A Co-Evolutionary Perspective on Sustainable Entrepreneurship, Innovation, and Transformation -...

Dr. Florian Lüdeke-FreundUniversity of Hamburg | Faculty of Business, Economics & Social Sciences Leuphana University | Centre for Sustainability Management (CSM) Research Fellow

Business Models for SustainabilityA Co-Evolutionary Perspective on Sustainable Entrepreneurship, Innovation, and Transformation

UN PRME Mini ConferenceJönköping International Business School, Sweden, 10 May 2016

http://www.wiso.uni-hamburg.de/


www.SustainableBusinessModel.org 2

Based on:

Schaltegger, S.; Lüdeke-Freund, F. & Hansen, E. (2016, in press): Business Models for Sustainability: A Co-Evolutionary Analysis of Sustainable Entrepreneurship, Innovation, and Transformation, Organization & Environment, online first February 25, 2016. [ResearchGate, Organization & Environment]

https://www.researchgate.net/publication/296159902_Business_Models_for_Sustainability_A_Co-Evolutionary_Analysis_of_Sustainable_Entrepreneurship_Innovation_and_Transformation

http://oae.sagepub.com/content/early/2016/02/25/1086026616633272.full.pdf+html



Business as usual is over …



… but how to change the game? One against the world?



A co-evolutionary perspective

Values

Technology

Organization

Environment

Knowledge

Based on Norgaard, 1994

Business model A

Business model B Business model N



Markets- Complex, adaptive systems- Susceptible to changes by single actors/entrepreneurs- Not deterministic, predictable or mechanistic- Process-dependent, organic and always evolving

Sustainable entrepreneurs- Deliberately (co-)creating markets- Often starting in protected learning environments- Develop the micro behaviours that change macro patterns

“… the elements [sustainable entrepreneurs] adapt to the world – the aggregate pattern [the market] – they co-create”*

A co-evolutionary perspective

Based on *Arthur, 1999; Foxon, 2011



Market transformation through sustainable entrepreneurship

Schaltegger et al., 2016

Upscaling

Upgrading



If “processes generating variation and retention are present in a system, and that system is subject to selection processes, evolution will occur.”*

Evolutionary processes

*Aldrich & Ruef, 2006; Schaltegger et al., 2016



Retention is decisive for market transformations. It is a precondition for the diffusion of business models created by variation and affirmed by selection

Evolutionary processes






GrowthReplication

M&AMimicry



The challenge: achieving growth and replication – upscaling – without sacrificing the original sustainability qualities.

From sustainable niches to sustainable mass markets


Repn.

Gr.

M&A

Mim.

Integratability

Replicability

Imitability

ScalabilityEnteg

aEnteg

a

Bionade (as part of

Radeberger group)

Carlsberg, Oettinger

RWE Innogy, E.ON ClimRen

Lichtblick

Lichtblick

GP Energy, Energrün, etc.

Bionade

Stadtauto Berlin

StattAuto, BookNDrive, etc.

Replication

Growth

Merger &Acquisition

Mimicry

Int.

Repy.

Im.

Sc.

Abbreviations: Sc. = Scalability; Repy. = Replicability; Int. = Integrability; Im. = ImitabilityGr. = Growth; Repn. = Replication; Mim. = Mimicry; M&A = Merger and/or acquisition

* Not illustrated further.

RWE Eprimo, etc.

Car2Go

DriveNow, etc.

Evolutionary Processes of Sustainable Entrepreneurship

Variation Selection* Retention Variation Selection* RetentionInitial occurrence of new business models Further variation and co-evolution


The challenge: engaging in M&A and mimicry – upgrading – without losing credibility and market shares.

From mass market offers to sustainable mass markets


Repn.

Gr.

M&A

Mim.

Integratability

Replicability

Imitability

ScalabilityEnteg

aEnteg

a

Bionade (as part of

Radeberger group)

Carlsberg, Oettinger

RWE Innogy, E.ON ClimRen

Lichtblick

Lichtblick

GP Energy, Energrün, etc.

Bionade

Stadtauto Berlin

StattAuto, BookNDrive, etc.

Replication

Growth

Merger &Acquisition

Mimicry

Int.

Repy.

Im.

Sc.

Abbreviations: Sc. = Scalability; Repy. = Replicability; Int. = Integrability; Im. = ImitabilityGr. = Growth; Repn. = Replication; Mim. = Mimicry; M&A = Merger and/or acquisition

* Not illustrated further.

RWE Eprimo, etc.

Car2Go

DriveNow, etc.

Evolutionary Processes of Sustainable Entrepreneurship

Variation Selection* Retention Variation Selection* RetentionInitial occurrence of new business models Further variation and co-evolution


Summary

Market transformation through sustainable entrepreneurship …

- … involves different strategies of upscaling and upgrading the business models of niche and mass market players.

- These strategies depend on the initial market position of a company.

- … is a co-evolutionary process involving business model variation, selection, and retention.

- Retention is crucial for market transformation and it depends on the scalability, replicability, integrability, and imitability of business models.



THANK YOU!

More about SBMs on

www.SustainableBusinessModel.org



Additional case: Aravind Eye Care Systems



The “freemium” model

http://www.klgadgetguy.com; http://assets.slate.wvu.edu

Free basic service

Chargedpremium service



The “social freemium” model

http://www.aravind.org; http://assets.slate.wvu.edu

Free basic service

Chargedpremium service



Inclusive business model innovation : Aravind Eye Care Systems

http://www.aravind.org



Appendices



Business model for sustainability

“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, p. 6



Latest news on BMfS publications, projects, events 16 researchers from 10 countries

www.SustainableBusinessModel.org

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Organization & Environment, Vol. 29, No. 1, March 2016

Schaltegger, S.; Hansen, E. & Lüdeke-Freund, F. (2016): Business Models for Sustainability: Origins, Present Research, and Future Avenues, Organization & Environment, Vol. 29, No. 1, 3-10, DOI

Roome, N. & Louche, C. (2016): Journeying Toward Business Models for Sustainability: A Conceptual Model Found Inside the Black Box of Organisational Transformation, Organization & Environment, Vol. 29, No. 1, 11-35, DOI

Wells, P. (2016): Economies of Scale Versus Small Is Beautiful: A Business Model Approach Based on Architecture, Principles and Components in the Beer Industry, Organization & Environment, Vol. 29, No. 1, 36-52, DOI

Randles, S. & Laasch, O. (2016): Theorising the Normative Business Model, Organization & Environment, Vol. 29, No. 1, 53-73, DOI

Abdelkafi, N. & Täuscher, K. (2016): Business Models for Sustainability From a System Dynamics Perspective, Organization & Environment, Vol. 29, No. 1, 74-96, DOI

Upward, A. & Jones, P. (2016): An Ontology for Strongly Sustainable Business Models: Defining an Enterprise Framework Compatible With Natural and Social Science, Organization & Environment, Vol. 29, No. 1, 97-123, DOI

Gauthier, C. & Gilomen, B. (2016): Business Models for Sustainability: Energy Efficiency in Urban Districts, Organization & Environment, Vol. 29, No. 1, 124-144, DOI

Special issue on “Business Models for Sustainability”

https://href.li/?http://dx.doi.org/10.1177/1086026615599806









Slide 3- Forest: http://solfront.org/wp-content/uploads/2014/04/environmental-disaster-rainforest1.jpg- Ships: http://greenerideal.com/wp-content/uploads/2010/05/05-24-aral-sea-disaster.jpg- Woman: http://i.dailymail.co.uk/i/pix/2014/04/30/article-2616932-1D78902E00000578-358_964x640.jpg

Slide 4- Chess: https://japnamsingh.files.wordpress.com/2015/05/one-pawn-against-the-world.jpg

Slide 8- Elon Musk: http://t3n.de/news/wp-content/uploads/2016/04/2016-04-01-08_43_17-Tesla-Unveils-Model-3-

YouTube-595x337.png- Model 3: http://cdn.slashgear.com/wp-content/uploads/2016/04/tesla-model-3-25-1.jpg - Nissan: http://bestcarmag.com/sites/default/files/1358911Nissan-Leaf.jpg- GM: http://buyersguide.caranddriver.com/media/assets/submodel/5535.jpg- BMW: http://cdn.macrumors.com/article-new/2015/07/bmwi3.png

Slide 12- Whole Foods: http://www.wholefoodsmarket.com/sites/default/files/styles/large/public/media/Stores/D-M/LNF/

TeamPhoto2013.jpg?itok=e03MHORN Slide 14

- Coal: https://gyemgh.files.wordpress.com/2013/07/coal-plant.jpg- Coal: http://blogs.scientificamerican.com/media/inline/blog/Image/coal-power-plant%282%29.jpg- Solarwind: http://www.nrcm.org/wp-content/uploads/2013/09/solar-wind-high-res-1150x400.jpg

Photo credits


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