Sustainable entrepreneurship, innovation, and business models: Integrative framework and propositions for future research

Florian Lüdeke‐Freund

doi:10.1002/bse.2396

Abstract

AbstractThis article introduces the business models for sustainability innovation (BMfSI) framework to study how business models mediate between sustainability innovations and business cases for sustainability. The BMfSI framework integrates two major perspectives (implicitly) found in the sustainable business model literature. The first is the agency perspective. It takes into consideration that some form of agency is needed, that is, “someone” who takes decisions and acts. Sustainable entrepreneurs are discussed as those agents who align their new or existing business models with sustainability innovations in order to be successful in business and to create value with and for stakeholders. The second perspective is the systems perspective, which acknowledges that business models are always embedded within sociotechnical contexts through which, for example, public policies, private financing, or stakeholder interests influence whether and how business models can be developed. The agency and systems perspectives are integrated in the so‐called business model mediation space. This theoretical notion embraces the decisions and activities pursued by sustainable entrepreneurs as they align their business models with sustainability innovations on the one hand and the influence of environmental contingencies, barriers, and stakeholders from the sociotechnical context on the other hand. The paper concludes with propositions for future research derived from the BMfSI framework.

Highlights

Inventions with the potential to create positive ecological and social effects need to leave their niches to turn into effective sustainability innovations (Boons, Montalvo, Quist, & Wagner, 2013; Geels, 2010)
This article presents the business models for sustainability innovation (BMfSI) framework to structure core issues that emerge at the diverse intersections of sustainable entrepreneurship, sustainability innovation, and business model research (Boons et al, 2013; Schaltegger, Hansen, & Lüdeke‐Freund, 2016)
The framework builds on the theoretically grounded assumption that the most important business model function for the creation of ecological, social, and economic value is its ability to mediate between innovations, for example, new processes, products or services, and valuable outcomes such as solved ecological and social problems

Summary

| INTRODUCTION

Inventions with the potential to create positive ecological and social effects need to leave their niches to turn into effective sustainability innovations (Boons, Montalvo, Quist, & Wagner, 2013; Geels, 2010) Sustainable entrepreneurs face this challenge whenever they try to disseminate new solutions to sustainability problems through commercial activities and whenever they aim for large market shares and socio‐ political influence (Hockerts & Wüstenhagen, 2010; Schaltegger, Hansen, & Lüdeke‐Freund, 2016; Schaltegger & Wagner, 2011). Regardless of personal motivations and success metrics, sustainable entrepreneurs need to commercialise their problem solutions and transform markets to create private and public benefits on a significant scale and for various stakeholders (Freudenreich et al, 2019; Schaltegger, Lüdeke‐Freund, Hansen, & Lüdeke‐Freund, 2016) This means that they must reduce or even eliminate the market imperfections and negative externalities that lead to humanity's unsustainable development (Cohen & Winn, 2007).

| RESEARCH METHOD

| DISCUSSION AND PROPOSITIONS FOR FUTURE RESEARCH