If there’s one thing that governments, corporations, and individuals can all collectively agree upon, it is the necessity of working towards achieving a greener future. The world is in the midst of a climate crisis, fighting rising temperatures, more severe and frequent natural disasters, the loss of biodiversity, the depletion of natural resources, and food shortages.
It’s also understandable that some can do more than others to address these interconnected issues, as the extent of the contributions and the methods employed to achieve them vary greatly from one stakeholder to another. While individual actions matter, there’s one category in particular that has the ability to significantly move the needle in the right direction, namely, sustainable entrepreneurs.
But who are these entrepreneurs and where do they come from? Recent research conducted by the Global Entrepreneurship Monitor (GEM) reveals some interesting insights in this regard – and the findings might not be exactly what you’d expect.
Entrepreneurs in the Global South are at the forefront of sustainability efforts
In order to evaluate the level of involvement in sustainability initiatives and identify the entrepreneurs who rank high in this respect, GEM took into account four main factors, as follows:
- The motivation to make a positive difference in the world
- The desire to make sustainability an integral part of business strategies
- Placing sustainability above financial gain or business expansion
- Getting actively involved in promoting sustainability at all business levels
- Taking an active role in promoting sustainability throughout the organization
Most people would assume that the highest percentage of new entrepreneurs who meet the characteristics listed above pertains to developed countries across Europe, but the results of the study contradict these expectations, revealing a different reality.
Findings indicate that countries with developing economies in the Global South, such as Guatemala and India, have a notably higher number of entrepreneurs motivated in their activities by the desire to make a difference in the world. This likely has to do with the fact that people in the Global South are well acquainted with the disastrous consequences of climate change, having experienced the effects first-hand, and therefore entrepreneurs from these communities are more inclined to take action by embracing and promoting sustainability principles.
Results from previous studies also point out that collectivist cultures, which are predominant in southern regions of the globe, tend to support entrepreneurial initiatives whose goal is to improve people’s lives, since one of their core characteristics is prioritizing group needs over individual needs. This also explains why there are more sustainable entrepreneurs in Latin America and the Caribbean than in other parts of the world.
The demographics of sustainability in entrepreneurship
The high concentration of sustainability-centered entrepreneurs in the Global South is not the only notable insight that the research provides. The GEM identified other key trends related to entrepreneurship and sustainability. One of them is that women, graduates, and young individuals make up the majority of the population that’s driven by the ambition to effect change in the world when starting a business venture.
On the other hand, male entrepreneurs were mostly motivated by the idea of building great wealth or earning a very high income, and to continuation of family traditions. Older entrepreneurs and non-graduates find themselves in a similar situation where they are more likely to be motivated by the necessity to earn a living in times of job scarcity.
These results also seem to reflect the different challenges that people from different categories encounter in the job market.
The inconsistency of SDG awareness
Although the conversation around sustainability and the challenges it involves continues to gain traction as countries ramp up environmental protection efforts, knowledge on SDGs (Sustainable Development Goals) remains limited, with awareness levels varying widely across regions and income segments.
Based on the study, there also seems to be a connection between SDG awareness and the economic status of each country. This is evidenced by the fact that countries with strong economies and higher incomes had a bigger number of entrepreneurs familiar with SDGs, compared to middle-income or low-income countries, where awareness was lower or non-existent.
This shouldn’t come as a surprise, though, since populations in richer countries benefit from more access to education and therefore are more knowledgeable on a wide variety of topics, including sustainability. Equipped with the necessary knowledge, entrepreneurs can take matters into their own hands and create businesses driven by sustainability, whether that implies reducing waste, switching to renewable energy sources, increasing recycling rates by employing specialized waste management equipment from companies such as Miltek, and so on.
Translating knowledge into action
In theory, a higher level of SDG awareness should lead to intensified efforts and stronger engagement in this respect. However, GEM findings reveal an interesting contradiction in practice. Data shows that in countries with low SDG awareness, there were more new entrepreneurs who adhered to the sustainability criteria employed by the study.
The direct experience that developing economies have with environmental issues caused by the lack of sustainability action might offer an explanation for this. Existing policies may also play a role in it since many emerging economies are currently looking to diversify their income sources, and focusing on sustainable entrepreneurship might unlock new opportunities for them.
A few words on the research organization
Founded in 1999, the Global Entrepreneurship Monitor is a group made up of national teams from each member country – most of which are connected with reputable academic institutions – that have joined forces to study entrepreneurial practices and ecosystems around the world.
The organization uses a combination of surveys and expert assessments to collect data directly from entrepreneurs and carry out their studies. The program’s purpose is to shed light on a variety of topics related to entrepreneurship and how it relates to economic growth, which allows them to draw up recommendations for decision-makers.
