format. In total, 88 secondary sources such as media reports, industry statistics, and information from
company web sites were also collected.
Findings – Ecopreneurs were motivated by five factors: their green values; earning a living; passion;
being their own boss; and seeing a gap in the market. Ecopreneurs appear to have quite similar
motivations to entrepreneurs in general, aside from their green motivations. They had lower level
financial motivations than have been found in prior research on entrepreneurs. The ecopreneurs were
primarily pulled into entrepreneurship, which bodes well for their ongoing success. The paper presents
a number of contributions to both the ecopreneurship and entrepreneurship literatures.
Research limitations/implications – The small sample is a potential limitation and the country
context may also influence the findings.
Originality/value – This is one of the largest samples of ecopreneurs to date. Given the emerging
nature of the field of ecopreneurship, this study’s conclusions require further research and testing. A
total of 11 such suggestions for future research are made.
Keywords Business formation, Entrepreneurs, Motivation (psychology), New Zealand
Paper type Research paper
1. Introduction
Ecopreneurs are emerging as a new breed of entrepreneur who are worthy of much
greater consideration than has been given to date. The field of ecopreneurship began to
receive research attention in the late 1990s (Anderson, 1998; Keogh and Polonsky, 1998;
Pastakia, 1998), but is still in its infancy (Cohen and Winn, 2007). Clemens (2006)
similarly notes that little research exists on the environment and small firms in general
(see, for example de Bruin and Lewis, 2005). While there has been increasing research
interest in discussing ecopreneurs from a conceptual perspective, there remains little
empirical research to date (Gibbs, 2007). Only one study could be located which focused
directly on the ecological orientation of founder’s start-up processes (Freimann et al.,
International Journal of
Entrepreneurial Behaviour & 2005). Where there has been useful related research, small sample sizes prevail.
Research Authors to date have focused on single case studies (Dixon and Clifford, 2007), or small
Vol. 16 No. 3, 2010
pp. 204-228 samples of between one and 10 cases (de Bruin and Lewis, 2005; Freimann et al., 2005;
q Emerald Group Publishing Limited Pastakia, 1998; Schaltegger, 2002). Others have studied co-operative ownership
1355-2554
DOI 10.1108/13552551011042799 arrangements in the energy sector (associative entrepreneurship) (Cato et al., 2008).
Ecopreneurs are defined in this study as those entrepreneurs who enter these What motivates
eco-friendly markets not only to make profits, but also having strong, underlying green ecopreneurs?
values. Our definition is:
Entrepreneurs who found new businesses based on the principle of sustainability (based on
ideas from Issak, 2002; Walley and Taylor, 2002).
This definition has two main components which also need to be carefully defined. First, 205
there are many different definitions of what constitutes an entrepreneur (see, for
example Carland et al., 1984; Gartner, 1990), and no consensus has been reached. The
definition used in this study focuses on the founding role but others would suggest that
innovation is a requirement for 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” (Issak,
2002). One of the classic examples is the company founded by Anita Roddick – 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 p. 47).
These ecopreneurs who are “eco-dedicated” have been found to exhibit “firm
convictions” (Freimann et al., 2005, p. 117). We contrast this population with other
entrepreneurs and business owners who undertake (or contemplate) environmental
initiatives after starting their business (McKeiver and Gadenne, 2005; Rao, 2008;
Schaper, 2002b). For example, research has concluded that while entrepreneurs may
have positive environmental attitudes this does not automatically translate into the
adoption of environmental management systems (McKeiver and Gadenne, 2005).
The second component of our definition of an ecopreneur is that the business must
be sustainable. Our focus is on green entrepreneurs, and while that might mean they
operate with some social values, their inclusion in this research is primarily a
consequence of their green practices. Of particular interest for this study of
ecopreneurs is the notion of ecological sustainability. Our definition of an ecopreneur is
not, however, as narrow as some researchers who include the requirement of having
social drivers as well as environmental and business goals (Dixon and Clifford, 2007).
For some it is strongly linked to the greening of an existing business (Issak, 2002), and
for others ecopreneurship is related to sustainability, which adds social dimensions
such as justice and equity into the construction of the business (Gladwin et al., 1995).
Theoretical perspectives
Our view at the outset of this study is that ecopreneurs are a subset of entrepreneurs
who may differ in the way they start businesses, particularly in their motivations for
becoming entrepreneurs. Before commencing with a review of the relevant literature, it
is important to describe our theoretical approach to ecopreneurship. In addressing the
research aims there are various perspectives of analysis that are useful. Researchers
have noted that psychologists, economists and sociologists have tried to understand
the business start-up process (Freimann et al., 2005). In early studies of
entrepreneurship, economists have had much input into the body of knowledge
about the field (Knight, 1921; Penrose, 1968; Schumpeter, 1934). The focus of
economists has primarily been at the firm level (such as size of the firm, growth
intentions, firm performance and survival rates), but this perspective has the potential
IJEBR danger of removing the person (the entrepreneur) from the study of entrepreneurship
16,3 (Smith, 1967). In this paper, one of our research objectives was to explore the
motivations for becoming an ecopreneur, and it seemed that Smith’s concerns were
well-founded. An alternative view of entrepreneurship is from a psychological
perspective. This psychological viewpoint certainly moves closer to being interested in
the entrepreneur, rather than looking at entrepreneurship as a purely economic
206 process. Researchers following this psychological perspective have focused on
personality traits such as the need for achievement (Langan-Fox and Roth, 1995), and
risk-taking propensity (Belcourt et al., 1991; Watson and Robinson, 2002). However,
like economic views of entrepreneurship, psychological perspectives have also been
criticized because “too often entrepreneurship is viewed merely as a psychological
capacity like musical or poetical talent” (Campbell, 1992, p. 21).
Due to the weaknesses of both of these perspectives of entrepreneurship, this study
prefers a sociological theoretical framework. This perspective argues that the social
environment affects entrepreneurs (Belcourt, 1987; Hurley, 1999). Such perspectives
assume that behaviour is “so constrained by ongoing social relations that to construe
them as independent is a grievous misunderstanding” (Granovetter, 1985, p. 482). We
concur with other ecopreneurship researchers who observed that “both
entrepreneurship and environmentalism are deeply embedded in the social matrix”
(Anderson, 1998, p. 138). In order to understand how individuals become ecopreneurs,
we must view their decisions as being embedded in a wider sociological perspective.
Indeed, “entrepreneurs are human, part of the same ecological system as their
organization, and consequently subject to the same concerns” (Anderson, 1998, p. 138).
In practice, taking this sociological perspective meant that we asked questions about
the founder’s background, their personal views on the environment and discussions
often revolved around their families and the importance of that in their motivations for
ecopreneurship. The open-ended questions (discussed further in method) allowed us to
explore issues that were relevant to our participants, and cast a wider net than taking
only a firm level (economics approach) or individual (psychological) approach as
discussed earlier.
2. Literature review
The emerging ecopreneurship literature
As mentioned above, we view ecopreneurship to be one form of entrepreneurship. The
growth in ecopreneurs may be partially due to increasing market opportunities for
sustainable products and services. Customers are becoming increasingly environmentally
conscious (Laroche et al., 2001). Many are losing confidence in larger corporations and
have expectations of companies to exhibit more social and environmental responsibility
(Webb et al., 2008). A trend towards value-driven environmentalism has flourished since
consumers started demanding and purchasing environmentally friendly products and
services (Bansal and Roth, 2000; Post and Altman, 1994). Recent discourse on
environmental issues such as climate change and carbon miles has raised awareness of
the environment and many people now choose to purchase with environmental sensitivity
in mind (Anderson, 1998). In response to this, many companies are recognising the need to
go green (Bansal and Roth, 2000; Schaper, 2002a).
Increasing numbers of entrepreneurs are also recognizing opportunities for new
ventures as consumer demand grows for more eco-friendly products and services
(Cohen and Winn, 2007; Dean and McMullen, 2007; Schaltegger, 2002; Schaper, 2002a). What motivates
New ventures are a different scenario to companies which go green; because when ecopreneurs?
someone founds a new business they have the ability to shape their company from the
outset (Schaltegger, 2002). Thus, with ecopreneurs, green values are built into the
company from inception. Some background to the current thinking on environmental
change is first required. Three key drivers for environmental change have been
identified (Post and Altman, 1994). First, compliance-based environmentalism – based 207
on regulatory and legal systems – is enforced by governments. Second, market-driven
environmentalism has emerged, whereby companies are given incentives to be
environmentally conscious. Finally, there has been a trend towards value-driven
environmentalism, where consumers started demanding and purchasing
environmentally friendly products and services. This driver has moved the focus to
balancing economic activity with environmental protection, and has become known as
sustainable development (Post and Altman, 1994). Post and Altman (1994) also
recognize that there are many barriers to environmental change. 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). To borrow from Freimann et al. (2005), it may be easier to “infect”
founders with ideas of sustainability. This solves many of the problems that existing
companies have in “going green” (Bansal and Roth, 2000; Schaper, 2002a); which many
apparently do only as a defensive mechanism rather than as a proactive desire to be
green (Freimann et al., 2005)
At first glance, entrepreneurship and environmentalism appear to have little in
common. Indeed, some suggest they could be seen as “intrinsically hostile” to each
other (Anderson, 1998, p. 135). However, on closer examination, this view may not be
the case – as Anderson (1998) notes: the two are not irreconcilable, entrepreneurs can
give environmentalism substance, and they may be a vehicle for social change.
Therefore, we support the argument that both entrepreneurship and environmentalism
are about values and attitudes (Anderson, 1998), and commitment (Keogh and
Polonsky, 1998). There has been increasing interest in the notion that ecopreneurs may
act as important change agents (Anderson, 1998; Gibbs, 2007; Keogh and Polonsky,
1998; Pastakia, 1998), in part due to market opportunities. Indeed, researchers have
recently begun to question whether a sustainable economy requires an increased
presence of non-traditional forms of entrepreneurship, such as associative
entrepreneurship (co-operatives) (Cato et al., 2008).
212
Table I.
IJEBR
Country context
Before presenting the findings, it is important to explain the setting for the study as
this potentially has an impact on the findings. This recognizes that the participants in
our study are socially embedded in a particular country context, which has a
potentially strong impact on both their motivations for ecopreneurship and the
conclusions we draw. New Zealand is a country of small to medium enterprises (SMEs).
SMEs are those with 19 or fewer employees (Ministry of Economic Development, 2007).
New Zealand is also widely regarded as being highly entrepreneurial compared to
other countries (Frederick and Chittock, 2006). With respect to entrepreneurial
motivations, GEM found New Zealand to have the highest percentage of opportunity
entrepreneurs of all 35 participating countries, suggesting that entrepreneurs are
primarily pulled into entrepreneurship rather than pushed into it (necessity
entrepreneurs) (Frederick and Chittock, 2006). This high level of entrepreneurship
(particularly opportunity entrepreneurs) may impact on the findings because of the
high number of people who are open to entrepreneurship.
New Zealand also has a reputation of being “clean and green” and this is important
to the study of ecopreneurship (for a more extensive explanation of New Zealand’s
environmental climate with respect to entrepreneurship, see de Bruin and Lewis, 2005). What motivates
One of the key branding images used by the New Zealand Tourism Board is of being ecopreneurs?
100 per cent pure. Such by-lines are accompanied by images depicting the “pristine”
natural environment of New Zealand. The branding and image of a clean green country
is argued to be “strongly embedded in the cultural imagination” (Coyle and
Fairweather, 2005, p. 148). As such it is not just the tourism board and export brands
that rely on the clean green image but it is also a significant part of a national identity 215
(Bell, 1996; Dew, 1999). Such an image requires careful preservation. A report
commissioned by the Ministry for the Environment quantifies the clean green image
for the New Zealand economy. It concludes that the green image is worth millions of
dollars for exports in terms of the value it adds to products and services (Ministry for
the Environment, 2001).
4. Presentation of findings
The ecopreneurs in this study were motivated to start their own business by a number
of factors. These revolved around five common drivers. As indicated in Table II, three
motivators were apparent in seven cases (half the sample):
(1) their green values;
(2) identifying a gap in the market; and
(3) making a living.
Two related motivators were evident in six cases:
(1) being their own boss; and
(2) passion.
The following sections present verbatim quotes from the participants on the five key
motivators found in this study. Following this, a discussion around the
inter-relationship between the motivators is presented. This is due to the
observation (see Table II) that in all but one case, participants described their
motivations for starting the business as being the result of more than one factor.
Green values
A key motivator for half of the ecopreneurs was their underlying green values. These
green values often worked in combination with the ecopreneur seeing a gap in the
market. The ecopreneurs in this study would not engage in the exploitation of market
opportunities at the expense of their green values. They would certainly not exploit a gap
in the market for a product or service that they did not believe was sustainable. The
following quotes illustrate three ecopreneur’s motivations for starting their businesses:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 Total
Be own boss U U U U U U 6
Gap in market U U U U U U U 7
Passion U U U U U U 6 Table II.
Make a living U U U U U U U 7 Primary motivators for
Green values U U U U U U U 7 each case company
IJEBR I sat there watching all the taxis come and drop people off and thought about the emissions
and everything they were producing. [I thought] there’s got to be a better way than this
16,3 (participant 8).
It’s a way of life really. It’s really a lifestyle; it’s a way of life decision to operate this way. It’s a
deliberate one (participant 11).
216 These excerpts from two of the participants show their conscious decision to do things
differently in their businesses compared to what was currently on offer in the market;
and in the second example, differently to what they had been doing in the past.
Similarly, another participant discussed the way the green side of the business “gave
meaning to the business” (participant 12). Interestingly, a number of the participants
described their green motivations as being tied to their monetary motivations. Two
examples illustrate this:
50 percent my set of values and 50 percent financial because it was worth us doing it, you
know? (participant 14).
Well a business is an organization designed for profit and a cause is motivated by changing
the world and I’ve just melded the two. I don’t see it as separate. I think, you know they’re one
in the same (participant 13).
Both of these participants indicate the interrelationship between their motivations for
becoming ecopreneurs. Additionally the ecopreneurs were strongly motivated by
spreading their green values to others. They were motivated to spread the word about
their business and environmentalism in a number of different forums. Much of this
occurs through educational strategies that ecopreneurs operate as core to their
business. They do this through web sites, visiting markets and expos, and word of
mouth. Word of mouth should not be underestimated, with some customers acting as
“disciples” and selling the product or service to their friends. The ecopreneurs placed
great importance on younger generations being more aware of environmental
concerns. For example, five ecopreneurs saw that Generation Y was more
environmentally conscious and aware than older generations. In one case, children
drove the decision to eat organic food and asked their parents to change their
purchasing behaviour. Others sought to educate people directly, seeing this as an
important part of their role. For example, one offered “education programmes to
sustain those key values because it’s about putting back as well as taking” (participant
10). One ecopreneur had a contract from local government to provide environmental
education in schools. Others targeted these young people who they saw as particularly
open to their products, attempting to “try to excite the emerging green consumer”
(participant 13).
While a further seven ecopreneurs did not mention their green values as being a
motivating factor for their business start-up, it is evident that their underlying green
values have a major influence on the type of business they started. That is, these
remaining participants started eco-businesses and many of their practices were
environmentally focused, but green values were not necessarily the key motivator for
them in starting the business. Perhaps more importantly than at the time of business
start-up, these green values appear to be held as a top priority in the ongoing
management of the business (see future research questions in Section 6).
Gap in the market What motivates
Half of the participants stated they saw a gap in the market for a particular eco-friendly ecopreneurs?
product or service. The following two excerpts from participants illustrate their
perception of these gaps in the market:
The first thing I did was I started an [type of] business because I thought there was a sort of
need in that market (participant 6).
217
With this business it was an opportunity I guess. . .natural products were growing worldwide
(participant 5).
These examples are classic cases of entrepreneurs seeing market imperfections and
viewing these gaps as an opportunity to start a new venture. For another ecopreneur,
the gap in the market was more closely aligned with their expertize and interest:
To me it was just a glaring gap, it was something I was interested in and could do
(participant 3).
For another ecopreneur, business was more user-driven:
As a family, we’re very environmentally friendly and it was really frustrating because there
was nothing available (participant 9).
In this example, the ecopreneur had identified a personal need that was currently
unmet in the market and that spurred her to start the business. Interestingly, none of
these participants had prior experience in the industries in which they started their
businesses. In fact, their work experience was totally unrelated. The gap in the market
was identified through their awareness of environmental issues rather than purely
commercially-based opportunity recognition.
These findings mirror the few existing studies on ecopreneurs’ motivations which
show ecopreneurs taking advantage of market imperfections and opportunities (Cohen
and Winn, 2007; Freimann et al., 2005). They also highlight examples where
ecopreneurs started a business as a response to the market failing to deal with negative
externalities (Pastakia, 1998). Ecopreneurs exhibited typical entrepreneurial
behaviours in terms of opportunity recognition. Interestingly they did not tend to
have prior experience in the area in which they started the business, as prior studies of
entrepreneurs in general have found to be most common (Terjersen, 2005).
Making a living
For other ecopreneurs (seven cases), monetary motivations were apparent. They spoke
very little about being profit-driven but more about wanting to earn a living or cover
their costs. Two ecopreneurs explain their views further:
Neither Tim or I are particular profit driven so it’s not like we’d looking to extract every
single profit from an organization so we would be looking at covering costs and making a
living and that would be it (participant 3).
The business is incidental in a way. It’s simply a word to describe the way we earn a
living. . .there’s this tendency to sort of categorize business as being, you know this ugly
monster, you know the elephant in the rainbow, nobody wants to talk about it, it’s an ugly
thing that if you’re in business, you must be a greedy little maximizer. But in fact it’s simply
the way we earn a living (participant 11).
IJEBR The second of these two examples highlights the view the ecopreneur has of other
16,3 people’s perceptions of business. He is almost apologetic for the fact that the couple
own a business in order to make their living.
In another case, one ecopreneur’s motivations were more clearly focused on profit.
This participant decided to start a business to avoid the financial pitfalls of working
for another company:
218 Basically it was financial for us. They weren’t paying until nearly the next season’s crop.
They were paying us in December for what we produced in January so I decided to, that I
could do better than that (participant 14).
In all of the cases where ecopreneurs talked about financial motivations, none
mentioned a desire to make a large profit. It is important to note that many stated they
were definitely “not profit driven”. In fact, the business just had to make enough money
to be sustainable and support their families and lifestyle.
Passion
Related to their green values, six participants spoke of the passion they had for the
business and the products or services they offered for sale. Statements such as “I’ve
really got a real passion for it” (participant 9) and “I was so passionate about
[business]” (participant 8) were common. Another participant expands on the role of
passion in her motivations for starting the business:
I was passionate about making this journey something I wanted to enjoy. . . To look after the
[raw material] (participant 10).
This example shows the participants’ passion was with the natural, raw material which
went into the product. This example shows that passion may be closely linked to the
ecopreneurs’ strong underlying green values. This parallels prior work from New Zealand
(on three cases) which shows passion for the “green cause” to be a primary goal of
ecopreneurs (de Bruin and Lewis, 2005). The ecopreneurs in this study were passionate
about the environment and wanted to play a part in reducing environmental degradation.
They also had a similar passion for their product or service and this illustrates the close
linkage between this passion and the ecopreneurs’ green values. In fact it may be difficult
to separate the two motivators (passion and green values) in the case of ecopreneurs.
7. Conclusion
The outcomes of this study are twofold. First, we add empirical data to the worldwide
literature on ecopreneurs. The 14 case companies is one of the largest samples of
ecopreneurs that have been studied to date and the resulting empirical findings offer
new insights into this under-researched type of entrepreneur. Theoretical contributions
to the ecopreneurship and entrepreneurship literature were also made which add to our
understanding of ecopreneurs’ motivations for starting new businesses. In addition,
the extensive list of future research opportunities helps to advance the field of
ecopreneurship, which we argue is going to grow in significance as environmental
awareness increases.
Within the entrepreneurial motivation literature reviewed at the start of this paper,
it was noted that push-pull theory is the primary way of categorizing entrepreneurs’
motivations. When applying this categorization to the participants of our study, the
following became apparent: these ecopreneurs could all be classed as being pulled into
IJEBR business ownership rather than being pushed into it. This is important because
16,3 entrepreneurship works best if it is an individual initiative (Sriram et al., 2007). This
may be highly significant, as studies have concluded that those entrepreneurs who
start businesses with pull factors are more financially successful in ongoing business
(Amit and Muller, 1995). This bodes well for the ecopreneurs in the longer term,
especially when considered alongside their strong green values, passion for their
224 product or service, and their relatively low monetary motivations.
There are undoubtedly limitations to this study. The most apparent is the small
number of case studies, although this is due to the limited understanding of ecopreneurs
and the need for initial qualitative research to develop further research questions.
Additionally, the setting of the study is a potential limitation. The results of this study
may be country specific. Prior research found New Zealanders were primarily pulled into
entrepreneurship rather than pushed into it (Frederick and Chittock, 2006). This high
level of entrepreneurship (particularly opportunity entrepreneurs) may impact on the
findings because of the high number of people who are open to entrepreneurship.
Similarly, the country context in terms of its reputation for being clean and green may
also make ecopreneuership a more viable option than in other countries.
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