Bridging the governance divide: The role of SMEs in urban sustainability interventions

Abstract

Private sector actors play important roles in urban governance systems, including by supporting innovation, responding to new opportunities, and exercising control over a significant proportion of resource consumption and environmental degradation. Yet, there is a dearth of knowledge regarding the role of small- and medium-sized enterprises (SMEs) in urban sustainability governance. Responding to this gap, this study examines how SMEs are mobilized in sustainability initiatives in the Greater Toronto Area (GTA), Canada. The paper does so by presenting analysis of a database of 130 initiatives and 53 interviews. The results demonstrate limitations of existing governance strategies in enrolling SMEs in sustainability governance – a problem which we conceptualize as a ‘governance divide.’ This divide consists of three interconnected phenomena: 1) practical barriers related to engaging SMEs in sustainability-oriented policy-making and programs; 2) cognitive barriers created by differences in approach, language, and modes of operation between the public sector and SMEs; and 3) normative barriers produced by viewing SMEs as performing predominantly economic functions in society. We conclude that increasing the inclusion of SMEs in local sustainability efforts may unlock greater opportunities for transformative change.