Country Context as a Driver of Sustainable Innovation and Entrepreneurship in Europe

Examples of sustainable ventures in Europe

Sustainability innovations are a creative and powerful tool to foster the transition towards more sustainable lifestyles. Such present themselves very differently across Europe. This diversity of the European sustainability scene has been analysed by screening for respective institutions, business concepts, NGO initiatives, and academic research centres in a relatively broad and comprehensive way. Different case studies show the unique context in different European regions:

  • Vestas (Denmark): a Danish manufacturer, seller, installer, and service provider of wind turbines
  • Helsinki Region Transport (Finland): an initiative aiming at emission free public transport by using 100% renewable biofuel in their diesel vehicles
  • Biobank (Italy): a community focusing on food, ccosmetics and detergents, e-commerce regarding organic products, and sustainable agricultural tourism
  • Red de Semillas (Spain): a network aiming at raising efforts to preserve agricultural biodiversity in the local context, facilitating and promoting the use, production, maintenance and conservation of agricultural biodiversity
  • HBCC (Hungary): promotes the increased use of renewable, mainly energy from biomass
  • Bhrugu Aranya (Poland): a blossoming International Ecovillage
  • LowCVP (UK): public-private partnership with the purpose to accelerate a sustainable shift to lower carbon vehicles and fuels
  • Belwind (Belgium): Belgium’s largest renewable power plant with 55 turbo-lines in the North Sea
  • Autolib (France): an electric car-sharing scheme in Paris and is led by Bolloré industrial group

Different roles of European citizens in the transition towards sustainable lifestyles

The results from research of the EU-InnovatE project clearly show different ways how of users and citizens can engage in and contribute to the sustainable development of our societies.

  1. As voters they legitimate representatives on the European, national and local level, which are responsible for political frameworks, rules and initiatives.
  2. Beyond this direct political process, citizens can engage in NGOs and other civil society’s activities.
  3. Users themselves often work in businesses as employees, where they may either act as Intrapreneurs or as participants of corporate citizenship activities (e.g. corporate volunteering), thus promoting the development of sustainability innovation.
  4. As consumers, they directly influence the demand side of the market through sustainable lifestyles and new consumption patterns.
  5. Additionally, users can participate in academic activities, such as the EU-InnovatE project, to express their opinions and provide information relevant for greening our markets.

It is important to mention that in reality, all of these roles are not separable from each other; rather they are rather executed simultaneously. For example, as over time a tendency exists towards growing consistency in Human behaviour, engagement in an NGO or a Corporate Volunteering project may in the long run also contribute to responsible consumer behaviour or enfold an impact on election preferences. Complementary, a general discussion as well as the inter-sectoral exchange about sustainable development contributes to a more vivid civic engagement in our society. The United Nations Sustainable Development Goals (SDGs) want to provide a first international framework for these processes.

The relevance of country context for user innovation and entrepreneurship

However, our results also showed that regional differences among European countries are enormous (see examples of sustainable ventures above). Firstly, this includes different topics dominating the respective sustainability discussions in European countries. Moreover, culturally coded expectations (i.e. historical learning and past experiences) have pushed sustainability perceptions and expectations in different directions. Increasing economic interconnectedness inside Europe strengthens the awareness for sustainable innovation in an industry (“Imported Sustainability Aware­ness”). Thereby, however, the overall scale of exposure to global sustainability issues (e.g. climate change, social inclusion, health issues) varies substantially among European countries. Thirdly, the ‘social capital’ of a society steers sustainability perceptions in different directions. Therefore, initiatives, which are successful in one region, might not be so in another. This is because most sustainability innovations are context dependent and emerge from local knowledge and analysis. As a result, persons in different European countries are facing country (or even region) specific transaction costs of engagement for sustainable lifestyles.

Consequently, different transaction cost structures result in divergent levels of personal engagement. Persons choose the most efficient way of turning their sustainability preferences into action – results depending for example on weather effective NGOs or political initiatives exist, whether political frameworks are responsive, whether the media regularly report on corresponding issues etc. For example, in regions with effective governments, this implies voting for the most appropriate party and subsequently sticking to the established law. On the contrary, in the context of less responsive governance structures as we find them for example in many Southern European regions, engagement in local initiatives or sustainable food consumption seems to be the dominant road of sustainability engagement.

Thus, in the context of national discussions different sectors are competing for the relevance and support of the consumer-citizens. For example, in the context of less efficient and low trust political environments, genuine political initiatives seem less appropriate than in politically well organized, high trust nations. At the same time, however, important interdependencies exist among regional sectors, e.g. successful business activities require the existence of academic think tanks as well as a necessary level of administrative responsiveness. Similarly, political initiatives need support from corresponding academic research and civic engagement in order to achieve its goals.

Conclusion

Summing-up, for promoting innovation towards more sustainable lifestyles, it is of general interest to establish and foster sector-specific ‘hotspots’ (politics, civil society, business, consumers and academia). These include social partnerships (e.g. Bundesinitiative Mobility, an Austrian eMobility cluster for industry, users, experts and communities), sustainable entrepreneurship initiatives (e.g. “Autolib”, an electric carsharing scheme lead by Bolloré industrial group), regional consumer cooperatives (e.g. biocoop”, a cooperative of organic consumers formed in Lisbon), and academic think tanks (e.g. Sustainability Science Center in Denmark). The more options for sustainability engagement are provided by regional and national frameworks, the lower becomes the transaction cost of sustainability innovation engagement for a certain person; consequently, more uses and citizens with their individual preferences and interests can be involved. With a greater variability of (alternative) forms of engagement, citizens face an enhanced opportunity structure for sustainable lifestyles, e.g. to vote for corresponding political forces, to engage in innovative NGOs and social partnerships, to work for sustainable enterprises, to buy sustainable products, and/or to actively perceive the latest information and know-how from academic think tanks.


by Andre Habisch, Rene Schmidpeter, Franz Wenzel, and Bing Zhu

Advertisements

Invitation to the EU-InnovatE Research Fest @ TUM

It is our pleasure to cordially invite you to the EU-InnovatE Research Fest @ TUM. The event will take place in the Immatrikulationshalle at the main campus on December 8th from 14:00 until 18:00.

After three exciting years, the time of our large-scale interdisciplinary research project EU-InnovatE is soon coming to an end. It is therefore the aim of this event to present our main outcomes and all research conducted during the project at TUM. We want to acknowledge the scientific achievements of the project and foster exchange and discussion among the members of the project and all faculty, TUM students and external visitors who are interested in joining us.

We are looking forward to a series of speeches, presentations and posters, and an opportunity for inspiring discussions while enjoying refreshments and snacks. Please find attached the detailed program. To register for the event, please follow this link: https://eu-innovate-research-fest-tum.eventbrite.de/

In case you have any questions, please do not hesitate to contact Eva Weissenböck (eva.weissenboeck@tum.de).

invitation

Sustainable Entrepreneurship Award 2016

What is the Sustainable Entrepreneurship Award (SEA)?

SEA specifically searches for and supports entrepreneurs who recognize social problems and link them to solutions with an innovative and profitable business idea. Thereby, it honors companies that act for the good of society, the economy, and the environment – in harmony with their entrepreneurial interests.

Among a vast number of applications, the top 15 start-ups were selected and invited to present their project to our jury members, a number of potential investors, interested visitors and guests at the SEA Pitch-Day.

Together with 250 top-class guests out of economy, science, politics and society the most outstanding projects have then been awarded on November 17th at the SEA-Gala in Vienna, Austria. Prizes were given in 5 categories – altogether breakthrough, innovative projects, that deliver a tremendous social and economic contribution to a livable future. The most outstanding of these final projects then receives an award of € 10,000.

Who are the winning projects?

Plastics & Recycling and “Best Project Award”: Full Cycle Bioplastics. This company turns waste into fully biodegradable plastic using a process that is more robust and lower cost than any preceding technologies. Thereby, they address major environmental problems, such as the growing volumes of plastic.

Lifestyle & Culture: Smart Floating Farms. Based on a Floating Multi-layered strategy that combines Aquaculture (fish), Hydroponics-Aeroponics (crops) and Photovoltaics (solar power & other renewable energies) into a single platform, they aim that creating “floating farms” that can be located close to areas where food is more needed.

Knowledge & Education: BLITAB. This new venture managed to developed an iPad for the blind. As a result, this product enables blind people to visualize graphics, maps, and whole books and as such represents the first innovative and affordable solution on the market.

EU-InnovatE Award

One of the categories of SEA is the EU-InnovatE award, which was given by Prof. Dr. Frank-Martin Belz, head of the EU-InnovatE team. The EU-InnovatE project leverages EUR 4.7M from the European Commission’s 7th Framework Programme for Research to investigate the creative, innovate and entrepreneurial roles of users involved in developing sustainable and novel products, services and systems (“Sustainable Lifestyles 2.0”).

This year’s winner in this category is an exciting new sustainable venture called Leaf Republic. They develop, produce, and market product innovations on the basis of leaves for the sector of food and non‐food packaging as well as the sector of paper & pulp. Inspired by the Asian leaf plates, the founding team created a lid made from bioplastic and a three-layer bowl made of leaves. Their products are waterproof and create an excellent sustainable alternative for other plastic cutlery and plate products.

leaf_republic_30

An overview of the winners can be found here:
http://www.se-award.org/en/content/winners-sea-2016

EU-InnovatE Final Conference

On November 22, we convened our final EU-InnovatE conference, which brought together various stakeholders to define the most effective pathways to bring user innovation and sustainable entrepreneurship from the margins to the mainstream.

Harnessing the expertise of 14 leading academic, think tanks, and network partners, EU-InnovatE has spent the past 3 years generating scientific evidence and analysis to test the prospects and obstacles for achieving sustainable living in Europe by the year 2050.

The final conference took place at the Atelier des Tanneurs, which apart from being an event venue, also serves as an ideal springboard for new projects in a real hub of economic development, hosting several sustainability-oriented start-ups. Overall, the conference attracted over 100 guests from business, academia and policy. In the following paragraphs we want to provide some insights into what we have learned and experienced during this lively event.

venue

Final Conference Programme

The day was kicked off by a brief introduction to the project by Prof. Frank-Martin Belz – TUM School of Management and Simon Pickard – ABIS, showcasing headline findings, evidence and analysis from the project with perspectives and stories from participating companies.

Afterwards, our delegates were part of a broader networking session, in which each participant identified his or her main personal learning and action goals for the conference and was asked to share those with others having similar aspirations.

_del7719

The Sustainable Entrepreneur Perspective

Just before lunch, the audience had the chance to listen to a great set of corporate plenary speakers consisting of Jakob Assmann – Co-Founder of Polarstern, Tobias Lau – Co-founder of Social Action and Beyond Coffee, Marcello Palazzi – Co-Founder of B Corp / B Lab Europe and Amr Dawood – Co-Founder of Wassel.io and ENACTUS, which shared their challenges but also opportunities of what it means to be a sustainable entrepreneur.

Following our networking lunch, Madi Sharma – Member of the European Economic & Social Committee and Founder of the Madi Group gave the audience great inspiration for becoming actively engaged by sharing insights about her own journey as a sustainable entrepreneur. She made clear that it does not necessarily require specific qualifications to become active in this exciting and diverse field.

_del8017

Policy Recommendations to enhance Sustainable Entrepreneurship

The session afterwards, hosted by the Copenhagen Business School and Cranfield School of Management team, focussed on how to create more favourable conditions for the success of sustainable entrepreneurship through EU policy changes. These changes should include a prioritisation on the types of innovations which have the greatest positive sustainable impact, done through modelling which considers the interconnectedness within the system (e.g. food and energy), whilst also simulating individual household behaviours in different geographical and/or policy contexts.

Towards the end of the conference, participants went back to the visioning exercise from the morning and convened into small groups to anticipate a range of solutions that could transform current practice within the different areas of the Sustainable Entrepreneur Life Cycle. In the following open session, every group presented their ideas that could enhance the development of sustainable entrepreneurship.

Building on these insights, Basudeb Chaudhuri – Seconded National Expert of DG Research & Innovation, European Commission, Laurent Bontoux – Senior Policy Analyst of JRC, Marcello Palazzi and Madi Sharma responded in a final plenary to the feasibility and materiality of new ideas for upscaling and innovation in sustainable entrepreneurship and citizen innovation.

_del8314


On a final note, we would like to thank all participants that contributed to a very memorable final conference of this EU project that is now about to end this year. However, we still look forward to continue sharing with you some of the project’s insights through this blog in the weeks to come!

Model of Innovation Assessment Toward Sustainable Lifestyles

An agent-based computational model has been developed for the EU-InnovatE project, which gives users of the model an indication of the effect of a sustainable innovation in a simulated population. The model population represents households and their major consumption activities from energy, food, mobility and housing.

What is being measured?

The effects in the model are measured in two ways: grams of carbon dioxide (CO2) emissions and kilograms resource consumption. CO2 emissions arise from the services used by the household such as heating, lighting, cooking, and mobility. Likewise, kilograms of resources are consumed depending on the choices of households such as heating fuel, personal transport fuel, food packaging, and insulation.

The model population is simulated from data which describes the nature of either a real-world place or an imagined sustainably desirable place. The model is scale-free in the sense that a population as small as an urban area or as large as the world can be modelled. However, of course, the larger the scale, the less diverse the population becomes, so modelling at the scale of a nation, a region, or a city is perhaps ideal.

The policy maker, user innovator, or sustainable entrepreneur may use this model to assess impact by providing three input data sets: scenario, innovation, and adoption (as described in the following).  The scenario data allows the population to be described, such as the number of households with two occupants, the emissions from diesel vehicles and the energy grid mix (such as coal, nuclear, wind).

The scenario context for the model

The user specifies the number of households needed in the simulated population.  As a rule of thumb, one household represents 1,500 real households. This means there are fewer households in the model than there are in the population to be modelled but this is merely a modelling mechanism and simplification to speed up the run time in the model.  Already there are four national scenarios: Finland, Germany, Spain and UK, based on current data.  Users can easily create new scenarios, but must have good data in order for the model to provide useful insights.

In addition to contemporary populations, the policy maker may want to consider the effects of systemic innovations brought about through sustainability innovation, such as changing the energy grid mix toward low carbon fuels. Comparisons can easily be made between today’s consumption and one in which sustainability innovation has been implemented.  The effects of changes in consumption as a result of changes in the population can also be modelled, such as increasing the size of the urban population.

A last note on scenarios concerns the European SPREAD project, in which four radically different future scenarios were identified but all shared the same trait of having only 8,000 kilograms on average per person per year consumption.  You can read more about SPREAD here.  These desirable scenarios have also been coded for use by the model.

Innovation outcomes

The second set of data the model needs are details about the innovation itself. Fourteen types of innovation are possible from reducing kilometres travelled, reducing food consumption, improving household energy efficiency, and community living.  Some innovations, such as changing living type (toward community living), involve a bundle of innovations.

Innovations have feedback effects which are incorporated into the model. One such feedback concerns the consequences for reducing living space. This has a non-linear effect on heating demand (and so emissions and kilograms) and the magnitude of the effect depends entirely on the characteristics of the adopter (household size, number of occupancy, starting energy efficiency, etc.).

Adoption characteristics

The last set of data concerns the innovator’s or policy maker’s expectation of the uptake of the innovation.  This will be a judgment on the capacity of the population to take up the innovation, such as whether there are supporting networks or service providers, or interest from the public (e.g. crowdfunding), and also on the anticipated effect of policy interventions, such as subsidies and taxation changes.  The model runs for 35 years and the innovator or policy maker using the model can indicate different adoption rates for each year: they might anticipate lower adoption in early years.  The model also recognizes inertia in the population which is assigned randomly to households.

Results and experimenting

Outputs from the model include charts for different sources of consumption such as the fuel consumption, food waste, as well as the consequences of consumption which are CO2 emissions and total kilograms (see below).

wp5_model

95% confidence intervals are shown in the charts (the lighter coloured band in the chart above) which give the high and low results for the multiple simulated populations created for the test experiments.  When running the model online, the user’s experiment is available for others to see and can be compared with other experiments, enabling direct comparison of alternative innovations.

You can try the model yourself here or by clicking the link from the EU-InnovatE project website. Please, feel free to provide feedback at this website – we welcome constructive comments and insights.


by Liz Varga

Collective Action 2.0: The New Heyday of Community Enterprises

We are the makers of our own state and individuals who realize the fact need not, ought not, to wait for collective action.
-Mahatma Gandhi


User-led innovation, crowdfunding, community-driven marketing – collective action has emerged as a central recurring theme throughout all sections of EU-InnovatE. Community entrepreneurship is a form of entrepreneurship that takes the ideas of collective action even one step further. Although the phenomenon is not new at all, we are currently experiencing a new heyday of community enterprises in Europe: with the increasingly pressing economic, social and ecological challenges, collectively created and managed enterprises have become an attractive context-specific and flexible mechanism for development in both rural and urban local communities.

What are community enterprises?

Community enterprises are businesses that are corporately established by the members of a community and that combine two central characteristics: First, they aim at yielding not only economic, but also social, ecological, cultural and/or political benefits for the local community they are embedded in, and second, ownership and control are vested in the community. Community enterprises are trading organization, i.e. they provide goods and/or services on a commercial basis, but although economic revenue generation is important to ensure economic viability, it may be considered to be only a means to an end and all benefits are fully redistributed to the community. Oftentimes, community enterprises yield additional benefits for the community by serving as local hubs that foster mutual support and novel ideas for collective action. Usually, community members can buy shares for a small amount of money and participate in decision-making through a democratic board of management.

Community enterprises can take on various forms: They emerge in rural as well as in urban communities, sometimes involve all members of the community or often only a part of them. Some have open membership, while others restrict membership to local inhabitants. All are to some degree created bottom-up, but some receive support from NGOs or governmental organizations. They take on different legal forms from cooperatives to limited liability companies and thus, adopt different structures of governance and control. Finally, they vary in regard to the product or service they offer and the local problem they tackle. Particularly common examples are community agriculture cooperatives, local community shops, and media or crafts collectives.

It is exactly this sheer unlimited variability that makes community enterprises so attractive for all kinds of communities in different geographic contexts that have different needs and face different problems.

Towards a new heyday of community enterprising

The economic crisis has led to economic decline and severe cuts in public expenditures. Community enterprises have become an increasingly prominent mechanism for safeguarding community assets and boosting the local economy. For example, in the UK alone, 400-500 local shops are closing down every year. To date, almost 350 communities have successfully managed to re-open these shops open under community ownership – and the numbers are growing constantly. At the same time, pressing sustainability issues, such as resource degradation, pollution, and social injustice are becoming increasingly important on the public agenda. While legislations and regulations will certainly play an important role in a transition towards a sustainable Europe, more and more citizens decide to pro-actively take the lead. Community enterprises allow for collective sustainable resource management, for example, in the form of community woodland enterprises that aim at bringing woodlands into collective management and generate trading income. In addition, community enterprises have the potential to ameliorate social issues by providing affordable housing or nursing care.

The German case Schloss Blumenthal is an example for an exiting and slightly different type of community enterprise. In 2007, a group of 16 people bought a beautiful vacant castle between the cities of Munich and Augsburg and moved there. Together, they renovated the old buildings, took over the traditional restaurant, and opened a hotel and a seminar house which now constitute an integral part of the community’s economic concept. In addition, Blumenthal has become well-known as a cultural center in the region and is currently in the process of extending its collective business endeavors by establishing a community-supported agriculture scheme. Today, Schloss Blumenthal is home to 41 adults and 11 children and the number of people who are showing interest to join is constantly increasing.

Where to get inspiration from

When it comes to community cooperatives, the UK and Finland are undoubtedly the pioneers in Europe. If you want to learn more about how to establish community shops, pubs or woodland enterprises, visit the website of the Plunkett Foundation, a charitable consultancy that helps local communities to establish community enterprises. Although they only operate in the UK and Ireland, they provide a large body of literature, best-practice case examples and toolboxes that also help potential community entrepreneurs outside Europe. Take some time to browse their website, and get inspired!


by Christina Hertel

Crowdfunding for Sustainability

Sustainable entrepreneurs spend up to 90% of their time simply surviving. While there are multiple reasons for this, a lack of funding opportunities represents at least one major contributor to this state of uncertainty. In particular, many sustainable ventures are often relegated to a relatively narrow set of funding opportunities given a perceived comparable lack of marketability due to their self-imposed social and environmental goals. However, there is a steady growth of alternative finance opportunities like crowdfunding. Are we witnessing a new source of finance that could put sustainable entrepreneurs at an advantage?

What is Crowdfunding?

Crowdfunding involves seeking finance not through large investments or loans from e.g. professional investor, but rather in seeking small investment or donations from a large and diverse group of people. The process consisting of three central actors: the crowd-founders, crowdfunders and platforms. The crowd-founders are the entrepreneurs initiating a campaign to be financed. Crowdfunders are the target audiences of the campaign who are enticed to invest or donate. While the platform is the mechanism that facilitates contact between the crowd-founders and crowdfunders – typically an online platform like Indiegogo.com. And while it is possible to crowdfund independently via, for example, e-mail, most entrepreneurs and projects use online platforms to act as intermediaries as it provides them with a number of forms of support and, not least, legitimacy.

This is especially important as crowdfunding is at its heart reliant on strangers supporting strangers for causes, products or services that have not yet been realized and that they have little direct oversight or control off. Trust is therefore fundamental for crowdfunding to function and while possible without intermediary support, contacting strangers directly via, for example, email to ask them to support a of-yet realized project sounds suspicious – just like the daily phishing emails I receive from Nigerian princes who need my help. So while it may sound odd that a diverse group of strangers would support other strangers in their effort to get their idea of the ground, crowdfunding is nonetheless growing rapidly. So, the question remains: why do people support crowdfunding and why could this be good news for sustainable projects, ventures and entrepreneurs?

Why do people invest?

To be honest, the phenomena is still fare to novel to say anything that is scientifically valid, but we are getting some initial insights that are promising not least from a sustainability perspective. Firstly, it appears that since crowdfunding draws upon many small incremental amounts of money coming from a diverse group of individuals (‘the crowd’), the motivations for investing appear to be driven by different intentions as compared to large investments by professional investors. Early empirical evidence suggests that crowdfunders appear to respond positively to intrinsic cues and sustainability oriented projects. Both have been shown to have a positive effect on the likelihood that the project campaigns hosted on a platform will achieve funding success. It has therefore been suggested that crowdfunders when investing or donating are often driven to do so not solely by its marketability, but rather the idea, core values, and perceived legitimacy of the given campaign seeking finance.

From a sustainability perspective, these driving forces seem promising. As with all things, however, these observations are not that simple, as other studies have emerged that suggest extrinsic cues still play a central role in guiding crowdfunder behavior. So, in many ways the jury is still out and the true potential of crowdfunding as significant financier of sustainable projects is hardly uncovered. What some of us at EU-InnovatE are therefore doing, is conducting a number of experiments to try to explore crowdfunding from an alternative perspective where we can observe direct (or causal) relationships. So, if we confirm the insights from other studies that crowdfunding does appear to represent a good source of finance for sustainable entrepreneurs and projects, how could it be best promoted?

Supporting sustainable crowdfunding

The example of the German crowdfunding platform EcoCrowd illustrates how public finances can be used to create platforms dedicated to tackling environmental challenges by co-supporting their development. The added benefit of these types of platforms is that they, if successful, become self-sustaining resource centers for further sustainable ideas and ventures. This type platform support allows citizens to engage directly in driving sustainable change by supporting, for example, community projects. One example of this includes the ‘The Peckham Coal Line urban park’ that sought to convert the old raised Peckham coal line in London into a raised urban park via an online campaign on the civic crowdfunding website SpaceHive. The Peckham Coal Line further illustrates how policymakers can draw-upon the strengths of crowdfunding by co-financing community projects if they hit a certain level of financing. The Peckham Coal Line ultimately successfully raising £64,140 of which government funds represented £10,000 in backing. In this way, community projects could be driven via the entrepreneurial ideas of members of the community.


by Kristian Roed Nielsen