NTNU Norwegian University of Science and Technology Faculty of Economics and Management Dept. of Industrial Economics and Technology Management
Siefkes, StocksmeierPerspectives on Boosting Sustainable Entrepreneurship Through Business Incubation
Meike Siefkes Gero Stocksmeier
Perspectives on Boosting Sustainable Entrepreneurship Through Business Incubation
How Is Sustainable Entrepreneurship Facilitated in Business Incubators?
Master’s thesis in Innovation Management, Sustainability and Entrepreneurship
Supervisor: Dag Håkon Haneberg Co-supervisor: Jan Kratzer
June 2021
Master ’s thesis
Meike Siefkes Gero Stocksmeier
Perspectives on Boosting Sustainable Entrepreneurship Through Business Incubation
How Is Sustainable Entrepreneurship Facilitated in Business Incubators?
Master’s thesis in Innovation Management, Sustainability and Entrepreneurship
Supervisor: Dag Håkon Haneberg Co-supervisor: Jan Kratzer
June 2021
Norwegian University of Science and Technology Faculty of Economics and Management
Dept. of Industrial Economics and Technology Management
ABSTRACT
Purpose – The purpose of this thesis was to discover how sustainable entrepreneurship (SE) can be boosted in incubators by revealing with which means incubators facilitate SE today along the different stages of the incubation process.
Design/methodology/approach – The authors conducted exploratory qualitative research based on a unique dataset from multiple-case studies of eleven incubators from major entrepreneurial ecosystems in Europe. In-depth interviews with incubator managers were conducted and secondary material was gathered to allow for triangulation. The data was coded with an iterative approach inspired by Gioia et al. (2013) and led to a comprehensive code structure that laid the groundwork for the authors to develop substantiated findings.
Findings – The analysis revealed how existing frameworks for business incubation can be enhanced to facilitate SE along the incubation process. The authors identified activity fields for each stage of SE incubation: implementing an overarching incubation strategy for sustainability, attracting future sustainable talent, granting sustainability significance during the selection, anchoring sustainability while the businesses evolve, creating sustainable opportunities outside of the program, and finally, orchestrating the longevity in the incubation ecosystem. For each field, the authors pinpointed specific tools for incubators ranging from the early stages up to more advanced approaches to facilitate SE.
Originality/value – The authors closed a research gap by opening the “black box” of business incubation for SE. For this, the authors extended Bergek & Norrman’s (2008) framework with three more stages that are essential for the facilitation of SE. On top, the authors derived six propositions to substantiate the main finding and to stress aspects that are crucial for future investigation.
Keywords – sustainable entrepreneurship, facilitation, business incubation, tools, process, exploratory qualitative multiple-case study
PREFACE
This thesis was written by two students in the final semester of their double degree master’s program at the NTNU School of Entrepreneurship (Norway) and TU Berlin (Germany). The students have specialized in sustainability within entrepreneurship throughout the course of their studies and believe in sustainable innovation as a major driver towards a sustainably sound economy. This circumstance motivated the authors to elaborate on how SE can be boosted in different contexts during their final year of the studies. Therefore, in the second half of 2020, they conducted a literature review on the topic of SE facilitation in various contexts. After identifying a research gap explicitly in the field of business incubation, the authors started to write their master thesis in January 2021, building upon the results of their literature review and spotlighting business incubators as a main environment for SE. The authors were especially motivated by the duality of potential to generate valuable findings for both theory and practice: while the authors contribute to the scarce existing literature and offer points of reference for future research, their findings can also serve as a guidance for practitioners in incubators to advance SE in their realm.
Foremost, the authors want to thank their supervisor Dag Håkon Haneberg from the NTNU for his outstanding support during their entire final year. Regular discussions and critical perspectives led to an intriguing learning process and paved the way for exciting opportunities in the future. Moreover, the authors appreciate the several discourses with Marc Karahan from TU Berlin who is currently shaping the research field of SE in incubators. In addition, the authors want to express their gratitude to all incubators that have shown overwhelming enthusiasm for the topic of SE in their ecosystems. Lastly, the authors are grateful for their joint journey during the past year – both on a personal and academic level.
The Authors,
Meike Siefkes and Gero Stocksmeier Trondheim, June 3rd, 2021
TABLE OF CONTENT
1. INTRODUCTION ... 3
1.1. Research Question ... 4
1.2. Approach and Contribution ... 5
2. Literature Review: How is Sustainable Entrepreneurship Facilitated in Theory? ... 5
2.1. Conceptual Background: Defining Sustainable Entrepreneurship ... 6
2.2. Drivers and Barriers for Facilitating Sustainable Entrepreneurship ... 8
2.3. Environments of Sustainable Entrepreneurship Facilitation ... 13
2.4. The Significance of Business Incubators as an Environment to Advance Sustainable Entrepreneurship .... 18
2.5. Conclusion on How Sustainable Entrepreneurship is Facilitated in Theory ... 23
3. Reviewing Assessment Frameworks for Business Incubation ... 24
3.1. Conceptual Background: Introducing Business Incubation ... 25
3.2. Frameworks: How Business Incubators Work ... 28
3.3. Narrowing the Research Gap ... 33
4. Methodology and Research Design ... 34
4.1. Selected Method: Multiple Case Study ... 34
4.2. Case Selection and Data Collection ... 35
4.3. Data Analysis ... 40
4.4. Theory Building ... 45
4.5. Limitations ... 47
5. Analysis of the Results ... 48
5.1. Sample Characteristics ... 49
5.2. The Discovered Dimensions of Sustainable Entrepreneurship Facilitation in Business Incubators ... 51
5.3. Summary of the Analysis of the Results ... 76
6. Discussion ... 78
6.1. The Incubators Do Not Share a Common Understanding of SE ... 78
6.2. Incubator Archetypes and Environments Influence the Facilitation of Sustainable Entrepreneurship ... 80
6.3. There is a Knowledge-to-Action Gap for Drivers and Barriers of Sustainable Entrepreneurship ... 82
6.4. Incubators Display Varying Maturity Levels of Sustainable Entrepreneurship Facilitation ... 87
6.5. Opening the Black Box of Business Incubation for Sustainable Entrepreneurship ... 90
7. Conclusion ... 96
7.1. Contribution ... 98
8. References ... 102
9. Appendix ... 114
A. Interview Guide ... 114
B. List of Workshops at Green Labs ... 116
C. Sustainability Readiness Level ... 116
D. Tool List for SE Facilitation (Excerpt) ... 117
E. Gaps Between Theory and Practice ... 118
F. Cross-Case Analysis ... 122
LIST OF FIGURES
Figure 1: Action Recommendations Considering Drivers & Barriers. ... 13
Figure 2: Relative Frequency of the Environments for SE Facilitation in the Reviewed Articles. ... 14
Figure 3: Phases of the Incubation Process. ... 30
Figure 4: Selection Strategies. ... 31
Figure 5: Nature of Business Support Strategies. ... 32
Figure 6: The Authors’ Process of Developing a Code Structure. ... 41
Figure 7: The Theoretical Foundation for the Authors’ Theory Building. ... 46
Figure 8: Final Code Structure. ... 52
Figure 9: Selection Strategies from the Sampled Incubators. ... 60
Figure 10: Sustainability as a Selection Criterion at the Sampled Incubators. ... 61
Figure 11: Gap Between Theory and Practice for SE Competences. ... 83
Figure 12: Gap Between Theory and Practice for SE Attitude. ... 84
Figure 13: Gap Between Theory and Practice for Team Culture. ... 84
Figure 14: Gap Between Theory and Practice for SE Environment. ... 85
Figure 15: Gap Between Theory and Practice for SE Market Dynamics. ... 86
Figure 16: Gap Between Theory and Practice for SE Best Practices. ... 86
Figure 17: Maturity Stages of the Sampled Incubators' SE Facilitation. ... 87
Figure 18: The Facilitation of SE in Business Incubation with Insights and Tools for Every Activity Field in Each Phase of Incubation. ... 95
LIST OF TABLES Table 1: Five Defining Services of Business Incubators. ... 29
Table 2: Incubators in the Authors’ Sample. ... 38
Table 3: Fact Sheet with Additional Questions to the Incubators after the Interviews. ... 40
Table 4: The Sampled Incubators’ Characteristics. ... 51
Table 5: List of Workshops at Green Labs ... 116
Table 6: Excerpt from Tool List for SE Facilitation. ... 118
Table 7: Cross-Case Analysis. ... 118 LIST OF ABBREVIATIONS
CE = corporate entrepreneurship
COVID-19 = COVID = Coronavirus SARS-CoV-2 EET = entrepreneurship education and training e.g. = exempli gratia
et al. = et alii i.e. = id est ibid. = ibidem
R&D = research and development SDG = sustainable development goals SE = sustainable entrepreneurship SME = small and medium enterprises UN = United Nations
1. INTRODUCTION
The public understanding of sustainability changed immensely over the last years and decades (Wunder, 2019). Over thirty years ago, the United Nations (UN) called for a common future worth living in (Brundtland, 1987). Since then, the global community has surpassed at least four planetary boundaries of safe operating spaces for humanity and is facing severe shortfalls in its social foundations (Rockström et al., 2009; Stoknes & Rockström, 2018; Lade et al., 2020). Now, the Earth has entered a new geological epoch called the “Anthropocene”, implying that humans have a significant influence on the Earth’s ecosystems (Crutzen, 2006). Thus, business activities and their impact on the environment and society become more closely scrutinized. Stakeholder groups such as investors, customers, and others in the business ecosystem and beyond are putting pressure on companies to make effective contributions to sustainable development (Wunder, 2019).
Humankind is facing a great number of sustainability challenges. One key approach to preserve the Earth’s system is seen in sustainable entrepreneurship (SE) (Hummels & Argyrou, 2021). As entrepreneurs shift their thinking towards valuing environmental and social sustainability as much as profitability, SE continuously gains importance and interest both within the research community and for businesses (Volkmann et al., 2019; Kratzer, 2020). In fact, some scholars assert that entrepreneurs are
“instrumental in solving our most pressing societal challenges through business model, technological, financial and social innovation” (Cojoianu et al., 2020). Specifically, sustainable entrepreneurs are individuals who holistically integrate “the goals of economic, social and environmental entrepreneurship into an organization that is sustainable in its goal and sustainable in its form of wealth generation”
(Young & Tilley, 2006). They aim to contribute to social welfare and an ecologically sustainable economy combined with economic success (Dean & McMullen 2007). Yet, there are tensions in the research community concerning the definition of SE and its application (Terán-Yépez et al., 2020).
Hence, the calls for a more aspiring approach towards SE are getting louder (Hummels & Argyrou, 2021).
Recently, a growing number of business incubators have specialized in supporting startups on their journey towards SE (Schabel & Fichter, 2018). As one environment where business ideas are transformed to viable ventures and where experts accompany startups from pre-seed ideas towards realizing the market entry, incubators have a central position in the entrepreneurial ecosystem (Lamine et al., 2016). They have seen vast growth since they originated in New York in 1959 and have gained global attention as they have become an “integral part of the entrepreneurial ecosystem” (Hausberg &
Korreck, 2020). Nowadays, they play a vital role in the global economy since they “connect science, technology, education, knowledge, entrepreneurial talent, and capital” (Lamine et al., 2016). Lamine et al. (2016) argue that incubation mechanisms may even be the main environment to grow sustainable enterprises. However, it is widely unknown how SE can be integrated into these mechanisms and boosted through targeted business incubation activities. While theoretical frameworks mostly revolve
around conventional business incubation, there is also no examined status-quo of hands-on practices (Fichter & Hurrelmann, 2021).
1.1. Research Question
The research on the field of SE has grown exponentially in the last years (Bank et al., 2017). Since previous research on SE mostly revolves around practices for higher education, business incubators represent an under-researched environment for SE (Biggs et al., 2010). The authors’ research shows that few case studies have been conducted so far that assess the aspect of sustainability practices in business incubators.
Bergek & Norrman (2008) have developed a widely used and renowned framework for identifying best practices of incubator models. In the beginning of 2021, Fichter & Hurrelmann (2021) showed that Bergek & Norrman’s (2008) framework for business incubation is a) still highly relevant and applicable to the field of SE and b) open towards extensions and enrichment with other theories about business incubation. Their research showed that the support of business model development is one key element of an incubator’s specific activities. In that line, Klofsten & Bienkowska (2021) carried out an exploratory study observing the integration of sustainability aspects into their operations. However, they only scratch the surface on how exactly this integration can be done within incubation programs and merely make assumptions.
Until now, no scholars have assessed how SE can actively be enhanced by business incubators through targeted actions. The authors identified a clear research gap for investigating which tools and activities are currently being applied along the entire incubation process with the goal to boost sustainability when a company is started up. A tool in this thesis is defined by the authors as a hands-on method for the facilitation of SE that is well-described by an incubator and is unambiguous in its implementation.
The activities of incubators in order to boost SE are what the authors call “facilitation”. It is a collective term for all activities of an incubator, ranging from access to financial or physical resources to networks and entrepreneurial knowledge. This facilitation could be substantial to drive SE as Lamine et al. (2016) conclude that incubation mechanisms have “the potential to be the principal vehicle for nurturing and growing” enterprises such as (sustainable) startups.
Considering the growing importance of SE on the one hand, and the influence of business incubators in the early stage of the startup development of its “incubatees”1 on the other, it is of interest to explore how SE can be advanced through targeted business incubator actions. Therefore, this thesis aims to answer the following research question:
How is sustainable entrepreneurship facilitated in business incubators?
1.2. Approach and Contribution
The authors aim to contribute to existing research. They substantiate research (Carayannis & von Zedtwitz, 2003; Mian, 2014; Mian et al., 2016; Volkmann et al., 2019) and extend upon other scholars’
literature reviews (Terán-Yépez et al., 2020). They build upon frameworks that categorize the incubation process from different perspectives (Bergek & Norrman, 2008; Fonseca & Chiapetta Jabbour, 2012).
Specifically, the authors extend upon Fichter & Hurrelmann’s (2021) first approaches on implementing SE in specific stages of the incubation process. Moreover, the authors add to the current discussion stream on the maturing of SE (Volkmann et al., 2019; Fichter & Hurrelmann, 2021; Hummels &
Argyrou, 2021; Klofsten & Bienkowska, 2021).
Given this current state of the literature, studying the facilitation of SE in business incubators is still a pioneering endeavor. The authors conduct a comprehensive qualitative study that is exploratory in its nature to show the range of applied facilitation tools that are currently used in SE practice. Besides uncovering which facilitation methods are used, the focus will also be on how and when these methods are adopted.
To investigate this, a multiple-case study is conducted by interviewing eleven business incubators located in major entrepreneurial ecosystems in Europe and gathering secondary material to allow for triangulation. The authors strive to develop unbiased findings on the activities applied in incubators to facilitate SE during the different stages of the incubation process by following an iterative method inspired by Gioia et al. (2013).
With their research, the authors uncover with which tools and activities incubators across Europe facilitate SE today in the different stages of the incubation process. By connecting existing research, drawing conclusions about the phenomenon of SE in business incubators, and incorporating practitioners’ experience into investigating which tools are currently being applied along the entire sustainability-oriented incubation process, the authors can expand the scarce existing literature on SE facilitation in business incubators and contribute valuable findings for both practitioners and researchers.
2. Literature Review: How is Sustainable Entrepreneurship Facilitated in Theory?
Before conducting the case studies, it is necessary to establish a common terminology and review the existing literature on SE, its facilitation in different contexts, and the application in business incubators.
Finally, bringing those topics together, the field of sustainable business incubators will be explored.
This chapter is a literature review, consisting of a threefold perspective. First, the terms “sustainability”
and “sustainable entrepreneurship” will be reviewed (Chapter 2.1). By doing so, the authors’
preunderstanding of the topic is disclosed, and can be considered for the starting position for the following literature review. Next, a broad review of literature on SE facilitation in different contexts was conducted, resulting in the identification of driving and hindering forces of SE (Chapter 2.2). Based on this, main factors for SE facilitation will be derived. The same literature was used to investigate the different environments in which SE is facilitated and researched today (Chapter 2.3). Lastly, the authors zoom in on the interface of SE and business incubation and offer a review on the role of business incubators to advance the topic of SE (Chapter 2.4).
2.1. Conceptual Background: Defining Sustainable Entrepreneurship
Research on SE uses a variety of definitions. An assessment of the different definitions and understandings of SE used in research is essential as it cannot be answered how SE is facilitated when the concept of SE has not been explored sufficiently.
The most referenced definitions of SE according to Terán-Yépez et al. (2020) are provided by Cohen &
Winn (2007), Dean & McMullen (2007), Hockerts & Wüstenhagen (2010), Schaltegger & Wagner (2011), and Shepherd & Patzelt (2011). While these five renowned scholars have different approaches towards SE, they have one aspect in common: they all base their definition of SE on Elkington’s (1998) so-called “triple bottom line” of business value creation that refers to combining economic, social and environmental value. This concept is again based on the Brundtland definition of sustainable development as meeting “the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987).
Terán-Yépez et al. (2020) cluster the varieties of SE definitions by describing two streams of SE definitions: The first stream was influenced by the sustainable management perspective. It highlights the importance of the concepts of the triple-bottom-line and sustainable development. Entrepreneurial activities are subordinate to them (Lans et al., 2014). From this point of view, SE includes but goes beyond exploiting market opportunities. Additionally, this academic perspective analyzes the impact on the economic, social and environmental dimensions that companies have more consciously and on purpose. In the first stream of a SE definition, the aim is for entrepreneurs to approach sustainable development as a unique business opportunity to transform the current economy into a sustainable one and thereby creating solutions for a variety of environmental and social aspects (Schaltegger & Wagner, 2011). Schaltegger & Wagner (2011) are quoted often as they build heavily on the triple-bottom-line.
Here, SE constitutes entrepreneurial activity that includes the economic, the ecological, as well as the social dimensions of sustainability as part of the company’s core business model (Schaltegger & Wagner 2011). Therefore, SE aims to solve societal and environmental problems through the realization of a successful business, i.e. the market-oriented form of creating economic and societal value through
sustainable development into goal setting and organizational processes. Lans et al. (2014) add another perspective: the sustainable competitive advantage. They argue that SE is seen as a way of generating competitive advantage by identifying sustainability as new business opportunities, resulting in new and sustainable products, methods of production or ways of organizing business processes in a sustainable way. Their approach is also based on Schaltegger & Wagner’s (2011) definition.
The second definition stream sees SE as a combination of the triple-bottom-line and the entrepreneurship process perspective. Here, Terán-Yépez et al. refer to Pacheco et al. (2010), Patzelt & Shepherd (2011), Belz & Binder (2017) and Dean & McMullen (2007) as the most prominent academics highlighting the importance of the relationship between entrepreneurs and opportunities. They argue that entrepreneurs are completely aware of their businesses’ impact on the environment. Patzelt & Shepherd (2011) define SE as “the discovery, creation, and exploitation of opportunities to create future goods and services that sustain the natural and/or communal environment and provide development gain for others”. For them, SE is focused on sustaining and developing six aspects: on the one hand, there are three constructs informed by sustainable development literature, i.e. sustain nature, life support systems and communities. On the other hand, three constructs informed by entrepreneurship literature are central:
developing economic gains, non-economic gains to individuals and non-economic gains to society.
Pacheco et al.’s (2010) approach connects SE with the UN’s Sustainable Development Goals (SDGs).
Here, SE is the discovery, creation, evaluation and exploitation of opportunities to create future goods and services that are consistent with SDGs: they are relevant for tackling fundamental societal challenges such as climate change, the development of sustainable production and also consumption patterns. Young & Tilley (2006) also belong to this stream as they define the sustainable entrepreneur as “the individual who holistically integrates the goals of economic, social and environmental entrepreneurship into an organization that is sustainable in its goal and sustainable in its form of wealth generation”. Therefore, Young & Tilley (2006) draw on the theoretical perspective of business sustainability while Shepherd & Patzelt (2011) draw on entrepreneurship research. Still, they agree that the goal of SE is not to pursue either social, economic or environmental objectives, but rather to integrate all components of sustainability in a holistic approach (Muñoz & Cohen, 2018).
However, Volkmann et al. (2019) identify a common ground despite all of the differences: “it is noticeable that it is a consensus that sustainable entrepreneurs seek to achieve a hybridity objective.
They are a type of entrepreneurs that go beyond the rent-seeking behavior that conventional entrepreneurial theories have attributed to entrepreneurs. Therefore, with regard to its intended and realized impact, SE differs significantly from traditional entrepreneurship”.
As shown, most popular definitions of SE have been anchored in the definition of sustainability as the
“triple bottom line” (Elkington, 1994). In this thesis, the authors base their understanding of sustainability on the referenced Brundtland definition and additionally advocate for a strong definition
of SE in light of the urgency to keep within the planetary boundaries. Hence, in this thesis, Hummels &
Argyrou’s (2021) re-definition of SE as “the process of discovering, evaluating, and exploiting opportunities, which are economically, environmentally, planetarily, and socially relevant and present themselves in market failures which detract from sustainability in general and the planetary boundaries in particular” is used as a landmark.
2.2. Drivers and Barriers for Facilitating Sustainable Entrepreneurship
It is necessary to identify forces that can influence SE to understand how it can be facilitated effectively.
There are enabling forces, i.e. drivers of SE, and hindering forces, i.e. barriers which make the process more difficult. In the literature, the authors identified six dimensions that can drive or hinder the facilitation of SE: competences, attitude, team culture, environment, market dynamics, and best practices. The chapter is structured based on these six dimensions.
Competences
In addition to general entrepreneurial skills, sustainable entrepreneurs need specific SE competences.
One major competence driving SE is the ability to recognize opportunities, i.e. market gaps. This is described by Terán-Yépez (2020), Kirkwood & Walton (2010), Belz & Binder (2017), Ploum et al.
(2018), and Stål & Bonnedahl (2016). Also the importance of sustainability-oriented creative problem solving is highlighted by several researchers (Stål & Bonnedahl, 2016; Haldar, 2019; Shu et al., 2020).
Here, Stål & Bonnedahl (2016) point out that “creative problem solving based on an [SE] perspective recognizes the need for humility, respecting that creativity and the power of entrepreneurial cognition cannot replace ecosystem services performed by critical natural capital.” Also for SE, general entrepreneurial skills are needed. As shown by Schlange (2006), the ability to design viable business concepts as well as network and build relationships with partners is essential. On top of this, innovation is needed, i.e. the ability to develop a business further (Haldar, 2019; Terán-Yépez, 2020). Terán-Yépez et al. call this “dynamic capabilities”. Furthermore, Rodgers (2010) and Chander et al. (2020) mention practical knowledge and the ability to self-educate and learn. Communication skills for teamwork are deemed relevant by Faludi & Gilbert (2019).
In the area of competence, Faludi & Gilbert (2019) found lack of knowledge to be a major competence barrier in the area of facilitating SE in higher education. Schaltegger & Wagner (2011) find that the competence to radically innovate depends on the size of a firm: “there is some negative association between the size of a firm and the radicality of any sustainability innovation it attempts. (…) Reasons for the challenges that radical innovation poses for firms are partly rigid routines and higher levels of administration”. Additionally, the lack of technical knowledge and expertise is a barrier for SE (Haldar,
Bringing together these competence drivers and barriers, it appears that success factors regarding the sustainable entrepreneurs’ competences cover both general entrepreneurial skills as well as specific SE competences. However, competences for sustainability and entrepreneurship are inherently different (Lans et al., 2014). Thus, the combination of these competences is essential since it is also highly applicable in the corporate entrepreneurship context (Miles, 2009).
Therefore, it is recommended that SE competences need to be trained in targeted skill-development programs (Vuorio et al., 2018). It must be highlighted that since SE cannot happen in isolation, these SE skills should not be trained separately (Schlange, 2006; Lans et al., 2014). The competencies emerging from this learning process is summarized by Ploum et al. (2018) “as a catalyst for creating a more critical, innovative, and reflexive culture that frequently questions its own routines, assumptions, and guiding principles”. Hence, a key aspect for competences is to design integrated skill-development programs that are tailored to the target group.
Attitude
Another prominent driver is the individual entrepreneur’s attitude. First of all, the attitude towards sustainability and entrepreneurship, i.e. the environmental and social personal preferences as seen in Vuorio et al. (2018), Haldar (2019), Schaltegger & Wagner (2011). On top of that, the motivation, vision and passion for it is highlighted by Schlange (2006), Kirkwood & Walton (2010), and Haldar (2019).
This goes hand in hand with individual entrepreneurial ethical values like honesty or integrity as shown by Rodgers (2010), Parra (2013), Kirkwood & Walton (2010), and Haldar (2019). Furthermore, aspects that are favoring entrepreneurship more in general, such as the independence of being their own boss (Kirkwood & Walton, 2010; Klapper & Farber, 2016) and a higher risk tolerance (Rodgers, 2010;
Haldar, 2019) can drive SE through the entrepreneur’s attitude.
Risk averseness as an attitude barrier for SE is mentioned by both Haldar (2019) and Hoogendoorn et al. (2019), who did “not find any noteworthy differences between regular and sustainable entrepreneurs in terms of their risk attitudes and the financial risks that they perceive when running their businesses.”
Vuorio et al. (2018) identify gender as a barrier since their results “reveal that gender and disciplinary differences are present in SE. On average, women tend to have more positive attitudes toward sustainability, while men tend to perceive entrepreneurship as more desirable and feasible. (…) Surprisingly, there are no gender differences when it comes to the level of sustainability-oriented entrepreneurial intentions” (Vuorio et al., 2018). Additionally, Haldar (2019) highlights the cruciality of attitudes like weak entrepreneurial motivation, ethical reasoning, and weak sustainability orientation.
These (sustainable) entrepreneurial attitudes can be shaped and strengthened through facilitating approaches for SE. Especially in the activation process, value-activation strategies as proposed by Thelken & de Jong (2020) can be essential. It can help influence attitudes by including sustainability- focused courses that motivate entrepreneurs to engage in dialogue and exchange their attitudes. This
learning process enables knowledge- and attitude-spillovers that in turn can influence the participants’
attitudes and broaden their horizon (Wagner et al., 2011). Hence, it is essential to enable knowledge and attitude-spillovers through dialogues. The authors deem another factor to be vital for aspiring entrepreneurs: to provide them with positive experiences related to entrepreneurship (Vuorio et al., 2018). This can help shape the level of sustainable entrepreneurial intentions, for example through the participation in business plan competitions with a focus on SE.
Team Culture
Team culture is a driving force for all entrepreneurial endeavors that comprises more than one individual. For SE, team culture with a sustainability connection is especially significant: sustainability as a dominant logic in the team culture and as “the ‘entrepreneurial DNA’ of startup teams in general”
is important for the company to contribute effectively to achieving the SDGs (Fichter & Tiemann, 2020).
Academic diversity is another important topic for cultural drivers. Karlusch (2018) points out that
“teams, which include participants with a greater diversity of academic backgrounds, tend to think and act more creatively in the conceptualization of new [sustainable] business models compared to less diverse teams in a similar academic context”. Cincera et al. (2018) add the importance of “a culture of dialogue, participation and learning in diverse teams”. Additionally, Parra (2013) expands the values from the individual entrepreneurial sustainable values to shared ethical values, i.e. employee and cultural values like organizational culture and employee well-being, customer and quality values as in products/service quality and consumer satisfaction, as well as external accountability values regarding stakeholder relationships.
Hence, to effectively facilitate a good team culture for SE, it is crucial to balance a team’s diversity and its ability to overcome inevitable cultural differences. Possible challenges need to be made salient and talked about openly in a proactive manner. Targeted trainings can help foster these kinds of cultures in teams and thereby cultivate team diversity. Another essential factor for the culture in a team is the open communication of the shared ethical values. This is one main dimension of the value-activation process and helps ensure the development of shared values.
Environment
An entrepreneurial environment includes the ecosystem, infrastructure, network, government, education, and technology. It also includes the entrepreneurial ecosystem itself, as described by Cohen (2006), Terán-Yépez et al. (2020) or Fichter & Tiemann (2020) who state that “policies and public and private support systems for entrepreneurship also play an important role in achieving sustainable businesses”. A number of authors talk more specifically about institutions, standards and regulations such as Fichter & Tiemann (2018), Haldar (2019), Shepherd & Patzelt (2011), or Thelken & de Jong (2020) who highlight that “governments could therefore be to raise awareness and to promote the
and Faludi & Gilbert (2019). Eventually, technology is pointed out by Rashid (2019), partnerships by Meyskens & Carsrud (2013), regional clusters and firm interaction by Sunny & Chu (2019) and Schaltegger & Wagner (2011). Cagarman et al. (2020) call for a change in the set of applied selection criteria towards sustainability when selecting startups for public funding. They argue that having this change would “make it much more attractive for startups to investigate social and environmental problems. Moreover, shifting the judgement of startups away from purely profit-driven to impact driven (social, ecological, and economical) would probably create a much stronger foundation of the economic and societal changes ahead” (Ibid.).
Environmental hindering forces include a wide range of factors such as bureaucratic barriers, financial constraints, technological incompetence, lack of skilled labor, an unfavorable policy ecosystem, resource constraints, and inefficient legal frameworks as Haldar (2019) and Faludi & Gilbert (2019) summarize. Some authors deep dive into the single topics. This could be a wrong configuration within higher education (Fichter & Tiemann, 2018; Rashid, 2019) or incubators (Klofsten et al., 2016), false pedagogical intentions of educators (Wyness et al., 2015), or the lack of a sufficient support system for universities (Wagner et al., 2019). Moreover, policymakers can be a hindering force as they “have a tendency to favor incumbents over entrepreneurial startups” (Hockerts & Wüstenhagen, 2010). More specifically, bureaucracy is often a barrier (Bikse et al., 2016; Klapper & Farber, 2016), and access to capital is instrumental for sustainable entrepreneurs (Cohen, 2006; Klapper & Farber, 2016).
Naturally, the environment of sustainable entrepreneurs and firms can hold aspects that are both furthering and hindering SE. Therefore, independent from the context, the authors claim it is vital for the facilitation of SE that the ecosystem run by the practitioner is connected to the external entrepreneurial ecosystem. The degree of this interconnectedness is certainly important. The environment has the special role to provide financial capital (Cohen, 2006; Klapper & Farber, 2016), technology (Rashid, 2019), and new relationships (Schaltegger & Wagner, 2011; Meyskens & Carsrud, 2013; Sunny & Shu, 2019). Following Theodoraki et al.’s (2018) social capital theory, the more external links exist, the better capital, technology and new relationships can be accessed by entrepreneurs. An effective and solution-oriented interplay of the different actors in the entrepreneurial environment is therefore key. The main goal of all actors’ actions should always be the enabling of SE and for this, the actors need to identify their own power over the aspiring entrepreneurs’ successes.
Market Dynamics
Exploring the dimensions that influence and leverage the facilitation of SE, the dynamics of the market cannot be left aside. Researchers highlight market dynamics as a central element for SE: without the existence of a business case for SE, there is no opportunity for sustainable entrepreneurs to unfold (Schaltegger & Wagner, 2011). Sustainability can thus be a competitive advantage as it makes more business opportunities available (Miles et al., 2009). Dean & McMullen (2007) find that market failure
is the origin for entrepreneurial opportunities while Sunny & Chu (2019) see social norms as a precursor of market change towards more sustainability. Kushwaha & Sharma (2017), Haldar (2019), Fichter &
Tiemann (2020) and Rodgers (2010) take the same view; the latter stresses the chance of educating the market as a main driver.
In terms of market dynamics, market uncertainty is a key barrier according to Haldar (2019). Cohen (2006) calls upon a technology lock-in as a result when “a geographic region could develop a niche specialty in a particular environmental technology”.
Therefore, it is the duty of SE facilitators to debate the market dynamics with all its facets, contradictions and flaws regularly with all ecosystem members, instead of just accepting the circumstances. By doing so, sustainable entrepreneurs could possibly 1) identify market opportunities stemming from imperfect or even inconsistent markets and 2) anticipate personal setbacks on their entrepreneurial journey resulting from systemic flaws. To sum up, even though an external factor like market dynamics is out of an incubator's influence scope, the incubator can nurture a vivid discussion culture around market dynamics and identify relevant potential for disrupting existing markets. This way, incubators can leverage market dynamics to drive a change that boosts SE.
Best Practices
Best practice examples and role models are a key success factor for the attitude of sustainable entrepreneurs and therefore the facilitation of SE itself (Klapper & Farber, 2016; Vuorio et al., 2018).
These role models can be key persons and change agents in the environment of sustainable entrepreneurs that are promoting ideas around SE (Fichter & Tiemann, 2018). These can be coaches and mentors (Klofsten et al., 2016). But they can also be successful sustainable entrepreneurs themselves that take a
“lighthouse” position and have positive social, cultural, and material effects on others (Tiba et al., 2020).
The authors support the notion that through their positive images, they can shape their surrounding ecosystem and pave the way for more SE following their footsteps. Regarding the utilization of role models in entrepreneurship education, it needs to be considered that while educational role models are used often, explicit SE role models are needed that go beyond the ‘add-on’ to traditional entrepreneurship character (Wyness et al., 2015). From a theoretical perspective, best practices can also emerge from the “burgeoning literature” stream around SE (Wijnker et al., 2015).
Thus, bringing aspiring sustainable entrepreneurs into contact with these role models is a main success factor to facilitate SE. Hence, the authors suggest that facilitators should introduce successful role models to their ecosystem members through mentorship programs, networking events, coaching offers, speed-dating, presentations, pitching competitions, etc. This does not only add value to entrepreneurs but also to the extended ecosystem, e.g. convincing decision makers and capital owners of the value of SE.
Bottom Line
This subchapter presented the different drivers and barriers for SE facilitation according to the literature.
The authors derived action recommendations. These recommendations help leverage the drivers’ full potential and anticipate or react to the barriers. This way, the opportunities to facilitate SE can be exploited. Figure 1 provides an overview of all main factors that were presented by the authors. The reader should keep in mind that the implementation of the following suggestions has a fundamental importance on the effective facilitation of SE in different contexts. These factors are one contribution to answer the research question on a superordinate level since they explicitly address the activities that are needed for a sound sustainable entrepreneurial ecosystem.
Figure 1: Action Recommendations Considering Drivers & Barriers (own creation).
The target group of these facilitation factors are individuals that are responsible for setting up a framework in which SE should be facilitated. That could be a dean running a higher education program, a manager running an intrapreneurship stream for CE, a project manager running an incubator, or other SE facilitators. These people will be regarded in the following as “practitioners” or “operators”.
2.3. Environments of Sustainable Entrepreneurship Facilitation
Before deep-diving into the context of business incubators itself, it is necessary to get an overview of the variety of environments that can further SE. With the research question focusing on the how of SE facilitation in one specific environment, it is essential to also look at the where and distinguish the environments of SE facilitation that are discussed in the literature. Environments could include institutions, actors, and relations between them. Scholars focus on business incubators, corporate entrepreneurship, entrepreneurship education and training (EET), higher education, startups, and university-firm cooperation. Figure 2 shows a simplified depiction of the relative frequency on the respective environments covered in the reviewed articles:
Figure 2: Relative Frequency of the Environments for SE Facilitation in the Reviewed Articles (own creation).
It is striking that a myriad of researchers suggests specific methods for SE facilitation within their area of research, for example higher education, yet do not link it with other fields of literature. To answer the research question presented in this thesis, the authors highlight which practices from each individual field could be also relevant for the application in the environment of business incubators, drawing attention to their differences.
Higher Education
The vast majority of scholars focus on higher education as an environment for SE facilitation. Most scholars place educators and courses at universities in the center of observation, but also entire master programs are considered. Universities are crucial for the skill development of the so-called “would-be [sustainable] entrepreneurs” since “competence development usually is strongest in a context in which learning is central, which also emphasizes the role of higher education”, as underlined by Ploum et al.
(2018). Potential and nascent entrepreneurs are future change agents for sustainability, therefore higher education has an important role for facilitating SE, argue the authors (Ploum et al., 2018).
On a program level, Cincera et al. (2018) present the European project “Competencies for a Sustainable Socio-Economic Development” as a best practice for a sustainability-driven entrepreneurship master’s program. It recommends “learner-centered, collaborative, inter- and transdisciplinary, real-world and value-based teaching and learning” as a core element to develop competencies for SE. Business incubators could profit from this holistic understanding and adopt it to their program. Bikse et al. (2016) underline the need of transforming universities into entrepreneurial universities to ensure sustainable higher education. One way is presented by Shu et al. (2020) where a sustainability- oriented creativity, innovation, and entrepreneurship education framework is proposed that uses creative problem solving.
This feature could also be embraced by business incubators through including problem solving frameworks into their curriculum. Similarly, Karlusch et al. (2018) created a framework for a university
(2017) show in a case study how innovative training modules and case projects, in their example on waste management, can complement the SE learning experience. Also, the methodologies that are learnt during a master program are essential for advancing entrepreneurial skills and creating technology- centered firms later on (Portuguez Castro et al., 2019).
Several researchers relate their findings to intention and values. Universities should enforce the students’
intention to create a social enterprise, as well as related entrepreneurial behaviors, values, competences and outcomes, as Klapper & Farber (2016) point out. To stimulate behavior change, Parra (2013) suggests three approaches for value-based teaching: an introduction to ethics course for first-year students, a critical thinking course for every department, and teaching values across disciplines.
Moreover, "if entrepreneurs understand their own and other people’s values, they could have a better understanding of actual market changes toward sustainability”, therefore the students’ reflection skills should also be trained, according to Parra. These approaches are of high significance for business incubators as they could take up the value-based teaching and reflection skills training. Vuorio et al.
(2018) go further and distinguish between female and male students. Universities should take into consideration that the attitudes towards sustainability are highest among females and men are more attracted to entrepreneurial activity. They explain how the offered courses should educate and influence their attitudes. Furthermore, they mention that “individuals from fields other than business are more prone toward sustainable entrepreneurship”, therefore non-business students should also be targeted for a better facilitation of SE (Ibid.). Thelken & de Jong (2020) suggest distinguishing also between undergraduate and graduate courses: “once the decision to become a sustainable entrepreneur has been made, more practical and technical knowledge becomes increasingly relevant” for graduates. Before that decision, the scholars recommend value activation strategies to arouse students’ interest for SE (Thelken & de Jong, 2020). Business incubators could learn from this differentiation of target groups by understanding the attitudes and values of men and women, business and non-business students, or graduate and undergraduate students. Faludi & Gilbert (2019) investigate best practices in teaching environmental responsibility to inventors and innovators specifically for higher education in engineering, design and business. A study by Wyness et al. (2015) reveals that there is already an abundance of good practice in the entrepreneurship discipline, however sustainability is often embedded in a limited way since it “was more typically regarded as an ‘add-on’ to traditional entrepreneurial teaching".
Lastly, spillovers play an important role in higher education. This includes knowledge as well as value spillovers. This can refer both to the students within the university context, but also external actors.
Therefore, universities “should analyze their specific regional context to ensure that their chosen configuration and design (…) fit the specific regional situation in the best possible way” (Wagner et al., 2019). Fichter & Tiemann (2018) stress that university support for SE should be aimed in both directions: “support for members of the universities (students, professors, researchers) in developing
their entrepreneurial skills and help for them in starting new business ventures, as well as support for external economic actors like SMEs or startups in developing and establishing green products and sustainable business models”. Among students, personal attributes are also influenced by each other, for example motivation, sustainability orientation or perpetual reasoning (Wagner et al., 2019). These knowledge and value spillovers could also apply to the members of business incubators, such as the individual entrepreneurs and startups, employees and trainers of the incubator and external actors within the network.
Startups
The role of startups themselves for SE facilitation is also discussed by scholars. Cohen (2006) explains that “components of the formal and informal network, physical infrastructure and culture within a community” contribute to a sustainable entrepreneurial ecosystem for startups. Schaltegger & Wagner (2011) include both startups and corporate entrepreneurship when saying that “sustainable entrepreneurship can thus be described as an innovative, market-oriented and personality driven form of creating economic and societal value by means of break-through environmentally or socially beneficial market or institutional innovations. This (…) takes into account intrapreneurs". They stress the two dimensions of the market and personality of the entrepreneur. This distinction could also be picked up by business incubators in order to understand the dynamics of the incubatees.
In contrast, Dean & McMullen (2007) focus on the external factor, market failure, as a main facilitator for SE. This allows opportunity creation for startups in the first place. Meyskens & Carsrud (2013) explore which components are crucial for the success and entrepreneurial process of green-tech ventures.
They discover that the “business plan sponsor and client location are important in green-tech venture success”, and that “both green-tech venture partnership diversity and resources mobilized are related to venture development”. This means that business incubators could profit from looking at different means of opportunity creation for SE through market failure and partnerships.
Other scholars put emphasis on the personality of founders. Kirkwood & Walton (2010) and Schlange (2006) explore the motivations for becoming a sustainable entrepreneur while Kushwaha & Sharma (2017) give insights into how to further SE based on Kirkwood’s research. Barriers and risks that are perceived by founders play a vital role for the development of a sustainable business (Hoogendoorn et al., 2019). Fichter & Tiemann (2020) link the entrepreneurial orientation back to the entrepreneurial support systems which directly influence the sustainability performance of the ventures. Business incubators could leverage this understanding of founders’ motivations and hindrances to support their sustainable entrepreneurs.
Corporate Entrepreneurship
Several researchers offer insights towards corporate entrepreneurship (CE). Miles et al. (2009) offer a framework of how sustainability can be embedded into CE. In doing so, they present different forms of sustainable corporate entrepreneurship, such as sustainable product/market regeneration or process rejuvenation. The main advantage of facilitating SE within CE is to question assumptions which eventually leads to innovation by uncovering opportunities: “therefore, sustainable corporate entrepreneurship is positioned as the critical strategic choice for managers to make” (Miles et al., 2009).
Hockerts & Wüstenhagen (2010) relate to this as they discover that new entrants, “Emerging Davids”
as they call them, pursue more sustainability-related opportunities in comparison to incumbents.
However, the latter, called “Greening Goliaths”, have a more extensive reach, when they decide to engage in corporate SE activities. In between new entrants and incumbents, small medium enterprises (SME) act as drivers to bring “entrepreneurial founders forward in their sustainable agendas” (Rodgers, 2010), called “Green SME”. Schaltegger & Wagner (2011) mention both entre- and intrapreneurs in their analysis by concluding that “the spirit and the process of creating substantial market success with environmentally or socially beneficial products and services is not limited to startups; sustainable entrepreneurship can also be seen in established companies, or in the process of building up corporate ventures, spin-offs (…)”. Although the presented insights focus on more mature companies, they could be relevant for business incubators by understanding the influence and interplay of startups, SMEs and corporations and also by showing early-stage entrepreneurs what benefits SE offers to startups when growing bigger, as sustainable startups often reap benefits after a longer term than traditional startups.
University-firm Cooperation
Only two papers have been found that analyze the university-firm cooperation. While other authors within the higher education environment have mentioned that universities should engage with external actors (Wagner et al., 2019; Fichter & Tiemann, 2020), the following authors get more specific. Wijnker et al. (2015) present a concept that is driven by Eindhoven University of Technology in the Netherlands that cooperates with innovative companies in renewable energy, by placing students “in companies to study and contribute to the development and incubation of sustainable energy innovations. (…) This empowers students to identify those techno-economic aspects that are critical to innovation success and advise the entrepreneurs about these aspects". Similarly, Nave & Franco (2019) study the cooperation of a Portuguese university and a food-producing firm. They point out that both students and firms can learn how to facilitate SE: “Both sides in this cooperation relationship recognize that its [the cooperation’s] purpose was fruitfully and successfully achieved” (Navo & Franco, 2019). While more uncommon to universities, an industry cooperation could be interesting for business incubators.
However, the business incubators could create sustainable business opportunities in addition to creating learning opportunities.
Entrepreneurship Education and Training
In contrast, some researchers mention the facilitation of SE in a broad environment. These more general remarks have been subsumed by the authors under the term of Entrepreneurship Education and Training (EET). Rashid stresses the importance of repeated exposure to EET “at various stages and in different settings” (2019). The scholar considers specifically the context of fragility and poverty where EET can allow “entrepreneurship to reach its full potential” (Rashid, 2019). Including fragile and bottom-of-the- pyramid markets could be an option for business incubators to create new business opportunities for sustainable entrepreneurs.
Terán-Yépez et al. (2020) highlight the importance to “develop not only knowledge construction but also social construction, i.e. it is important that it is not only ideas that meet, but also that people meet”.
Therefore, they recommend a variety of measures to increase SE facilitation, such as hosting more social events on SE, creating multidisciplinary groups of researchers, and transferring SE knowledge to communities of other fields. Chander et al. (2020) support the need for more exchange within the SE community by stating that “interlocutors play an essential role in effectuating extensive social changes”.
Business incubators could be a suitable place for people to meet, enabling discussions and creating multidisciplinary exchange.
2.4. The Significance of Business Incubators as an Environment to Advance Sustainable Entrepreneurship
Business incubators are one of the environments discussed by scholars assessing SE facilitation. As business incubators are the environment that is in the focus of this thesis, the authors will explore the literature more extensively. Hence, it is now necessary to explore the current state of research regarding the role of business incubators in furthering SE in order to lay the theoretical groundwork for the following qualitative research.
A recent bibliometric analysis of business incubators by Albort-Morant & Ribeiro-Soriano (2016) has shown that the number of publications in this field grows slowly. From 1985 until 2015 only 450 articles were published in the Web of Science database. They argue that research on business incubators is still in its “initial stages” and the available knowledge is “fragmented because many research areas mention business incubators and its characteristics" (Albort-Morant & Ribeiro-Soriano, 2016). Dias Brito et al.
(2018) point out that the institutional environment puts pressure on business incubators to take responsibility for fostering the development of sustainable startups. Yet “little is known at present about how incubators are assuming this task” (Dias Brito et al., 2018). Looking at the nascent stage of research on business incubation alone, it is not surprising that information on sustainable business incubation is
discover the crossroads of SE and business incubation instead of contributing to the fragmented literature of SE in BI. Thus, in the following this fragmented field of literature will be explored.
Searching for literature on the intersection of business incubators and SE, it becomes apparent that the research in the field is not only scarce and fragmented but also varies in quality and level of detail. A significant portion of the articles found were not relevant to the research question. They addressed sustainability in business incubators in terms of sustainable growth and long term profitability (Bruneel et al., 2012; Lose & Tengeh, 2015; Al-Mubaraki & Busler, 2017) or discussed the topic of sustainability in a very rudimentary way (Kabiraj et al., 2010; Ahmed et al., 2020).
Besides the articles that are out of scope for this thesis, there are several publications with a very specific focus. This literature is interesting for the interface of SE and business incubation since these streams suggest topics that can become more important during the incubation program. First, these streams will be examined. Finally, research that provides a holistic, process-oriented approach will be presented.
Economic Relevance & Investment Perspective
Bank & Kanda (2016) criticize the negligence of business incubators in general to identify sustainability as an opportunity. They find that while there is “great interest in promoting SE and relatively large investments made to stimulate the growth of new, sustainable firms, incubators have found it difficult to maintain a sustainability-oriented focus” (Ibid.).
Bruno (2011) argues from a more purpose-oriented point of view that business incubators are mentioned as moderators attempting to help entrepreneurs overcome the disadvantages of capitalist economies with a fast, short-term orientation.
Some authors approach the topic from an investment perspective: Bocken (2015) for example describes sustainable venture capital as a catalyst for sustainable startups that can be decisive for the success or failure of a sustainable startup in the incubation phase.
Regional Perspective for Sustainable Development
Another stream of research focuses on the regional importance of business incubators for sustainable development. One frequently cited example is Potts’ (2010) study on the natural advantage of regions.
The scholars links sustainability, innovation, and regional development in Australia and elaborates on the resulting benefits for the whole ecosystem. Another example is by Gonsalves & Rogerson (2019) who present a case study on the Climate Innovation Centre in South Africa as a sustainable incubator.
Nicolopoulou et al. (2015) also belong in this category as they focus on the London Hub in order to take an incubation perspective on social innovation. In their case study, they studied in-depth processes, characteristics and dimensions of social innovation within the context of an incubator that is particularly driven to achieve a combination of social and economic outcomes.
In addition, there is the notion of the not-for-profit incubators which “usually fulfill a public mission first, such as regional employment and growth” (Carayannis & Von Zedtwitz, 2005). A study by Fernandes et al. (2019) shows that incubators offer a myriad of initiatives for the surrounding community, including courses, lectures, and training. The willingness to share knowledge and develop local relationships is high as more than two thirds of incubatees communicate with the community (Fernandes et al., 2019).
Ballering & Masurel (2020) took a first step into the sphere of business incubation for SE. They researched business incubators and their activities for sustainable development in the context of Europe.
Since they applied a broad definition of SE and a limited scope of research, this research rather contributes to the investigation of the regional sustainable development importance of incubators than to the field of incubators’ impact to facilitate SE.
Ecological Perspective
In contrast to this social dimension, Millette et al. (2020) approach SE in business incubators from the third dimension of the triple bottom line: the ecological perspective. They propose a framework for an incubator focused on circular economy solutions that removes barriers regarding information flow and cognitive bias which can limit entrepreneurs’ ability to recognize and develop circular economy opportunities.
Abstract Perspective
Some scholars already take a more abstract perspective. Johnson & Schaltegger (2020) highlight the main causal links between processes and outcomes according to situational, action-formation, and transformational mechanisms in entrepreneurship for sustainable development in a literature review. An earlier example is Bruno (2011) who developed “a concept for integrating incubation and sustainability issues into real-world process models” while at the same time integrating these issues into a computational concept “concerned with the question of how to assess and to value the complex stochastic process resulting from the incubation-sustainability relation”. These abstract approaches towards SE facilitation in business incubators are still scarce.
Tools for sustainability-oriented business model development
In practice, there are various approaches to further SE in business incubators by exposing the incubatees to sustainability-oriented business development theory. Since these methods and tools are relatively new and best practice examples are scarce, it is difficult for an incubator management team to identify the appropriate approaches for their incubation program (Fichter & Hurrelmann, 2021).
One approach is to implement sustainability into business models. Bocken et al. (2014) define that
stakeholder interests, including environment and society” and classified the variety of different sustainable business models into “archetypes”. One popular way to approach sustainability in the business model is the implementation of a circular business model, i.e. “design and business model strategies [that are] slowing, closing, and narrowing resource loops” (Bocken et al., 2016).
A popular tool for business development is the business model canvas proposed by Osterwalder &
Pigneur (2010). It consists of nine interconnected components: customer value proposition, segments, customer relationships, channels, key resources, key activities, partners, costs and revenues. On the one hand it helps users align profit and purpose to support more sustainability-oriented value creation on its own (Osterwalder & Pigneur, 2010), yet on the other hand, it’s economic value orientation has led to the criticism that it is necessary to develop more sustainability-oriented business models with a different tool (Bocken et al., 2014). Hence, Joyce & Paquin (2016) propose a triple layered business model canvas tool that explicitly integrated economic, environmental and social value into a holistic view of corporate sustainability. This tool can be used to identify sustainable value propositions along the triple-bottom- line, while also assessing the environmental and social impacts of the business idea.
Research with a Comprehensive, Holistic Approach on Sustainable Entrepreneurship in Incubators
The literature review about SE facilitation revealed some frameworks that are in the scope of this thesis by combining the aspects of business incubation and SE in a promising way.
Theodoraki et al. (2018) highlight that “the incubator is a key element of sustainable entrepreneurial ecosystems”. They investigate the university business incubator as a sustainable entrepreneurial ecosystem. Here, they explore the operation of three cases through the lens of social capital theory. Their analysis suggests that all three dimensions of social capital, i.e. structural, cognitive, and relational, are important to contribute to an effective and sustainable function. The structural dimension is relevant for better access to resources, the cognitive dimension strengthens relationships among ecosystem members and the relational dimension enhances complementarity and trust while the ecosystem evolves.
Klofsten et al. (2016) found that incubators usually have a high interest in both sustainable development and SE, “both supporting already sustainability-oriented firms, and also developing conventional firms in a more sustainable direction". They suggest complementing traditional business incubators with SE training programs. In this program, sustainability-oriented entrepreneurs (and firms) are offered a mix of business expertise, coaching, mentoring and networking. “In peripheral areas where recruitment could be a challenge for an incubator, but interest in sustainable business is still present” (Klofsten et al., 2016), these programs can offer an alternative to the traditional business incubation approach, and an efficient point of contact for interested entrepreneurs. In addition, Klofsten & Bienkowska (2021) have carried out an exploratory survey with 52 incubators from Germany, Finland and Sweden observing the integration of sustainability aspects into their operations. As a result, they construct a “sustainability
