Green Entrepreneurship

Tomás Alberto Ávila

07/15/09

In the old economic model profit was related to how much money you had available. Making
more profit has been considered the objective of every good business. It also has very much been
a cutthroat economy where the more economically advantaged is able to take advantage of those
less financially capable. Essentially this has been a model where love of money dominated and
people and the environment were considered viable options for exploitation to earn a profit. In
the old economy profit has often been made by letting other people pay the real costs of doing
business. It’s a cutthroat model where the motto was everyone for themselves!

The notion of a green economy a rapidly growing billion dollar sector that includes renewable
energy sources, organic produce and products, green buildings, alternative fuel vehicles, and
more1 activity by companies and customers in the form of products, services, and business
models that promote economic growth, reduced environmental impacts, and improved social
well being gathered steam in 2008. One key driver: the U.S. presidential campaign, the first ever
where both major-party candidates discussed accelerating investments in alternative energy,
electric vehicles, a “smart” electric grid, and, not insignificantly, the 40 million green jobs by
2030 these industries would create. The conversation accelerated during the fall, as the economy
tanked and unemployment rose. Suddenly, the green economy was seen as a pathway out of
economic gloom.

Green building is on the rise, spurring new technologies that save energy and money while
creating more healthful workplaces. There is a green race taking place in the automobile
industry, with every major manufacturer planning to introduce electric vehicles. The leading
consumer product makers and retailers are starting to rigorously assess the environmental impact
of their products using sophisticated metrics, sending signals up the supply chain that
tomorrow’s products will need to hew to higher levels of environmental responsibility.

Of course, all this is taking place during a time of staggering turbulence in the economy, and at
the dawn of a new political era in the United States, the combination of which is causing both
uncertainty and excitement over the notion of a green economy as a means of national economic
and environmental security. We stand on the cusp of a potential explosion of new ideas,
inventions, and initiatives, but face great questions about whether there will be sufficient
resources to bring them to fruition.

At the end of the day, the questions remain: Are we moving far enough, fast enough? Does the
ever-growing green activity in the business world represent a true transformation, one capable of
adequately addressing pressing issues like climate change, air quality, the loss of species, and the
looming water crisis? Or is it merely nibbling at the edges of the problems? Reasonable minds
can justifiably argue both sides.

1
Ella Baker Center for Human Rights. ellabakercenter.org/page.php

Tomás Alberto Ávila Green Entrepreneurship

The biggest business opportunities of the 21st century are for green businesses solving
environmental challenges such as climate change. The opportunities are as large as the
challenges, and innovative entrepreneurs taking on the challenges are moving green from the
fringes to Wall Street, Main Street and everywhere in between.

With the Green Economy estimated to be over 200 billion2 in the United States in 2005 and
growing globally, going green is both good for the environment and smart business move.

Going green means different things to different people, but it generally means reducing
pollution, conserving resources and ecosystems; being energy efficient and reducing climate
change. For many people, being green also means being aware of social issues such as fair trade
and labor practices. Green businesses ensure that the natural system on which our lives and
economies rely will be around for the long term, and provide an environmentally sustainable
world with profitable and rewarding ventures. Sustainable living meets our present needs without
compromising the needs of future generations.

The rapid growth of green business is seen in many fields such as the growth of the sale of
organic food 15-21 percent a year for more than a decade3. Businesses that develop new
technology that spans a broad range of products, services, and processes that lower performance
costs, reduce or eliminate negative ecological impact, and improve the productive and
responsible use of natural resources4.

To fight climate change, reduce pollution and lower our dependence on oil, businesses have
increased the use of United States wind power capacity 45% in 20075.

Entrepreneurs-someone who undertakes the creation of an enterprise or business at his or her

own financial risk that has the chance of success and/or profit, are transforming the buildings
where we live and work to be safer and more efficient as part of the booming green building
movement, which will be expanding with the recent passage of The American Clean Energy and
Security Act of 2009 that calls for a 30 percent reduction in Energy use relative to a comparable
building constructed in compliance with baseline code. The bill also mandates that each state or
local Administrator of a REEP program shall seek to ensure that sufficient qualified entities are
available to support retrofit activities so that building owners have a competitive choice among
qualified Auditors, Raters, Contractors and providers of services related to retrofit6.

In general, entrepreneurs are individuals who conceive new business opportunities and who take
on the risks required to convert those ideas into reality. They are people who are able to identify
new commercial ventures (which often involves a willingness to ‘look outside the box’ and
examine issues in fundamentally different ways from more conventional approaches), incubate
ideas and champion their adoption, assemble the resources needed to bring the idea to
commercial reality (such as money, people and technologies) and, finally, to launch and grow

2
Natural Marketing Institute, 2006
3
Organic Trade Association’s 2006 Manufacturers Survey
4
Cleantech Group, LLC. http://cleantechnetwork.com/index.cfm?pageSRC=CleantechDefined
5
American Wind Energy Association, AWEA 2007 Market Report, www.awea.org
6
H.R.2454 An act to create clean energy jobs, achieve energy independence, reduce global warming and transition a clean
energy economy, (pg. 355)
the business venture. In other words, entrepreneurship arises when enterprising individuals
identify an unsolved problem, or an unmet need or want, which they then proceed to satisfy. In
the process, they transform the existing status quo into a future opportunity and turn ideas into a
commercial reality.

Entrepreneurs seek to bring about change and new opportunities, both for themselves and for the
communities they belong to. They are often agents of what one of the early researchers in the
field, Schumpeter (1934), labeled as ‘creative destruction’: old ways of doing things are
transformed, or overtaken, when enterprising individuals wreak change in business systems. In
this way, entrepreneurs often play an important role as engines of change in market based
economies, because they are responsible for introducing innovation, adaptation and new ideas
types of economic circumstances.

Never before has there been such a broad range of opportunities for entrepreneurs with almost
any background to do well in business and help the environment at the same time. People around
the globe are rolling up their sleeves and getting to work on solutions for habitat loss, air
pollution, declining oil supplies, water pollution and climate change.

According to the Natural Marketing Institute, an estimated 30% of the United States adult
population are consider LOHAS (Lifestyle of Health and Sustainability) and are spending
money in ways consistent with the belief in the need for a greener world.

LOHAS7 (overall) $209 billion

Personal health $118 billion
Eco-Tourism $24.2 billion
Alternative Energy $400 billion
Alternative Vehicles $6.1 billion
Green Building $49.7 billion
Natural Lifestyles $10.6 billion

Every day more people are changing to more efficient light bulbs, buying more fuel efficient
cars, and doing whatever else they can in their daily lives to make a difference. Going Green is
not just a fad or a trend but a lasting change in how we live and do business.

Going Green also may be the best way to protect against the loss of business that may result from
a globalized economy and other economic challenges as we have learned from the present
economic crises we are experiencing, causing the demise of the automobile industry an iconic
employer for over one hundred years.

Former bastions of industrial strength The United States and Europe are giving way to new
industrialized powers such as China and India and this shift has eliminated or transferred
millions of jobs from the Unites States to other parts of the world.

7
Source: Natural Marketing Institute http://www.nmisolutions.org

Tomás Alberto Ávila Green Entrepreneurship

Developing Green technologies and companies helps develop economies offset their diminishing
roll in old industries and going green makes companies more efficient and more competitive in a
slow economy.

According to Jonathan G. Dorn, Staff Researcher, Earth Policy Institute “Just as the 19th century
was powered by coal and the 20th century by oil, the 21st century will be powered by the sun, the
wind and the renewable energy from within the earth.”

Green entrepreneurs have many advantages in the rapidly growing green economy, with small
innovative firms they don’t have to worry about changing their mindset or about loosing
investment in old technologies; instead new business owners start with a clean slate to build
profitable and environmentally sound companies from the ground up. They are proving to be
potent catalysts for greening the rest of the economy8.

Being entrepreneurial is more than staring a business. It’s about taking charge and blazing a path
forward, and this can happen anywhere, employees work inside businesses, non-profits and
government as entrepreneurs taking risk and innovating to create change. Mark Kravatz,
Director, Sustainable Business Development at The Apeiron Institute for Sustainable Living is
an example of such individual, who has carved his own path in the Green industry in Rhode
Island through his passion for a sustainable world and his desire to spread the fledging green
economy to segments of Rhode Island that would otherwise not been included.

The evolution of the modern economy keeps forcing us o be entrepreneurial in our daily work, in
order to remain significant in a more competitive job market. Globalization, outsourcing,
telecommuting, the internet and the flattening of corporate hierarchies have hastened the
evolution of the employee of the 1950s into the one man mobile work force of today. We can’t
no longer rest in our laurels, while slowly rising up the career ladder based on our seniority of
service.

Green Entrepreneurial individuals in government, business and non profits are engineering
sustainability which according to the most widely accepted definition of sustainability, a
sustainable business has objectives on three different fronts: the environment, the economy, and
social capital, from the inside out, but it doesn’t stop there as the evolution of work blurs the line
and the green wave the individual starts in his or her company may carry him or her to start their
own business.

Government stands smack in the middle of the green wave, creating laws such as the United
States House of Representatives passage of bill H.R.2454 an act to creates clean energy jobs,
achieve energy independence, reduce global warming and transition a clean energy economy,
and calls for a 30 percent reduction in Energy use relative to a comparable building constructed
in compliance with baseline code.

8
Croston, Glenn 75 Green Businesses You Can Start to Make Money and Make A difference
Rhode Island's governor signed a law that requires the state's largest electric utility to buy power
from renewable energy producers, a move intended to smooth the way for what could be the first
offshore wind farm in the United States.

The legislation requires National Grid Plc (NG.L) (NGG.N) to make long-term contracts to buy
90 megawatts of renewable power, a step that Governor Donald Carcieri says should help
Deepwater Wind to secure the $1.5 billion in funding it expects to need for two offshore projects.

The dynamic upswing in green business has also led to an upswing in the demand for innovative
solutions that Green entrepreneurs can use in their businesses. Opportunities for entrepreneurial
individuals to do right and do well are unlimited in the green economy. A rapidly growing
billion--dollar sector that includes renewable energy sources, organic produce and products,
green buildings, alternative fuel vehicles, and more.

In conclusion this is an exciting area to be involved in, at its best; entrepreneurship is about
harnessing the enthusiasm, initiative and creative energy of individuals. It is now time to pay
more attention to the role that entrepreneurs can play in the move to a more sustainable
economic and commercial system. When this dynamism is applied to developing business
solutions that help move enterprise along more sustainable ways, then the results have the
potential to be truly fascinating and rewarding.

Tomás Alberto Ávila Green Entrepreneurship

 References

Curtin, Michael, The Essence of Ecopreneurship, GMI Theme Issue: Environmental

Entrepreneurship University of Technology, Australia
City of Providence, Green Print Providence
H.R.2454 An act to create clean energy jobs, achieve energy independence, reduce global
warming pollution and transition to a clean energy economy.
H 7381 Residential Renewable Energy System Tax Credit
IREM & CCIM, The Institute Legislative Staff, Economic Stimulus
Package & Treasury Department’s Financial Stability Plan.
Rhode Island Green Building Council, Strategic Plan Approved Dec. 4, 2008
Rhode Island Economic Development Corporation, Renewable Energy Fund
S 0111 LONG-TERM CONTRACTING STANDARD FOR RENEWABLE ENERGY
S 2594 Renewable Energy Standard
The Apeiron Institute for Sustainable Living, www.apeiron.org
The Pew Charitable Trusts, The Clean Energy Economy: Repowering jobs, business and
investment across America
U.S. Conference of Mayors Announces 2009 Green Jobs Training Initiative Grant Winners
United Nation, Environment Program, A Global Green New Deal: Towards A Green Economy
University of Massachusetts-Amherst, Political Economy Research Institute (PERI) Testimony
before House Committee on Education and Labor Hearing on “Building an Economic Recovery
Package: Creating and Preserving Jobs in America” October 24, 2008
Los Angeles Trade -Technical College Green Community College Summit: Green Workforce
Development, The Role of Community Colleges
Transition to Green: Leading the way to a healthy environment, a green economy and a
sustainable future. Environmental Transition Recommendations for the Obama-Biden Team.
Natural Marketing Institute, From Haight Ashbury to Today’s Boardroom: Baby Boomers’
Impact on the Green Movement
Nielsen, WINNING AT GREEN: Exploring the Potential for Green Innovation using the Nielsen
BASES System and NMI’s LOHAS Segmentation Model
New York Times, Preparing for a Flood of Energy Efficiency Spending, February 26, 2009
University of Wisconsin–Madison Center on Wisconsin Strategy, Greener Pathways: Jobs and
Workforce Development in the Clean energy economy
Regional Economic Development Institute, The Strategic Opportunity to Build a Green
Workforce In Los Angeles, 2009
Deloitte Review, The Responsible and Sustainable Board, 2009
National Association of REALTORS, Climate Change Policy
The Green Resource Council of the National Association of REALTORS, Green Designation
Greener World Media, Inc. State of Green Business 2009