JOHANNES KEPLER

UNIVERSITY LINZ

Altenberger Straße 69

4040 Linz, Austria

jku.at

DVR 0093696

Author

Marcella Krawinkler, BA

Submission

Institute of

Innovation Management

Thesis Supervisor

Univ.-Prof. Dr.

Robert J. Breitenecker

September 2020

ENTREPRENEURIAL

ECOSYSTEMS

FACILITATING

SUSTAINABLE

ENTREPRENEURSHIP

Master’s Thesis

to confer the academic degree of

Master of Science

in the Master’s Program

Leading Innovative Organizations

September 29, 2020 II

Sworn Declaration

I hereby declare under oath that the submitted Master's Thesis has been written solely by me

without any third-party assistance, information other than provided sources or aids have not been

used and those used have been fully documented. Sources for literal, paraphrased and cited

quotes have been accurately credited.

The submitted document here present is identical to the electronically submitted text document.

Hofkirchen im Traunkreis, 29 September 2020

Marcella Krawinkler

September 29, 2020 III

Acknowledgments

First, I would like to thank my husband and our two little children for their great understanding over

the past 15 months. Although the master's program was rewarding and connected with many

personal learnings, it was a tour de force with countless hours in front of the computer than playing

with the children or having a nice dinner. And not to forget the numerous discussions with A about

the master thesis – I want you to know that even if I don't listen to you (immediately), your inputs

and opinions are the most important ones for me. I am so grateful to have you as a family. I love

you all infinitely.

Studying again at the age of 36 next to family was only possible with the generous support of our

families in Upper Austria and Vienna. My special thanks go to Goli and H. Oma for their ongoing

and warm care of L and V. Without them, I would not have been able to do my studies to this

extent.

I would also like to thank all interview partners who openly and honestly shared their experiences,

expertise, and views.

Finally, I would like to thank my thesis supervisor Univ.-Prof. Dr. Robert J. Breitenecker for his

trust throughout the last few months.

I dedicate this thesis to my beloved grandparents: Für Omi und Opi.

September 29, 2020 IV

Abstract (English)

Sustainable entrepreneurship and entrepreneurial ecosystems merge into the concept of

sustainable entrepreneurial ecosystems - a topic that has been increasingly discussed by both

academic scholars, practitioners, and policymakers in the past decade in response to the

sustainable development paradigm. This work contributes to research on sustainable

entrepreneurial ecosystems by examining the overall picture of sustainable entrepreneurial

ecosystems. It deepens the understanding of the defining pillars and characteristics that shape

them. Furthermore, the present master thesis can provide an anchoring point for actors to

understand the heterogeneity of different ecosystems in terms of context, complexity, geography,

agency, network, and governance. In this way, tailor-made instruments and measures can be

developed, which contrast with universal one-size-fits-all approaches.

The master thesis involves a well-founded literature review of the concepts of sustainable

entrepreneurship and (sustainable) entrepreneurial ecosystems, which will be synthesized in a

theoretical framework. This framework will serve as a basis for a qualitative study, in which

interviews with selected actors (i.e., sustainable entrepreneurs, financial supporters,

representatives of intermediary organizations, and business partners) in sustainable

entrepreneurial ecosystems in Austria were conducted. The study concludes with a conceptual

framework that integrates the empirical results into the findings derived from the literature

research.

Abstract (German)

Nachhaltiges Unternehmertum und unternehmerische Ökosysteme verschmelzen zum Konzept

der nachhaltigen unternehmerischen Ökosysteme - ein Thema, das im letzten Jahrzehnt als

Antwort auf das Paradigma der nachhaltigen Entwicklung von Wissenschaftler*innen,

Praktiker*innen und politischen Entscheidungsträger*innen zunehmend diskutiert wird. Diese

Arbeit trägt zur Forschung über nachhaltige unternehmerische Ökosysteme bei, indem sie das

Gesamtbild nachhaltiger unternehmerischer Ökosysteme untersucht. Sie vertieft das Verständnis

über die bestimmenden Säulen und Merkmale, die nachhaltige unternehmerische Ökosysteme

prägen. Darüber hinaus kann die vorliegende Masterarbeit einen Ankerpunkt für Akteur*innen

darstellen, um die Heterogenität verschiedener Ökosysteme in Bezug auf Kontext, Komplexität,

Geographie, Akteur*innenschaft, Netzwerk und Steuerung zu verstehen. Auf diese Weise können

zugeschnittene Instrumente und Maßnahmen entwickelt werden, die im Gegensatz zu universalen

Ansätzen stehen.

Die Masterarbeit beginnt mit einer fundierten Literaturübersicht über die Konzepte des

nachhaltigen Unternehmertums und (nachhaltiger) unternehmerischer Ökosysteme, die in einem

theoretischen Rahmen zusammengefügt werden. Dieser Rahmen dient als Grundlage für eine

qualitative Studie, in der Interviews mit ausgewählten Akteur*innen (d.h. nachhaltige

Unternehmer*innen, finanzielle Unterstützer*innen, Vertreter*innen von

Intermediärorganisationen und Geschäftspartner*innen) in nachhaltigen unternehmerischen

Ökosystemen in Österreich geführt wurden. Den Abschluss bildet ein konzeptioneller Rahmen,

der die empirischen Ergebnisse in die aus der Literaturrecherche abgeleiteten Erkenntnisse

integriert.

September 29, 2020 V

Table of Content

Sworn Declaration .......................................................................................................................................... II

Acknowledgments ......................................................................................................................................... III

Abstract ........................................................................................................................................................ IV

Table of Content ............................................................................................................................................ V

List of Tables ............................................................................................................................................... VII

List of Figures ............................................................................................................................................. VIII

Abbreviations ................................................................................................................................................ IX

1. Introduction ............................................................................................................................................. 1

Relevance and Motivation of the Topic .......................................................................................... 1

Research Questions and Objectives .............................................................................................. 2

Research Process .......................................................................................................................... 3

Structure of the Thesis ................................................................................................................... 4

2. Theoretical Background ......................................................................................................................... 5

Sustainable Entrepreneurship ........................................................................................................ 5

2.1.1. Pairing Sustainable Development and Entrepreneurship .................................................. 7

2.1.2. In Search of a Clear Definition ........................................................................................... 9

2.1.3. Social Entrepreneurship and Environmental Entrepreneurship as Related Concepts .... 13

2.1.4. Sustainable Entrepreneurship Process ........................................................................... 16

2.1.5. Synopsis .......................................................................................................................... 21

Entrepreneurial Ecosystems ........................................................................................................ 23

2.2.1. The Idea behind Traditional Entrepreneurial Ecosystems ............................................... 24

2.2.2. Systemic Perspectives on Entrepreneurial Ecosystems ................................................. 25

2.2.3. Dynamic Perspectives on Entrepreneurial Ecosystems .................................................. 32

Sustainable Entrepreneurial Ecosystems .................................................................................... 37

2.3.1. Perspectives on Sustainable Entrepreneurial Ecosystems ............................................. 38

2.3.2. Synopsis .......................................................................................................................... 42

Theoretical Framework ................................................................................................................ 45

3. Methodology ......................................................................................................................................... 48

Research Philosophy ................................................................................................................... 48

Qualitative Research Design ........................................................................................................ 49

3.2.1. Data Collection ................................................................................................................. 49

3.2.2. Data Analysis ................................................................................................................... 55

September 29, 2020 VI

4. Results .................................................................................................................................................. 57

Context ......................................................................................................................................... 57

Complexity .................................................................................................................................... 59

Geography .................................................................................................................................... 60

Agency ......................................................................................................................................... 63

Network ........................................................................................................................................ 67

Governance .................................................................................................................................. 69

Conceptual Framework ................................................................................................................ 72

5. Conclusion ............................................................................................................................................ 75

Theoretical and Practical Implications ......................................................................................... 75

Limitations of the Study ................................................................................................................ 76

Avenues for Future Research ...................................................................................................... 77

6. References ........................................................................................................................................... 78

September 29, 2020 VII

List of Tables

Table 1: Selection of definitions for sustainable entrepreneurship (in alphabetical order by name) ........... 10

Table 2: Defining elements of sustainable entrepreneurship (own depiction) ............................................. 21

Table 3: Distinguishing characteristics between different types of entrepreneurship .................................. 22

Table 4: Components of Isenberg's ecosystem domains (adopted from Isenberg, 2011b) ........................ 28

Table 5: Selection of definitions for entrepreneurial ecosystems (in alphabetical order)............................. 43

Table 6: Selection of definitions for sustainable entrepreneurial ecosystems (in alphabetical order) ......... 44

Table 7: Selection of study participants ....................................................................................................... 51

Table 8: Interview guideline (own depiction) ................................................................................................ 53

Table 9: Contextual interview data (own depiction) ..................................................................................... 54

September 29, 2020 VIII

List of Figures

Figure 1: Research process (own depiction) .................................................................................................. 3

Figure 2: Sustainability entrepreneurship model (Tilley & Young, 2009: 86) ............................................... 11

Figure 3: Linking sustainability and development: antecedents - opportunities - entrepreneurial action

(Shepherd & Patzelt, 2017: 162) .................................................................................................................. 12

Figure 4: Conceptualization of hybrid organizations (Giones et al., 2020: 6) .............................................. 14

Figure 5: Sustainable entrepreneurship process (Belz & Binder, 2017: 14) ................................................ 16

Figure 6: Organization design requirements (Parrish, 2010: 517) ............................................................... 19

Figure 7: Business model framework (Bocken, Short, Rana, & Evans, 2014: 43) ...................................... 20

Figure 8: Conceptual framework of the entrepreneurial system (Spilling, 1996: 93) ................................... 26

Figure 9: Entrepreneurial system components ............................................................................................ 27

Figure 10: Domains adopted from Isenberg's entrepreneurial ecosystem framework (Isenberg, 2011b) ... 27

Figure 11: Framework of entrepreneurial innovation and context (Autio et al., 2014: 1098) ....................... 29

Figure 12: Entrepreneurial ecosystem - elements and outputs (Stam & Van de Ven, 2019) ...................... 30

Figure 13: Ecosystem attributes and their relationships (Spigel, 2017) ....................................................... 31

Figure 14: Evolution of an entrepreneurial ecosystem (Mack & Mayer, 2016: 2122) .................................. 34

Figure 15: Dynamic entrepreneurial ecosystem lifecycle model (Cantner et al., 2020: 8)........................... 35

Figure 16: Transformation of entrepreneurial ecosystems (Spigel & Harrison, 2018: 162) ......................... 36

Figure 17: Effects of contextual factors on SE activities (Pankov et al., 2019: 10) ...................................... 39

Figure 18: Conditions nurturing SEEs (Divito & Ingen-Housz, 2019) .......................................................... 40

Figure 19: Idealized stakeholder framework of a SEE (Bischoff & Volkmann, 2018: 183) .......................... 41

Figure 20: Theoretical framework (own depiction) ....................................................................................... 45

Figure 21: SEE stakeholder framework (Bischoff & Volkmann, 2018) - ...................................................... 50

Figure 22: Extract from interview transcription (own depiction) ................................................................... 55

Figure 23: Conceptual framework (own depiction)....................................................................................... 72

September 29, 2020 IX

Abbreviations

Abbreviation Meaning

3BL triple bottom line

e.g. exmpli gratia (for example)

ed. note editor's note

EE(s) Entrepreneurial ecosystem(s)

EO entrepreneurial orientation

EU European Union

i.a. inter alia

i.e. id est (that is)

IUCN International Union for Conservation of Nature

KPI key performance indicator

n/a not available

OECD Organisation for Economic Co-operation and Development

ROI return on investment

SDGs Sustainable Development Goals

SE Sustainable entrepreneurship

SEE(s) Sustainable entrepreneurial ecosystem(s)

SEO sustainable entrepreneurial orientation

SEP Sustainable entrepreneurship process

SO sustainability orientation

UN United Nations

US United States

WCED World Commission on Environment and Development

September 29, 2020 1/82

1. Introduction

"Our biggest challenge in this new century is to take an idea that seems abstract - sustainable development - and turn it into a reality for all the world's people."

(Kofi Annan, UN Secretary-General, 2001)

"We [scientific researchers – ed. note] also need to change tack away from following behind the mainstream business community in their attempts to tackle environmental and social problems and start developing a path towards sustainable development for them to follow."

(Tilley & Young, 2009: 91)

In the past three decades, the principle of sustainable development became very central to

political agendas. According to the Brundtland Report, published by the World Commission on

Environment and Development (WCED) in 1987, sustainable development must warrant "the

needs of the present without compromising the ability of future generations to meet their own

needs" (WCED, 1987: 24). Sustainable development should be reached by considering the three

pillars of ecology, society, and economy (Gast, Gundolf, & Cesinger, 2017). Moreover, the United

Nations (UN) committed to 17 global Sustainable Development Goals (SGDs) associated with 169

targets, to be achieved by 2030, aiming to end poverty, to protect the planet from degradation,

and to ensure prosperity across generations (United Nations General Assembly, 2015). The

European Union (EU) responded to the SGDs, for instance, by introducing The European Green

Deal accompanied by the European Pillar of Social Rights to address climate change,

environmental degradation, and social injustice (European Commission, 2019). The overall

objective of sustainability-oriented policies and action plans is to foster a paradigm change in

institutions that shape the present and future real-world interactions impacting economy, society,

and ecology.

Relevance and Motivation of the Topic

Without a doubt, opening up a policy window for sustainable development to put the issue on

political agendas and create formal policies is an essential step towards a sustainable and

purpose-driven economy (Farley et al., 2007). But since global solutions are hard to accomplish,

solutions to pressing concerns are best initiated locally. Here, sustainable entrepreneurship

comes into play. In contrast to traditional entrepreneurs striving primarily for economic gains,

sustainable entrepreneurs aim at balancing the pursuit of social, environmental, and economic

goals (Hall, Daneke, & Lenox, 2010). This is called a triple bottom line approach (3BL) comprising

"profit, social good and environmental protection" (Muñoz & Cohen, 2018: 305). Following a

Schumpeterian perspective, "entrepreneurial processes can destroy existing market structures

and consumption patterns, and replace them with more sustainable alternatives" (Johnson &

Schaltegger, 2019: 2). In line with this statement, sustainable entrepreneurship is increasingly

associated with offering vital contributions to a purpose-driven and sustainable economy (e.g.,

Hall et al., 2010; Hockerts & Wüstenhagen, 2010).

Notwithstanding, entrepreneurship is not evolving in a vacuum (Isenberg, 2014). For an

entrepreneurial venture to grow, it is necessary to access resources such as talent, money, or

working space. This is accompanied by governmental policies enabling and nurturing both

entrepreneurship and regional development. A supportive network, comprising, e.g.,

September 29, 2020 2/82

intermediaries, other entrepreneurs, financial investors, universities or large firms, is seen as

indispensable for developing successful entrepreneurial ventures (Isenberg, 2010, 2011a; Stam,

2015; Stam & Van de Ven, 2019).

Subsequently, entrepreneurs - regardless of whether labeled conventional or sustainable - are

embedded in broader temporal, spatial, institutional, socioeconomic, and informational contexts

which influence their activities to a sky-high degree. The concept of an entrepreneurial

ecosystem (EE), which gained attention likewise by researchers, practitioners, and policymakers,

especially in the past decade, reflects this embeddedness. Accordingly, entrepreneurial ventures

are locally placed and require a supportive environment consisting of institutions and resources.

The focal entrepreneurial actor is highly interdependent, respectively interacting with other

influential partners in the ecosystem (Mason & Brown, 2014). Yet, entrepreneurial ecosystems are

unique and complex adaptive systems (Roundy, Bradshaw, & Brockman, 2018). This leads to

heterogeneity of EEs that also reflect different forms of entrepreneurship. In line with this, it is the

concept of a sustainable entrepreneurial ecosystem (SEE) that supports sustainable

entrepreneurship.

The present thesis draws on the concepts of sustainable entrepreneurship and entrepreneurial

ecosystems, which amalgamate into the idea of sustainable entrepreneurial ecosystems. The

study explores the elements and factors that define and shape a sustainable entrepreneurial

ecosystem. Hence, the thesis aims to explore the constituting aspects and contextual factors of

an entrepreneurial ecosystem that are decisive for the proper facilitation of sustainable

entrepreneurship. By synthesizing theoretical findings based on relevant academic literature and

empirical results derived from interviews with central actors in sustainable entrepreneurial

ecosystems, the thesis contributes to sustainable entrepreneurial ecosystem research. It supports

practitioners by providing a big picture that may guide the evaluation regarding which central

elements and factors are present or missing in existing SEEs.

Research Questions and Objectives

The thesis aims to answer the following primary research question:

Which elements and factors shape an entrepreneurial ecosystem

facilitating sustainable entrepreneurship?

To fully explore this issue, the afore-mentioned research question is divided into the following two

subquestions:

Subquestion 1

Based on academic literature, what are the core elements and driving factors of traditional

and sustainable entrepreneurial ecosystems?

In order to provide a sound basis for the empirical part, existent theoretical concepts will be

gathered and compiled into a theoretical framework.

Subquestion 2

From actors' perspectives, which elements and factors are relevant in entrepreneurial

ecosystems to explicitly support and enhance sustainable entrepreneurship?

September 29, 2020 3/82

Drawing on the experiences, observations, and perceptions of a distinct set of actors embedded

in sustainable entrepreneurial ecosystems will improve understanding on the pertinent

configuration of ecosystem elements and the essential contextual factors that enable sustainable

entrepreneurship.

Research Process

Drawing on academic literature can help practitioners and managers to expand knowledge in the

fields of sustainable entrepreneurship and sustainable entrepreneurial ecosystems. Conversely,

practitioners can inform researchers by providing their insights, experiences, and expectations. In

order to contribute to this bilateral knowledge transfer, this thesis does not only give a profound

elaboration on the relevant literature concerning sustainable entrepreneurship, entrepreneurial

ecosystems, and sustainable entrepreneurial ecosystems. It also takes on an empirical

perspective by exploring and describing the principal elements and factors of entrepreneurial

ecosystems for sustainable entrepreneurship through the eyes of various actors engaged in

sustainable entrepreneurial ecosystems.

Figure 1 illustrates the research process underlying the thesis at hand.

Figure 1: Research process (own depiction)

September 29, 2020 4/82

The whole research process is guided by an interpretivist approach (see subchapter 3.1.), which

shapes all steps in the research process ranging from the formulation of research questions to

qualitative data collection and analysis.

The literature reviews (see chapter 2) offers the theoretical background and contains a selection

of the relevant academic literature concerning the topics of sustainable entrepreneurship,

entrepreneurial ecosystems, and sustainable entrepreneurial ecosystems. It serves as the basis

for the design of the theoretical framework (see subchapter 2.4.). The latter will inform the

empirical part of the study as it is pivotal to the qualitative research techniques concerning data

collection and data analysis. The results of qualitative research will, in turn, be processed into a

conceptual framework. It is a derivative of the theoretical framework which incorporates the

findings from the empirical study.

The nature of the research integrates both exploratory and descriptive elements. An exploratory

study seeks "to discover what is happening and gain insights about a topic of interest" (Saunders,

Lewis, & Thornhill, 2019: 186), whereas descriptive research tries "to gain an accurate profile of

events, persons or situations" (Saunders et al., 2019: 187).

Structure of the Thesis

The remainder of the thesis is structured as follows:

The second chapter reviews the related state-of-the-art literature concerning sustainable

entrepreneurship, entrepreneurial ecosystems, and sustainable entrepreneurial ecosystems. In

this regard, a reasonable definition of sustainable entrepreneurship will be delineated that

accommodates seminal related work while simultaneously facilitating the aims and objectives of

the thesis. The significant characteristics of different forms of entrepreneurship (i.e., traditional,

environmental, social, sustainable) will be contrasted to put related concepts in mutual relation.

Moreover, a theoretical framework will be deduced that serves as a starting point to examine the

concept of sustainable entrepreneurial ecosystems.

The third chapter explains the applied methodology. A rationale for the chosen research

philosophy provides the ground for the selected data collection and analysis techniques.

Regarding qualitative research design, data collection includes information regarding the selection

of participants, the interview guideline, and contextual data regarding the study participants.

The fourth chapter presents the results of the qualitative study. Results directly refer to the

theoretical framework as elaborated in chapter 2 and are underpinned by quotations from the

interviews to grasp and catch the core findings fully.

The final section begins with theoretical and practical implications by summing up the essential

learnings concerning the research question and the respective subquestions. Limitations of the

study and potential future research avenues mark the concluding remarks of the thesis at hand.

September 29, 2020 5/82

2. Theoretical Background

This chapter establishes the foundational basis for the remainder of the thesis about what is

known. By elaborating on the major definitions, concepts, models, and findings of selected studies,

the reader will gain insight into relevant academic literature. The review serves as a basis for

gaining a general domain knowledge of the central topics. In this sense, the author draws on

seminal references about sustainable entrepreneurship, entrepreneurial ecosystems, and

sustainable entrepreneurial ecosystems. The latter is the conceptual amalgamation of the former

two topics. The sections about sustainable entrepreneurship and sustainable entrepreneurial

ecosystems conclude with a synopsis highlighting the core definitions and conceptual pillars

underlying the respective theories. At the end of the chapter, both outlines fuse to form a

theoretical framework that will guide the subsequent empirical examination of the subject of the

graduation paper. In this sense, the written elaboration stands in line with an integrative literature

review, which is defined as "a form of research that reviews, critiques, and synthesizes

representative literature on a topic in an integrated way such that new frameworks and

perspectives on the topic are generated." (Torraco, 2005: 356) Since sustainable

entrepreneurship and sustainable entrepreneurial ecosystems are relatively young topics, they

"would benefit from a holistic conceptualization and synthesis of the literature to date." (Torraco,

2005: 357)

In order to find appropriate academic literature based on the keywords 'sustainable

entrepreneurship', 'entrepreneurial ecosystems', and 'sustainable entrepreneurial ecosystems',

systematic searches were conducted in sequential steps. Initially, the databases Business Source

Premier, EconLit, and Web of Science were selected to perform queries to extract a first set of

relevant articles. This first set was expanded iteratively by a forward- and backward-snowballing

approach. Independent from the chosen search tools, only peer-reviewed, full-length articles from

scholarly journals, available online, and published in English were included. As the paper deals

with relatively nascent topics in science, most of the items were published between 2010 and

2020. After collecting a decent quantity of articles, the publishing journals were evaluated based

on specific journal rankings. For this reason, journal rankings were either taken from VHB-

JOURQUAL3 or, if the journal was not available in the VHB list, from the SCIMAGO Journal Rank.

This evaluation was undertaken to assess the quality and impact of the chosen research papers

and give the author an orientation on selecting relevant (and deselecting irrelevant) articles. A

specific search of grey literature published by recognized inter- and supranational organizations

such as the OECD, the UN, or the World Economic Forum, supplements the final set of academic

articles.

Sustainable Entrepreneurship

Prior to a profound review of the sustainable entrepreneurship literature, this chapter starts with a

basic introduction into the realm of entrepreneurship. The focus will be placed on specific

definitions and concepts that are central for the subsequent elaboration on the topic.

Entrepreneurship as a distinct and legitimate domain in business research gained attention,

especially since the 1990s (Baumol, 1990; Venkataraman, 1997). Venkataraman (1997) was

among the first who asserted the absence of a widely admitted definition of entrepreneurship. He

proposed the "nexus of opportunity and enterprising individual" (Venkataraman, 1997: 123) as the

significant constituting element. Hence, he defined entrepreneurship as a field that "seeks to

September 29, 2020 6/82

understand how opportunities to bring into existence "future" goods and services are discovered,

created, and exploited, by whom, and with what consequences." (Venkataraman, 1997: 120; italics

in original). Only if opportunities for future goods and services exist and are perceived as valuable

by an entrepreneur, the direct entrepreneurial action will then encompass the decision to take

advantage of the opportunities in focus. Consequently, discovery and exploitation of opportunities

are the significant activities for an entrepreneur which, in turn, result in economic profit. (Shane &

Venkataraman, 2000; Venkataraman, 1997)

Regarding the discovery activity, two factors straightly linked to the enterprising individual may

support this action. First, getting hold of utile information that facilitates the recognition of

opportunities. Second, the cognitive ability of an individual to process this information advantage

and to draw upon it by identifying new and useful ideas. The activity of exploitation is associated

with the subjective decision to pursue a specific opportunity. Whether a decision is for or against

the idea, depends on the nature of the opportunity and the entrepreneur's traits and attitudes. A

myriad of opportunities comes along with different expected values concerning the entrepreneurial

profit. Accordingly, the expected value must exceed the opportunity costs of other known

alternatives. Besides, individual entrepreneurs vary in their characteristics, such as optimism, risk

attitude, or ambitiousness. They might also differ in their access to scarce resources, such as

financial or human capital. Both discovery and exploitation require the objective existence of a set

of varying opportunities. (Shane & Venkataraman, 2000)

What the term opportunities precisely means in entrepreneurship literature is primarily shaped by

Drucker (1985), who identified three sources for entrepreneurial opportunities: (1) inefficiencies in

existing markets, for instance, caused by information asymmetries or technological limitations, (2)

exogenous changes in the social, political, demographic, or economic environment which are not

within the influenceable scope of the individual entrepreneur, and (3) inventions and discoveries

producing new knowledge and information (Thompson, Kiefer, & York, 2011, cited from Drucker,

1985).

If such opportunities are taken and exploited by an entrepreneur, they may result in productive

(i.e., innovative) entrepreneurship, a term initially coined by the American economist William J.

Baumol (1990). In contrast to unproductive or even destructive forms of entrepreneurship,

productive entrepreneurial activity positively contributes to economic development. By scrutinizing

and building upon Baumol's seminal work, Eliasson and Henrekson (2004) highlight the

combination of productive entrepreneurship with individual creativity to utilize, amalgamate, or re-

combine various inputs or resources, such as human or monetary capital, in a profit-making way.

A vital condition for productive entrepreneurship to flourish is an institutional environment or

framework fostering economic growth (Aeeni, Motavaseli, Sakhdari, & Dehkordi, 2019; Baumol,

1990; Eliasson & Henrekson, 2004). Though, it is the entrepreneur with his activities who becomes

a focal actor in driving economic prosperity.

This view is criticized for being "the "standard model" of entrepreneurship" (Welter, Baker, &

Wirsching, 2019: 321), aiming first and foremost at increasing profits and growth rates through

technology or business model innovation (Davila, Epstein, & Shelton, 2005). Entrepreneurship

research has to go beyond this vantage point, given the definition that "entrepreneurship is about

the creation and nurturing of new organizations" (Welter et al., 2019: 324). Only considering

traditional entrepreneurship being described as "high-growth, technology-driven, and venture

capital-backed" (Welter et al., 2019: 320), would fall too short in explaining the differences of

September 29, 2020 7/82

empirical observations in entrepreneurship research. Heterogeneity regarding diverse forms of

entrepreneurship is therefore appreciated, and a narrowed view on the domain shall be broadened

up. Correspondingly, the focus in research has expanded to alternative forms of entrepreneurship

going beyond pure profit-orientation, which may also encompass valuable contributions to the

environment and society (Hall et al., 2010; Shepherd, 2015; Welter et al., 2019). Accordingly,

scholars commenced researching entrepreneurship that is beneficial to the broader social and

natural environment and may mitigate hardships. The non-economic motivation of enterprising

individuals for doing good then guides the individual-opportunity nexus characterizing any form of

entrepreneurship (Shepherd, 2015). Entrepreneurship research "that is more compassionate and

prosocial" (Shepherd, 2015: 501) is, at present, either labeled as social entrepreneurship,

environmental entrepreneurship, or sustainable entrepreneurship. All of them amplify the field of

entrepreneurship research as relatively nascent but influential concepts (Muñoz & Cohen, 2018;

Thananusak, 2019; Thompson et al., 2011).

The remainder of this section first elaborates on the general concepts of sustainable development

and grand challenges, and their way into entrepreneurship, accumulating in the concept of

sustainable entrepreneurship. In the next step, a variety of definitions and concepts is presented

acknowledging that, to date, there is no commonly accepted definition. By delineating the

definitions of recognized scholars in chronological order, the reader will get a glimpse of the

scientific evolution of the subject. The third section will draw on environmental entrepreneurship

and social entrepreneurship as related, preceding concepts. This will allow the author to set out

boundaries and intersections between the three fields. Fourth, a close look is taken at the

sustainable entrepreneur and the sustainable entrepreneurial process. The section will end with a

synopsis which not only sums up the essence of sustainable entrepreneurship but also offers a

significant input for the ensuing theoretical framework.

2.1.1. Pairing Sustainable Development and Entrepreneurship

The sustainability focus in entrepreneurship was triggered by the claim for sustainable

development, which gained far-reaching importance as a public policy priority since the 1970s

(IUCN, 1980; Parrish, 2010; Thananusak, 2019; Thompson et al., 2011; UN Conference on the

Human Environment, 1972; WCED, 1987). In this regard, sustainable development stands for "the

need to integrate the pursuit of improved human wellbeing with the necessity of halting and

reversing systematic ecological degradation" (Parrish, 2010: 511). Though, for sustainable

development to become a reality, it needs the "man's capability to transform his surroundings"

while continuously "discovering, inventing, creating and advancing" (UN Conference on the

Human Environment, 1972: 3). Consequently, in their strive for economic development, human

beings "must come to terms with the reality of resource limitation and the carrying capacities of

ecosystems, and must take account of the needs of future generations." (IUCN, 1980: 1). With the

emergence of the sustainable development paradigm, the hitherto prevailing view that economic

growth and environmental protection are mutually exclusive goals started gradually to be shaken

(Tilley & Young, 2009). Not only policymakers but also researchers and entrepreneurs began to

think up entrepreneurship from a new angle. They became increasingly reflexive regarding taken-

for-granted assumptions and beliefs of conventional forms of entrepreneurship (Parrish, 2010).

According to the UN, "sustainable development is not a fixed state of harmony, but rather a

process of change in which the exploitation of resources, the direction of investments, the

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orientation of technological development, and institutional change are made consistent with future

as well as present needs." (WCED, 1987: 25). In this process of change, entrepreneurship can

and has to take a central role in promoting and attaining sustainable development with the

sustainable entrepreneur as the engine (Cohen & Winn, 2007; Muñoz, 2013; Thananusak, 2019).

Already in the 2000s, when sustainable entrepreneurship became a topic of increasing interest in

research, Cohan and Winn recognized the tractive force of "a new breed of entrepreneurial firm,

one that is driven to contribute to a society which is sustainable, not just from an economic

perspective, but from an environmental and social perspective as well." (Cohen & Winn, 2007: 30)

Tilley & Young denoted sustainable entrepreneurs "as the true wealth generators of the future"

(2009: 79) who can contribute and gear "toward a more sustainable society." (2009: 83) According

to the authors, an entrepreneur is no longer representing the stereotype of a homo economicus

mainly attributed to being a "competitor, wealth generator, innovator, creative, change-agent and

risk-taker" (2009: 83) who acts rationally in strive for economic and self-centered interests

(Schaefer, Corner, & Kearins, 2015). Instead, entrepreneurial individuals can overcome the

functional expectation in terms of economic growth and profit-orientation towards the integration

of social and environmental values and performance into their organizations. The new and

integrative focus in the form of sustainable entrepreneurship will then create sound economic,

social, and environmental wealth. Parrish (2010) brings in a similar perspective by which the goal

of sustainable development lies not in rent-seeking. Instead, the purpose of a sustainable

enterprise shifts towards ecological and social outcomes, and market-based monetary income is

perceived not only as the ends but also as the means to achieve these goals (Schaltegger &

Wagner, 2011).

Considering the above-mentioned, entrepreneurs are not only a significant driver for economic

development, but they also play a leading role on the front-line in combatting the pressing and

unresolved social and environmental hardships of our time (Thananusak, 2019). In this regard,

the notion of grand challenges found its way into business research comprising "specific critical

barriers whose removal would significantly help solve globally important societal and/or

environmental problems" (George, Merrill, & Schillebeeckx, 2020: 3). Examples are global

warming, environmental degradation, biodiversity loss, overexploitation of scarce resources,

poverty, social inequalities, or irresponsible consumption and production patterns. Grand

challenges are most prominently captured by the Sustainable Development Goals formulated by

the UN (United Nations General Assembly, 2015). Ferraro, Etzion, Gehman (2015) identified

three main characteristics of grand challenges, which they refer to as being complex, uncertain,

and evaluative. The attributed complexity is due to the nature of the challenge, the number of

actors involved, and their emergent, nonlinear dynamics, which often imputes immutability of the

challenge in focus. Radical uncertainty relates to the unfeasibility of forecast and computation,

making it difficult to point out "possible future states of the world" (Ferraro et al., 2015: 364) and

provide a sound basis for decision-making and action. The evaluative facet describes the multi-

perspective approach towards grand challenges as they might be defined, interpreted, associated,

and understood differently across people, times, and places.

Against this background, sustainable entrepreneurs are ascribed as having the potential to

transform society and to create a sustainable economy that is ameliorating adverse environmental

and social conditions. They are therefore valued as "panacea for many social and environmental

concerns" (Hall et al., 2010: 440) through the provision of sustainable and innovative products,

services, and processes (Hall et al., 2010; Schaltegger & Wagner, 2011). Schaltegger & Wagner

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(2011) hold that "sustainable entrepreneurship pulls the whole market towards sustainability and

influences the society as a whole." (Schaltegger & Wagner, 2011: 228). Also, Schäfer, Corner,

and Kearins emphasize that "entrepreneurship […] has the potential to transform industries,

institutions and societies" (2015: 395). Accordingly, sustainable entrepreneurship takes the role to

not only minimize existing unsustainable practices, but also to create non-economic value and to

enhance transformational change in economic, social, environmental, and institutional systems.

This is mainly triggered by the already mentioned sustainable development imperative, which is

inherently changing the "rules of the game" (Hall et al., 2010: 445). In contrast to incremental

solutions, such a transformation requires disruptive or radical sustainability innovation in terms of

products, services, and processes (Hockerts & Wüstenhagen, 2010; Schaefer et al., 2015;

Schaltegger & Wagner, 2011). Though, to address these grand global challenges, a coordinated

and collaborative multi-actor approach is needed in which the sustainable entrepreneur can take

a focal role in providing solutions through their activities and ventures. (Ferraro et al., 2015;

George et al., 2020; George, Howard-Grenville, Joshi, & Tihanyi, 2016)

Taking the preceding into consideration, sustainable entrepreneurship may lead to a

transformative change in business logic and economic organizing in which sustainability turns into

"a core economic opportunity and a way to forge novel capabilities" (George et al., 2020: 5). In

balancing "planet and profit" (Muñoz & Cohen, 2018: 304), sustainable entrepreneurs can find

solutions to pressing societal and environmental challenges through integrating the sustainability

imperative into their core business models, strategies, practices, and processes, which could

foster a transition toward sustainable industries and socio-economies (Thompson et al., 2011).

By introducing the concept of Sustainability-as-Flourishing, Schäfer et al. (2015) uplift sustainable

entrepreneurship towards a dynamic and systemic construct. In this regard, sustainable

entrepreneurship is not understood as merely "business-as-usual augmented by incremental

environmental or social initiatives" (Schaefer et al., 2015: 395). Instead, it requires fundamental

changes in the assumptions, beliefs, and actions of the actors involved to gear, over time, towards

an ideal state. For this concept to develop also in entrepreneurial practice, specific requisites were

identified by the authors in terms of (1) beliefs and values, (2) diagnosis, and (3) responsibility.

Beliefs and values include that humans show a caring behavior for others and nature (contrasting

the concept of homo economicus) and enact social justice and equity in terms of just, equal, and

balanced distribution of resources. Diagnosis comprises the ability of complex systems thinking

(concerning the embeddedness in broader contexts and systems, which induces nonlinearity and

uncertainty, as well as the thinking in longer periods), the addressing of root causes instead of

symptoms (identifying unsustainable practices is a major condition for addressing them), and

critical reflection (which, in turn, enhances understanding of complexity). Responsibility

encompasses profit as a means to an end (as with regards to the 3BL approach), considering

planetary boundaries (i.e., limited natural capacities), and participative collaboration.

2.1.2. In Search of a Clear Definition

Sustainable entrepreneurship literature holds an abundance of different conceptual definitions.

One reason might be that the nature and scope of entrepreneurship can take many forms so that

a one-size-fits-all definition would not provide the appropriate basis for examining the topic (Tilley

& Young, 2009). Ferraro et al. (2015) refer to the notion of multivocality in the context of

sustainable development. Accordingly, "different interpretations among various audiences with

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different evaluative criteria" are sustained "in a manner that promotes coordination without

requiring explicit consensus" (Ferraro et al., 2015: 373).

Table 1 shows a selection of recognized definitions in alphabetical order by the names of the

authors. The core definitions will be discussed chronologically in the section after the table.

Author(s) Definition

Belz & Binder, 2017 "[…] we define sustainable entrepreneurship as the recognition, development and

exploitation of opportunities by individuals to bring into existence future goods and services

with economic, social and ecological gains." (Belz & Binder, 2017: 2)

Cohen & Winn, 2007 "[…] we define sustainable entrepreneurship as the examination of how opportunities to

bring into existence' future' goods and services are discovered, created, and exploited, by

whom, and with what economic, psychological, social, and environmental consequences."

(Cohen & Winn, 2007: 35)

Dean & McMullen, 2007 "Sustainable entrepreneurship is defined to be: the process of discovering, evaluating, and

exploiting economic opportunities that are present in market failures which detract from

sustainability, including those that are environmentally relevant." (Dean & McMullen, 2007:

58)

Hockerts & Wüstenhagen, 2010 "We thus define sustainable entrepreneurship as the discovery and exploitation of

economic opportunities through the generation of market disequilibria that initiate the

transformation of a sector towards an environmentally and socially more sustainable state."

(Hockerts & Wüstenhagen, 2010: 482)

Muñoz, 2013 "Sustainable entrepreneurship is focused on pursuing business opportunities to bring into

existence future products, processes and services, while contributing to sustain the

development of society, the economy and the environment and consequently to enhance

the well-being of future generations." (Muñoz, 2013: 4)

Shepherd & Patzelt, 2011 "Sustainable entrepreneurship is focused on the preservation of nature, life support, and

community in the pursuit of perceived opportunities to bring into existence future products,

processes, and services for gain, where gain is broadly construed to include economic and

non-economic gains to individuals, the economy, and society." (Shepherd & Patzelt, 2011:

137)

Schaltegger & Wagner, 2011 "[…] sustainable entrepreneurship can […] 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."

(Schaltegger & Wagner, 2011: 226)

Tilley & Young, 2009 "[…] the sustainability entrepreneur, who holistically integrates the goals of economic,

social and environmental entrepreneurship into an organisation that is sustainable in its

goal and sustainable in its form of wealth generation." (Tilley & Young, 2009: 88)

Venkataraman, 1997 "[Entrepreneurship – ed. note] seeks to understand how opportunities to bring into

existence "future" goods and services are discovered, created, and exploited, by whom,

and with what consequences." (Venkataraman, 1997: 120 – italic in original)

Table 1: Selection of definitions for sustainable entrepreneurship (in alphabetical order by name)

The definition of sustainable entrepreneurship, as suggested by Cohen and Winn (2007) draws

directly on the conceptual definition regarding the term entrepreneurship by Venkataraman (1997).

According to the researchers, Venkataraman's original suggestion is considered as being

appropriate to describe the word entrepreneurship as it focuses on (1) entrepreneurial

opportunities, (2) the entrepreneurs as the central agents of discovery and exploitation, and (3)

the consequences of entrepreneurial action. Thus, the original definition by Venkataraman was

slightly amended through the addition of the expression environmental. Notwithstanding,

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integrating the word environmental accommodates the general sustainable development

paradigm. Furthermore, it also challenges the view on traditional entrepreneurship towards an

alignment of economic goals with ecological aspects.

Following an economics perspective and combining it with entrepreneurship research, Dean &

McMullen (2007) hold that environmental market failures provide opportunities for entrepreneurs.

The authors emphasize that the focus of sustainable entrepreneurship is not only put on

environmental gains but also on economic returns.

In their attempt to explain sustainable entrepreneurship, Tilley and Young (2009) address the

potential of the sustainable entrepreneur to create value beyond mere economic wealth. In doing

so, the authors emphasize looking at the consequences (i.e., sustainable wealth creation) caused

by the actions and behaviors of individuals (i.e., sustainable entrepreneurs). Correspondingly,

sustainable wealth "means contributing a holistic net benefit to the economy, community, and the

natural environment" (Tilley & Young, 2009: 88). Figure 2 presents the Sustainability

Entrepreneurship Model by Tilley & Young (2009), which links together 12 elements and shows

the relationships between the four poles of economic, environmental, social, and sustainable

entrepreneurship. In this regard, ecological equity, sufficiency, eco-effectiveness, eco-efficiency,

socio-effectiveness, and socio-efficiency are seen as the underlying values that shape the

sustainable entrepreneur. Environmental sustainability, environmental stability, intergenerational

equity, economic equity, futurity, and social responsibility need to be implemented in the

entrepreneurial context to foster sustainable entrepreneurial action. If all these elements are

combined without compromising each other or neglecting separate objectives, sustainable

entrepreneurship can be achieved.

Figure 2: Sustainability entrepreneurship model (Tilley & Young, 2009: 86)

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Hockerts and Wüstenhagen (2010) refer with their definition closely to the Schumpeterian

perspective on entrepreneurship. According to Schumpeter (1934), entrepreneurial action is linked

to the process of creative destruction. Different types of market failures, such as social or

environmental disruptions, ignite entrepreneurial opportunities which, in turn, may lead to

innovation in terms of products, service, processes, or even organizational form. Through

entrepreneurship, societal change can be invigorated, and social or environmental hardships

mitigated (Hall et al., 2010; Schaltegger & Wagner, 2011; Tilley & Young, 2009).

Shepherd and Patzelt (2011) regard sustainable entrepreneurial activity as the main link between

components to be sustained (i.e., nature, life support system, community) and features to be

developed (i.e., individuals, economy, society). Accordingly, there are two significant outcomes

related to their concept of sustainable entrepreneurship – sustainability and development. The

former refers to the areas of nature (i.e., earth, biodiversity, and natural ecosystems), sources of

life support (i.e., environment, natural resources, and ecosystem services), and communities

(comprising culture, groups, and places). Development, in turn, pertains to the economic and non-

economic consequences (i.e., gains) to individuals and society. Economic gains encompass, for

instance, monetary profits or financial growth. In contrast, non-economic gains may include (1)

factors on an individual level such as education, equity, life expectancy, or (2) consequences on

a societal level such as the public well-being or security of regions or institutions. Hence, the term

gain is understood as a broad construct that integrates monetary and non-monetary

consequences entailing sustainable entrepreneurial activity. By simultaneously expressing the

relevance of entrepreneurial opportunity and action, the authors consciously stand in the tradition

of Venkataraman's definition of the term entrepreneurship (1997). Figure 3 shows the respective

sketch of the link between entrepreneurial action and outcomes (see the left side of the Figure).

Figure 3: Linking sustainability and development: antecedents - opportunities - entrepreneurial action (Shepherd & Patzelt, 2017: 162)

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Schaltegger & Wagner (2011) attached to the combined value approach of sustainable

entrepreneurship (i.e., integrative pursuit of environmental, social, and economic goals) additional

perspectives, namely the consideration of sustainability innovation and the strong emphasis on

market effects. The individual entrepreneur comes to the fore and holds skills and capabilities to

innovate and contribute to market success. In this regard, sustainable entrepreneurs "generate

new products, services, techniques and organizational modes that substantially reduce

environmental impacts and increase the quality of life" (Schaltegger & Wagner, 2011: 223). Their

definition puts entrepreneurial action into a clear market-related context. The sustainable

entrepreneur integrates sustainable development as a core business goal and into organizational

processes. While simultaneously realizing an economically successful business, the sustainable

entrepreneur contributes to substantial positive effects on the market, environment, and society.

Also, Muñoz (2013) expresses an entrepreneurial opportunity-activity focus. He expands the

tripartite form of value creation (i.e., social justice, environmental protection, and economic

development) by a fourth factor, namely intra- and intergenerational equity, which means social

justice for present and future generations. An element that roots in the public claim for sustainable

development (WCED, 1987), and which is also encountered in the model of sustainable

entrepreneurship by Tilley and Young (2009). With this additional perspective, the focus lies not

only on "which development is to be directed but also an overarching concern with the fate of

future generations" (Muñoz, 2013: 4).

Firmly in line with the definition of Cohen and Winn (2007) is the one of Belz and Binder (2017).

The authors suggest a process model of sustainable entrepreneurship regarding the opportunity-

activity nexus of individual entrepreneurs (for a description of the model, see section 2.1.4.).

2.1.3. Social Entrepreneurship and Environmental Entrepreneurship as Related Concepts

Social, environmental, and sustainable entrepreneurship are related concepts contrasting

traditional entrepreneurship. In the following, the approach of Thompson et al. (2011) is adopted

because the three domains need to be distinguished from each other while keeping in mind that

they are not separate fields. Yet, all three streams cannot be examined in isolation as sustainable

entrepreneurship roots in social and environmental entrepreneurship (Hockerts & Wüstenhagen,

2010; Thananusak, 2019). Therefore, the different types share similar underlying principles and

characteristics, although other elements such as the primacy of goals, underlying motivations, or

disciplinary roots differ (Muñoz & Cohen, 2018; Schaltegger & Wagner, 2011; Thompson et al.,

2011). In literature, there remains unclarity in terms of meanings and interchangeability of the

notions' social', 'environmental', and 'sustainable'. Also, where to draw the exact boundaries

between the three concepts is unsolved (Thompson et al., 2011). Some authors agree in line with

Thompson et al. (2011) that each of these forms is a distinct field of research (e.g., Schaefer et

al., 2015; Schaltegger & Wagner, 2011). Other scholars, in turn, hold that social and environmental

entrepreneurship are subordinated concepts to sustainable entrepreneurship (e.g., Dean &

McMullen, 2007; Tilley & Young, 2009).

Each of the three entrepreneurship lenses shares the essential understanding of the "potentially

positive outcomes for society that result from entrepreneurial actions" (Thompson et al., 2011: 5).

In line with the coupling of entrepreneurship with the sustainable development concept, Muñoz

and Cohen (2018) hold that all three types are hybrid organizational forms. They are defined by

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"structures and practices that allow the coexistence of values and artifacts from two or more

categories" (Muñoz & Cohen, 2018: 304), respectively, where "conflicting institutional logics can

coexist" (Giones, Ungerer, & Baltes, 2020: 4). Social and environmental entrepreneurship are

ascribed to balance economic goals with either social or environmental gains. This is referred to

as the double bottom line approach (Belz & Binder, 2017). Instead, sustainable entrepreneurs

blend and balance three distinctive values while aiming at long-term impact (Giones et al., 2020).

In this regard, the notion' value' is defined as the inner principle of the entrepreneur which directly

affects the identity of the organization, whereas the term 'impact' marks the tangible outcomes

(i.e., goals) of the venture. Figure 4 shows the conceptualization of hybrid organizations and the

inherent blended values in the realm of sustainable development.

Figure 4: Conceptualization of hybrid organizations (Giones et al., 2020: 6)

Hence, sustainable entrepreneurs "enact a "triple bottom line" […] by supporting a combination of

social equity, economic stability, and reducing environmental degradation through entrepreneurial

action." (Thompson et al., 2011: 214). This triple bottom line is the "ideological foundation of many

sustainable entrepreneurs" (Neumeyer & Santos, 2018: 4566). What distinguishes sustainable

entrepreneurship from socially or environmentally oriented concepts is the need for a sustainable

organizational design that considers all elements of sustainable development simultaneously

(Parrish, 2010).

Criado-Gomis, Cervera-Taulet, and Iniesta-Bonillo (2017) highlight that sustainable

entrepreneurship happens not at the intersection of the three values. Instead, it is a concept that

holistically integrates the triple-orientation of objectives. At the core are the realization of both a

sustainability-performing and financially self-sustaining business that contributes to social good

and environmental protection, and a broader transformational process concerning society,

environment, and economy (George et al., 2020; Schaltegger & Wagner, 2011).

Mair & Martí define social entrepreneurship "as a process involving the innovative use and

combination of resources to pursue opportunities to catalyze social change and/or address social

needs." (2006: 37) Accordingly, new value creation is triggered by the interconnection of

entrepreneurship with social issues. Social value is then defined as "value for people and

communities" (Schaefer et al., 2015: 396). Venkataraman integrated social wealth already into the

realm of traditional entrepreneurship: "Entrepreneurship is particularly productive from a social

welfare perspective when, in the process of pursuing selfish ends, entrepreneurs also enhance

social wealth by creating new markets, new industries, new technology, new institutional forms,

new jobs, and net increases in real productivity." (1997: 133) The major difference to social

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entrepreneurship (and subsequently to sustainable entrepreneurship) is that in Venkataraman's

view, social wealth creation is just a side product to entrepreneurial activity, whereas, in the case

of sustainable entrepreneurship, it becomes the prime focus (Mair & Martí, 2006).

The discovery and exploitation of opportunities focus on positive social benefits and the resolution

or mitigation of social ills. Entrepreneurs are caring actors showing altruistic motives that go

beyond profit-seeking and self-interest. This, in turn, leads to the primacy of a social agenda (i.e.,

social wealth) before pursuing financial goals (i.e., economic wealth). Funding is a vital means to

secure organizational viability and to continue with the venture's mission, although decisions are

based on other criteria than financial returns. Social entrepreneurial ventures can be organized

with a for-profit or not-for-profit orientation which finds expression in the respective business

model. Notably, measuring and evaluating social performance and social impact remains one of

the most challenging endeavors in this field. (Mair & Martí, 2006; Schaefer et al., 2015;

Schaltegger & Wagner, 2011; Thananusak, 2019; Thompson et al., 2011)

Regarding environmental entrepreneurship (in literature interchangeably used with the terms

ecopreneurship and green entrepreneurship), profitable opportunities are found in market failures.

These failures create ecological degradation (e.g., climate change) such as externalities (e.g.,

emissions of carbon dioxide) and public goods (e.g., emission reduction). Remarkably, market

failures arise as a result of business and industry activities. Simultaneously, it is business being

increasingly perceived as providing solutions to environmental degradation and to preserve the

natural environment. Environmental entrepreneurs are "environmentally oriented individuals who

aspire to create economic value by solving environmental issues." (Thananusak, 2019: 2) This

requires knowledge about substantial problems in the natural environment. They are driven by a

double bottom line balancing economic goals (financial gains are of paramount importance) and

environmental-specific ethics to solve problems for future generations. Environmental value is

associated with the "preservation and regeneration of the natural environment" (Schaefer et al.,

2015: 396). (Dean & McMullen, 2007; Muñoz, Janssen, Nicolopoulou, & Hockerts, 2018; Schaefer

et al., 2015; Schaltegger & Wagner, 2011; Thananusak, 2019; Thompson et al., 2011)

In essence, the distinguishing characteristics regarding social, environmental, and sustainable

entrepreneurship are well-echoed by the following statement: "social entrepreneurs focus mainly

on problems that affect people today, sustainable entrepreneurs focus on a "triple bottom line" of

people, planet, and profit, whereas environmental entrepreneurs are focused on creating

simultaneous economic and ecological benefit." (Thompson et al., 2011: 208) The uniting factor

is the "perspective on entrepreneurship as a process for socioeconomic transformation where the

business creates value beyond profit." (Schaefer et al., 2015: 396) Though, social and

environmental entrepreneurship alone, each with its specific focus, can contribute to sustainable

development only to a certain extent. Muñoz et al. (2018) hold in this regard that considering only

one of these perspectives, entrepreneurs risk neglecting the respective other side. For instance,

focusing purely on economic and environmental objectives may damage the social side, whereas

a strong focus on social goals could also lead to ecological harm. In contrast, sustainable

entrepreneurship is a holistic and promising approach to sustainability and development in all

three dimensions (Shepherd & Patzelt, 2011). This requires the coupling of the triple bottom line

with the discovery, creation, and exploitation of entrepreneurial opportunities to become more than

just a theoretical concept (Muñoz et al., 2018).

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2.1.4. Sustainable Entrepreneurship Process

Adopting a process perspective on sustainable entrepreneurship, Belz and Binder (2017) suggest

six phases for an entrepreneur to recognize, develop, and exploit sustainable entrepreneurial

opportunities (see Figure 5) – (1) identifying a social or ecological problem, (2) recognizing a social

or environmental opportunity, (3) developing a double bottom line solution, (4) developing a triple

bottom line solution, (5) funding and forming of a sustainable enterprise, and (6) creating or

entering a sustainable market.

Figure 5: Sustainable entrepreneurship process (Belz & Binder, 2017: 14)

At the core of the sustainable entrepreneurship process (SEP) is the sustainable entrepreneur

who is defined as the "individual who participates in the development of the sustainable venture"

(Muñoz & Cohen, 2018: 305). Shepherd & Patzelt (2011; 2017) put to question the psychological,

moral, and cognitive conditions that precede the actual entrepreneurial opportunity-action process

(see Figure 3). Those people who attend to or engage themselves in social and/or environmental

issues are more likely to perceive a threat or notice a change in the environment and, in turn, form

an opportunity belief regarding sustainable development. Though, prior knowledge that directs

attention does not only concern environmental and/or social environments and noticed threats but

also entrepreneurial knowledge in terms of markets, strategies, and costumers (Patzelt &

Shepherd, 2011).

Kuckertz & Wagner (2010) examined the role of sustainability orientation of individuals and its

effect on entrepreneurial intentions. Sustainability orientation of individuals is defined as the

underlying attitudes and convictions reflecting environmental protection and social responsibility.

Such a direction is vital for the intent to commence a sustainable venture. Whereas the scholars

found a positive relationship between sustainability orientation and entrepreneurial action, they

observed a decline in the sustainability orientation of individuals if business experience increased

over time. Reasons for this observation are, on the one hand, based on the higher propensity of

less experienced individuals in taking more ethical actions. On the other hand, more ample

professional experience showed adverse effects on an optimistic attitude, meaning that working

experience leads people to strictly assess and evaluate sustainable opportunities, which, in turn,

impedes sustainable entrepreneurial action and fosters concentration on economic gains.

Scholars suggest a strong focus on undergraduate and graduate education to deal with these

downsides by enhancing sustainability and entrepreneurial knowledge and skills in an

interdisciplinary way (Filser, Kraus, Roig-Tierno, Kailer, & Fischer, 2019; Kuckertz & Wagner,

2010).

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Besides, it is a personal motivation that influences opportunity beliefs. Entrepreneurial motivation

can either be activated by discerning or experiencing physical threats (as, for instance, in the case

of pollution or oppression of marginalized groups) or by sensing a risk to psychological well-being

(as in the case of dissolution of social ties entailing the decline of social or natural environments).

Both concerns trigger negative emotions (e.g., fear, frustration, anger), leading to entrepreneurial

intention to overcome these challenges. An altruistic or prosocial value orientation may also instill

the motivation for sustainable entrepreneurship. In this regard, empathy and sympathy with

disadvantaged or marginalized groups may trigger the pursuit of entrepreneurial opportunities.

(Patzelt & Shepherd, 2011; Shepherd & Patzelt, 2011; 2017)

Concluding, problem recognition (1) is associated with prior knowledge and first-hand

experience corridors in private, educational, and professional lives (Corner & Ho, 2010; Hanohov

& Baldacchino, 2018; Shepherd & Patzelt, 2011; 2017). Regarding the latter, "entrepreneurs’ past

life experiences created awareness of and information about particular areas that shaped

opportunity development.” (Corner & Ho, 2010: 652) Also, Muñoz & Cohen (2018) hold that

besides prior knowledge, also entrepreneurial orientation is a central requisite for an

entrepreneurial intention to grow. Other scholars emphasize that profound knowledge of natural

(i.e., the physical world including earth, biodiversity, and natural ecosystems) and communal

environments (i.e., communities in which people live) gained through stays abroad or socialization,

a noticed threat when living in these environments, a high degree of altruism, and a strong

sustainability orientation are the key factors preceding opportunity recognition, especially if these

factors are combined with prior entrepreneurial knowledge resulting from previous jobs or projects

(Hanohov & Baldacchino, 2018; Muñoz & Dimov, 2015; Patzelt & Shepherd, 2011).

Depending on the specific problem, which is either focused on social or environmental issues on

a local or global level, the sustainable entrepreneurship process starts according to the respective

subject orientation of the individual on one of two possible pathways. This is the reason why the

SEP model of Belz and Binder (2017) suggests two different starting points, which will converge

in the subsequent steps into one typical stream (see Figure 5).

Opportunity recognition (2) in sustainable entrepreneurship is primarily associated with socio-

ecological market failures and imperfections. In this sense, they are not only seen as the cause

for social and environmental problems but also as a significant source for entrepreneurial

opportunities aiming at resolving these challenges (Hall et al., 2010; Muñoz & Cohen, 2018).

Cohen and Winn (2007) identified four pervasive and environmentally-relevant market

imperfections contributing to the degradation of the natural environment: inefficient firms (in terms

of resource allocation and utilization), negative externalities (if external costs are not appropriately

reflected or compensated in the prices of products and services), flawed pricing mechanisms (due

to natural exhaustible or non-renewable resources being undervalued and underpriced), and

imperfectly distributed information (existence of bounded rationality and decision-making under

limited and asymmetric information). Through innovative solutions, sustainable entrepreneurs can

address these imperfections and, subsequently, “create entrepreneurial rents for the innovating

firms, improve market performance, and introduce more sustainable interactions with the natural

environment.” (Cohen & Winn, 2007: 32)

Similarly, Dean and McMullen (2007) argue that market failures trigger entrepreneurial

opportunities. Supplementing externalities and imperfect information, the authors added public

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goods (characterized by non-excludability through missing property rights), monopoly power (i.e.,

the market power of incumbents), and ill-suited interventions by the government (e.g., public

policies and inappropriate subsidies to industries damaging the natural environment). By exploiting

these opportunities through entrepreneurial action, financial performance, social welfare, and

betterment of environmentally condemnable economic behavior can be reached. Mitigating market

imperfections contribute to market efficiency, which is essential for alleviating environmental

degradation, the efficient use of scarce natural resources, and, in the longer run, for a more

sustainable economy.

Shepherd and Patzelt (2011; 2017) hold that opportunity recognition happens in two distinct

stages (see Figure 3). Once an individual recognizes a signal from the natural or communal

environment, it leads to a third-person opportunity belief. The socio-ecological problem gets

focused attention as an opportunity for someone. In the next step, a first-person opportunity belief

might be developed. If the individual perceives the opportunity as feasible (i.e., corresponds with

the entrepreneurial knowledge and self-efficacy of the individual) and desirable (i.e., corresponds

with the motivational focus), then the individual will act upon it, and entrepreneurial action will

begin to emerge.

After deciding to form an entrepreneurial venture, the next step is then to translate the envisioned

goals along the 3BL into services or products that are valued by the potential stakeholders. Based

on their empirical findings, Belz and Binder (2017) emphasize that sustainable entrepreneurs tend

to start with conceptualizing double bottom line solutions (3) (i.e., economical plus social or

environmental goal). Only in a subsequent step, the respective third goal will be included

enhancing a triple bottom line solution (4). In contrast to simultaneous incorporation of the 3BL,

the sequential approach “reduces the complexity of the challenging task, and makes the

integration and balancing process [of social, environmental, and economic goals – ed. note] easier

and manageable for the co-founders.” (Belz & Binder, 2017: 13) This integration takes place before

market kick-off, which increases both the authenticity and credibility of sustainable value

propositions. Yet, the integration of potentially conflicting bottom lines involves trade-offs and

tensions which “emerge naturally in the process of combining private and public interests, with

social, environmental and economic interests.” (Muñoz & Cohen, 2018: 317) Moreover,

sustainable entrepreneurs try to balance conflicting goals, rather than to sacrifice on one or

another. In this regard, Giones et al. (2020) have shown with their study that sustainable impact

can indeed coexist with financial goals.

Regarding the stage of funding and forming the venture (5), Belz and Binder (2017) refer only

to a diversity of potential and even unconventional sources for seed-capital, such as private

donors, crowdfunding, or public funding. Indeed, in order to fully comprehend the concept of

sustainable entrepreneurship, it is essential to open up the “‘black box’” (Parrish, 2010: 511) of the

sustainable enterprise to get a holistic picture on how the envisioned goals along the 3BL

addressing social, environmental, and economic value are achieved. The following paragraphs

provide theoretical insight into the sustainable entrepreneurial orientation of ventures as basic

strategic orientation, the organizational design of sustainable entrepreneurial ventures, and the

interplay of sustainability innovation and sustainable business models.

Criado-Gomis et al. define the sustainable entrepreneurial orientation (SEO) of sustainable

ventures as a “high-order dynamic capability that has the possibility of creating new first-order

September 29, 2020 19/82

capabilities, such as EO [entrepreneurial orientation – ed. note] and SO [sustainability orientation

– ed. note].” (2017: 13) Dynamic capabilities allow organizations to stay adaptive and flexible in

uncertain and complex internal and external business environments. In this sense, entrepreneurial

orientation in organizational culture refers to innovativeness, proactiveness, and risk-taking.

Sustainability orientation is associated with organizational change behaviors that are in line with

the sustainable development paradigm.

Parrish (2010) states that organizational design is decisive for a successful pursuit of sustainable

entrepreneurship in a competitive market context and “remaining true to their sustainability-driven

values and purpose” (Parrish, 2010: 521). According to the author, it needs “more than the right

set of values and motives to succeed” (Parrish, 2010: 511). In this regard, Figure 6 summarizes

the five principles for sustainable organizational design: (1) resource perpetuation (enhancing and

maintaining quality resources for the longest possible period), (2) benefits stacking (piling plenty

of benefits in each operational activity), (3) strategic satisfying (focusing on satisfactory outcomes

of multiple competing objectives), (4) qualitative management (deciding based on quality than on

quantity), and (5) worthiness of the contribution (distributing benefits based on worthy

contributions). In contrast to traditional entrepreneurship in which the focus lies on exploitative

reasoning focusing only on the short term, the five principles together form the scheme of

perpetual reasoning. With a holistic organizational design, the entrepreneur can consider the long-

term needs and benefits, which is an essential factor to achieve the goals along the 3BL.

Figure 6: Organization design requirements (Parrish, 2010: 517)

Lüdeke‐Freund (2020) ask how business models of sustainable entrepreneurs can support

sustainability innovations to create economic, social, and environmental value for a diversity of

stakeholders. In this regard, the sustainable business model is considered as a mediating device

between sustainability innovation (i.e., new products, services, or processes) and the generation

of sustainable business practices that lead to outcomes solving environmental and social

problems while unlocking economic value. Accordingly, “sustainable entrepreneurs bring forth

sustainability innovations that convert market imperfections into business opportunities, replace

unsustainable forms of production and consumption, and create value for a broad range of

stakeholders” (Lüdeke‐Freund, 2020: 667). Sustainability innovation is then equated with radical

innovation in which small entrepreneurial ventures are ascribed to have superior capabilities in

carrying them out compared to larger firms. (Schaefer et al., 2015; Schaltegger & Wagner, 2011)

Creating value with sustainability innovation requires an appropriate sustainable business model

September 29, 2020 20/82

design. Correspondingly, it is “not only the innovation itself, that decides about market success or

failure” and the sustainment in the long-run, but also “how an innovation is brought to the market”

(Lüdeke‐Freund, 2020: 676).

Muñoz et al. hold that “[s]ustainable business models give sustainable enterprises a roadmap for

the pursuit of social and environmental impacts.” (Muñoz et al., 2018: 327) In general, business

models comprise three defining elements – value proposition, value creation and delivery, and

value capture (see Figure 7).

Figure 7: Business model framework (Bocken, Short, Rana, & Evans, 2014: 43)

In line with this framework but with regard to sustainable development, Schaltegger, Hansen, and

Lüdeke-Freund (2016) modified the traditional business model concept stating that “[a] business

model for sustainability helps describing, analyzing, managing, and communicating (i) a

company’s sustainable value proposition to its customers, and all other stakeholders, (ii) how it

creates and delivers this value, (iii) and how it captures economic value while maintaining or

regenerating natural, social, and economic capital beyond its organizational boundaries.”

(Schaltegger et al., 2016: 6) Business models aiming at sustainability need to not only attend to

the costumers of the venture’s product and services and the venture’s shareholders. Instead, it

has to follow a multi-stakeholder approach, including the natural and communal environments in

focus (Geissdoerfer, Vladimirova, & Evans, 2018; Schaltegger et al., 2016). Remarkably, business

model creation is not an activity solely driven by a sustainable entrepreneur. Instead, it requires

the support and participation of a comprehensive set of relevant stakeholders (such as

governmental agencies, investors, incubator or accelerator organizations, or higher education

organizations) due to its complexity and goal orientation (Lüdeke‐Freund, 2020; Neumeyer &

Santos, 2018).

Geissdoerfer et al. (2018) identified four types of sustainable business models. First, circular

business models which aim at the favorable modification of resource loops. Second, social

enterprises focusing on social impact which are either organized as for-profit or not-for-profit.

Third, the so-called bottom of the pyramid solutions focuses on costumers on the lowest income

levels. Fourth, product-service systems, i.e., providing a product, service, feature, or a result to

costumers.

The final step in the sustainable entrepreneurship process concerns creating or entering a

sustainable target market (6) with the respective sustainability innovation (i.e., a product or a

service). Belz and Binder (2017) identify three different market realities. First, if there is no

sustainable niche in the market, the sustainable venture must create one. Second, a sustainable

venture enters an established sustainable niche. In the third case, a sustainable market segment

exists, and the sustainable enterprise enters the segment. Each situation bears risks in terms of

resources, costumers, competition, failure, and survival. However, the empirical study of Belz and

Binder (2017) shows that sustainable entrepreneurial ventures place their products and services

September 29, 2020 21/82

at the upper end of the market, where the focus lies on quality and superior environmental and

social standards.

By taking on a strict market perspective, Hockerts and Wüstenhagen (2010) discuss the different

roles of small entrepreneurial entrants and large incumbent firms in pursuing sustainability-related

opportunities in existing markets. Their examination suggests that to drive the sustainability

transformation of a market, it is crucial that both parties co-exist and interact with each other as

each of them holds specific strengths and weaknesses that are relevant to this process. In this

regard, when a sustainable start-up enters a market by occupying a sustainability niche through

the launch of a sustainability innovation (i.e., a product or service offering), they might hold the

primacy of innovation, but tend to focus on single-issue campaigning due to their smallness,

focused attention, and limited resources. In contrast, incumbents might not be aware of the market

potential or are disadvantaged in terms of radical innovation (Schaltegger & Wagner, 2011). In the

phase of early growth, incumbents enter the field as fast second and hold superior competencies

in terms of technology, marketing, or process innovation. In the third phase of take-off, first

ventures may exit, other start-ups may substantially grow while combining product and process

innovation. Finally, in the maturity phase of sustainable entrepreneurship, the sustainable start-

ups transcend into serious competitors, create new niches, or become Goliaths in the market, and

incumbents discover a promising market potential for themselves. In the end, sustainability

innovation becomes a central part of the entire industry, which marks a preliminary milestone in

the transformation of the economy towards sustainable development. Schaltegger and Wagner

share the view that “[c]ompanies contribute most to the sustainable development of an economy

and society if their core business deals with solutions to environmental and social problems, if they

supply environmentally and socially superior products and if their innovations influence the mass

market and society substantially.” (2011: 227)

2.1.5. Synopsis

Since more than a decade, scholars emphasize sustainable entrepreneurship and its potential

transformational and positive impact on the natural environment, society, and economy. In

response to this awarded stewardship, many definitions emerged, which serve as a basis to create

common understanding in this field. Table 2 synthesizes these definitions into major defining

elements underlying the thesis’ notion of sustainable entrepreneurship.

Sustainable entrepreneurship

Value orientation Following a triple bottom line approach

balancing the planet, people, and profit

Focus on sustainability (nature, life support, communities) and

development (economic, non-economic gains)

Long-term orientation integrating present and future

(intra- and intergenerational perspective)

Problem & opportunity recognition Sustainable entrepreneur triggered by

prior knowledge, experience, and sustainability orientation

Altruistic, prosocial, or pro-environmental value orientation affecting

entrepreneurial motivation and intention

Opportunities evolve from market failures and imperfections, and

grand challenges (captured in the UN SDGs)

Entrepreneurial action A holistic approach including organizational design, sustainability

innovation, and sustainable business models

Table 2: Defining elements of sustainable entrepreneurship (own depiction)

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In order to offer a profound basis for the remainder of the thesis, the following passages will

contrast conventional entrepreneurship with the three alternative types of entrepreneurship as

discussed in subchapter 2.1.3. Table 3 gives an overview of traditional entrepreneurship, social

entrepreneurship, environmental entrepreneurship, and sustainable entrepreneurship. It provides

the reader with the principal distinguishing characteristics between the four types in focus and

shows that sustainable entrepreneurship differs notably from its traditional counterpart.

Traditional Entrepreneurship

Environmental Entrepreneurship

Social Entrepreneurship

Sustainable Entrepreneurship

Core motivation Create a successful

business

Contribute to solving

environmental

problems and create

economic value

Contribute to solving

societal problems,

value for society

Contribute to solving

social and

environmental

problems through the

realization of a

successful business

Main goal

Generate profit and

strive for financial

growth

Earn profit by solving

environmental issues

Achieve societal goal

and secure funding to

achieve this goal;

social agenda before

financial goals

Creating sustainable

development along the

3BL through

entrepreneurial

business activities

Boundary perception Organizational and

market boundaries

Natural boundaries Societal boundaries Plantery boundaries

Time focus Present Future Present Present and Future

Role of economic goals

Ends Ends Means Means and Ends

Role of non-economic goals

Social Issues only

subordinated role

Environmental issues

as integrated core

element

Societal goals as ends

Core element of

integrated end,

contribution to

sustainable

development

Strategic business Orientation

Entrepreneurial

orientation; concept of

homo economicus

Pro-environmental and

entrepreneurial

orientation

Pro-social and

entrepreneurial

orientation

Sustainability and

entrepreneurial

orientation

Core feature

Identifying and

exploiting opportunities

aiming at economic

benefits

Identifying and

exploiting opportunities

in environmental

market failures

Identifying and

exploiting opportunities

in social ills

Identifying and

exploiting sustainable

opportunities based on

prior knowledge and

moral values

Organizational design principle

Exploitative reasoning n/a n/a Perpetual reasoning

Organizational development challenge

Increase effectiveness,

efficiency, and

performance

From focus on

environmental issues

to integrating economic

issues

From focus on societal

issues to integrating

economic issues

From small contribution

to large contribution to

sustainable

development

Type of Innovation

Technology or

business model

innovation

Ecological (Green)

innovation Social innovation

Sustainability

innovation

Table 3: Distinguishing characteristics between different types of entrepreneurship (adopted and developed from Schaltegger & Wagner, 2011: 224)

The foregoing considerations and definitions lead to the identification of three major inherent

conceptual blocks. These blocks help to frame and advance our understanding of the concept of

sustainable entrepreneurship. They reflect the conceptual distinctions between definitions of Mair

& Martí, 2006, and the framework approach suggested by Muñoz & Cohen, 2018). Accordingly,

the building blocks encompass (1) individual sustainable entrepreneurs as the founders of the

enterprise, (2) the sustainable entrepreneurship process including the value-creating nature of

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opportunity recognition and exploitation, and (3) the sustainable entrepreneurial venture following

a sustainable business model, which facilitates the tangible outcomes along the 3BL. Sustainable

entrepreneurship impacts multiple levels because it situates between entrepreneurial processes,

market and industry transformations, and far-reaching societal and environmental developments

(Johnson & Schaltegger, 2019).

What was entirely left out hitherto is the relevance and role of context in sustainable

entrepreneurship. The subsequent subchapters will act upon this omission.

Entrepreneurial Ecosystems

Welter (2011) emphasized the importance of moving away from de-contextualization and a sole

focus on business-internal elements or individual actors towards an integrated perspective of

diverse contextual lenses, factors, and forces that affect the whole entrepreneurship field. In this

regard, sustainable entrepreneurs do not act in isolation but find themselves and accommodate

to, get influenced by, and shape various contexts, such as institutional, business, social, or spatial

systems in which they are embedded (Arenas, Strumińska‐Kutra, & Landoni, 2020; Muñoz &

Cohen, 2018; Volkmann, Fichter, Klofsten, & Audretsch, 2019; Welter, 2011). Furthermore,

entrepreneurs are not disconnected from their surroundings. Instead, they engage in a plethora of

interactions with various stakeholders – a topic that was touched on only briefly in the previous

section regarding the sustainable entrepreneurship process. The cause why context is such a

relevant dimension is that contextual factors may enable or constrain the entire entrepreneurship

process (Welter, 2011). For instance, different contexts may provide individual entrepreneurs with

other opportunities, while they also may restrict or impede entrepreneurial actions. Hence, context

refers to “those elements outside the control of the entrepreneur that will affect the development

of the venture” (Muñoz & Cohen, 2018: 310).

These reasons make it necessary “to conceptualize entrepreneurship more holistically, as part of

larger ecosystems with interactions between actors” (Volkmann et al., 2019: 2) as this contributes

significantly to the general understanding of entrepreneurship. Against this background,

entrepreneurial ecosystems gained growing attention and became a popular concept not only in

academics but also among practitioners (e.g., Isenberg, 2010; 2014) and policymakers (e.g.,

Mason & Brown, 2014; World Economic Forum, 2013). The idea behind is to create a valuable

and conducive environment to support the formation and development of successful

entrepreneurial activities, and to contribute to long-term regional socio-economic growth,

revitalization, and prosperity (Roundy, Brockman, & Bradshaw, 2017; Simatupang, Schwab, &

Lantu, 2015; Volkmann et al., 2019). Moreover, entrepreneurial ecosystems are considered “a

critical tool for creating resilient economies based on entrepreneurial innovation” (Spigel, 2017).

Scholars suggest that in contrast to entrepreneurial ecosystems for traditional entrepreneurs,

entrepreneurial ecosystems embracing sustainable entrepreneurship show other distinct

configurations of ecosystem elements and follow different dynamics and processes supporting

sustainable entrepreneurship. In line with this, Muñoz and Cohen (2018) hold that “only

appropriate conditions may lead to producing social, environmental and economic wealth” (Muñoz

& Cohen, 2018: 311). The following sections draw on the academic literature and elaborate on the

concept of entrepreneurial ecosystems, focusing on those fostering sustainable entrepreneurship.

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It corresponds with the “systemic nature of entrepreneurial activity” (Cavallo, Ghezzi, & Balocco,

2019: 1292).

The following section introduces the reader to the topic of entrepreneurial ecosystems. It aims at

creating an understanding of the general ideas behind the concept, including the strength of a

conducive environment for high-growth entrepreneurship and the significance of place. The

subsequent section delineates systemic perspectives on entrepreneurial ecosystems by

describing the most relevant conceptual frameworks and models developed by scholars or

practitioners. The focus lies on holistic configurations of elements within a given ecosystem.

Complementarily, the third section addresses dynamic perspectives such as the emergence and

evolution of entrepreneurial ecosystems over time, as well as underlying processes and

interdependencies.

2.2.1. The Idea behind Traditional Entrepreneurial Ecosystems

A conducive environment for high-growth entrepreneurship

Entrepreneurial embeddedness in a plurality of contexts manifests itself in the concept of an

entrepreneurial ecosystem. The core idea is “to explain the persistence of high-growth

entrepreneurship within regions” (Spigel, 2017). High-growth entrepreneurship is a form of

entrepreneurship capable “to drive productivity growth, create new employment, increase

innovation, and promote business internationalization” (Mason & Brown, 2014: 3). With substantial

economic potential, high-growth ventures are not necessarily technology-based but exist across

industries and sectors. They may create positive spillover effects on other firms and organizations

in the same territory (Mason & Brown, 2014). Even more, successful entrepreneurship may lead

to positive spillover effects on the entire ecosystem (Isenberg, 2011a). These spillovers do not

only address, for instance, the spawning of new ventures, but also broader impacts on, e.g., life

quality, social innovativeness, or philanthropy.

Embodied in the notion of high-growth entrepreneurship is the statement of Stam and Spigel

(2016) at which “not all types of entrepreneurship are equally important for economic growth”. In

this regard, Isenberg advocates broad-based entrepreneurship, which can only flourish if

governments are “explicitly sector agnostic” (Isenberg, 2011a: 4). Isenberg recommends looking

at observable entrepreneurial directions rather than on given industries in the region. He argues

that discovering opportunities lies in the responsibility of the entrepreneur, whereas governments

must create advantageous framework conditions. For this, Isenberg recommends governments to

uplift and communicate entrepreneurship “as a high social priority” (Isenberg, 2011a: 6). Isenberg

(2010) insists on focusing on high-potential ventures in place of a high quantity of small-scale

enterprises. If this is the case, Isenberg argues, “[p]eople start talking about it [entrepreneurship

– ed. note], it becomes socially acceptable, the institutions begin to form, and government

recognizes that something positive is happening and sometimes listens to the newly influential

entrepreneurs and initiates reforms”. (Isenberg, 2011a) For this aim, it is central to define two

targets, (1) the type of entrepreneurship in focus, and (2) how much of it is favored. This must be

paralleled, if necessary, by a cultural shift in the attitude of a community towards the acceptance

of failure and experimentation. Though, it is not the government alone which is responsible for

stimulating prospering entrepreneurial ecosystems, private and public actors (i.e., individuals,

business, governments, civil society, supporting and development partners) need to work together

September 29, 2020 25/82

for an ecosystem to realize its full potential in nurturing entrepreneurial ventures that create

economic value. (Isenberg, 2010; Simatupang et al., 2015)

In order to support high-growth entrepreneurship, it is not enough to create loose and

disconnected framework conditions (Mason & Brown, 2014). Instead, it is recommended to

deliberately build a business environment conducive for entrepreneurs and their ventures

(Scaringella & Radziwon, 2018). Though, it has to be considered that “the ‘heroic entrepreneur’ is

not the sole determinant of entrepreneurial success, and that the ‘ecosystem’ plays an important

role in nurturing new venture seeds into fully-fledged, value-adding growth ventures” (Radinger-

Peer, Sedlacek, & Goldstein, 2018: 1499). Mason and Brown advocate for a “systems-based form

of support for high growth entrepreneurship” (2014: 5)

The spatial dimension of entrepreneurial ecosystems – place as a prerequisite

Scholars hold that entrepreneurial activities need an examination at a regional or local context in

which entrepreneurs operate (Audretsch & Belitski, 2017). Though, EEs are not restricted to a

specific geographical scale, and could therefore comprise particular territories, such as countries,

regions, or cities (Mason & Brown, 2014; Stam & Van de Ven, 2019). Since “[s]ystems of

entrepreneurship are geographically bounded” (Audretsch & Belitski, 2017: 1031), there are

significant differences in the conditions between regions and cities in terms of, e.g., regulations,

institutions, social norms and culture, or access to finance. Radinger-Peer et al. (2018) equate the

spatial dimension with context-specificity, which they borrow from the ecosystem definition in the

natural sciences. Region-specificity is used synonymously. Both terms refer to place-based

factors, i.e., the “unique set of conditions and circumstances under which the ecosystem emerges”

(Radinger-Peer et al., 2018: 1503).

2.2.2. Systemic Perspectives on Entrepreneurial Ecosystems

Before the notion of entrepreneurial ecosystems has been used, Spilling employed the term

entrepreneurial system addressing “the complexity and diversity of actors, roles, and

environmental factors that interact to determine the entrepreneurial performance of a region or

locality.” (1996: 91) Spilling holds that organizing and hosting a mega-event in a region (the author

refers to the case of Olympic games), the construction of a significant facility (e.g., bridges or

tunnels), or the introduction of new technology, are the significant drivers activating an

entrepreneurial system.

According to the author, economic development on a regional level is a consequence of multiple

entrepreneurial processes and requires “[a] complex system of initiatives, actions, and events”

(Spilling, 1996: 91). Spilling dissociates himself from the focus on the individual entrepreneur.

Instead, he holds that the foundation of a new venture may also involve groups, organizations, or

other firms, making it necessary to put the accent preferably on entrepreneurial events of a venture

than on a single person. Stimulating and restricting environmental factors, i.e., existing business

and socio-cultural structures (such as infrastructure or public institutions) shape the

entrepreneurial climate in a distinct region. This climate affects a multiplicity of actors, e.g., other

entrepreneurs or firms, and the discovery and exploitation of opportunities. The resulting series of

entrepreneurial events will, in turn, impact the environmental factors. The changing context ideally

fosters a new entrepreneurial climate in the region with positive long-term effects. Hence, an

entrepreneurial system is stable in the short run, but subject to changes in the long term. Figure 8

September 29, 2020 26/82

visualizes the respective conceptual framework consisting of those elements that Spilling suggests

for an entrepreneurial system. (Spilling, 1996)

Figure 8: Conceptual framework of the entrepreneurial system (Spilling, 1996: 93)

Neck, Meyer, Cohen, and Corbett (2004) examined the components relevant for new venture

creation in a region, i.e., system, focusing on a high level of entrepreneurial activity in high-

technology industries. In contrast to Spilling (1996), who focused solely on elements, these

authors tried to address the interactions of components and the relationships between them. By

doing so, it was possible to get a first insight into the development of entrepreneurial systems over

time.

The starting point for their study was the assumption of a spawning effect of entrepreneurial

ventures, meaning that “a genealogy of firms created from organizations spawning new

organizations is a natural occurrence within an entrepreneurial system.” (Neck et al., 2004: 192)

In such a setting, an incubator organization is a firm where a focal entrepreneur was employed

before creating his or her venture. In contrast, a spin-off organization is a new venture formed in

a related industry by an individual or a group that left an established firm. The study showed that

few incubator organizations triggered a high ratio of spin-offs either implicitly (i.e., incubator

organization not being aware of the intention of an employee to form a business but leaving the

individual with skills and abilities gained during tenure) or explicitly (i.e., aware of the intention and

providing support and assistance). Second generation spin-offs were not preferred and thus not

supported explicitly, as the founders wanted to retain their workforce.

Findings suggest that next to incubator and spin-off organizations, formal and informal social

networks, physical infrastructure, and the culture of a region are “related uniquely and interact to

form a system conducive for dense high-technology entrepreneurial activity.” (Neck et al., 2004:

190) Among all these elements, culture is the most critical element in the system.

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Figure 9 shows the identified elements based on an empirical study of a distinct US region.

Re

gio

na

l E

ntr

ep

ren

eu

ria

l S

ys

tem

Incubator Organizations

Implicit Spin-offs Second and Future Generation Spin-offs Explicit Spin-offs

Distinct regional elements

Informal Network

(friends, families, colleagues, informal ties with other firms)

Formal Network

University

(e.g., developing talented graduates, providing leading-edge technology, providing consultants)

Government (e.g., taxes, incentives, financial support)

Professional and Support Services (e.g., lawyers, accountants, consultants)

Capital Sources

(e.g., venture capitalists, business angels, banks)

Talent Pool

Large Corporations

Physical Infrastructure (e.g., roads, traffic, office space, housing, real estate)

Culture (e.g., geography, climate, intellectual capital, high-tech capabilities)

Figure 9: Entrepreneurial system components (own depiction developed from Neck et al., 2004: 199)

Isenberg (2010; 2011a; 2011b; 2014) contributed fundamentally to the practical understanding of

entrepreneurial ecosystems.

Entrepreneurship

Policy

Finance

Culture

Supports

Human Capital

Markets

Figure 10: Domains adopted from Isenberg's entrepreneurial ecosystem framework (Isenberg, 2011b)

September 29, 2020 28/82

Policy Markets Finance

Leadership

- Unequivocal support

- Social legitimacy

- Open door for advocates

- Entrepreneurship strategy

- Urgency, crisis, challenge

Government

- Institutions (e.g., investment, support)

- Financial support (e.g., for R&D, jump

start funds)

- Regulatory framework incentives (e.g.,

tax benefits)

- Research institutes

- Venture-friendly legislation (e.g.,

bankruptcy, contract enforcement,

property rights, and labor)

Early Costumers

- Early adopters for proof-of-concept

- Expertise in productizing

- Reference costumers

- First reviews

- Distribution channels

Networks

- Entrepreneur’s networks

- Diaspora networks

- Multinational corporations

Financial Capital

- Micro-loans

- Angel investors, friends, and family

- Zero-stage venture capital

- Venture capital funds

- Private equity

- Public capital markets

- Debt

Human Capital Culture Supports

Labor

- Skilled and unskilled

- Serial entrepreneurs

- Later-generation family

Educational Institutions

- General degrees (professional and

academic)

- Specific entrepreneurship training

Success Stories

- Visible successes

- Wealth generation for founders

- International reputation

Societal norms

- Tolerance of risks, mistakes, failure

- Innovation, creativity, experimentation

- Social status of the entrepreneur

- Wealth creation

- Ambition, drive, hunger

Infrastructure

- Telecommunications

- Transportation & logistics

- Energy

- Zones, incubation centers, clusters

Support professions

- Legal

- Accounting

- Investment bankers

- Technical experts, advisors

Non-Governmental Institutions

- Entrepreneurship promotion in non-

profits

- Business plan contests

- Conferences

- Entrepreneur-friendly associations

Table 4: Components of Isenberg's ecosystem domains (adopted from Isenberg, 2011b)

Accordingly, individual elements of an entrepreneurial ecosystem need a holistic and strategic

integration. Addressing only few components would fall too short in fostering new venture creation

and economic growth, which could lead to unintended negative consequences, such as brain drain

of potential entrepreneurs due to a sole focus on education. Instead, it is vital to “address many

factors in parallel” but “in non-formulaic ways” (Isenberg, 2011a). In this regard, Figure 10 and

Table 4 show Isenberg’s framework consisting of six major domains – “a conducive culture,

enabling policies and leadership, availability of appropriate finance, quality human capital, venture-

friendly markets for products, and a range of institutional and infrastructural supports” (Isenberg,

2011b) - each connected to specific components.

Following the approach of Autio, Kenney, Mustar, Siegel, and Wright (2014), entrepreneurial

ecosystems “regulate the direction and quality of entrepreneurial innovation by shaping the

direction […] and even the types of organizational forms that will be accepted as legitimate.” (Autio

et al., 2014: 1100). Entrepreneurship and innovation should not be used interchangeably, instead

it is to examine when and under what conditions entrepreneurs innovate. This brings us directly

to the notion of innovation-conducive contexts. Figure 11 displays the respective framework of

September 29, 2020 29/82

entrepreneurial innovation and context comprising (1) spatial context (i.e., spatial locus of

entrepreneurial ventures, as well as geographical concentration of institutions, policies, and social

norms) , (2) temporal context (considering the dimensions of time in the life-cycle of organizations,

industries, and ecosystems), (3) industry/technology context (industry structure and technologies

shape the innovation activities of ventures), (4) organizational context (including, for instance,

organizational culture, practices, and knowledge), (5) institutional/policy context (i.e., formal

institutions, such as regulations and the rule of law; informal institutions, such as culture or social

norms), as well as (6) social context (i.e., interactions and networks between ecosystem actors).

Different contexts directly influence entrepreneurial behavior and action, which, subsequently,

affects the type of entrepreneurial innovation and venture performance. Ultimately, different

contexts also influence disparate configurations of entrepreneurial ecosystems.

Figure 11: Framework of entrepreneurial innovation and context (Autio et al., 2014: 1098)

Stam (2015) and Stam and Van de Ven (2018; 2019) follow a systems approach in terms of

entrepreneurial ecosystems and uplift the entire EE as a unit of analysis. They argue that EEs are

nested in “a broader set of complex systems” (Stam & Van de Ven, 2019). Entrepreneurial

Ecosystems are inherently artificial constructions of humans, which bring the notions of agency

and institutions to the fore. Against this background, it is even more essential to regard an EE as

a whole; therefore, “it should not be decomposed in ten elements for explaining the relative

influence of different elements of the system.” (Stam & Van de Ven, 2019)

Figure 12 depicts the integrative model regarding the elements and outputs of an entrepreneurial

ecosystem and marks the underlying causal paths (propositions abbreviated as P1, P2, P3).

According to the authors, an EE consists of three elements assigned to institutional arrangements,

and seven factors associated with resource endowments. In sum, the ten elements reflect the

functional equivalents of institutions and resources that are needed in a sound regional

entrepreneurial ecosystem fostering productive, high-quality entrepreneurship. In this regard,

productive entrepreneurship is defined as “any entrepreneurial activity that contributes directly or

indirectly to net output of the economy or to the capacity to produce additional output” (Baumol,

1993 cited from Stam & Van de Ven, 2019).

September 29, 2020 30/82

Figure 12: Entrepreneurial ecosystem - elements and outputs (Stam & Van de Ven, 2019)

Institutional arrangements concern formal institutions (i.e., the rules of the game in a society

provided by, e.g., government bodies), culture (i.e., cultural context as an informal institution; here:

entrepreneurship culture as the degree to which entrepreneurship is appreciated), and networks

(i.e., social connectedness of actors).

Resource endowments comprise physical infrastructure (i.e., enabling economic interaction and

allowing actors to meet in physical proximity), demand (i.e., potential market demand or

costumers’ purchasing power for goods and services), intermediaries (i.e., business support

services lowering entry barriers for new ventures, and reducing time-to-market of innovations),

talent (i.e., diverse set of human capital in terms of skills, knowledge, and experience), knowledge

(i.e., investments in scientific and technological knowledge creation), leadership (i.e., building and

maintaining an ecosystem, guidance for and direction of collective action through ‘visible’ leaders),

and finance (i.e., financial investments with an expected return in the future).

All these observable elements are mutually interdependent and co-evolving in a specific region

over time (co-evolutionary proposition P1). By the interplay of the factors, productive

entrepreneurial activity is evolving, which results in the outcome of aggregated value (upward

causation proposition P2). Stam and Van de Ven (2019) speak of structure affecting agency.

Finally, productive entrepreneurship loops back and affects the EE directly (downward causation

proposition P3). The final proposition corresponds with the process of agency affecting structure,

meaning that successful entrepreneurs might take on other roles within an EE as they morph, for

instance, into venture capitalists or network developers in their territory.

The relational approach of Spigel (2017) puts the focus on the constituting internal attributes of

entrepreneurial ecosystems within a region, and the relationships and interactions between them

(see Figure 13). He distinguishes between cultural, social, and material attributes (i.e., resources).

Spigel holds that “successful ecosystems are not defined by high rates of entrepreneurship but

rather how the interaction between these attributes creates a supportive regional environment that

increases the competitiveness of new ventures.” (Spigel, 2017)

Cultural attributes represent the fundamental beliefs and attitudes about entrepreneurship. In this

regard, positive risk perception and entrepreneurial success stories contribute to a robust

entrepreneurial culture. Social attributes relate to those resources that are associated with social

networks and social capital. Formal and informal networks themselves are essential for the

acquisition of resources, the creation and exchange of knowledge, and access to the market.

Mentors and dealmakers are actors with high degrees of social capital, assisting in network

building and skill development. Investment capital is provided by formal and informal investors

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who may simultaneously act as advisors to the ventures. Worker talent corresponds with skilled

employees who form the human capital within a local EE. Material attributes connect to tangible

assets, such as universities developing new knowledge and human capital, early-stage support

services and facilities in the form of lawyers or co-working spaces, supportive government rules

and policies, and the existence of strong local markets.

Figure 13: Ecosystem attributes and their relationships (Spigel, 2017)

The single attributes affect and support or reinforce each other. The resulting unique relational

structure between the attributes manifests in multiple regional ecosystem configurations, which,

in turn, “encourage entrepreneurial activity and provide critical resources that new ventures can

draw on as they expand and evolve.” (Spigel, 2017) Each of these configurations affects the type

of resources available in a respective EE. Notably, the resources are explicitly related to new

venture creation and development and could not be easily accessed otherwise.

Audretsch and Belitski (2017) advanced previous EE frameworks to a remarkable extent. By

focusing on entrepreneurial ecosystems in cities, their framework consists of six domains, of which

four are known from previous ones (Stam, 2015): culture, formal institutions, demand and

workforce, and physical infrastructure and amenities. Remarkably, they included two other

elements, namely the melting pot index and the informational and technology context.

According to the authors, improvement of urban entrepreneurial ecosystems can be reached if a

local culture facilitates trust and safety for undertaking entrepreneurial activities, if transport

connections and city amenities (e.g., green spaces, coffee shops, museums) are perceived as

good, if administration services are efficient and public resources are responsibly allocated, and if

internet access and connectivity are adequately given. Regarding the latter, including the

informational and technology context in the framework supports “individual decision-making,

judgment and the ability to foresee opportunities” (Audretsch & Belitski, 2017: 1034). The melting

pot index (valuing diversity, tolerance, and integration) refers to an appropriate integration of

foreigners, which will improve an existing urban EE. In contrast to the beneficial consequences,

high demand for the labor force and housing might be adverse for EE as individuals might change

their minds to start their own business.

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2.2.3. Dynamic Perspectives on Entrepreneurial Ecosystems

More recently, research on EE has shifted from static frameworks to process perspectives, aiming

to understand the underlying dynamics, cause-effect interlinkages, and interdependencies (e.g.,

Brown & Mason, 2017; Radinger-Peer et al., 2018). Perceiving entrepreneurship as a process

implies that entrepreneurial ecosystems are inherently dynamic. Such a perspective on EEs

focuses on questions around the emergence (i.e., the formation of an EE), adaptation, evolution,

sustainment, and transformation of entrepreneurial ecosystems over time.

Isenberg (2010) considers the creation of an entire ecosystem as a significant challenge. By

asking “[n]ature or nurture?” (Isenberg, 2011b), he addresses the vital issue if entrepreneurial

ecosystems are artificial constructions, or if they develop naturally. Isenberg holds that the answer

lies in between and is related to a process he calls intelligent evolution. Accordingly, it combines

“the invisible hand of markets and deliberate helping hand of public leadership” (Isenberg, 2011b).

While Hakala, O'Shea, Farny, and Luoto (2020) delineate the emergence of an EE primarily

nurtured by regional agents (i.e., governments) and enacted public policies, it is Stam who

emphasizes that “[e]ntrepreneurship is not only the output of the system, entrepreneurs are

important players themselves in creating the ecosystem and keeping it healthy.” (Stam, 2015:

1759) Inherently, the role of the government is not denied but decreased towards an enabling or

facilitative role, becoming a feeder of the ecosystem rather than a leader (Spigel & Harrison, 2018;

Stam, 2015). In line with the foregoing, Stam and Van de Ven (2019) argue that there are plenty

of possibilities how the evolutionary process of an EE might kick off, though, they connect the

process directly to agency. In this regard, the process can start through the intentions and activities

of entrepreneurs, ecosystem leaders, or by partisan mutual adjustment. Roundy et al. (2018) holds

that the emergence of EEs is due to a mix of “micro-level processes (e.g., the intentions of

entrepreneurs), meso-level processes (e.g., the provisioning of resources to entrepreneurs from

support organizations), and macro-level processes (e.g., the influence of ecosystem culture)”

(Roundy et al., 2018: 2).

Importantly, imitating or trying to reproduce thriving existing ecosystems may result in a dead-end

situation as the uniqueness of circumstances and factors shaping any entrepreneurial ecosystem

cannot be repeated. Instead, it is of utmost importance to cultivate a local entrepreneurial

ecosystem that is “based on the realities of their [regions’ – ed. note] own circumstances”

(Isenberg, 2010). Though, Isenberg asserts that “[g]rowing your own [entrepreneurial ecosystem

– ed. note] requires time, effort and resources, as well as experimentation and learning until the

right unique configurations evolve.” (Isenberg, 2011a)

According to Roundy et al. (2018), emergence can only be explained if frameworks acknowledge

the inherent complexity of EEs. Hence, and with reference to complexity science, EEs are complex

adaptive systems “in which macro-level behaviors both emerge from and influence the micro-level

interactions of the elements of the system” (Roundy et al., 2018: 2). By simultaneously connecting

micro-levels (i.g., the intentionality of entrepreneurs or individual-level activities) with macro-levels

(e.g., system-level rules), it becomes evident that the single elements in the ecosystem are

continuously interacting with each other across levels. Subsequently, they can respond and adapt

to altering conditions and contexts. Characteristics of complex adaptive systems include open-

but-distinct boundaries, complex components, nonlinearity, adaptability, sensitivity to initial

conditions, and self-organization.

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Open-but-distinct boundaries refer, on the one hand, to the geographical boundedness of an EE,

on the other hand to the openness and permeability regarding resource flows entering or leaving

the EE. The complexity of components includes the role pluralism of agents (i.e., entrepreneurs,

investors, mentors, etc.) and the activities on multiple levels (i.e., micro, meso, macro). Nonlinear

dynamics and (positive or negative) feedback loops are caused by the interdependency of

components. Adaptability is an essential characteristic as “actions of agents within an EE will

produce continuous modifications to the system, which shape how the system responds to

endogenous and exogenous disturbances and allow it to adapt to changing and novel conditions”

(Roundy et al., 2018: 4). An EE is sensitive to initial conditions, meaning that the primary

configuration may have unexpected and unpredictable effects on future developments.

Considering the property of self-organization, EEs emerge in “uncoordinated, semi-autonomous

actions of individual agents” (Roundy et al., 2018: 3). This corresponds with Isenberg’s (2010;

2011a) point of view. Accordingly, an entrepreneurial ecosystem is not driven by a single actor,

e.g., by entrepreneurs. Neither is it a two-actor game involving merely entrepreneurs and

governments (Scaringella & Radziwon, 2018). Instead, there are plenty of others acting as “key

catalysts” or “important connectors and influencers who may not be entrepreneurs themselves.”

(Isenberg, 2014). These actors might have different roles in developing conducive entrepreneurial

environments, which also influences the evolution of an EE (Colombelli, Paolucci, & Ughetto,

2019). The fact that “no one owns or represents an entrepreneurship ecosystem” (Isenberg, 2014)

leads to different motivations and objectives of the actors involved, though, they are working

together for the common purpose of economic prosperity (Scaringella & Radziwon, 2018).

According to Isenberg (2014), ecosystems can develop a self-sustaining nature if a multiplicity of

stakeholders finds benefits in there. Isenberg states that if the tipping point of self-sustainment is

reached (i.e., if the six conducive domains in his model are empowered and mutually reinforcing

each other, see Figure 10), institutional actors (such as governments) need to reduce their

involvement.

Because a profound explanation of entrepreneurial ecosystems requires a dynamic approach,

Mack and Mayer (2016) suggest an evolutionary view on EE. Figure 14 shows four stages of

development, i.e., birth, growth, sustainment, and decline, which are related to Isenberg’s

ecosystem framework (Isenberg, 2011b) containing the six elements of policy, finance, culture,

support, human capital, and markets.

Over time, while the EE evolves and declines, both the importance and strength of critical elements

alter, which, in turn, impacts the entrepreneur, his venture, and the entire EE. In the birth phase,

for instance, elements in the EE are still underdeveloped. During the growth phase, the domains

become increasingly oriented towards entrepreneurship, whereas during sustainment, each of the

elements starts to diminish. If the EE actors in the respective domains fail in prolonging the

sustainment phase, the decline of the EE will follow. In this final stage, the entrepreneurial climate

weakens to a considerable extent, and “[e]ntrepreneurship is no longer perceived as a viable

career option” (Mack & Mayer, 2016: 2124). Ultimately, according to the authors, the EE will

disappear, or the cycle will start afresh. Referring to Mack and Mayer (2016), Malecki (2018)

contrasted that such a life cycle model should not contain the stage of decline, but end with a

sustainability phase.

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Figure 14: Evolution of an entrepreneurial ecosystem (Mack & Mayer, 2016: 2122)

Building on Mack and Mayer (2016), Cantner, Cunningham, Lehmann, and Menter (2020) take a

dynamic lifecycle view on entrepreneurial ecosystems, which involves a transitional perspective

(i.e., morphing into a different form of an ecosystem, in this case, a business ecosystem such as

an industrial cluster). Figure 15 shows five stages in the development process: birth, growth,

maturity and stabilization, decline, and re-emergence.

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Figure 15: Dynamic entrepreneurial ecosystem lifecycle model (Cantner et al., 2020: 8)

The birth-phase of an EE starts with the idea of an individual, which may be triggered by a

knowledge spillover from different sources such as universities or established firms, which was

overlooked and stayed unutilized by others. If such ideas are exploited and translated into an

increasing quantity of new venture creations or spin-offs, the EE starts to evolve. In the second

stage, the growth phase, all elements in the ecosystem form and specialize in the requirements

of entrepreneurship. What is called a “vibrant entrepreneurial scene” (Cantner et al., 2020: 9) is

the emergence of a regionally embedded entrepreneurial culture, which inspires and motivates

others to start their venture. During maturity and stabilization, the number of entrepreneurial

ventures weakens due to less attractiveness in the EE, and incumbent firms start reintegrating

existing successful enterprises. Here lies the tipping point, where the EE starts to transform into a

business ecosystem with plenty of established actors. In the decline stage, the ecosystem

transformation towards a business ecosystem with established firms, routines, and norms is

completed. It is marked by the exploitation of opportunities of incumbents than of entrepreneurial

ventures, and radical innovations are replaced by incremental ones in line with established

technological standards. Importantly, this poses new opportunities for potential entrepreneurs,

which is the basis for the upcoming phase of re-emergence. In this case, the lifecycle starts anew

but with different, more advantageous conditions. Supporting networks, institutions, routines, and

norms are already in place, and the entrepreneurial culture re-emerges continuously. A new

technological regime has overtaken the site from the previous one.

Spigel and Harrison (2018) follow a process- and resource-based view on entrepreneurial

ecosystems because, according to the authors, such an approach is, in contrast to the actor-

centric perspective as in previous models, more adequate “to better understand how

entrepreneurs gather resources and support from an ecosystem” (Spigel & Harrison, 2018: 165).

Furthermore, it helps to recognize if entrepreneurs and ventures act differently when it comes to

other stages in their lives or the venture life cycle. In this regard, EEs are driven by ongoing

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processes of resource creation, resource recycling, and flow of resources through social networks

which may alter the structure of an EE to a notable extent. Key resources in this regard may

include knowledge, capital, mentors, or talent. The mere presence of resources is not a reason

for an EE to emerge and to grow. Instead, it is vital that entrepreneurs can access and make use

of resources, which are provided by the flow through social networks. For this reason, local social

networks need to be built dense and trust-based, and within the networks (i.e., the entrepreneurial

community) entrepreneurs are perceived as legitimate to deliver high-growth entrepreneurship.

Moreover, public bodies and agencies have the task to create opportunities for actors in the

networks to connect, hence, taking care of relational forms of support (Mason & Brown, 2014).

Resource recycling is another factor which is contributing to the development of an EE.

Correspondingly, successful or failed entrepreneurs exiting the EE free up resources, which can

be recycled in the EE, meaning that these resources are available for others. It is also an option

that successful or failed entrepreneurs do not exit the EE but sustain the entrepreneurial resources

in the region. Subsequently, they contribute, for instance, their knowledge, capital, or networks to

younger generations of entrepreneurs, and they may take on new roles, e.g., as mentors,

investors, or as serial entrepreneurs.

Taking the previous into account, the three processes of resource creation, resource recycling,

and the flow of resources lead to a typology of four different EEs, distinct by their network strength,

and functionality in terms of the available resources. As shown in Figure 16, the transformation of

entrepreneurial ecosystems over time affects the connectivity between actors and resource

processes, moving from a nascent to a strengthening, and subsequently resulting in either a

resilient or a weakened ecosystem.

Figure 16: Transformation of entrepreneurial ecosystems (Spigel & Harrison, 2018: 162)

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Cantner et al. (2020) pointed to the essential aspect that ecosystems can exist in parallel. This

implies that ecosystems are heterogeneous in nature. In this regard, Roundy et al. (2017)

examined the variance between different ecosystems by asking “why some EEs thrive, particularly

in response to environmental changes, while others decline or fail to develop” (Roundy et al.,

2017: 99). Accordingly, EEs vary in their degree of diversity in terms of actors, venture types,

business models, and support organizations, e.g., incubators and accelerators) and their degree

of coherence concerning shared values and activities, which causes components of an EE to

interact. The interplay between them leads to system-level resilience, which is the distinguishing

factor between the variance of ecosystems. Resilience is an indicator for ecosystem health defined

as “the degree to which an EE can continuously recover from and adapt to exogenous shocks and

endogenous pressures” (Roundy et al., 2017: 99).

Sustainable Entrepreneurial Ecosystems

By referring to Welter (2011) and Welter et al. (2019), Volkmann et al. (2019) hold that by

integrating sustainability into entrepreneurial ecosystem research, accumulating in the nascent

field of sustainable entrepreneurial ecosystems, a new wave of contextualization inaugurates. In

this regard, context does not end with, for instance, institutional or geographical dimensions.

Instead, we must take broader societal and environmental contexts into account to

comprehensively respond to the needs and requirements of sustainable entrepreneurship

(Volkmann et al., 2019).

In analogy to traditional EEs fostering long-term economic growth and development, sustainable

entrepreneurial ecosystems aim at advancing sustainability transition into the economy,

environment, and society (Bischoff & Volkmann, 2018; Pankov, Velamuri, & Schneckenberg,

2019). In this regard, “the establishment of an entrepreneurial ecosystem which places

sustainability at its core can be an important contributing factor to sustainable development.”

(Bischoff & Volkmann, 2018: 182) The question arises of how entrepreneurial ecosystems aiming

at supporting sustainable entrepreneurship and contributing to the UN Sustainable Development

Goals must be configured and shaped (Volkmann et al., 2019). As outlined in previous sections,

sustainable entrepreneurship is explicitly different than traditional entrepreneurship, which may

imply that an ecosystem for a different form of entrepreneurship has a dissimilar configuration of

ecosystem elements (such as institutions or actors) and follows other dynamics (Divito & Ingen-

Housz, 2017).

In line with the preceding, the next section deals with systemic and dynamic views on sustainable

entrepreneurial ecosystems and highlights those elements, processes, and interdependencies of

importance for this topic. The focus lies on relevant systemic components of SEEs, supporting

and impeding contextual factors, the emergence of and transformation into SEEs, and the

significance of stakeholders within existing SEEs. The chapter concludes with a synopsis that

defines the overarching pillars of all entrepreneurial ecosystems independently of their thematic

orientation. Corresponding with the synopsis about sustainable entrepreneurship, the synopsis

regarding EEs and SEEs will directly flow into the subsequent theoretical framework.

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2.3.1. Perspectives on Sustainable Entrepreneurial Ecosystems

A systemic perspective on SEEs

Cohen (2006) defines a sustainable entrepreneurial ecosystem as an “interconnected group of

actors in a local geographic community committed to sustainable development through the support

and facilitation of new sustainable ventures.” (Cohen, 2006: 3) Cohen was among the first

researchers who expanded the concept of entrepreneurial ecosystems with the sustainable

development paradigm. He holds that benefits of SEE comprise not only economic outcomes such

as job growth and prosperity, but also those corresponding with social and environmental values,

e.g., improved social and ecological conditions and reduction of poverty and homelessness. In his

study, Cohen explored the potential of existing traditional EE components to contribute to (or

impede) the development of a SEE by looking at the system components of formal and informal

networks, university, government, professional and support services, capital services, and talent

pool.

Findings suggest that it is relevant for the development of a SEE that potential stakeholders (e.g.,

costumers, advisers, other firms) are open to and understand sustainability principles and issues

otherwise, entrepreneurs and their ventures will not get the appropriate support. Additionally,

policies and regulations need to encourage sustainable behavior at various levels. Moreover,

sustainable entrepreneurs are expected to face barriers from the formal network, which increases

the importance of informal social networks for advice, mentoring, and support. Cohen concludes

with the assumption that “the backbone of a SEE is the natural environment and culture of the

community” (Cohen, 2006: 12), which triggers the question if a SEE can also be developed “in a

community that lack[s] a quality natural environment or culture towards sustainability” (Cohen,

2006: 13).

Divito and Ingen-Housz (2017) assume that a SEE differs substantially from a traditional EE in

terms of ecosystem components, i.e., actors and institutions necessary for fostering sustainable

entrepreneurial action. In this regard, it is the local culture supporting sustainability values, which

is decisive for attracting new supportive actors to the SEE. Collectively forming and supporting

sustainability innovation projects may help the SEE to grow and the diverse actors to gain

legitimacy for their activities. Bischoff (2019) also argues that the perceived strength of sustainable

entrepreneurial ecosystems depends on the role of entrepreneurial stakeholders by engaging in

sustainability-focused stakeholder support and collaboration, and the regional culture shaping the

awareness for entrepreneurship and sustainability. Against this background, Bischoff concludes

that SEEs are highly context-specific.

Supporting and impeding contexts

Pankov et al. (2019) take a holistic approach and emphasize that EEs need to be studied as a

whole. They argue that an ecosystem “is much more than an arbitrary composition of various

elements and attributes; it is noticeably characterized by an interrelation between entrepreneurs

and contextual factors that can weaken and empower an ecosystem.” (Pankov et al., 2019: 18)

In this sense, their study explores the effects of contextual factors on entrepreneurial activities of

sustainable ventures in the sharing economy. They argue that sustainable ventures are confronted

with a different set of competitive conditions compared to traditional entrepreneurs. Accordingly,

as sustainable entrepreneurs follow a triple bottom line of objectives, they might face challenges

in terms of “higher information asymmetries, more regulatory complexity, or difficulties of achieving

market breakthroughs” (Pankov et al., 2019: 2). Sustainable entrepreneurial ecosystems should

be shaped in a way that they respond and adapt to these challenges. Therefore, is it critical to

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investigate how contextual factors influence the development of SEEs. One of the significant

findings concerns the importance of socio-cultural boundaries for developing SEEs. In this regard,

Pankov et al. (2019) hold that “values, rules, and norms are powerful tools to enforce sustainable

behavior and [to] draw the line between sustainable and non-sustainable entrepreneurs” (Pankov

et al., 2019: 18)

Figure 17 depicts the theoretical framework showing two sets of contextual factors of an EE, one

of them enhancing, the other set restraining sustainable activities in the sharing economy.

Stimulating effects on sustainable entrepreneurial activities include enforcing the adaptation of

behavioral rules and enabling the development of organizational capabilities. In contrast,

restricting effects involve impeding market penetration and organizational agility and suppressing

growth. These conjoint set of contextual factors shape the strategic choices of sustainable

entrepreneurs.

Figure 17: Effects of contextual factors on SE activities (Pankov et al., 2019: 10)

Emergence of and transformation into SEEs

O’Shea, Farny, and Hakala (2019) link the entrepreneurial opportunity discovery and creation

process to the emergence of a SEE. Throughout opportunity development, individuals engage in

the three interaction-based phases of co-intuiting (i.e., idea generation and prototyping), co-

interpreting (i.e., identifying faults, looking for opportunity gaps and collaboration synergies, testing

ideas), and co-integrating (i.e., designing roadmaps or creating commercialization paths). These

phases are strongly characterized by a collective agency, which contrasts with the isolated actions

of entrepreneurs, founding groups, or other actors within an EE.

Remarkably, it is this collective agency that facilitates the emergence of a SEE. By referring to the

concept of a nascent EE, the authors draw on Spigel and Harrison (2018) and adopt a process-

and resource-based view. They frame a SEE as an artifact that is deliberately and collaboratively

designed by the respective ecosystem actors engaged in new venture ideation and developing

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opportunity confidence. Hence, a vital basis for a SEE to evolve is the shared sustainability

intention of all engaging actors comprising of strong beliefs, a shared vision, and multidisciplinarity

as a goal. This intention fosters an enabling emotional climate (i.e., passion for renewal, high level

of trust, and freedom), contributing to the SEE development.

Divito and Ingen-Housz (2019) examined based on the Amsterdam denim sector how traditional

entrepreneurial ecosystems become one with a distinct sustainability focus. As shown in Figure

18, the authors identified four interrelated conditions nurturing the transformation into a SEEs: (1)

sustainability orientation of actors, (2) recognition of sustainable opportunities and resource

mobilization, (3) collaborative innovation of sustainability opportunities, and (4) markets for

sustainable products. Significantly, these conditions affect the interactions and interdependencies

between various actors. In this regard, the authors hold that “[t]he favorable presence of these

conditions allows sustainable entrepreneurs to interact and engage in entrepreneurial

experimentation that focuses on sustainable solutions, products, and innovations.” (Divito & Ingen-

Housz, 2019)

Regarding the first, a strong sustainability orientation of actors may lead to the spawning of new

actors, not only new sustainable entrepreneurs or established firms showing ambition to foster

sustainable business model innovation, but also other actors such as a new type of support

organizations (e.g., activists). Recognition of sustainability opportunities and assembling

resources was primarily based on the geographical and cognitive proximity to potential partners.

The findings of the study suggest that opportunities are co-recognized and co-created through the

interactions of various actors in the SEE. Accordingly, “opportunities are networked, socially

constructed occurrences that require coordinated efforts in entrepreneurial ecosystems” (Divito &

Ingen-Housz, 2019) Collaborative innovation refers to a high level of exploration and exploitation

activities, which leads to positive knowledge spillover effects among the various actors. Markets

for sustainable products involve the transition of ideas into a value proposition of products or

services that, in turn, generate social, environmental, and economic wealth.

Figure 18: Conditions nurturing SEEs (Divito & Ingen-Housz, 2019)

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The relevance of stakeholders for SEEs

In line with the view that entrepreneurial ecosystems are primarily shaped through the

participation, interconnections, and interdependencies of multiple actors, an EE is perceived as “a

highly complex multi-level construct” (Simatupang et al., 2015: 390) involving actors at an

international level (e.g., supranational agencies, international aid agencies), at a national or

regional level (e.g., government agencies, business associations, universities), a firm level (e.g.,

entrepreneurial ventures on different stages of the venture life cycle, smaller and larger incumbent

firms, private foundations), and at the group and individual level (e.g., entrepreneurs, mentors,

investors, lawyers).

Bischoff and Volkmann (2018) explored the role of sustainability-focused stakeholder support in

developing sustainable entrepreneurial ecosystems. Figure 19 displays a framework of a SEE

focusing on sustainable entrepreneurs and nine related stakeholder groups (i.e., other actors in

the ecosystem supporting and collaborating with the sustainable venture), including the types of

interactions and support. Importantly, this framework depicts an idealized view on SEEs, meaning

that it needs adaptation to real-life circumstances. This could, for instance, lead to a separation of

primary and secondary stakeholder groups depending on the focus, intensity, frequency, and

duration of involvement.

Figure 19: Idealized stakeholder framework of a SEE (Bischoff & Volkmann, 2018: 183)

Sustainable entrepreneurs are the key actors in a SEE. Through their activities, they “directly or

indirectly transfer sustainable mindsets and promote sustainable behaviour.” (Bischoff &

Volkmann, 2018: 187) The framework suggests that both stakeholder support and collaboration

enhance engagement in sustainable entrepreneurship, which subsequently contribute to the

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development of a SEE (next to other influencing factors, such as geography or formal and informal

institutions).

In this regard, stakeholder support (e.g., through the provision of valuable tangible or intangible

resources) must be explicitly tailored to the needs and requirements of sustainable entrepreneurs

who follow a triple bottom line of social, environmental, and economic goals (Bischoff, 2019). It is

ascribed to be extensive, complementary, and all-encompassing. Stakeholder collaboration goes

further by embracing mutual relations and interdependencies. In fostering partnerships, the focus

shifts to value co-creation, where different stakeholder interests are considered. Stakeholder

collaboration needs to be well-coordinated, aligned, coherent, and enduring. The authors highlight

that multi-stakeholder partnerships and alliances are not only valuable on a micro-level (i.e., for

sustainable entrepreneurial success), but also on a macro level (i.e., taking a systemic perspective

by perceiving SEE as a whole).

2.3.2. Synopsis

In the past two decades, entrepreneurship research moved away from the individual entrepreneur

as the sole responsible for value creation towards a holistic perspective that puts the entrepreneur

and his activities in a broader contextual setting (Stam & Spigel, 2016). The literature part of the

thesis at hand depicts this evolution precisely.

As outlined in Table 5, there exists a high quantity of definitions for the concept of entrepreneurial

ecosystems. Each of them is eligible and focuses on distinct but overlapping aspects. Therefore,

we will subsequently seek to derive the significant conceptual pillars underlying the phenomenon

of entrepreneurial ecosystems. This helps the reader to get a grasp of the big picture.

Author(s) Definition

Audretsch & Belitski, 2017 “a dynamic community of inter-dependent actors

(entrepreneurs, supplies, buyer, government, etc.) and

system-level institutional, informational and socioeconomic

contexts” (Audretsch & Belitski, 2017: 1033)

Audretsch, Cunningham, Kuratko, Lehmann, & Menter,

2019

“entrepreneurial ecosystems” as organized attempts to

establish environments that are conducive to increasing the

success for newly established ventures. (Audretsch et al.,

2019: 313)

Isenberg, 2010 “The entrepreneurship ecosystem consists of a set of

individual elements—such as leadership, culture, capital

markets, and open-minded customers—that combine in

complex ways.” (Isenberg, 2010)

Isenberg, 2014 “an ecosystem is a dynamic, self-regulating network of many

different types of actors” (Isenberg, 2014)

Mason & Brown, 2014 “a set of interconnected entrepreneurial actors (both

potential and existing), entrepreneurial organisations (e.g.

firms, venture capitalists, business angels, banks),

institutions (universities, public sector agencies, financial

bodies) and entrepreneurial processes (e.g. the business

birth rate, numbers of high growth firms, levels of

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‘blockbuster entrepreneurship’, number of serial

entrepreneurs, degree of sellout mentality within firms and

levels of entrepreneurial ambition) which formally and

informally coalesce to connect, mediate and govern the

performance within the local entrepreneurial environment”

(Mason & Brown, 2014: 5; italics in original)

Neck et al., 2004 “a complex relationship of many interacting elements that

need to be in place to support high levels of regional

entrepreneurial activity” (Neck et al., 2004: 192)

Roundy et al., 2017 “communities of agents, social structures, institutions, and

cultural values that produce entrepreneurial activity”

(Roundy et al., 2017: 99)

Roundy et al., 2018 “An entrepreneurial ecosystem is a self-organized, adaptive,

and geographically bounded community of complex agents

operating at multiple, aggregated levels, whose non-linear

interactions result in the patterns of activities through which

new ventures form and dissolve over time.” (Roundy et al.,

2018: 5)

Spigel, 2017 “Entrepreneurial ecosystems are combinations of social,

political, economic, and cultural elements within a region that

support the development and growth of innovative startups

and encourage nascent entrepreneurs and other actors to

take the risks of starting, funding, and otherwise supporting

high-risk ventures.” (Spigel, 2017)

“Ecosystems are the union of localized cultural outlooks,

social networks, investment capital, universities, and active

economic policies that create environments supportive of

innovation-based ventures. (Spigel, 2017)

Spilling, 1996 “the concept of the entrepreneurial system, i.e., the

complexity and diversity of actors, roles, and environmental

factors that interact to determine the entrepreneurial

performance of a region or locality.” (Spilling, 1996: 91)

Stam & Van de Ven, 2019 An ecosystem “consists of all the interdependent actors and

factors that enable and constrain entrepreneurship within a

particular territory.” (Stam & Van de Ven, 2019)

Stam & Spigel, 2016 “Entrepreneurial ecosystems are defined as a set of

interdependent actors and factors coordinated in such a way

that they enable productive entrepreneurship within a

particular territory.” (Stam & Spigel, 2016)

Table 5: Selection of definitions for entrepreneurial ecosystems (in alphabetical order)

Taking all the above-mentioned definitions into consideration, the defining overarching pillars

comprise context, complexity, geography, agency, network, and governance (adopted from Velt,

Torkkeli, & Laine, 2020). Context relates to different dimensions, such as temporal, institutional,

or social facets, and the contextual boundaries of a given EE. Complexity refers to the view of EEs

as a systemic whole with a dynamic, adaptive nature. The pillar of Geography perceives

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entrepreneurial activity and EEs as locational phenomena which emphasize region-specific

attraction, development, use, and flow of resources. Agency concerns individual and collective

actors having an intended or unintended influence on the emergence and development of EEs.

Network involves the support and collaboration of a broad set of stakeholders within an EE, and

aims at understanding the interactions, connectivity, and interdependencies between EE elements

and actors. Governance refers to the questions of who coordinates/regulates an EE and how EEs

should be governed. This pillar relates to institutions that take the role of nurturing and supporting

entrepreneurship.

These pillars frame any entrepreneurial ecosystem. In the unique manifestation and interplay of

conditions, elements, actors, and processes, the heterogeneity of EEs is a plausible consequence

(in the case of this thesis, we contrasted traditional EEs with sustainable EEs). This leads to the

assumption that sustainable entrepreneurial ecosystems (for the respective definitions see Table

6) share the pillars but with different foci, configurations, scales, actors, and dynamics. The primary

difference lies in the distinct sustainability-orientation of the entire EE elements and actors (Acs,

Stam, Audretsch, & O’Connor, 2017).

Author(s) Definition

Bischoff & Volkmann, 2018 “A sustainable entrepreneurial ecosystem refers to an

interconnected and collaborating group of stakeholders

providing sustainability-focused support to entrepreneurs

in order to foster entrepreneurial activities that

simultaneously address the economic, ecological and

social dimensions of sustainability and thereby contribute

to the transformation to a sustainable regional economy.”

(Bischoff & Volkmann, 2018: 186)

Cohen, 2006 “interconnected group of actors in a local geographic

community committed to sustainable development

through the support and facilitation of new sustainable

ventures.” (Cohen, 2006: 3)

Table 6: Selection of definitions for sustainable entrepreneurial ecosystems (in alphabetical order)

Together with the synopsis to the topic of sustainable entrepreneurship (see section 2.1.5.), this

part is taken further for the subsequent elaboration on the theoretical framework in the next

subchapter.

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Theoretical Framework

Figure 20: Theoretical framework (own depiction)

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The synopses of both the chapters sustainable entrepreneurship (see section 2.1.5.) and

entrepreneurial ecosystems, respectively sustainable entrepreneurial ecosystems (see section

2.3.2.) form the basis for developing the theoretical framework as displayed in Figure 20. The

framework merges the core statements of the literature review into a holistic picture integrating

those elements and factors that are characteristic of entrepreneurial ecosystems in general and

sustainable entrepreneurial ecosystems in particular.

The overarching pillars – context, complexity, geography, agency, network, governance –

characterize any entrepreneurial ecosystem independent of its thematic focus (adopted from Velt

et al., 2020). Notably, these pillars do not follow a notable sequence but are listed in a way that is

understandable for the structure of the whole research topic. A short description of each pillar can

be found in the framework containing the primary content expected when dealing with it more

profoundly. The pillar descriptions were derived from the literature review about EEs and SEEs.

In accordance with the six pillars, core findings from the chapters regarding SE, EEs, and SEEs

were divided into the topics of Entrepreneurial Ecosystems and Sustainable Entrepreneurial

Ecosystems. The bullet points reflect the core elements and factors that shape any entrepreneurial

ecosystem. Hence, these factors apply to all EEs regardless of their thematic orientation. The last

column, termed Sustainable Entrepreneurial Ecosystems, aims only at factors that are decisive

for SEEs, and should be considered as detailing elements and characteristics concerning those

mentioned in the penultimate column.

In this regard, the pillar Context includes, i.a., different contextual factors, such as temporal or

institutional ones, that have a supporting or constraining influence on entrepreneurial ecosystems.

In general, EEs are embedded in various contexts that influence the ecosystem to a great extent.

In terms of SEEs, these contexts ideally support the sustainability-orientation of the ecosystem.

The sustainable development paradigm, for instance, is primarily induced by political decision-

makers. Such an institutional context is needed for sustainable actors to enhance sustainability

transformation on different levels. Awareness of or experiences with problems in the broader

societal and environmental environment increases the opportunity recognition of individuals. The

temporal focus is not only put on present days, but on a volatile, complex, and uncertain future,

which must take future generations and natural environments into consideration. Social and

environmental entrepreneurship as related concepts also falls under the umbrella of different

contexts. Although they are adjacent concepts, they are themselves embedded in other, more

specific contexts.

The pillar Complexity refers to entrepreneurial ecosystems as both static but comprehensive

configuration of elements and dynamic aspects regarding its dynamic and adaptive nature,

meaning, for instance, that the emphasis of constituting elements might differ between different

types of ecosystems. Analogous to other kinds of EEs, SEEs show a distinct configuration of

elements which might have a different emphasis and strength in response to the sustainability

orientation. These configurations might also change over time; literature speaks here of

entrepreneurial ecosystem lifecycles. Besides, coupling the sustainable entrepreneurship process

with triple bottom lines of goals and objectives may lead to a more complex entrepreneurial reality

also encompassing trade-offs and other obstacles when doing business.

The pillar Geography comprises the assumption that entrepreneurial activity is a locational

phenomenon. Hence, resources that are needed by entrepreneurs and other actors within an EE

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are region-specifically mobilized, developed, and used. The geographical boundedness of EEs

goes hand in hand with a spatial concentration of resources. Positive effects relate to knowledge

spillover effects between different actors and elements. Adverse effects might involve gaps

between regions caused by different access to resources. In the case of SEEs, place-based

resources must be sustainability-oriented. The realization of a successful entrepreneurial business

is highly contingent on these resources.

The fourth pillar, Agency, relates, on the one hand, to the individual and collective actors operating

in an EE, and comprises, on the other hand, their role in the emergence and development of EEs.

According to the literature, EEs develop through the activities of actors. In addition, also

evolutionary dynamics play a significant role. In SEEs, agency is highly connected with a

pronounced sustainability-orientation of actors. In this regard, the emergence and development of

SEEs is also a mix of visible and invisible hands.

The Network pillar takes support and collaboration of stakeholders into account. Furthermore, this

pillar addresses the interdependencies and interactions between EE elements and actors. EEs

follow a multi-stakeholder approach with the entrepreneur in the center. Various forms of

stakeholder involvement might either encompass active forms of collaboration or passive forms of

support. In SEEs, stakeholder involvement is driven by a strong sustainability focus. It is of high

importance not only to the focal entrepreneurs but to all actors in the field, to build up a strong

stakeholder community with a shared ambition towards sustainable development. In line with this,

the realization of a successful entrepreneurial venture can be perceived as a collective effort.

The last pillar, Governance, deals with topics around the coordination and regulation of EEs,

aiming specifically at formal and informal institutions. In any EE, formal institutions have a role in

advocating entrepreneurship by creating conducive framework conditions. Informal institutions, in

turn, influence entrepreneurial culture to a considerable extent. In the case of SEEs, the

importance of formal and informal institutions is predominant. Literature suggests that sustainable

entrepreneurship needs to be anchored in governmental, economic, and educational institutions,

whereas culture should consider both entrepreneurial and sustainability aspects.

Concluding, SEEs differ from EEs primarily through the strong alignment with the sustainability

imperative on the pillars of context, complexity, geography, agency, network, and governance.

SEEs fulfill the overall characteristics as stated in the column Entrepreneurial Ecosystems but

differ in the detailing elements highlighted in the column Sustainable Entrepreneurial Ecosystems.

The theoretical framework serves as the major guidance for the subsequent qualitative research

process (see chapters 3 and 4).

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3. Methodology

This chapter starts with the chosen research philosophy, which is an appropriate step to

understand the subsequent choices concerning qualitative research design fully. A detailed

introduction follows concerning data collection and analysis techniques applied to the thesis at

hand.

Research Philosophy

Among the five research philosophies in business and management research (termed as

positivism, critical realism, interpretivism, postmodernism, and pragmatism), the author follows an

interpretivist approach. The reason for addressing this topic in the thesis is that research

philosophy underpins the entire research process fundamentally. It shapes the author’s research

questions, methodological choices, the techniques for data collection and analysis, and how

findings are interpreted (Saunders et al., 2019). In this regard, research philosophy “refers to a

system of beliefs and assumptions about the development of knowledge.” (Saunders et al., 2019:

130) It involves ontological assumptions about the nature of the world and the reality,

epistemological beliefs about what constitutes knowledge, and axiological assumptions regarding

how far own values influence the research process.

Regarding ontology, interpretivism assumes that humans continuously create different meanings,

interpretations, and realities as they are in a constant flux of processes and experiences. Hence,

reality is socially constructed and increasingly complex. Concerning epistemology, theories, and

concepts are too limited in depicting the complexity and differences of social realities, making it

necessary to include narratives, stories, perceptions, and interpretations of individuals into

research. This leads to an enrichment in understandings and worldviews. From an axiological

point of view, the researcher brings in value-bound, subjectivist interpretations, and is not

detached from those being researched.

Interpretivism follows a clear subjectivist orientation. In this sense, social reality is not externally

given and independent from an individual’s view as in the case of objectivism, but “is made from

the perceptions and consequent actions of social actors (people).” (Saunders et al., 2019: 137)

This necessitates for researchers “to study a situation in detail, including […] contexts in order to

understand what is happening or how realities are being experienced.” Hence, the role of

subjectivist researchers is to understand the different experiences and realities of the actors in

focus. By taking an empathetic standpoint, “[t]he challenge for the interpretivist is to enter the

social world of the research participants and understand that world from their point of view.”

(Saunders et al., 2019: 149)

Setting the previous in reference to the thesis at hand, it is not only the sustainable entrepreneur

or other actors within an entrepreneurial ecosystem that are highly influenced by the multiple

contexts, they are embedded in. Also, the author of the thesis is affected by contextual factors as

she is an active part of the research process. Hence, both the units of analysis in focus and the

author of the thesis make subjectivist sense and meaning of their realities. To fully understand the

needs and requirements of actors in terms of a conducive sustainable entrepreneurial ecosystem,

it is relevant to ask the research participants about their perceptions, views, and stances.

Regarding the role of the author’s values in the research process, the selection of literature, the

conducted literature review, the design of the research instrument, and the realization of interviews

was made mainly as objective as possible. Though, the author was not neutral or detached in

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terms of the own world view and experiences. Nevertheless, the author tried to take a reflexive

stance and to continually question her own beliefs and assumptions.

Qualitative Research Design

Research design is a guiding plan of coherent steps towards answering the research questions

(Saunders et al., 2019). It is informed by the underpinning research philosophy of interpretivism

(see subchapter 3.1.) as the thesis aims at making “sense of the subjective and socially

constructed meanings expressed about the phenomenon being studied.” (Saunders et al., 2019:

179) By empirically exploring the phenomenon of sustainable entrepreneurial ecosystems, the

goal is to develop a theoretical contribution to the subject in focus – in this case, to sustainable

entrepreneurial ecosystem research.

Consequently, qualitative research draws on specific data collection techniques and analysis

procedures which seek to derive meanings from words and images. These techniques stand in

contrast to quantitative research designs gathering and analyzing numerical data. Regarding data

collection, a mono method qualitative study constitutes the methodological choice. Accordingly,

the applied data collection technique concerns the type of semi-structured interview. The outcome

of the conducted interviews is non-standardized data, which necessitates using specific analytical

procedures. Participant selection happened based on non-probability sampling. In the case of the

thesis, heterogenous purposive sampling was undertaken. The time horizon of the thesis is cross-

sectional, which involves “the study of a particular phenomenon at a particular time” (Saunders et

al., 2019: 212). In this case, data collection (i.e., conducting interviews) happened in a timeframe

of five days, which, in contrast to longitudinal studies, only represents a snapshot at a specific

point in time.

In line with the foregoing, the next sub-sections deal with a detailed presentation of the data

collection techniques and analysis procedures applied to the thesis at hand.

3.2.1. Data Collection

Selection of Participants

The population of interest comprises all actors within any sustainable entrepreneurial ecosystem.

Due to the limited scope in terms of time to finalize the thesis and access to potential interviewees,

it was necessary to delineate a target population consisting of all actors within sustainable

entrepreneurial ecosystems in Austria, focusing on the regions of Vienna and Upper Austria. The

reason for the explicit regional emphasis is the fact that the author of the thesis could make use

of the personal network in this field, which was enlarged by snowballing recommendations. The

sample was drawn from the target population and stands therefore in direct relation to it. Hence,

a sample is a preselected subset that is manageable in size. (Saunders et al., 2019) In the case

of the thesis, a suitable sample size was determined with six participants.

Under the umbrella of non-probability sampling fall the techniques of purposive sampling. It is

characterized by using “your judgment to select cases that will best enable you to answer your

research question(s) and to meet your objectives” (Saunders et al., 2019: 321). Remarkably,

purposive (or judgemental) sampling techniques are not statistically representative of the target

population, which makes it necessary to select information-rich cases. This is also in line with the

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statement that “qualitative research is not necessarily intended to be replicated because it will

reflect the socially constructed interpretations of participants in a particular setting at the time it is

conducted.” (Saunders et al., 2019: 216) In the context of the thesis, the subtype of heterogeneous

sampling was chosen. Consequently, it was the author’s choice “to choose participants with

sufficiently diverse characteristics to provide the maximum variation possible in the data collected.”

(Saunders et al., 2019: 321) This technique allows identifying key themes that can be derived

based on the selected data collection method.

The characteristics with maximum variation in the context of sustainable entrepreneurial

ecosystems was derived from the actual functions and roles of different actors operating in the

targeted sustainable entrepreneurial ecosystems. The orientation framework for selecting useful

and credible participants is based on the stakeholder model suggested by Bischoff and Volkmann

(2018), which was explained in section 2.2.3. Figure 21 shows the model with the allocation of the

study participants to the respective actor groups.

In line with the precedent depiction of the stakeholder framework for SEEs, Table 7 gives a

detailed overview of the selected participants of the study. Subsequently, the author provides not

only detailed background information about the participants but also the reasons why the author

perceives the single individuals as valid contributors to the study at hand.

Figure 21: SEE stakeholder framework (Bischoff & Volkmann, 2018) - with additional notes concerning study participants (own remarks)

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Participant Gender Age Range Assigned Group of Actors

Actor Organization

Current Function in

Actor Organization

Spatial Focus

Participant A Female 30-40 Incubators & Accelerators

Impact Hub Vienna GmbH

Managing Director

Vienna

Participant B Male 40-50 Sustainable

Entrepreneur

ENOMICS E-Charging

Technology GmbH

Managing Director, Co-

Founder

Based in Vienna / not

geographically bounded

Participant C Female 30-40 Sustainable

Entrepreneur

Wohnbuddy / WGE! – Gemeinsam

Wohnen Co-Founder

Vienna/Lower Austria

Participant D Male 30-40 Business Partner

i-LOG Integrated Logistics GmbH

(attached to Schachinger Logistik

Holding GmbH)

Project Manager for Energy

Efficiency and Mobility

Upper Austria/Vienna

Participant E Male 30-40 Financial Institution

Private Foundation Impact Investor Vienna

Participant F Male 30-40 Financial Institution

AWS Austria Wirtschaftsservice

GmbH

Head of Entrepreneurship

and Creative Industries

Based in Vienna / National Focus

Table 7: Selection of study participants

Accordingly, two female and four male persons have been gained for the empirical part, all of them

between age 30 and 50. Most of the actors, respectively, actor organizations, are based in Vienna.

However, the geographical focus might be larger than one distinct region due to the purpose and

scope of the single organizations.

Participant A is the managing director of Impact Hub Vienna. Due to her longstanding experience,

she is a suitable contributor. Founded in 2009, Impact Hub Vienna is “a community of

entrepreneurs, freelancers, investors, corporates, and BGs to work on socially impactful business

ideas” and is part of a broader regional, national, and global network (Impact Hub Vienna, 2019).

It enables social innovation and collaboration by hosting a co-working and event space,

accelerator programs, and a strong network of partners from various backgrounds. Initially born

as a platform for social entrepreneurship, it became increasingly relevant in recent years to expand

the scope towards environmental and sustainable entrepreneurship. Therefore, due to its

intermediary role as actor, driver, and operator within an existing entrepreneurial ecosystem, the

Impact Hub Vienna represents a valid contribution to the study.

Two sustainable entrepreneurs participated in the study. One of them (Participant C) is a co-

founder of Wohnbuddy, which is carried by a non-profit association based in Vienna. Wohnbuddy

is a platform mediating vacant living space between young & old and creates thereby an affordable

and lasting form of living together between generations. Although the business model has a strong

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social focus (intragenerational co-living), it integrates ecological (i.e., utilization of vacant space)

and economic (i.e., financial operability) aspects.

The second sustainable entrepreneur (Participant B) is the co-managing director of ENOMICS,

which develops, produces, and provides electric charging technology. As a market-oriented

enterprise with a green business model, it also involves social dimensions (e.g., ENOMICS

produces at manufacturing workshops inclusive of people with disabilities in Lower Austria).

Hence, both representatives, marked as Participants B and C, are considered suitable choices for

sustainable entrepreneurs operating along the triple bottom line of social, ecological, and

economic objectives.

Schachinger Logistik is a family-owned large company in holistic logistics solutions for various

sectors and industries. Notably, sustainability is one of Schachinger’s core principles, which the

company integrates into social and environmental agendas. Through i-LOG representing the

research wing of Schachinger Logistik, the company participates in several research projects with

various partners (e.g., start-ups, universities, established small and large companies) in the field

of renewable energy and mobility. The project manager, who is, i.a., responsible for the successful

handling and coordination of these projects, participated in the study (Participant D) and provided

valuable insights from the vantage point of a green goliath (Hockerts & Wüstenhagen, 2010).

Participant E is a potential impact investor with first experiences who, together with his family,

represents a family-owned private foundation. He invested already in a selected project, which

makes this person an extending part of the study. Impact investments are “made with the intention

to generate positive, measurable social and environmental impact alongside a financial return”

(GIIN, 2020). In this regard, private foundations, as distinct types of financial supporters, dedicate

their resources to impact investing.

Participant F has a leading role at Austria Wirtschaftsservice (AWS), the promotional bank for

innovation and growth of the Austrian federal government. It provides supports in setting up an

enterprise, i.a., by accessing soft loans, grants, or guarantees. Against the background of holding

various functions and roles within purpose-driven entrepreneurial ecosystems (he is also one of

the co-founders and former co-managing director of Impact Hub Vienna), Participant F has long-

time expertise in the field of social, environmental, and sustainable entrepreneurship. In his current

position as Head of Entrepreneurship and Creative Industries, he integrated impact into the

specific AWS funding opportunity Creative Impact. The grant targets companies in the foundation

and small- or medium-sized enterprises that engage in the development of innovative products,

services, or processes, e.g., in the field of social impact. The establishment of this grant reflects

the increase in applications in the areas of sustainability and entrepreneurship. Hence, based on

his function and the programs launched by the respective department, Participant F can positively

contribute in various ways to the development of sustainable entrepreneurial ecosystems.

Data Collection

Semi-structured interviews serve as sources for data collection (Saunders et al., 2019). This

research instrument commences with a predetermined list of themes (i.e., topics) derived from the

initial literature review (see chapter 2). On this basis, key questions were developed.

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Table 8 depicts the interview guideline, including the major themes and key questions.

Step 1: Briefing of the participant before the interview

(1) Welcoming

(2) Introductory presentation of the thesis (including the purpose of study, general topic, research question(s),

basic definitions of SE and SEE)

(3) Remarks concerning audio-recording, notetaking, use of data, and anonymity

Step 2: Conducting the interview

Theme (Topic) Questions

Theme 1:

Configurational elements and factors of

SEEs

Q1: From your perspective, which elements and factors are

there in existing sustainable entrepreneurial ecosystems to

support and enable sustainable entrepreneurship?

Q2: From your perspective, which elements and factors are

missing in existing sustainable entrepreneurial ecosystems to

support and enable sustainable entrepreneurship?

Repeating Theme 1, including Q1 and Q2, by

showing and explaining a primary model

concerning the configuration of

entrepreneurial ecosystems provided by

Stam and Van de Ven (2019) – see Figure 12

Q3: From your perspective, which elements and factors are

there in existing sustainable entrepreneurial ecosystems to

support and enable sustainable entrepreneurship?

Q4: From your perspective, which elements and factors are

missing in existing sustainable entrepreneurial ecosystems to

support and enable sustainable entrepreneurship?

Theme 2:

Roles in and contribution to SEEs

Q5: From the perspective of an actor’s representative within a

SEE, how would you define or describe your function(s) and

role(s)?

Q6: From the perspective of an actor’s representative within a

SEE, what is the actor’s contribution to a SEE?

Theme 3:

Resume

Q7: What would it take to create or develop an ideal

entrepreneurial ecosystem for sustainable entrepreneurship?

Step 3: Closing of the interview

(1) Ask for remaining questions

(2) Clarify the use of data and anonymity

(3) Thank interviewee for participation

Table 8: Interview guideline (own depiction)

The briefing part (Step 1) contained the welcoming of participants, an introduction into the thesis,

and informed consent regarding the collection and use of data. It aimed at creating a trustworthy

atmosphere for the participants to answer openly and honestly.

While conducting the interviews (Step 2), the interviewer (i.e., the author of the thesis) stuck widely

to the predefined questions throughout the conduct of the interviews. This ensures consistency

and allows for comparable and valid data when testing the theoretical framework. Additional

questions were asked to some of the interviewees but only in cases when it was necessary to ask

for background or contextual information (see above-mentioned sub-section about the selection

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of participants), or when a crucial topic popped up (in this case, the importance of a specific topic

was based on the interviewer’s subjective judgment). This is in line with the interpretivist

philosophical approach, which allows “to be more flexible and contingent on what each participant

says” (Saunders et al., 2019: 438).

The closing of the interview (Step 3) comprised room for open questions from the participants, a

final clarification of the use of data, and concluding remarks.

All the six interviews took place on a one-to-one basis on the Internet (via the digital conferencing

platform Zoom). They were audio-recorded in German with the consent of the individual

participants. Besides, the interviewer took both content-related and contextual notes. Whereas

content-related information sets the basis for the subsequent task of analyzing data, contextual

data refers to the background information of the interview. (Saunders et al., 2019) In terms of the

use of data and anonymity, the interviewer agreed with the individual participants to omit the

personal names. It is allowed by informed consent to mention gender, function(s) and role(s), and

the focal organization.

Table 9 shows the contextual data assigned to each of the participants, including the location of

the interview, date and time, setting, and the author’s impression about the course of the interview.

Participant Location of Interview

Date, Time, Duration

Setting Author’s Impression

Participant A Online (via Zoom) Sep 08, 2020

4.30 p.m. 00:53:21

Quiet atmosphere, no interruptions

Familiar with concepts of SE, EE, SE; very profound insights

into various topics

Participant B Online (via Zoom) Sep 10, 2020

8.30 a.m., 00:24:17

Quiet atmosphere, no interruptions

Was not familiar with the concept of EE, SEE; answered

openly; sustainable entrepreneur who faces trade-offs along 3BL

Participant C Online (via Zoom) Sep 10, 2020

9.30 a.m., 00:35:49

Quiet atmosphere, initially internet

connection problems

Familiar with concepts of SE, EE, SE; a perfect example for a

sustainable entrepreneur operating along the 3BL

Participant D Online (via Zoom) Sep 10, 2020 10.30 a.m., 00:21:41

Quiet atmosphere, initially internet

connection problems

Was not familiar with concepts of EE, SEE; answers reflect his professional background in a large established company

Participant E Online (via Zoom) Sep 10, 2020

5 p.m., 00:28:09

Quiet atmosphere, no interruptions

Familiar with concepts of SE, EE, SEE; well-reflected answers

from an impact investor’s perspective

Participant F Online (via Zoom)

Sep 11, 2020

10 am, 00:16:38

Quiet atmosphere, no interruptions

Familiar with concepts of SE, EE, SE; high-quality responses due to long-term expertise in the

fields of SE and SEE

Table 9: Contextual interview data (own depiction)

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3.2.2. Data Analysis

Analyzing qualitative data requires profound data preparation. With regard to the previous section,

all the interviews were audio-recorded. Only those sections in the audio-recordings were

transcribed that were identified by the author to be relevant for the research. This approach has

the advantage of reducing time but involves careful listening to the audio file to fully grasp the

content. Additionally, it triggers the risk of missing some aspects of the interview, which required

the author to listen to the audio files more than once. The whole process of data preparation

increases familiarity with the data, which is a prerequisite for subsequent data analysis. (Saunders

et al., 2019)

Microsoft Office Excel was used to transfer the audio data into written form (the file is attached via

USB stick to an analog copy of the thesis available at the Institute of Innovation Management,

Johannes Kepler University Linz). As displayed in Figure 22, column A comprises the posed

question following the interview guideline (see section 3.3.1.). In this example taken from the

original Excel file, column H contains notes in German put down during the conduct of the

interview. Column J captures the quotes in German, which are pertinent to the research, including

the timestamps taken from the audio files. Quotes are reflected in column I, which holds the core

statements derived from the quotes. The core statements entail the principal themes addressed

by the interviewees and, subsequently, served as guidance during data analysis. The connection

between the core statement(s) and respective quote(s) was marked by sequential numbering in

the respective cells.

During data analysis, translating the verbatim statements from German to English, respectively

paraphrasing these quotations into English, happened simultaneously to writing the analysis

section. Each quote was considered individually and evaluated concerning the affiliation to one of

the six pillars of the theoretical framework developed in subchapter 2.4. (i.e., context, complexity,

geography, agency, network, governance).

In the next step, quotes were assigned to the single themes subordinated to the topic of

sustainable entrepreneurial ecosystems according to the theoretical framework. Quotes that fitted

the themes subordinated to the topic of Entrepreneurial Ecosystems were included in the analysis

part when it contained important information enriching sustainable entrepreneurial ecosystems. If

a transcribed quote could not fulfill the criteria of any of the six pillars, it was not considered in the

analysis section, but remained in the Excel file. Those quotes which were included in the analysis

Figure 22: Extract from interview transcription (own depiction)

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section were highlighted in italic and marked with the respective author of the quote and the

timestamp of the audio file. In line with the chosen interpretivist research philosophy, quotations

of participants are intensely used in the results section of the thesis (see section 4) to fully take

account of the subjectivist perceptions, interpretations, and views verbally expressed by the

interviewees.

This procedure helped to assort the selected quotes into clusters that offer the basis or a profound

thematic analysis. In this sense, thematic analysis helps to comprehend qualitative data sets, to

identify themes and patterns for further exploration, and to subsequently draw conclusions

(Saunders et al., 2019).

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4. Results

This section deals with the results of the conducted empirical data collection and analysis

procedures. The first six sub-sections of this chapter correspond with the pillars developed in the

theoretical framework (see subchapter 2.4.). They contain the core statements of the interviews

substantiated by the respective quotes shared by the interviewees.

The chapter concludes with a conceptual framework. For this, the theoretical framework will be

further developed by taking the findings from the analysis into account.

Context

The interviews confirm that context is a vital factor for sustainable entrepreneurial ecosystems.

Accordingly, contextual factors influence the significance and understanding of sustainable

development in general and the flow of this concept into the entrepreneurial ecosystem field.

The item ‘inter- and intragenerational orientation/sustainability transformation’ equates not only

with a temporal orientation of a SEE comprising the present and the future but also with the shared

ambition of actors to promote sustainability transformation in society and economy. The latter was

addressed by one participant who highlighted the significance of long-term transformation and

changes towards a world that is in sync with environmental and societal needs.

And what I think is very relevant, it needs a social change. Because this issue of

sustainable development is closely interwoven with a rethink in society about what our

values are, what the economy needs, or what society needs. And now, I often think that

we live in a society that serves the economy and not the other way around. And shouldn't

it be the other way around? That the economy serves society? There must be a very strong

rethinking of what is a priority, and that profit should not have the primacy. (Participant C,

00:31:54)

But at the same time, I think that these huge issues around social and environmental

challenges cannot be left to private individuals; industry and politics must also set the

standards. And above all, the industry itself must implement these targets and have the

will to change. It simply needs a will to change on the part of society. (Participant C,

00:32:55)

The item ‘topic of sustainable development leads to recognition of sustainability opportunities’ was

mentioned by two participants. Participant A sees opportunity beliefs triggered through school or

university programs. In contrast, Participant E identifies personal conviction, or a personal pain

point as pivotal for a first spark to become a sustainable entrepreneur.

What it takes is awareness and inspiration around sustainability issues, i.e., it takes a

specific anchor point to say this is something I want to pursue. University programs or

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school programs that link entrepreneurship with sustainability or the Sustainable

Development Goals will undoubtedly help. It's essential to open the mindset for these

topics and show that this is also a possible way forward instead of a purely traditional

career path. (Participant A, part I, 00:04:40)

A conviction, a personal connection, or a personal pain point - successful sustainable

entrepreneurs are people who are themselves affected by an environmental or social

problem or challenge. (Participant E, 00:07:21)

The item ‘social and environmental entrepreneurship as related concepts’ comes forth in the

interviews with both sustainable entrepreneurs. Although Participant B follows a green-oriented

business model, this person matched the definition of a sustainable entrepreneur acting along the

triple bottom line of economic, environmental, and social goals. Though the entrepreneur’s self-

conception differed from it and the term sustainable entrepreneurship, as used in this thesis, was

unknown to the day of the interview. Instead, during the interview, Participant B was continuously

referring to green or environmental entrepreneurship.

If we help more people to become green faster through our products, then we have already

won. (Participant B, 00:20:49)

In contrast, Participant C was intensely familiar with the concept of sustainable entrepreneurship.

For her, the term sustainable is an internalized expression which she uses consistently. Hence,

she forwent the term social during the interview, although Wohnbuddy implements a business

model with a primarily social focus.

In line with this, Participant A states that not only entrepreneurs developed a new self-conception

in recent years, but also organizations broadened their scope and acknowledge contextual

frameworks, such as the UN Sustainable Development Goals, aiming at a broader understanding

and internalization of sustainability.

A thematic refocusing is also owed to the SGDs. So far, we have simply said that social

innovation was the big topic, and that's where every social or environmental idea was

subordinated. And now there are the SDGs - that is of course, a congenial framework, and

it is also a matter of saying which SDGs are relevant for Austria, and on which ones do we

focus as Impact Hub. (Participant A, part II, 00.20:54)

One aspect that was raised during one interview deals with a specific socioeconomic context for

sustainable entrepreneurship that needs to be established. Accordingly, a high level of

socioeconomic prosperity supports the emergence of sustainable ventures. This financial

endowment on a macro level is also reflected in the financial endowments on a micro (individual)

and meso (organizational) level, which will be addressed in the section of the Geography pillar.

Another factor is a certain level of prosperity, a certain slack, in society. I believe that

sustainable entrepreneurship in a precarious society, where people don't have much time

and other resources to deal with more than what is necessary, then, I believe, you won't

find enough people who are committed to this. Financial resources, economically speaking,

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or at least on an individual level, are essential. A successful sustainable entrepreneur could

move more freely than someone who must fight for his food. (Participant E, 00:06:04)

Complexity

Concerning the point ‘unique SEE configuration in response to sustainability imperative’, it became

apparent during the interviews that the model developed by Stam (2015) and Stam and Van de

Ven (2018; 2019) – see section 2.2.2. – stays valid also for SEEs. All elements of institutional

arrangements (i.e., formal institutions, culture, networks) and resource endowments (i.e., physical

infrastructure, demand, intermediaries, talent, knowledge, leadership, finance) were mentioned by

each of the participants but with different emphasis concerning their perceptions and experiences.

In the entire results part, those elements are put under a closer look, which showed noteworthy

findings, such as formal institutions, culture, or finance.

The item ‘coupling of sustainable entrepreneurship process with triple bottom line’ was mainly

addressed by Participant B, the sustainable entrepreneur with a green business model. He stated

that the triple bottom line approach leads inevitably to trade-offs between economic,

environmental, and social objectives - especially in the case when an entrepreneur runs a

business that has a clear market- and costumer-focus and is contingent on upstream business

partners in the supply network.

You cannot force people to buy sustainable products. If I run a sustainable company, then

I am dependent on the products. I can be a sustainable entrepreneur, but I gain nothing if

I can't sell my products. (Participant B, 00:06:20)

When I start a company, the economic factor is crucial. The ecological aspect is considered

as much as possible. But, to be honest, we are significantly affected by the financial

aspects. (Participant B, 00:06:53)

In the charging infrastructure industry, it is not always possible [to remain ecologically

sustainable] because you are also buying products and materials. They have specific

industry standards. Once you are inside a product chain, you are dependent on suppliers.

And changing these chains is a very, very big effort. But I always have the ecological

bubble on the radar. (Participant B, 00:07:28)

Nevertheless, he tries to make sustainability-oriented adjustments as far as they lie within the

range of his possibilities as a sustainable entrepreneur.

What you can do is, you decide on a different material, e.g., aluminum - because they say

it is durable. What you can also control is the place of production and at what wages you

produce. At ENOMICS, we made a conscious decision to manufacture in Austria, even

though all the consultants told us to go to Romania or Bulgaria or China, where production

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is much cheaper. But then we looked for a production possibility in Austria, which also

meets social aspects, and we ended up at the Geschützte Werkstätten in St. Pölten.

(Participant B, 00:08:26)

Due to the high complexity in following a triple bottom line of goals, sustainable entrepreneurs are

at risk to endanger their own well-being conditions.

And there are also themes that run through these entrepreneurial journeys. A lot is also

about personal development, well-being, how can I avoid burn out. Because often, if you

pursue several goals - not only profit and social issues or profit and green issues - and

then you are still on fire for them, you are relatively young and have little experience, there

is a danger behind it. And this is also an area that is only developing in this way and where

you only now realize that it actually needs it because many people have not pursued their

businesses further even after burnout. (Participant A, part I, 00:08:52)

Geography

Regarding the ‘provision of place-based sustainability-oriented resources’, there is, according to

some of the interviewees, a noticeable gap between urban and rural regions. A strong focus on

resource provision and allocation is put on cities (with Vienna as the most advantaged area in

Austria). Therefore, participants expressed the need to catch up in non-urban regions, for

instance, how to attract and sustain talent respectively to build up a first-quality informational and

technological infrastructure that allows for the migration of ventures’ products or services into the

digital space. Another argument was brought up with regard to programs, events, and workshops.

In rural areas, sustainable start-ups are certainly another challenge. (Participant D,

00:08:20)

There are many incubator or accelerator programs in Vienna and workshops. But there are

less offerings on a regional level. That is also something where there is certainly still a

need to catch up. (Participant A, part I, 00:07:17)

One resource category that was highlighted in the interviews concerns the access of sustainable

entrepreneurs to financial endowments. Multiple sources are available, such as financial support

from informal networks, public grants, and private investments.

And then, of course, there is the issue of financing. But in the case of sustainable

entrepreneurship, financing is not only about investments, especially at the beginning,

because there are rarely investors who invest large sums of money in a very fresh start-

up. Sometimes these are also loans or crowdfunding campaigns or support from the

network. Many of the founders who are with us in the networks say that the first financing

comes from friends and family, and only subsequently comes from banks. Much further

down the line, it comes from investors, but then you need a case that will survive in the

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market, you need to have specific numbers, etc. Especially in the beginning, it is often a

lot of self-financing or friends or family. But there is also, and this is also important, social

banking, e.g., from Erste Bank. This is a separate institution that deals only with social and

ecological start-ups. Interestingly, they have also expanded their focus: designed initially

purely for social issues, they are now expanding their focus towards the Sustainable

Development Goals. (Participant A, part I, 00:07:32)

In Austria, grants, loans, and investments focusing on sustainable entrepreneurship are only at a

nascent stage.

There are already rudimentarily single philanthropic institutions or philanthropically

oriented persons. There is a bank that offers loans; there are the first established investors,

as well as support programs from the state and private sector. (Participant F, 00:01:38)

When one speaks of real investments, there is a lack of a capital market. The capital market

is a huge problem, especially in Austria and Europe. There is simply not enough money in

the various phases of an innovation-driven company to grow. (Participant E, 00:09:14)

Remarkably, there is a difference between philanthropic capital and investment capital for which

the investor expects returns from the investee.

It needs much more philanthropic capital, also compared to other countries. In Germany,

for example, all charitable foundations distribute around 200 EUR per inhabitant and year.

But in Austria, it is only 3 to 4 EUR. Philanthropic capital is already present in a first, tiny

scale, but it needs much more. An early-stage ecosystem, in which the ecosystem cannot

finance itself via the markets, needs patient and risk capital, and perhaps also one that

does not have to be paid back. (Participant F, 00:04:34)

Public fundings remain an essential source for financing sustainable entrepreneurs and their

activities. They are of significant relevance to finance life during the start-up phase of

entrepreneurial ventures.

One must also start with national and regional public funding agencies. For example, there

are special funding offers for sustainable entrepreneurs. Because in the end, what most

people lack is time. Time to implement their ideas. And with time comes money. You must

be able to finance your life in the time it takes to build up your business. These are the

things I see that often make a venture fail. Because then people are forced to go back to

a regular life in which you work 30 to 40 hours per week in a regular job. But besides that,

realistically, you can't seriously build a sustainable business. You must go to events that

are during the day. You must take care of your clients during the day, and you can't just do

it in the evening or only on the weekend. It just doesn't work that way. (Participant C,

00:10:36)

The examples mentioned above are some of the resources required by sustainable

entrepreneurship, which directly relate to the item ‘realization of successful sustainable

businesses (resource-based perspective)’. Hence, sustainability-oriented actors mobilizing and

granting resources contribute positively to the capacity-building of SEEs.

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‘Creative Impact’ of the AWS is a program with accompanying measures aiming at a

positive impact on the ecosystem, e.g., by presenting individual projects, connecting actors

with each other, offering workshops, or cooperating with stakeholders who offer

workshops. In sum, it is about promoting capacity building in the ecosystem. (Participant

F, 00:11:08)

One topic that came up in some of the interviews relates to impact and performance measurement.

It turned out that it is under dispute what is understood under the term impact, how the impact is

measured, and how this, in turn, relates to traditional forms of performance measurement such as

KPI or ROI. Interviewees agree that ventures must sustain financially, but nevertheless, if an

enterprise is explicitly sustainability-oriented, then measurement tools have to reflect it. This helps

to increase comparability and transparency of instruments on financial markets and in financial

institutions.

And the next question is, of course, what is impact? This requires an impact measurement

tool, which, to my knowledge, is not undisputed - when is impact impact? Do you only

measure the output of an organization, or do you measure the change you want to cause?

e.g., CO2 savings or biodiversity in %. This is, of course, a complicated topic. It would be

ideal if every investor or every bank could calculate on a piece of paper just like when you

invest in a share or a property - that would bring me this return or value. Because then it

would be much easier to compare it with other targets. (Participant E, 00:24:28)

But I think we have to get away from the idea that the only KPI is profit. They have to be

financially sustainable, and they have to be able to finance themselves over a more

extended period. Otherwise, you have a problem as a company. But you don't have to

make high profits or returns; you have to measure returns differently. If I invest there, I get

two or three percent interest, so maybe still a little bit more than at the bank. But I haven't

emitted that much CO2 per year. Or I have given so many children, who usually have no

access to education, access to education. Or I have integrated so many homeless people

into the job market. So I think there must be other standards or KPIs as well. And they

have to be included in investment decisions but also in government decisions. (Participant

A, part II, 00:16:36)

And it needs a standard and agreed definition of how much "return on impact" is. Because

if you would have that, and if everyone would accept it, you could approach the capital

market and finance yourself in the same way as other companies do." (Participant E,

00:23:16)

One point that will always come up is undoubtedly the topic of investments and financing.

Simply because sustainable entrepreneurship naturally measures with a different measure

than classic startups. And because the same profit rates cannot be assumed because we

have several goals and therefore, it is less interesting for classical investors. An impact

investment scene has developed over the last years, but it is still relatively small. The sums

are also minimal in comparison. And even if you look at it now: what is the ministry doing

in times of Corona, they now have a start-up commissioner and a team, but they mainly

promote digital innovations and things that make coal, and they don't have a focus on

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sustainable entrepreneurship now. They are already publishing a report, but it has little to

do with entrepreneurship. I think there is still a lot of development potential there. But there

is still a lot of information and clarity to be created: what do I measure at all? And the

investors must be not only profit-oriented but also quasi sustainability-oriented. In other

words, I invest in a better world and get a certain return, but a much lower return than if I

invest in a company that doesn't even look at people or planet. (Participant A, part I,

00:13:08)

What also needs to be considered is the factor of time. In this sense, impact may need a longer

time than financial returns to become evident.

When I look at investors in Austria: there are so few investors who invest impact-driven

and do not think economically. Of course, you have to think economically, but where the

focus is on impact and not on return on investment. And that people do invest, even if they

know that the next five years will be relatively slow. But in the long term, it is simply vital

for society that it is done. And it just takes a while to see the impact. (Participant C,

00:29:19)

In line with this, fast growth in terms of scale and profit might be counterproductive when the

direction should go towards long-term sustainability.

Sustainable entrepreneurship is also a topic that can lead to a rethink: certain things simply

take time. Especially when you launch a new product on the market. This whole start-up

mentality, which only aims to sell the product in the shortest possible time and make as

much money as possible - I think you have to say goodbye to that, too. And that kind of

mentality shouldn't be something worth striving for. (Participant C, 00:30:10)

Though, in general, growth is not perceived as adverse; instead, it is also relevant for sustainable

ventures.

It does not have to be just small start-ups. They can also be sustainable start-ups that are

scalable and can grow. (Participant A, part II, 00:16:36)

Agency

The item ‘pronounced sustainability orientation of all actors’ was a central topic to all interviewees.

Sustainability orientation is reflected in the primary activities of the single actors (e.g., financial

institutions offering impact investments or entrepreneurs implementing sustainable business

models). In the case of large companies who were not born sustainably, but integrated

sustainability into their business models over time, sustainability orientation becomes a strict

requirement in their business processes and activities.

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Our customers demand the integration of sustainability practices, and we require

sustainability principles from our business partners. (Participant D, 00:14:11)

In line with the previous is the fact that sustainable entrepreneurship can have an important

influence on the sustainability orientation of large incumbent firms. In this context, the topic of

sustainable intrapreneurship gains increasing attention. This is about convincing large companies

to enter the SEE and provide engagement opportunities with sustainable actors in the ecosystem.

This links to the Network pillar.

What I find a fascinating topic and where there is still little is Sustainable Intrapreneurship:

How do I get larger organizations to rethink? There is still very little. And there are some

stimulating approaches that could give us more leverage. (Participant A, part I, 00:16:42)

I believe that sustainable entrepreneurs should become examples for all organizations.

They could teach the other organizations how to live a triple bottom line. And what

innovations do you have to make to get that right? And how do you have to rethink or

perhaps restructure internally? (Participant A, part II, 00:19:53)

Sustainability orientation is also present in the plethora of roles actors take or develop throughout

their journeys. Through engaging in various roles, actors, in turn, influence the sustainability

orientation of new or existing stakeholders in the field.

On the one hand, you are a pioneer, a forward thinker, a visionary. In the context of Vienna,

also a city maker. A sustainable entrepreneur is also somehow a stimulator. Organizations

may start to think about doing something new or think about their existing processes. You

are also inspiring for many other people because you realize your idea. When you build up

an organization that is strongly value-oriented, you are very much reflected. That way, you

can also help other people who want to do something similar. You are indeed a mentor

and consultant. And when you submit funding applications - you also confront those who

make the selection with entirely new ideas. (Participant C, 00:19:34)

Remarkably, not only sustainable entrepreneurs are hereby addressed. Also, actors in financial

institutions identify additional roles beyond the mere function of providing monetary support.

Though, these different roles are not obligatory and depend highly on the personality of the

respective actor.

However, an impact investor is also a gateway or a potential business partner. He should

at least give feedback on your business model. A good impact investor should also facilitate

access to customers, not necessarily grant it because he might not be in the field, but the

investor can open doors. He is also an accelerator, maybe not as professional as a

program or an organization, but a good impact investor should be able to draw up a plan

with the sustainable entrepreneur and look together what are the possible next steps, how

can you be sure to make it to the next investment round. Some impact investors can also

connect you with other sustainable entrepreneurs or other stakeholders that might be

important to you. But these additional roles are always only partially present. It depends

on who they are. Some people don't want to deal with it and just want to get rid of their

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money. Some people run a small consulting firm and give you only 80 of the promised 100

while getting the remaining 20 as a consulting service. (Participant E, 00:17:32)

In the case of intermediaries like the Impact Hub, which provides physical space, accelerator

programs, workshops, and access to a broad community and network of partners, additional roles

relate to being a multi-sectoral spot, to promoting the topic of sustainable entrepreneurship, and

to communicating success stories of sustainable entrepreneurs.

The role is that we have become a multi-sectoral spot where people know that when they

come here, they will get a lot of information, like which start-ups are cool in the market right

now? What happened to the start-ups in the corona crisis? How can I work with these start-

ups? And what do I get out of a collaboration? How can I support them? Can I use this

community to solve my questions? (Participant A, part II, 00:04:00)

One of the roles that we have not actively pursued, but which is always resonant:

communicating the topic and the individual sustainable entrepreneurs in the marketplace

and thus making the topic known and establishing it. And the growth of this sector. I believe

that the Impact Hub has significantly contributed to the fact that social entrepreneurship

has become more relevant in Austria and that new individuals and organizations have

joined in. (Participant A, part II, 00:05:06)

The interviewees identified a new category of actors influencing primarily awareness creation

concerning sustainable entrepreneurship to a great extent, namely media and communication

partners. In this sense, effective communication is a critical requirement to increase knowledge

about sustainable entrepreneurship and sustainable entrepreneurial ecosystems and to co-form

a positive attitude and culture towards sustainable entrepreneurship.

Everyone repeats what is written in the ‘Heute’ newspaper. Nobody reflects about what

sustainability really means and what everyone can personally contribute to a positive

change. (Participant D, 00:19:35)

What is missing is a vital communication channel: who talks about sustainable

entrepreneurship? Who reports about it? How does society, but also public decision-

makers, learn that it exists? (Participant F, 00:05:21)

I also believe that the topic has still not been accepted by the masses, not even in Vienna.

And that's where it's all about promoting communication. There is now a project where we

are considering with Ashoka and SENA (Social Entrepreneurship Network Austria) whether

it makes sense to have a comprehensive communications agency that communicates:

What is Sustainable Entrepreneurship? What do people do? They tell stories, but they also

really provide data and do press work. And you also make sure that such stories get to the

top or today or anywhere else. In truth, it is still a niche topic, and if you say you want to

reach the SDGs, then EVERY company should become a sustainable company. But you

can only achieve that if you broaden the issue a lot. (Participant A, part I, 00:14:59)

Effective communication of success stories of sustainable entrepreneurs contributes to the long-

term maintenance and impact of SEEs.

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At the end of the day, it needs proof that sustainable entrepreneurship works. Okay, there

are more and more examples of entrepreneurs who live this triple bottom line, that have a

positive impact not only on the economic side but also on the ecological and social

components. This can have a positive contribution to the ecosystem that increases. Where

you see, it is a concept that works. At the end of the day, every ecosystem needs trees in

bloom and healthy animals. Because if it just muddles along, it will probably implode at

some point because people say, "okay, it's not supposed to work out.” (Participant F,

00:15:05)

The emergence of SEE is linked to a shared vision and a handful of individuals who connect.

These individuals take up an initial spark or trigger in society and transform an idea into a venture

or an organization.

An ecosystem needs a specific time when several players check that something is moving

or needs to change. This can also be a period. And I think that when I think about the Social

Entrepreneurship Ecosystem in Vienna, there were not three people who suddenly came

up with the idea. Still, there was a worldwide movement that started in the USA and

England because the social systems there were fucked up, and people were thinking. I

have to do something myself because the state doesn't do it anymore. (Participant A, part

II, 00:25:59)

To build an ecosystem, you need a vision, something you can communicate. Something

this ecosystem is built around. Ten years ago, this trend was social entrepreneurship and

young people who said that we no longer wanted to pursue a classic career but to do

something else and stepped up to this trend. And organizations that then somehow

structured it. (Participant A, part II, 00:27:30)

Participant A brought up a new perspective with regard to SEEs. She emphasized the

development of sub-ecosystems within an existing SEE, reflecting specific key themes. This is

insofar of importance as such an approach influences other pillars such as Network or

Governance.

I believe that differentiation is needed, i.e., ecosystems to specific topics. You could say

there is a climate hub, a poverty hub, an education hub. We notice and get feedback from

sustainable entrepreneurs who are already further along in their development that they

need or want very concrete support in their fields. For example, if they work in education,

they must work with schools or with the city school board. (Participant A, part II, 00:11:17)

I think these sub-ecosystems are essential. Climate is still too big. We must break the topic

down into areas such as sustainable construction, energy, and mobility. The start-ups then

actually need partners in precisely this area and input from precisely this area. And in some

cases, laws that must change for the sustainable entrepreneurs to be able to bring their

innovations to market. (Participant A, part II, 00:13:35)

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Network

Concerning the item ‘building up a stakeholder community with shared ambition towards

sustainability’, it is of relevance that networking happens on different spatial levels and involves

other small and large actors or stakeholders.

An ecosystem needs local, regional, and national networking through virtual and physical

platforms, peer-to-peer, and other stakeholders. (Participant F, 00:02:18)

An ecosystem needs systematic networking of young innovations with established

corporations and public organizations. Small and large entities must be connected, more

than has been the case so far. (Participant F, 00:05:53)

What you also need are docking points and role models where you can simply see: how

can a sustainable entrepreneurial venture look like? But also: who can support me? Who

can I talk to about initial ideas? What kind of networks are there? Which events fit my

purpose - so it is more on this connection or network level to look at: Ok, who are the

people from which I can get some input and see how things work. And where are examples

of how it works in practice, and is sustainable entrepreneurship something that interests

me? (Participant A, part I, 00:05:27)

In the interviews, the peer-to-peer exchange became a highly significant factor for sustainable

entrepreneurs, which involves both content-related information and interchange and psychological

support on a personal level.

It needs other people, other sustainable entrepreneurs who support each other. Simply a

community where you can exchange ideas. One of the most challenging things is to feel

alone with what you do. There is nobody who does the same (in Austria at least). You also

need mental hygiene. We sometimes face hurdles or obstacles that you might not have as

a typical entrepreneur, and this exchange with the community is essential to keep up, not

to stop. Or the community can help you, e.g., 'talk to him or her' or 'have you already heard

about this funding opportunity or event? (Participant C, 00:07:54)

Another theme that runs through is this peer-to-peer exchange of entrepreneurs at different

stages. This means bringing sustainable entrepreneurs together not only with banks,

potential customers, or partners but also with each other so that they can exchange ideas

and learn from each other. This is also something that has been embraced much more

strongly and positively in recent years than the classic workshop held by a consulting group

because entrepreneurs often learn closer to reality than from any expert coming from any

large company. (Participant A, part I, 00:10:02)

A sustainability-oriented stakeholder community is associated with a stronger cross-sectoral focus

and goes hand in hand with the topic of ‘sustainability-focused stakeholder involvement’.

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What is still missing are networks that work together across sectors. We hear this

frequently from start-ups, from large companies, and the public sector. There are indeed

networks that work on the Sustainable Development Goals, for example, on climate or

education. For instance, there is a group of companies that deals with the topic of climate,

but there are no start-ups, scientific partners, or NGOs involved in it. Or there are NGOs

that join forces, but they are skeptical about the sustainable entrepreneurship scene or

companies because they are too privately oriented. Breaking down these silos is one thing.

The second is to create genuinely multi-sectoral networks that really support each other

and don't just meet and chitchat a bit but work together on solutions". (Participant A, part

I, 00:12.00)

I believe that an ecosystem can establish well if there is a positive response from the

environment, i.e., if society understands what it is, that other sectors and institutions

recognize it and try to play an active role here. In other words, it is not a hermetically closed

system but that it can interact with different ecosystems too. Exchange with business, with

public organizations, with politics, with science should become even stronger. But also, the

networking of the existing actors with each other - I believe there is still a lot of potential.

Many actors look only on their well-being. But I think now is a good time to see what the

actors can do to strengthen themselves and others. (Participant F, 00:12.59)

And then we should see that sub-ecosystems meet. They also need to learn from each

other; for example, they have digital tools that can be used there. But I believe that in

concrete terms, we also need more sub-communities. It should then also be about bringing

these sub-ecosystems together. (Participant A, part II, 00:11:17)

Stakeholder involvement may take various forms. Large companies, for instance, may engage in

publicly funded research projects in which the project consortium involves, i.a. sustainable

entrepreneurs.

We work on a project basis with sustainable start-ups and SMEs and support them in their

growth. We are not a bad platform for this; we are open for research projects, contribute

our know-how, and offer our infrastructure and resources to test or use prototypes in

practice. Then sustainable entrepreneurs and their ventures have the push to grow. We

give them a little help to get started. (Participant D, 00:15:20)

Taking the foregoing into consideration, the primary aim is to support the individual entrepreneurs

in scaling their businesses. This responds to the item ‘realization of successful sustainable

businesses (network-based perspective)’.

Networking is an essential contribution to sustainable entrepreneurship. That you help

people who have cool sustainable ideas but who come from an environment where they

can't scale these ideas. For example, if I have a promising investee, I would not only give

him or her money, but I would also help him or her to get more donors, I would make him

or her known, I would maybe even politically connect this person and help to make his or

her idea big. (Participant E, 00:21:43)

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Governance

It turned out in the interviews that formal institutions (i.e., government, economy, education) and

informal institutions (i.e., culture) play a significant influencing role in sustainable entrepreneurial

ecosystems.

The item ‘relevance of sustainable entrepreneurship in formal institutions’ relates primarily to the

simultaneous anchoring of sustainability and entrepreneurial content in public policies, laws, and

regulations, as well as in education. Hence, SEEs are also shaped by government, economy, and

education, which ideally support the stimulation and pursuit of sustainable entrepreneurial

activities by setting appropriate rules and norms.

What is missing is awareness in society, especially among decision-makers, that this type

of entrepreneurship is essential, and our society needs it. And that in the future, it cannot

only be about profit but that there are also other values that need to be implemented. I am

talking about decision-makers in all areas - politics, business, culture, education.

(Participant C, 00:09:31)

According to the interviewees, governmental decision-makers give direction and are responsible

for establishing conducive framework conditions for sustainable entrepreneurship. They must be

sensitive to the challenges sustainable entrepreneurs are confronted with, which may differ

enormously from those of traditional entrepreneurs. Furthermore, governments and politics can

also become a vital leverage point for lifting sustainable innovation being considered as valuable

for society, economy, and the planet.

We can now see that politicians and the public sector are increasingly recognizing the topic

of sustainable entrepreneurship. We see in the government program that impact start-ups

are mentioned and that they need the right framework conditions - this can be funding

opportunities, perhaps access to philanthropic money, a legal form, or incentive systems

such as tax breaks. If you address these issues, then the legal framework conditions must

be adapted even more. (Participant F, 00:14:24)

Strong political support is needed in a way that decision-makers say ‘yes, our society needs

sustainable entrepreneurship, this is valuable, and we support it’. Whatever such support

may look like. For example, people who implement an idea that we believe in, that we

consider essential, receive a year of unconditional basic income. Or that they say: we take

over the start-up financing for the product or service development. A separate agency or a

different department in a ministry evaluates the ideas and then decides who will be

supported and what this support will look like. This support must be individual. Because

every sustainable entrepreneur faces different challenges. (Participant C, 00:27:55)

State support is also an important issue. My dream, but this is a personal dream of mine,

is that we, as Austria, stop wanting to become the new Silicon Valley and say we have to

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go in this direction, but to say: Austria has so many advantages in the direction of

sustainability - why can't we become the model country for sustainable innovation? And

that the Ministry of Economic Affairs is also behind it and then brings these entrepreneurs

in front of the curtain, including small businesses and agricultural enterprises, and that this

super stage gives them the kind of stage that is sometimes granted to all kinds of start-

ups, especially in the digital and digital financial sector. To want to become the new Silicon

Valley is simply not sensible. (Participant A, part II, 00:14:18)

Binding rules set by governmental bodies are vital in contributing to the promotion of sustainability

because non-binding policies only leading to a voluntary adherence to environmental and social

standards would not have the desired effects. Therefore, Participant B advocated for more exact

and stricter legal and regulatory requirements.

Many freely adhere to environmental standards. We could tighten the legal requirements

even further because then they would apply to everyone. That is the adjustment screw that

I see most strongly. There are environmental movements, etc. But in the end? You can't

force people [to sustainability]. Laws can only do that. (Participant B, 00:10:00)

Regarding the institution of economy, structural flexibility would be a significant prerequisite to

establishing sustainability innovations in markets. Accordingly, norms in well-developed markets

may constrain innovativeness.

What may be lacking is structural flexibility in markets, e.g., if a sustainable entrepreneur

plans to set up a business in a highly standardized field, e.g., drones delivering

pharmaceuticals. Norms, standards, or constraints from a highly developed market can

inhibit innovation. (Participant E, 00:10:31)

Education must systematically consider topics around sustainability and entrepreneurship.

Schools and universities should incorporate these topics into their curricula and lesson plans to

promote sustainable entrepreneurship profoundly and regularly.

What should be more is the integration of sustainability and entrepreneurship into the

educational system, so that young people and young adults get to know it at an early age,

understand what it is, perhaps discover it for themselves, and gather initial knowledge and

experience to put it into practice. (Participant F, 00:04:06)

Sustainability education must start in elementary school. You must start early so that it

becomes a matter, of course, to think about sustainability, to work on it, and to ultimately

act sustainably. (Participant D, 00:20:00)

Nevertheless, it is not only about addressing and integrating the two core topics of sustainability

and entrepreneurship. Other relevant subjects may concern leadership competencies or skills in

information- and communication technologies that enrich personal capabilities.

Education and training can be taken even further, for instance, in the direction of

leadership. (Participant F, 00:07:45)

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Many topics need to be integrated into education - it starts with programming, incorporating

sustainability issues into lessons, or anchoring them in the school system. In education,

there should be better prepared for work life, for teamwork. (Participant D, 00:17:45)

The importance of education and training of potential sustainable entrepreneurs that lack specific

skills or competencies becomes predominant with the subsequent statement.

Many people have good ideas, but they often lack specific knowledge. Especially when

you talk about the triple bottom line, some people come from BOKU and say: wow, great,

I'm an expert in engineering, and I know how to make things green, but I don't know much

about setting up a business plan or getting funding. They lack the economic side.

Conversely, many business students always come up with platform ideas but don't have

the products. In these cases, it's all about bringing together the respective other

knowledge, but also getting an understanding of it, mostly the business perspective. Many

of them, especially in the social sector, have excellent ideas, maybe even worked in NGOs,

but they lack the entrepreneurial approach: how do I bring my idea to the market? And of

course, there are a lot of programs there now. (Participant A, part I, 00:06:10)

Another vital aspect with regards to this pillar are ‘informal institutions fostering entrepreneurial

and sustainability culture’. Entrepreneurial culture is mainly linked to risk-taking, which also

involves accepting mistakes as learnings and not as a failure that cuts down your abilities or

competencies.

There is a lack of willingness to take risks. That also falls under culture. Austria has a very

risk-averse culture. In Austria, it's not like people say, we just try, we'll find a way. That also

applies to error acceptance. Even if you fall on your face with a project, in other cultures, it

is often a learning experience and is highly regarded or at least not considered bad. In

Austria, it is more a sign that you have failed, and therefore, it is less valuable. That is bad.

(Participant E, 00:15:34)

Culture and education are two elements that are highly interwoven.

This is not an easy issue in Austria because we are not such an entrepreneurial country. I

think we even have a more positive culture when it comes to sustainability because there

is a lot of awareness compared to other countries, but less entrepreneurial culture. We are

used to the fact that the social state takes over a lot, that there are a few NGOs, but they

are also openly connected to the state or even supported and even founded by the state.

And bringing THAT together is a fascinating topic for me, which also goes very much into

education. But it is also a cultural topic. There is a strong approach. Austrian start-ups

always have a nice saying: Entrepreneurship must be like skiing. Every child must have

taken an entrepreneurship course at an early age, because only then can it change. This

is a cultural topic that has to be applied on a large scale, and I believe that it has to be

done at a very young age". (Participant A, part I, 00:18:52)

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Conceptual Framework

Figure 23: Conceptual framework (own depiction)

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Figure 23 illustrates the conceptual framework representing the output of the whole research

process regarding the thesis at hand. In sum, all characteristics from the theoretical framework

were adopted. The pillar of Context goes into the conceptual framework without any adjustments.

In the following, only those elements and factors will be delineated in detail, which differ from the

theoretical framework and, thus, constitute new findings derived from the qualitative study (the

respective elements and factors are highlighted in red in Figure 23).

In terms of Complexity in SEEs, following a triple bottom line approach is, in many cases,

connected to trade-offs. This increases the challenge of sustainable entrepreneurs in

simultaneously balancing economic, environmental, and social objectives. Although objectively,

an entrepreneur might fulfill the defining criteria for sustainable entrepreneurship, in practice, it is

not easy to act upon the three goals equally. Economic pressure might put the well-being of

sustainable entrepreneurs under risk, for instance, concerning mental and physical burnout

(notably, burnout is a topic that is already taken up by scholars, see in terms of social

entrepreneurs and personal resource depletion, e.g., Kibler, Wincent, Kautonen, Cacciotti, &

Obschonka, 2018).

Regarding the pillar of Geography, findings suggest addressing the gap between urban and non-

urban areas regarding the mobilization and development of resources. Since EEs are generally

bounded to a specific geographical region, access to resources might be restricted to sustainable

entrepreneurs and actors operating in non-urban areas. An important outcome was that

sustainable entrepreneurship necessitates not only adequate financing resources but different

measurements of success and performance that align to the sustainability focus while considering

that impact and sustainable growth need time to come to the fore. Moreover, a generally accepted

definition of what impact means and how to measure it is not present, which aggravates the topic

of financial resources in SEEs.

In the case of Agency, it is not enough to speak of one sustainable entrepreneurial ecosystem as

sustainable development, and the UN SDG framework is far too big to name and display the

relevant requirements and expectations of the involved actors. Instead, it could be useful to

develop sub-ecosystems within existing SEEs that reflect the thematic foci. In such cases, actors

could draw on the resources and actors of the general SEE and the specialized sub-SEE.

Another factor concerns the plethora of roles of individuals, which may change over time. Anda

change in roles goes hand in hand with a change in contribution. The leverage effects may become

an important topic. Besides, new actors become highly relevant for SEEs. As awareness-building

corresponds directly with communication, it is crucial to actively perceive media and

communication actors as essential stakeholders and multipliers in SEEs.

Concerning the pillar of Network, it is not only the sustainable entrepreneur networking and

partnering with other actor groups. Instead, it becomes increasingly essential that sustainable

entrepreneurs meet and exchange ideas and experiences in physical and virtual peer-to-peer

settings. Moreover, cross-sectoral networking with actors from other EEs is a crucial factor not

only for the future orientation and activities of SEEs but for advancing sustainability transformation

on multiple levels.

Ultimately, findings concerning Governance suggest that it is not enough to increase the relevance

of sustainable entrepreneurship in institutions. Instead, it needs intended anchoring of

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sustainability and sustainable entrepreneurship in formal institutions, which include not only

government and economy, but also education. The latter is identified as a significant driver to

increase the sustainability orientation of actors. With reference to formal institutions, the structural

flexibility of institutions was stated as a pre-requisite for adapting institutional changes aiming at

fostering and enhancing sustainable entrepreneurship. All interviewees emphasized

entrepreneurial and sustainability culture.

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5. Conclusion

This chapter gives a résumé about the significant theoretical and practical implications and

answers the research questions pointedly. It concludes with the limitations of the study and

potential avenues for future research.

Theoretical and Practical Implications

This subchapter highlights the significant implications for theory and practice by recapitulating the

research question and the respective subquestions guiding the thesis at hand.

Subquestion 1: Based on academic literature, what are the core elements and driving

factors of traditional and sustainable entrepreneurial ecosystems?

Before answering this question, it is essential to agree on a common definition of sustainable

entrepreneurship. For the thesis at hand, sustainable entrepreneurship is characterized by a

strong value orientation following a triple bottom line of economic, social, and environmental goals.

The focus is put on both sustainability and development, which integrates a long-term perspective.

Driven by a strong sustainability-orientation, entrepreneurial action focuses on the implementation

of sustainable businesses and sustainability innovation. This is contrasted by traditional

entrepreneurs whose primary goal is to create an economically successful business, to generate

profit, and to increase performance.

Acknowledging the fact that entrepreneurs do not act in isolation but are embedded in broader

contexts brings the concept of entrepreneurial ecosystems to the center of attention. An

entrepreneurial ecosystem is a concurrence of six overarching pillars: context, complexity,

geography, agency, network, and governance. Importantly, each entrepreneurial ecosystem

shows a different configuration of elements and a distinct interplay of dynamics, which leads to

heterogeneity of ecosystems. Analogous to the difference between traditional and sustainable

entrepreneurs, the primary difference between traditional EEs and SEEs lies in the distinct

sustainability-orientation of all elements and actors. The theoretical framework in subchapter 2.4.

gives a comprehensive overview of the elements and factors derived from academic literature.

Subquestion 2: From actors’ perspectives, which elements and factors are relevant in

entrepreneurial ecosystems to explicitly support and enhance sustainable

entrepreneurship?

All elements and factors derived from the literature review and assembled in the theoretical

framework were supported by the interviewees. Though, they added essential statements.

Looking at the unique configurations of SEEs, it comes to the fore that specific elements, such as

finance, still need a lot of development to meet the needs of sustainable entrepreneurs fully. The

development of sub-ecosystems is suggested to provide targeted support and collaboration to

sustainable actors. Although various means of support are given, it is vital for sustainable

entrepreneurs to balance economic, social, and environmental objectives and to deal with

emerging trade-offs that might not only lead to unintended failure but also diminished the well-

being of individuals. Gaps between urban and non-urban areas need to be reduced for sustainable

entrepreneurship to flourish ubiquitously. Another critical factor is the definition and

implementation of appropriate measurements for impact, success, and performance concerning

sustainable entrepreneurship; otherwise, it remains difficult to build up relevant financial markets,

products, and services.

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Moreover, individual actors may hold a number of different roles, affecting their contribution to the

ecosystem. New actors may enter the SEE that are pivotal for propelling sustainability agendas.

The interviewees also stated the importance of peer-to-peer exchange between sustainable

entrepreneurs and cross-sectoral involvement with actors of other EEs. Formal and informal

institutions must also play an active and decisive role in promoting and enhancing sustainable

entrepreneurship.

Central research question: Which elements and factors shape an entrepreneurial

ecosystem facilitating sustainable entrepreneurship?

Derived from the previous literature review and the qualitative study, the conceptual framework

(see subchapter 4.7.) portrays a holistic picture of elements and factors relevant for a sustainable

entrepreneurial ecosystem. The six pillars of Context, Complexity, Geography, Agency, Network,

and Governance must be thought integratively to understand the scope of a sustainable

entrepreneurial ecosystem. Findings suggest that sustainable entrepreneurial ecosystems are

more extensive than traditional ones as they involve a strong and stringent thematic orientation

that influences every sphere of the ecosystem.

As the concept of entrepreneurial ecosystems is increasingly used by practitioners and

policymakers, and in response to the sustainable development paradigm in global politics and

society, this thesis contributes to a first orientation towards the defining characteristics of

sustainable entrepreneurial ecosystems. This may act as a starting point for real-life actors to

understand the heterogeneity of different ecosystems in context, complexity, geography, agency,

network, and governance. Hence, tailored instruments and actions can be developed and taken,

which contrast with one-size-fits-all approaches. This supports the healthy growth and

sustainment of sustainable entrepreneurial ecosystems, which will ultimately foster both positive

social and environmental impact and regional economic development.

Limitations of the Study

The first limitation concerns the nature of the conceptual framework. It is a static compilation of

findings from literature and conducted qualitative research. The six pillars of context, complexity,

geography, agency, network, and governance characterizing any form of entrepreneurial

ecosystems stand individually on their own. But as ecosystems comprise a notable quantity of

actors and elements, there are dynamic interactions and interdependencies which were not

explored in this study. Moreover, the collection of factors and elements in both the theoretical and

conceptual framework are not a comprehensive assemblage of all possible ones but may serve

as a first orientation.

In terms of the research design, the number of interviews could be increased. Taking again the

stakeholder model of Bischoff and Volkmann (2018) under consideration, out of all groups of

actors, at least two representatives could be interrogated to increase the holistic picture of

sustainable entrepreneurial ecosystems. This qualitative research could be extended by

quantitative research methods resulting in a mixed-method approach. This could increase the

reliability (i.e., replication and consistency) and validity (i.e., appropriateness of the measures, the

accuracy of result analysis, and generalizability of the findings). In doing so, the time horizon could

be expanded from a cross-sectional towards a longitudinal study. (Saunders et al., 2019)

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A further limitation concerns the critical discussion of the entrepreneurial ecosystem concept.

Fritsch, Sorgner, Wyrwich, and Zazdravnykh (2019) argue that the persistence of

entrepreneurship in a region is due to awareness of the regional entrepreneurial history. In this

regard, pre-existing economic structures (such as industries and firm sizes) may explain today’s

place-specific endowments and economic activity. If we follow this assumption, then the

entrepreneurial ecosystem approach might fall too short in explaining any form of successful

entrepreneurship. Subsequently, it is not sufficient to explore existing or missing entrepreneurial

ecosystem elements and driving factors, but to shed light on the “historical experience with

entrepreneurship in a certain industry” (Fritsch et al., 2019: 799). In this case, this would involve

the examination of the awareness of sustainable entrepreneurship across generations in Austria.

Avenues for Future Research

The present study sheds new light on both the sustainability orientation of actors and stakeholder

involvement. In contrast to the prevailing question of how actors such as large incumbent firms

can support sustainable entrepreneurs with resources or specific forms of engagement, findings

suggest that the question shifts more to what sustainable entrepreneurs can do for large

incumbent firms or other groups of actors in terms of sustainability orientation. This stands in

connection with the concept of sustainable intrapreneurship, whereby established companies

incorporate sustainability in their business agendas. It needs to be examined if the deliberate

combination of entrepreneurship and intrapreneurship can leverage the sustainability topic.

Regarding sustainable entrepreneurial ecosystems, stakeholder collaboration between

entrepreneurs and intrapreneurs could go into the direction of joint sustainability innovation.

Exploring the settings and formats appropriate for networking and partnering could be a new

avenue for future research.

Productive, high-growth entrepreneurship is seen as the primary output of conventional

entrepreneurial ecosystems. But does this also count for sustainable entrepreneurial ecosystems?

While entrepreneurial ecosystem performance is frequently linked to the rise of unicorns, i.e., new

ventures valued more than 1 billion dollars (see Acs et al., 2017), it remains unclear how impact,

performance, growth, and success is defined and measured in sustainable entrepreneurial

ecosystems. Therefore, it needs to be explored how to determine impact, performance, and

success with respect to sustainable entrepreneurship. In a second step, to explore how these

factors can be measured. In relation to this, it may also become relevant to examine the conditions

and factors under which sustainable entrepreneurial ecosystems become successful.

Regarding sustainable-oriented ecosystems, little is known about the key actors, processes,

conditions, and dynamics that drive and shape the emergence and development of sustainable

entrepreneurial ecosystems. Researchers can shed light on whether sustainable entrepreneurial

ecosystems are either naturally evolving or intentionally designed, or if other dynamics and forms

of coming-into-existence apply for SEEs. This process-oriented exploration resonates with the

view on EEs as complex adaptive systems as promoted by Roundy et al. (2018) whereby EEs

show an inherent complexity, which increases the challenge to grasp the emergence process as

this involves forces, interactions, and dynamics on multiple levels. Hence the primary question is,

how do sustainable entrepreneurial ecosystems emerge? What are the driving forces and

conditions in the emergence process? Who are the major actors in the emergence process? How

does the emergence process look like?

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