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Green Entrepreneurship: Building a Green Economy? Evidence from the UK

Chapter · December 2012

DOI: 10.1108/S2040-7246(2012)0000002008

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Book Title: Social and Sustainable Enterprise: Changing the Nature of Business

Chapter Title: Green Entrepreneurship: Building a Green Economy? Evidence from the UK

David Gibbs
Professor of Human Geography
University of Hull
Cottingham Road
Hull
HU6 7RX
01482 465330 / d.c.gibbs@hull.ac.uk

Kirstie O’Neill,
Research Associate
Department of Geography
University of Hull
Cottingham Road
Hull
HU6 7RX
01482 465922 / k.oneill@hull.ac.uk

Abstract

Purpose: There has been a growing interest in the development of a ‘green’ or ‘low carbon’
economy as a means of reconciling economic development and the environment. Research on
green entrepreneurs to date has been upon individual entrepreneurs, neglecting wider economic
and social contexts within which they operate. By looking at these wider networks of support we
suggest that discourses of the lone entrepreneur innovating and changing business practices are
misrepresentative.

Methodology/approach: Semi-structured interviews to investigate green entrepreneurship with

green building companies and policy makers.

Findings: Combined with new demands from consumers for more environmentally-friendly products
and services, the changing shape of national and global economies is leading to new forms of
entrepreneurship. We identify a number of tensions between policy intentions and businesses’
experiences on the ground.

Research limitations/implications: To date, research has only been undertaken in the UK – we

recommend that future research takes other national contexts into account. Other economic
sectors also represent promising areas for future research, potentially including social enterprises in
the green economy. Sustainability transitions theories offer a potentially valuable means for
understanding the role of businesses in engendering a green economy.

Practical implications: Implications for policy frameworks are outlined in the conclusions.

Originality/value of paper: By incorporating policy and support organisations, and informal

networks of support, the paper challenges the dominant view of the lone entrepreneurial hero and
points to the significance of networks for facilitating green entrepreneurship. This will be of interest
to policy makers and funders of entrepreneurship programmes.

1
Keywords: Green entrepreneurs; Green building; UK; Policy; Green economy

Paper classification: research paper

2
Introduction

Scientific evidence regarding adverse environmental impacts of economic development (e.g.

accelerated climate change, sea level rise, deforestation) has led to increased awareness and
concern amongst policy makers, particularly since the 1970s. However, these environmental
concerns are substantially different in scale and complexity to the environmental issues of the 1970s
and 80s, such as localised air pollution (Geels, Monaghan, Eames and Steward 2008). Consequently,
environmental problems increasingly require international and even global political responses, such
as the 1972 UN Conference on the Environment in Stockholm, and the 1992 Rio de Janeiro Earth
Summit, thus signifying the important links between scientific environmental evidence and social
and economic aspects of sustainability.

Despite the widespread adoption of sustainable development following Rio, and the potential
opportunity to combine economic, environmental and social policy aims, relatively little progress has
been made in most developed nation states. Economic development policies have remained
wedded to a high growth, carbon-based, consumption-led economy where success is measured by
increasing Gross Value Added and higher levels of personal consumption (Jackson, 2009). Recently,
however, there has been a growing policy debate around the potential to change existing
development pathways, where environmental challenges are seen as economic opportunities as
opposed to barriers (UNEP 2011; European Commission 2011).

Much attention has focused on low carbon initiatives – an attempt to reduce greenhouse gas
emissions and so mitigate climate change – and the development of a green economy (see for
example, Smith, Voß and Grin, 2010; Davies and Mullin, 2011). Effectively, this envisages future
economies and societies as different from current forms (e.g. energy will come from renewable
sources, vehicles will use different fuels, new sectors and types of jobs will be created), but the basis
of our capitalist, consumption-led economies will remain much the same. Businesses are seen as
having shifted from a position of denial about their impacts on the environment to one where they
have the potential to mitigate the detrimental effects. This perspective is essentially one of
ecological modernisation, at the heart of which is a belief in technology, innovation and progress to
solve environmental problems (Roberts and Colwell, 2001; Mol, 2002). Thus the green economy,
with a combination of new technologies and changing institutions, is increasingly becoming a source
of policy responses and initiatives in the developed world (Barry and Paterson 2003; Barry and Doran
2006). Concurrent with this has been a growing interest in the emergence of new types of business
that seek to radically alter mainstream economic activity. These are led by green entrepreneurs,
defined as those entrepreneurs who combine environmental and business aims and who seek to
achieve the social and ethical transformation of their particular business sectors (Isaak, 1998).
However, both academic and popular accounts of green entrepreneurs view them as lone actors
rather than linked into wider economic and social contexts. Given the emphasis on green
entrepreneurs as a force for change in the wider economy, this seems a key failing. Moreover, this
gives rise to limited analyses which focus upon individual activity and leads to simplistic policy
solutions. Our aim in this chapter is to begin to remedy this by examining green entrepreneurs in
more depth than has been undertaken to date, drawing upon empirical work with entrepreneurs in
the green building sector, as well as with policy makers and support institutions. In particular we
seek to address four questions:

 What role do supporting infrastructures and the wider environment play in creating
opportunities for, or barriers to, the development of green entrepreneurs?
 Do they manage their firms differently from more conventional entrepreneurs?
 Are green entrepreneurs seeking to restructure their sector and/or develop a new
paradigm?

3
  What are the implications for policy to encourage green entrepreneurial activity?

The structure of the chapter is as follows. In the next section we outline and critique the literature
on green entrepreneurship. Subsequent sections address our research questions drawing on our
empirical research work. A final concluding section draws the arguments together and addresses
implications for policy.

The Rise of Green Entrepreneurs

In recent years, there has been an expanding literature on green entrepreneurship which argues that
individuals who combine environmental awareness with entrepreneurial action will form a key
driver in any move towards a green economy (see for example the collection of papers in Schaper,
2010). The majority of this new field of research on green entrepreneurship has developed within
management and business studies, albeit frequently with limited engagement with more
mainstream entrepreneurship research (Thompson, Kiefer and York 2011). Both this academic
literature and more populist media accounts have focused upon the role of these individuals as
being in the vanguard of a shift to a new form of capitalist development that will address
environmental problems (Beveridge and Guy, 2005). This is a more substantive response than just
end-of-pipe solutions to the negative environmental impacts of economic growth – green
entrepreneurship could have the potential to be ‘a major force in the overall transition towards a
more sustainable business paradigm’ (Schaper, 2002: 27), acting as ‘exemplary solutions for a social
transformation’ (Isaak, 1998: 88). Green entrepreneurs are said to combine the environmental,
economic and social components of sustainability in a holistic manner and to have a different
organising logic to more conventional entrepreneurs (Tilley and Parrish, 2006). In these accounts,
green entrepreneurs seek to use the enterprise as a tool for perpetuating resources involving ‘whole
enterprise design’ focused on sustainable development (Parrish, 2006) rather than a more narrow
focus on economic factors. While these are for-profit businesses, they are established with strong
green (and frequently social) values as well (Kirkwood and Walton, 2010).

Green entrepreneurship is seen as the driving force for the establishment of a holistic and
sustainable economic–environmental–social system. For example, Willis, Webb and Wilsdon (2007),
drawing on the work of Christensen (1997), call such green entrepreneurs ‘disruptive innovators’
whereby established business models and user expectations are superseded and transformed.
Studying green entrepreneurship is thus ‘an attempt to understand the impact innovative individuals
and organisations can have on the environments within which they act: how they attempt to force
their vision upon other actors. It aims to enhance our understanding of the character of such actors
and how they interface with and transform their surroundings’ (Beveridge and Guy, 2005: 668).

This represents a substantial shift away from approaches which see economic development as
antithetical to environmentalism. Rather, it argues that green entrepreneurial activity will be
increasingly central to future market success. In many ways this goes back to the roots of work on
entrepreneurialism and the Schumpeterian vision of entrepreneurial activity as ‘a process of creative
destruction’ whereby entrepreneurs create new products, processes and working methods that
challenge and overturn conventional methods. If innovation is the essence of entrepreneurship,
then green entrepreneurs ‘destroy existing conventional production methods, products, market
structures and consumption patterns and replace them with superior environmental products and
services. They create the market dynamics of environmental progress’ (Schaltegger, 2002: 46). This
contrasts with a Kirznerian (1973) view of entrepreneurship where alert entrepreneurs drive prices,
inputs, outputs and resource allocation,1 and where entrepreneurs are motivated by self-interested

1
See Thompson et al., 2011 for a discussion of Kirzner’s and Schumpeter’s views of entrepreneurship in
relation to green entrepreneurship.

4
profit seeking in a situation where the green economy is another opportunity for pecuniary gain.
From this perspective, the focus is on the business case for sustainability and win-win outcomes and
innovation is largely absent (Dean and McMullen, 2007). For example, Cohen and Winn (2007) use
the term ‘sustainable entrepreneurship’ to focus rather narrowly on the economic opportunities
that arise from market failure, rather than upon the wider implications for the environment,
economy and society of a different mind-set amongst green entrepreneurs. This leads to a
concentration on the business case for the green economy, where actions are legitimised as a source
of competitive advantage (Parrish, 2010). Conversely, research on green entrepreneurs argues that
they ‘are social activists, who aspire to restructure the corporate culture and social relations of their
business sectors through proactive, ecologically oriented business strategies’ (Isaak, 1998: 88). For
them, ‘contributing to improved ecological and social wellbeing is a primary purpose of the
enterprise, and market-based income is valued as a means of achieving these ends’, rather than an
end in itself (Parrish, 2010: 512). Indeed, green entrepreneurs may engage in satisficing behaviour in
order to meet the ‘triple bottom line’ rather than profit maximisation (Kuckertz and Wagner, 2010).

As opposed to being the ruthless profit seeking capitalists of popular imagination, green
entrepreneurs display a different mentality, evidenced through donations to environmental causes,
employee-friendly working conditions, an interest in wider social issues than bottom line profits and
a concern for the longer term environmental implications of their business activities (Harvey, 2007).
Furthermore, many green entrepreneurs are happy to advertise their ‘alternative’ credentials
through their own publicity, promotional material and websites and may cultivate an image of
themselves as being outside the mainstream of business. Of importance here then is the
performativity of green entrepreneurs or what Schauch (2009) terms the ‘identity of enactment’
whereby they stress their individuality and their alterity, often over their business acumen. For
example, Dale Vince, CEO of the UK energy company Ecotricity, in his blog states ‘I’m a hippie, I run a
business…to bring change to the world’.2 Indeed, green entrepreneurs may reject being thought of
as entrepreneurial if this is seen to possess connotations of profit maximisation, materialism and
aggressive behaviour (Friedman and Phillips, 2003; see also Nicholson and Anderson, 2005 for an
analysis of these entrepreneurial stereotypes in the media). Rodgers (2010), for example, argues
that green entrepreneurs are concerned with the quality of business growth rather than quantity,
and with the impact of the business upon supply chains, markets and the wider industry sector.
Research into green entrepreneurship therefore extends entrepreneurship research into the non-
economic motivation and outcomes at work (Thompson et al., 2011).

However, this focus on individuals as change agents is problematic. An emphasis on the role of
charismatic and pioneering individual green entrepreneurs is a simplistic solution to current
environmental challenges, whereby if we only had more of these individuals, the problems would be
solved. Such an emphasis is especially prevalent in popular accounts of the potential of green
economy strategies (Hart, 2006; Pink, 2006). Much academic research also closely identifies the
personality and ideals of individual entrepreneurs as the major factors influencing company strategy
(Schaltegger and Wagner, 2011). This mirrors work on more conventional entrepreneurship where,
despite critiques, the notion of the individual ‘entrepreneurial hero’ remains pervasive (Nijkamp,
2003). Indeed, the reasons why individuals become entrepreneurs are often presented solely in
individual and psychological terms, leading to research which investigates individual entrepreneurial
histories and backgrounds (Down and Reveley, 2004; Wagner, 2009). In both the conventional and
green entrepreneurial literature, this pervasive focus upon individuals has led to a neglect of the
multiple factors at work and the role of supporting infrastructures at the national and local scales
(Cohen, 2006). In both cases, ‘researchers focusing on individual entrepreneurs have ignored the
historical evolution and actions of multiple actors that create the infrastructure for
entrepreneurship’ (Neck, Meyer, Cohen and Corbett, 2004: 192). Hence ‘we do not get much feel
2
Retrieved from Zerocarbonista.com.aboutme

5
for the interplay of competing discourses of business and the environment, the flow of national and
local technology politics, the trade-offs, compromises, deals and conflicting visions that constantly
frame and reshape innovation processes’ (Beveridge and Guy, 2005: 672).

We suggest that green entrepreneurship is a fruitful area for research in exploring the potential for
the development of a green economy and for a potential shift in the form and nature of capitalist
activity. Some interesting issues are raised by existing research on green entrepreneurship which
would suggest that a different approach to business is gaining ground amongst a subset of
entrepreneurs, one which is not only environmentally conscious, but which also spills over into social
attitudes and employee-friendly practices. However, we need to know much more about the ways
in which these individuals are situated within broader structures, the relationships they form, and
the potential (or not) for change that may come about. In the following sections we seek to subject
these theoretical ideas to empirical investigation through an analysis of interviews with both green
entrepreneurs and support institutions in the UK green building sector.

Eco-Construction in the UK: An Exploratory Case Study

Our focus to date has been upon the green building sector in the UK which provides a useful case
study for exploring the theoretical issues outlined in previous sections. The UK is seeking to
improve the energy efficiency and environmental performance of its building stock as a means of
reducing greenhouse gas emissions and the intensive resource use of construction. Green or eco
construction is thus not only seen as a business opportunity, but as a major source of emission
reductions. In the UK, buildings presently account for some 45% of carbon emissions and are
accordingly a key component in meeting the policy goal of an 80% reduction in UK carbon emissions
by 2050 (King 2010).

Construction and housing have also been identified as priority actions by supranational bodies,
including the European Commission, and as offering opportunities for business development and job
creation by SMEs (Vickers and Vaze 2009; CBI 2007; European Commission 2011). The UK
government has introduced policies to encourage more sustainable building practices, for example
changes to Building Regulations, the Code for Sustainable Homes, the Eco Homes Awards scheme, as
well as policies which encourage the uptake of small-scale renewable energy technologies. Much of
the impetus and stimulation for such policies has emerged from practices in other countries,
including Germany and Sweden specifically for building practices, but also the USA and Germany in
terms of feed-in-tariffs. While these practices are more established within such countries, the UK is
a useful case study given the national policy emphasis on sustainable building, and the development
of the green economy more broadly. However, although low carbon and environmentally friendly
building practices have been on the UK government agenda for at least the last decade, little
progress has been made in moving such practices into the mainstream, beyond bolt-on technologies
such as renewable energies (cf. Smith 2007; Lovell and Smith 2010; Porritt 2011).

Green building can incorporate a wide range of practices, and is best thought of as a heterogeneous
sector rather than being a cohesive set of agreed practices. ‘Green’ building might include diverse
approaches to reducing the environmental impact of construction and post-construction building
use, from straw, hemp or rammed earth installations to more conventional ‘brick and block’
buildings utilising technologies such as biomass boilers, ground heat source pumps, rainwater
harvesting, passive solar design and solar panels. Our research has involved green building
businesses which are involved in a range of these building practices, and which undertake new build
projects as well as retrofitting existing buildings to improve environmental performance and
efficiency.

6
Green building practices have emerged from concerns about the resource use and wastage, and
energy intensity of mainstream masonry building methods, leading to innovations and experiments
with materials and designs to reduce environmental impact, not all of which are compatible with
building regulations and planning policies. There is a wide range of ‘how-to’ and self-build books
that are available describing various green building methods, such as rammed earth, using straw
bales and so on, which have been popularised by television programmes like Grand Designs (see
Jones, 2009; Broome 2007; Chiras 2004). Despite this growing interest, green building is often cited
as being a niche market (Smith 2007), as masonry construction methods remain the dominant
method of house building in the UK (Barlow, 2000; Ross, 2002, both cited in Lovell and Smith 2010),
accounting for most of the existing stock and as much as 85% of new build (Building Talk, 2006).

The work in this chapter is based on an on-going research project into green entrepreneurship
involving 44 in-depth interviews with businesses in the green building sector and support
organisations (business support, finance, signposting and so on). In order to identify potential
research participants, we developed a database of companies from exhibitors at events such as
EcoBuild and GreenExpo, online membership databases of organisations like the Association for
Environment Conscious Building (AECB), internet searches and snowball sampling. Small and
Medium Sized Enterprises (SMEs) are our primary focus in the research, but we include sole traders
and micro-enterprises. Social enterprises and other not-for-profit organisations (see for example
Seyfang and Smith 2007) are not included in our research as we specifically wish to explore the
motivations of green entrepreneurs in combining business with environment, rather than social
issues which might feature in sustainable entrepreneurship more broadly.

Role of Supporting Infrastructures and the Wider Environment

This section explores the ways that green entrepreneurs are linked into wider networks thus
illustrating the limitations identified in the literature. Traditional business support in terms of
business advice, grants and loans, as well as institutional frameworks such as legislation and policies
which either encourage or discourage certain practices and behaviours are combined with less
formal support from family and friends. Additionally, the availability of skilled labour and
appropriate materials in the green building sector, and broader consumer demand for green building
products and practices affect the practices of green entrepreneurs in the building sector.

Formal support structures

Recognising the importance of support structures which facilitate, encourage, and nurture
entrepreneurs in running their business is a lacuna within much of the business and entrepreneurial
literature, yet it is particularly interesting to consider the different types of support available and
utilised by green entrepreneurs. Relatively few businesses involved in the research reported having
received grants, loans or business advice from formalised support structures, although the few who
had received such support suggested that it had been critical in advancing their business. However,
they found it hard to access, both in terms of finding out about the availability of such support and
getting the right support for them. Banks appear to be particularly problematic for green businesses
involved in our research (as they are, perhaps, for other small businesses), as they are increasingly
risk averse in the current financial climate, especially regarding business sectors which diverge from
the mainstream.3

3
See Lovell and Smith (2010: 462) for a discussion about the ways that mortgage lenders, insurance companies
and others work against novel construction methods, to reinforce a brick and block approach to construction.

7
Informal support structures

By contrast to more formal structures, our evidence suggests that informal business support is a
critical element of green entrepreneurs’ decision making, from deciding to establish a business to
the investment strategies taken. Family and friends were frequently cited as providing a wide range
of support, including finance, advice on finance, or simply a sympathetic ear. Relationships and
networks are particularly important for SMEs, whether green or otherwise, a point recognised by a
green building materials company who stated that:

I mean you rely on the support of everyone really, family and friends, you build good
relationships with people and yeah it’s a bit difficult to describe really but you kind of rely on
your contacts a lot, you rely on your relationships a lot...

Green businesses are also constrained by practices within the wider, more mainstream building
sector, as we now illustrate.

Finding skilled labour

It is not just the more obvious support structures of policy, advice and finance that provide the
context for entrepreneurial innovation. For many of our respondents, problems in finding skilled
labour were an equally important factor affecting the development of their business. The
dominance of unskilled labour in the volume construction industry and fixed costs per square metre
mean that only certain green technologies and practices are compatible with the mainstream ‘brick
and block’ culture. The dominance of volume house building has important knock-on impacts for
the green building sector in terms of labour availability and the skill and knowledge of that labour
force. Technologies for green building require specialist knowledge to install alternative forms of
insulation, renewable energies and passive solar gain for example, combined with local, natural and
reclaimed building materials. While Smith (2007) assumes a ready supply of such skilled labour, our
empirical evidence suggests such labour is in short supply, and that many trades-people may need
convincing that such techniques and technologies are viable. Many respondents suggested a mis-
match between the availability of greener materials and the ability to design homes and buildings
with green characteristics, and a lack of skills and knowledge to actually construct such properties.
In the words of one respondent:

can the construction industry kind of meet these ... like passivhaus... is the construction
industry ready for passivhaus? Because we’ve got the, the designers are in place now.
Everybody can design them but actually building them...is a different matter...

In consequence, a number of green building businesses have adopted a different business model to
support the development of skills within the general construction industry, for instance offering
additional services to ensure that green products and building materials are installed properly, from
advice and information to architects and designers, to on-site demonstrations and practical skills
sessions. However, many acknowledge that the practical interface on building sites is where skills
are particularly lacking, what has been called the ‘skills gap’ (Greenwood 2012), skills which are
necessary to achieve a built environment which meets the demands of creating a sustainable future
(Haryott, in King 2010):

we’re thinking about trying to train builders and you know actually just what it means on site
really and just like really little things about when you’re doing a cavity wall, you don’t put
loads of mess in the cavity because that will conduct heat through...There’s a lot of training
for architects and designers, but actually on site there’s a bit of a gap.

8
Moreover, the high costs of some green building products reduces profit margins, and the teething
problems associated with installing and using unfamiliar products, means that the cost of customer
support and training can be prohibitive for smaller companies:

I assume that we won’t find builders who have experience in these kinds of products! With
every project that we get I’m assuming that, well certainly with the bigger ones anyway, that
I will have to go to site and show, actually physically show, the guys how to install it and how
to use it, you know do a bit of trouble-shooting along the way.

Regulations, frameworks and policy interpretation

A number of green architects also discussed the vagaries of working with associated professions,
such as planning departments and building regulations officers, at the local scale. The geographical
implications of local-level implementation of planning policies can lead to markedly different types
of building in adjacent localities. For architects and people building new homes or remodelling
existing ones, navigating the planning system is geographically variable and dependent on local scale
interpretation. For instance, as one architect explained, while one local authority is keen to adopt
new practices and planners are seen as supportive, the neighbouring authority prefers replicating
old building styles, resulting in what he termed ‘Noddy’ houses. One architect explained the
frustrations related to the subjectivity of interpreting national level planning policy, and the spatially
distinct effects of this in the UK:

It’s so subjective...bloody planning! It’s ridiculous, a lot of these buildings...are still

here...because they’re quality buildings, you know they’re not still here because they were
listed from when they were built, they weren’t, and in fact you know maybe the reason why
Shrewsbury and places like it are so interesting is because things have changed and because
things have been allowed to grow and shrink and you know be adapted to modern lives or
whatever.

Whether or not ideas and innovations are adopted by the mainstream involves not only builders and
others involved in construction, but also the policies, codes, regulations and planning frameworks
which either encourage or discourage particular types of building in certain places. These processes
of translation and interpretation are not straightforward and are in a constant process of negotiation
and re-negotiation, as some ideas are picked up whilst others are discarded.

For many involved in building, there is a critical need to radically rethink what we want from our
homes in terms of how they are built and what they look like – as Mike Reynolds has argued ‘to hell
with what it looks like: it's how it performs that matters. We know we're rendering this planet
uninhabitable’.4 While some locales are relatively inhospitable to new or novel building styles, other
areas are more willing to experiment. For example, the work of Green Tomato Energy in London
demonstrates what can be done with period buildings with their case study of retrofit in a
conservation area, incorporating internal insulation, renewable energies and custom triple-glazed
sash windows.5

4
Retrieved from
http://www.theecologist.org/how_to_make_a_difference/recycling_and_waste/361020/case_study_building
_sustainable_houses_from_rubbish.html
5
Retrieved from http://greentomatoenergy.com/docs/lenagardens_casestudy.pdf

9
Developing New Paradigms: Educating the Market

One significant area where green building companies reported a divergence from the volume house-
builders is in regard to cost. Mainstream construction companies work to fixed costs per square
metre (between £600 and £1000 per square metre, quoted in Lovell and Smith 2010), which are paid
up-front and are known to consumers and comparable across the market. However, many green
building businesses highlighted a core problem in communicating costs to consumers or clients, in
that building a green or eco home can be more expensive up-front, but over the long-term the
running costs will be lower so that the overall total costs between green and conventional building
are comparable:

The difference is about looking at what the real cost is, peoples’ understanding of real cost,
whether it’s the initial purchase price or the final installed property price, plus so many years
of running the building, so yeah you know part of what we do is trying to get people to
understand that it isn’t just about the purchase price.

Green homes do not necessarily have to cost more,6 and self-build and using waste as a building
material (see Mike Reynolds’ Earthship concept7) can mean lower cost or cost savings. The Housing
Forum (2002: 2, quoted in Lovell 2008: 624) argue that ‘our overriding concern is to...encourage
those yet to embrace the [sustainability] agenda that sustainable construction can be low or no-
cost’. On the whole, however, there can be a cost premium for using emerging green building
technologies, which is an issue that businesses have to overcome in communicating with consumers,
leading to a lack of clarity over the cost of building ‘green’. The potential for homes constructed in a
way which has the potential to reduce energy usage and thus running costs is obviously attractive as
a means of tackling fuel poverty, as well as addressing rising fuel costs. The rising cost of gas and
energy prices was noted by many respondents as having been good for their business.

Thus although many clients tended to be described by green building businesses as people who were
already interested in green or environmental issues, perhaps being in the same niche as the
businesses, rising energy prices were seen as prompting a gradual foray by the mainstream, with
consumers and investors increasingly seeing ‘green’ as a viable investment, especially since the
introduction of Feed-in Tariffs in the UK. One architect explained that ‘generally speaking, clients
that we have are really aware about all this stuff, that’s why they come to us in the first place, and so
they know it’s going to cost them money, that’s not the issue,’ while another suggested that the
recession had encouraged them to become more ‘mainstream’ because ‘those people might have
money. You know, sometimes the greenies don’t.’

What actually constitutes a green or eco build was an area of debate amongst respondents, with
some frustration expressed at the current emphasis on solar panels and other renewable energy
technologies, which for many green building entrepreneurs should be the last thing to be installed
once other, more fundamental, issues had been addressed – ‘getting the simple things right first’.
Conversely there was not universal agreement amongst interview respondents as to what actually
constituted a ‘green’ house, for some this would be a passivhaus,8 whereas for others retrofitting
existing homes with insulation, better windows and breathable materials was more appropriate,
especially given that 80% of homes already built will still exist by 2050, when the UK goal is to

6
Retrieved from http://www.independent.co.uk/environment/green-living/how-i-built-my-house-for-4000-
784278.html
7
Retrieved from http://earthship.com/
8
A ‘passivhaus’ is one that has, according to the promoters, excellent thermal performance, exceptional
airtightness with mechanical ventilation. See http://www.passivhaustrust.org.uk/

10
achieve an 80% reduction in emissions (King 2010: 7). As others have found (Greenwood 2012),
however green a house is, and how many technologies it includes, it is ultimately the behaviour of
the occupier that has the greatest impact on the energy performance, as one respondent clearly
illustrates:

I mean you can get low flow showers, A+ rated washing machines, you can put low wattage
bulbs in and all that kind of stuff, but if someone leaves it on all day then it’s going to use
more than...and you know if they’re going to decide they want a massive fridge or a telly
that takes up half the wall, then that’s their choice and that’s going to undo to an extent all
the goodness that’s been done!

Green Business Practices – Managing Difference

Although the dominant mantra of traditional economic development is business growth at whatever
cost, many of the green businesses surveyed took a different perspective on this, preferring their
businesses to grow at a slower rate, which they see as being more sustainable. This sustainability
relates to business sustainability as well as product sustainability, as many green business owners do
not necessarily desire international business growth, rather they favour their business remaining
embedded within more localised markets. One respondent remembered, almost nostalgically, a
time in the past when their company had been smaller and how ‘it used to be lovely when we could
just sort of pootle along and it was kind of, quite sort of steady...we weren’t trying to grow massively
but we were just trying to sort of keep steady and keep everyone in a job.’ For many committed to
sustainability, slow growth can help ensure longevity:

looking back at the original question of what makes you successful in this market is, you
know, you need to be multi-faceted to, and start small I think...so I personally think you need
to start small and grow with the market rather than sort of trying to come in as a big player
and throw your weight around and then er actually just rubbish the market for everyone
including yourself.

Several respondents contrasted this slow growth approach with the explosion in solar installation
companies following the introduction of the Feed-in Tariffs (FITs) in the UK which was seen as having
created a volatile and unsustainable market. Some interview respondents suggested that the
profusion of companies established when the FITs were first introduced no longer existed in 2011 as
their rapid growth had been unsustainable.

However, growing a business slowly can be challenging for new green entrepreneurs if the business
is not yet at the point where it can support the entrepreneur on a full time basis, as was the case for
a number of respondents. This is less challenging when a flexible source of employment can
complement the growing green business, or where a larger business can support the growing green
offshoot of the business. As one architect suggested, they combine ‘green’ projects with more
‘conventional’ projects, as for them to do otherwise would be ‘financial suicide’. Loorbach, van
Bakel, Whiteman, and Rotmans, (2010: 139) similarly describe the experiences of a firm involved in
the Dutch transition management process in combining new and innovative green aspects of a
business with an existing conventional business. The firm’s success in developing innovations was
reliant on being able to continue with existing business in the mainstream or conventional sector.
Thus the firm:

was able to use a transition approach to roofs because it was able to simultaneously run a
solid business (in other areas), thus enabling the CEO and other actors to invest time and
resources in order to innovate and experiment with green roofs (Loorbach et al., 2010: 139).

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Loorbach et al. (2010: 141) describe this as a ‘shadow track’ which runs alongside existing
businesses, thus, transition strategies were conceived of as innovative experiments, creating space
(financially, institutionally and mentally) for fundamental reflection, debate and innovation. Whilst
Loorbach et al. (2010) are describing businesses that were not originally green but which were
developing sustainable offshoots, we found similar examples of experimentation with new ideas
among companies that were established as green companies but which were still looking to expand
into new areas. For example, a green building supplies company became interested in the German
concept of ‘passivhaus’, and part of the strategy for becoming an expert in passivhaus building
philosophies involved employing an extra member of staff to research passivhaus products. The
respondent discussed the financial risk of doing this, but explained that it has helped them stay at
the cutting edge and as a result win an award which has improved their business. In contrast, a
small minority of respondents were specifically aiming to run green businesses that could provide
enough financial support to sustain them, but which purposefully did not occupy them on a full-time
basis, as they were interested in creating a balance between working and their other interests,
which might include campaigning for wider environmental issues or looking after family members
(also see Rodgers 2010). One green building supplier was quite satisfied with working what might be
classified as part time in a conventional business, but combining this with learning about and
campaigning for renewable energy, which met his desire to contribute to green issues beyond his
immediate business.

Linnanen (2002) suggests that for green entrepreneurs pursuing the good life this, like sustainability,
is an acceptable goal but an inefficient business concept, as some of our respondents recognised:

But I think we realised...that enthusiasm doesn’t run a business, you know, and basically you
need to be a bit more disciplined about what you do and um how you do it, and so we kind
of learnt the hard lesson, which was pretty painful.

This emphasis on business viability marks a shift from the 1970s alternative technology movement
roots, and an attempt to gain acceptance by the mainstream, where, as Rodgers (2010:126)
observes, terms such as ‘alternative’ are viewed pejoratively. Yet, as Smith (2006) notes, many of
the ideas and practices adopted by green builders today stem from the original social movements of
the 1970s, which some respondents had sought to shake off by promoting the differences between
the original green movement and their more business-oriented approach:

you had the old green welly brigade who were into it because of the, I don’t know, whatever
qualities, sort of the breathability, it feels so good man!

Conclusions and Policy Implications

While governments, policy makers and academics are increasingly interested in green economies as
a new growth paradigm, empirical evidence from entrepreneurs running green businesses has been
lacking. Our research suggests that the green entrepreneurs we surveyed are seeking to combine
environmental and business objectives and that their concerns are rarely simply economically-
motivated. Rather they are seeking to develop new business models and to educate customers,
suppliers and the wider building sector about green building practices. In some cases this has been
difficult and green entrepreneurs have had to compromise by undertaking more conventional
projects at the same time. Furthermore, while the green economy is often referred to as a singular
entity, and the green building sector is also referred to as a coherent sector with agreed and
consistent practices, we have found that green building techniques and practices are far from
agreed, and there may even be significant contradictions within so-called green building practices.
Moreover, the local interpretation of planning and building frameworks, as well as the availability of
suitable labour, have all acted to encourage or inhibit the growth of green businesses. A key finding

12
from our research to date is that concentrating on the entrepreneur as a lone hero is a flawed
approach; rather, more attention should be focused on exploring the support networks, both formal
and informal, which encourage green entrepreneurs.

In order to address theoretical shortcomings in the green entrepreneurial literature, we suggest it is

useful to draw upon a body of work within social studies of technology which is concerned with the
transformation of technological regimes and which, within this, has emphasised the role of
innovative technological strategic niches in effecting transitions (Rip and Kemp, 1998; Smith, 2003;
Geels, 2005). The value of socio-technical transitions approaches for a study of green
entrepreneurship is that they stress not just these individual actions by single entrepreneurs, but
also ‘the networks and support structures that have built up to facilitate these alternative forms of
sustainable practice’ (Smith, 2003: 128; Geels et al., 2008; Jorgensen 2012), helping us to move away
from the notion of the lone entrepreneurial hero.

The relevance of transitions approaches, such as sustainability transitions, the multi-level

perspective and strategic niche management, to green entrepreneurial activity is that one strand of
such work focuses upon ‘innovative experiments in alternative, sustainable technological niches and
draws lessons from the challenges they face in the context of a dominant, unsustainable
technological regime’ (Smith, 2003: 128). However, much of the socio-technical transitions
literature foregrounds political intervention in environmental issues rather than entrepreneurial
(green or otherwise) leadership in conducting innovative niche experiments, thus representing an
opportunity to theorise and explore the ways that green entrepreneurs contribute towards
transitions. The actions of green entrepreneurs may be a driver to dislodge regimes, both through
their own business activities as well as through lobbying for wider system change. Yet, as we have
demonstrated, focusing solely on individual entrepreneurs can lead to an overstated relationship
between green entrepreneurs and their potential to transform the economy, obscuring the role of
actors such as policy makers and funders, business support, informal support networks such as
friends and family, and user practices.

Green entrepreneurs can therefore be seen as one set of actors amongst those occupying
environmentally sustainable niches that offer lessons for policy makers in any transition to a green
economy. Encouraging and facilitating interaction between multi-actors, including green businesses,
investors, policy-makers and so on, is recommended as a policy approach to drive sustainability
transitions. Geels et al. (2008: 37) identify the need for broad, participatory networks incorporating
emergent entrepreneurs, social innovators and incumbent businesses as a policy instrument for
facilitating such transitions. While strategic niche management has been adopted by the Dutch
government in particular, the approach is increasingly finding favour in other countries (see Geels et
al., 2008) and as sustainability continues to have policy relevance the approach may become
increasingly popular.

We have shown how green building companies are incorporating methods of sharing learning about
green building practices in their business model; learning is a core aspect of transitions approaches
to engender the adoption of niche solutions (Hoogma, Weber and Elzen 2005). Additionally, green
building businesses are involved in testing of products and working to improve the performance of
the products, whilst communicating with, and educating, consumers about the benefits and
differential costs of green building. Testing and refining niche technologies and practices, as well as
trying to change social perceptions and user preferences, are key attributes in attempting to
advance niche innovations into the regime market. As such, we reiterate the merit in further
exploring socio-technical transitions approaches, both as a means of incorporating the networks
which green entrepreneurs are enrolled in, as well as suggesting how policy-makers might be able to
stimulate new innovations and trigger regime adoption of sustainability innovations.

13
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