Promoting Entrepreneurship for Sustainable Development

By Amelie Heuer and Helen Marquard, SEED Initiative

Promoting Entrepreneurship for Sustainable Development

Marquard, SEED

On 20 April, ten years ago, five start-up entrepreneurs from Bolivia, Cambodia, Madagascar, Nepal and Nigeria travelled to New York to attend the United Nations Conference on Sustainable Development (UNCSD). They were to receive the first SEED Awards for their innovative approaches to advance sustainable development at the grassroots. Little did they – or we – recognise at the time that they were pioneers of a new generation of enterprises: green and inclusive businesses – also known as social and environmental or eco-enterprises.

Since that day SEED has championed the cause of social and environmental entrepreneurship, and with the loyal support from our Partners and Associates we have been able to recognise and assist nearly 180 such start-up enterprises spread over 37 countries.

Eco-entrepreneurship for sustainable development; from niche to mainstream

At the genesis of SEED, the notion of channelling or even promoting sustainable development through entrepreneurship was a fairly nascent idea. Nowadays however entrepreneurship has become one of the forefront approaches to development, both at the local small scale as in large international institutions. One of the reasons for this shift is the growing recognition that small, micro and medium enterprises (SMMEs) create innovative and novel solutions for delivering development at the grassroots. Social and environmental enterprises, in addition, embrace the added values of social improvement and wise resource management which further sustainability and engender resilience and adaptability in their communities.

Take for example Tambul Leaf Plates. By developing a technique for making disposable dinnerware from waste leaves of areca trees and introducing production, they have generated employment or additional income for 3,000 rural community members, many of whom are young men. This is hugely significant as Tambul operates in the northeast of India; where unemployment is a chronic problem and plays a significant role in the increasing insurgencies. At the same time Tambul is reducing pollution from plastic and polystyrene foam plates by 100 tonnes annually. And because Tambul operates on a participatory basis, and pays great attention to training – both technical and business – the enterprise is strengthening community structures and raising the skills level in the communities.

Using a completely different model of green entrepreneurship, Blue Ventures, one of the first SEED Winners in 2005, developed Madagascar’s first Locally Managed Marine Area (LMMA). By training local communities in transformative approaches of conservation and sustainable aquaculture, not only are the coastal resources protected and overfishing is reduced, but local communities also benefit from increased fish catch, and alternative livelihoods opportunities. They are now working with over 75 communities, involving over 40,000 people and 5,857km2 of ocean and marine habitat is now managed by communities, which is the largest LMMAs in the Indian Ocean. The model has now guided national fisheries policy and has been replicated by fishing communities, NGOs, businesses, donors and government agencies along thousands of miles of coastline. A success that was just recently honoured through the 2015 Skoll Award for Social Entrepreneurship.

Success factors to overcome barriers

Despite such successes, social and environmental enterprises still constitute an almost vanishingly small proportion of small, micro and medium-sized enterprises (SMMEs), largely due to the challenges they face, and possibly due to the lack of awareness about the feasibility of integrating benefits over and above straightforward economic profitability. Obviously many of the barriers, such as availability of finance, help with developing business and administrative skills, and access to technology and research, are common to all start-ups. But for those that are green and inclusive, some of the most significant additional barriers to success – where success can be measured in terms of economic gain, tangible societal benefits, and improved use of natural resources or climate change mitigation or adaptation – include:

  • the lack of recognition and hence support by investors, funders, enterprise partners and consumers of social and environmental impacts as valued and tangible results
  • the frequent under-implementation of local level environmental monitoring and enforcement which reduces the perceived value of the products or services enterprises offer but which if redressed gives green enterprises a competitive advantage
  • the difficulty for enterprises to define suitable triple bottom line (TBL) targets and monitor impact and hence to be able to tell the story of what they have achieved convincingly and become incorporated into larger value chains.

The SEED Research and annual SEED Symposia in Africa have pointed to various factors that can help social and inclusive start-ups to address these barriers and enable them to scale up. The most common ones include:

  • funding and financial challenges: start-ups need to have a good business plan and consider alternative sources of capital such as subsidies, crowdfunding, donations, sponsorship in addition to investment;
  • local enforcement: governments can play an important role by setting up and implementing national environmental legislation and regulations and introduce adequate certification;
  • defining targets: small and micro enterprises need to consider partnerships with research and technical experts, and with larger businesses.

Fortunately the last of these, where large businesses explore ways of working with SMMEs, is a growing trend. For both parties, it enhances the opportunities for innovation and learning, while providing valuable insights into local conditions, and production and marketing benefits. While such collaborations can unleash innovative opportunities for both, it is crucial that they are developed on a partnership basis, ensuring grassroots ideas and conventional business approaches are embraced. At SEED we believe that local drive is essential for most green SMMEs to be sustainable. People on the ground understand local problems and therefore design business concepts that are tailored to the circumstances of the local communities, and importantly, they have ownership of the process and can secure buy-in.

Highlights of 2015 for SEED

To advance social and inclusive entrepreneurship even further in 2015, SEED will:

  • hold the 4thSEED South Africa Symposium on 27th May in Johannesburg. The Symposium will centre on ‘Entrepreneurship: A solution for climate change and green growth”. It is being organised in partnership with the International Conference on Innovation for Sustainability under Climate Change and Green Growth which is expected to bring together more than 250 delegates from government, private sector, academia, and civil society. At the event SEED will launch the new SEED Virtual Exhibition, a dynamic platform that will highlight achievements of SEED Winners through case studies and videos.
  • help bring about more enabling environments for eco-enterprises to flourish by increasing its collaboration with local business intermediary organisations through the Business Development Service training (BDS+).
  • announce the next generation of SEED Winners at the 2015 SEED International Awards Ceremony, together with the ‘10 Years SEED Awards Special Recognition’. This will be the centrepiece of the SEED Africa Symposium, in Nairobi Kenya, which will focus on: Building Bridges for Impact: Green and Inclusive Growth through Entrepreneurship. Last year the event was attended by about 350 people; we hope to see even more this year (read more here)
  • publish a dedicated flagship report to highlight the achievements of the last 10 years of SEED Awards.

These 10 years have been our start-up phase. The SEED Partners look to grow considerably over the coming 10 years – a critical phase in the global community’s efforts to combat climate change.

This blog was previously published on the SEED website and is reproduced with permission.

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