What Is Sustainable Entrepreneurship, and Why Does it Matter?
Are entrepreneurs ethically responsible to create a better world?
Opinions expressed by Entrepreneur contributors are their own.
A few years ago, in a pre-pandemic time when congregating with masses of handshake-wielding professionals wasn't reckless endangerment, I sat in the audience at a Collision Conference session in New Orleans. I listened as Ana Kasparian interviewed panelists and dot-com-era tech pundits Naveen Jain and Robert Scoble. Kasparian's series of thought-provoking questions could be summarized this way: What is the tech entrepreneur's ethical responsibility to answer for the ramifications of their technology? Naveen and Scoble's responses to the session, the title of which aptly referenced Silicon Valley's superhero complex, portrayed a romantic view of entrepreneurship and business venturing. Their sentiment? It's up to the next generation's entrepreneurial action to fix the mistakes of the past.
In the years since, the short-sighted Silicon Valley ethos conveyed by Facebook's infamous move fast and break things mantra has been rightfully challenged. Last year, WeWork collapsed under the enormity of its own unsubstantiated brand promises. CEO Adam Neumann failed to deliver on his vision in a dramatic reckoning with data and market demand. Companies like Uber started with utopian ideals, only to succumb to the pressures of the bottom line and relegate worker's rights down the list of company priorities. Google's arguable drift away from their original ethos of don't be evil has kept step with Facebook's evolution into a shadowy political power broker. And there have even been cases of outright Silicon Valley fraud such as Theranos, Elizabeth Holmes' multi-billion dollar biotech startup that lied about its technological capabilities.
The fall of the superhero complex
Technology startups haven't been the superheroes we'd hoped for. In response, industry insiders like ex-Google design ethicist Tristan Harris have formed the Center for Humane Technology. The organization is working to raise public awareness, change legislation and encourage tech leaders toward a new, more sustainable business model. "Tech culture needs an upgrade," their website reads. "To enter a world where all technology is humane, we need to replace old assumptions with deeper understanding of how to add value to people's lives." To start with, they urge entrepreneurs to consider that tech is never neutral.
It's both poetic and significant that since Covid, people are emigrating away from the Bay Area. Professionals would rather work remotely from less expensive cities, since they can't enjoy the best of the Bay anyway. Residents have moved on, like the public's trust.
The old business model that peaked with Silicon Valley's glory days promised to reward great ideas with billions of dollars. But the global health crisis has exacerbated economic inequalities. It's time to take a hard look at where our investments are going as an entrepreneurial community, and to thoughtfully build a future that we all want to inhabit. We have a part to play.
These unrelenting years are also showing us how much we rely on systems that aren't profit-driven, like the postal service. And, some that shouldn't be, like ICUs and healthcare services more generally. It's showing us the cracks in our system, and the massive cracks in racial equity. Entrepreneurship will never be the same.
What is a sustainable entrepreneur?
Entrepreneurs today face a complex dilemma. How can we help create a post-pandemic reality, where access to care is equitable, where Black lives matter, and where the climate is in balance?
Entrepreneurs have a responsibility to consider the future ramifications of social innovation and business strategy, and to practice business ethics that prioritize the long-term health of society at large.
Nielsen predicted that by 2021 sustainable products will take up a quarter of retail shelf space and capture $150 billion in consumer spending. But some experts are saying that green capitalism isn't enough.
"For things to really change, we must break with the logic of expansion," says Stefano Ponte. Ponte is Professor of International Political Economy and Director at Copenhagen Business School's Centre for Business and Development Studies, as well as the author of Business, Power and Sustainability in a World of Global Value Chains . "In other words, while green capital accumulation strategies that optimize resource consumption are helping to lower the relative energy and material intensity of production, they do not address the overall ecological limits to growth because they are based on a logic of continuous expansion."
This view of capitalism is based on our current system that prioritizes short-term profits over long-term sociocultural and environmental issues. But capitalism isn't a one-size-fits-all economic system. Capitalism wasn't created external to us - we invented it and can shape the future of it. We can decide how we implement this system by way of continuing to pressure the drivers of capitalism to evolve and encourage more sustainability orientation.
Considering future generations before shareholders
The task of the sustainable entrepreneur is not finding new ways to build short-term profit machines. Profit should come with providing sustainable development, and consumers are increasingly demanding the shift. The social entrepreneur must find ways to provide sustainable innovation and solve environmental degradation problems using sustainable business practices and technology. And, with a deep understanding of their industry's impact on societal challenges at large. For successful entrepreneurs of the future, the bottom line will become entwined with social responsibility and ecological problem-solving.
I would answer Kasparian's question this way: tech entrepreneurs have a corporate social responsibility to serve future generations before shareholders. Humanitarian and ecologically-oriented biztech that puts economic growth second at most is going to define the new class of sustainability entrepreneurship. The world doesn't need more billionaires. But now more than ever, we need solutions. And that's where the best of social entrepreneurship have always stepped up to answer the call.