Journal of Cleaner Production 88 (2015) 376e384

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Green entrepreneurship in transition economies: a case study of

Bosnia and Herzegovina
Irem Silajd c a, *, Sanda Mid
zi zi
c Kurtagi
c b, Branko Vu
cijak b
a
Hydro-Engineering Institute Sarajevo, Stjepana Tomica 1, 71000 Sarajevo, Bosnia and Herzegovina
b
Faculty of Mechanical Engineering, Sarajevo University, Vilsonovo setaliste 9, 71000 Sarajevo, Bosnia and Herzegovina

a r t i c l e i n f o a b s t r a c t

Article history: The countries with transition economies are under pressure to increase entrepreneurial activities that
Received 25 November 2013 will enable fast growth with minimum impact on natural resources. Despite specific challenges the
Received in revised form economies in transition face, development of (sustainable) entrepreneurship has not been in focus of the
1 July 2014
academic research. This leaves some open questions such as those concerning the role and mode of
Accepted 2 July 2014
Available online 14 July 2014
operation of public policies, level of risk and its influence on entrepreneurship creativity, role of
knowledge in diffusing entrepreneurial values and fostering aspirations, externalities created for the
society and the connection between sustainability and entrepreneurship.
Keywords:
Green
This paper aims to introduce a discussion on sustainable entrepreneurship in countries with econo-
Sustainable mies in transition. The research carried out included (i) review of literature and statistical data on
Entrepreneurship entrepreneurial environment, (ii) structured interviews with representatives of government, civil society,
Transition business sector and academia to understand the society's perception of green entrepreneurship and (iii)
Economies analysis of case studies on green entrepreneurs.
It can be concluded that entrepreneurs in economies in transition do not seem to be ready to respond
to the challenges or to take any risks by investing in green business, but also that the government and
educational institutions do not recognize their own role and fail to support the development of green
entrepreneurship. For those “green oriented” businesses, the key sociological constructs are personal
motivation and mission, locality, and a forward-thinking orientation in terms of sustainability. All
businesses managed to achieve the economic, environmental and social value creation without any
support from the government.
© 2014 Elsevier Ltd. All rights reserved.

1. Introduction
Over the past two decades, interest in entrepreneurship, and
particularly in the emergence of new entrepreneurs and enter-
prises, has grown among governments and academics. This interest
is based on evidence demonstrating the contribution of entrepre-
neurship to the economic growth, increased productivity, and
rejuvenated social and productive networks. Entrepreneurship
has been shown to help revitalize regional identity, make the
Abbreviations: B&H, Bosnia and Herzegovina; FB&H, Federation of Bosnia and
Herzegovina; RS, Republika Srpska; SME, small and medium enterprise.
* Corresponding author. Tel.: þ387 33 212 466.
E-mail addresses: irem.silajdzic@heis.com.ba, irem.silajdzic@gmail.com
(I. Silajd
zi
c), midzic@mef.unsa.ba (S.M. Kurtagi
c), vucijak@mef.unsa.ba (B. Vu
cijak).
innovation process more dynamic, and create new job opportu-
nities (OECD, 2011).
The 99% of all European businesses, classified as small and
medium size enterprises (SMEs), have fewer than 250 employees.
They provide two out of three private sector jobs and contribute to
more than half of the total value-added generated by businesses in
the EU. They are primarily responsible for increasing wealth and
economic growth, next to their key role in innovation and research
and development (European Commission, 2012).
In the light of the present growing need to achieve sustain-
ability, it is recognised that entrepreneurship can be a panacea for
transition towards a more sustainable society. The researchers in
the field of entrepreneurship have devoted increasing attention to
the interrelation between businesses and the environment, in
particular to the role of entrepreneurs and their small and medium
sized enterprises in the development towards a more sustainable

http://dx.doi.org/10.1016/j.jclepro.2014.07.004
0959-6526/© 2014 Elsevier Ltd. All rights reserved.
 I. Silajdzic et al. / Journal of Cleaner Production 88 (2015) 376e384
commercial and economic system. Hall et al. (2010) concludes that
sustainability has become a main stream strategy in doing business
and that entrepreneurship is a significant conduit for a more sus-
tainable society. Levinsohn (2013) states that SMEs play a key, but
under-researched role, in contributing to the sustainability of local
communities. Zu (2014) points out that sustainable entrepreneur-
ship gained momentum in recent years as a global movement that
aims to encourage businesses to pay closer attention to their social
and environmental impact. Special issues of Journal of Cleaner
Production (Volume 19, issue 8, 2011) and Journal of Business
Venturing (Volume 5, 2010) devoted to sustainability and entre-
preneurship show that many authors employ the term “sustainable
development” to refer to the positive contribution of entrepre-
neurship to society. The transition toward a more sustainable sys-
tem is a complex process that requires interactions between
technology, policy/power/politics, economic/business/markets,
and culture/discourse/public opinion and requires a multi-level
perspective analysis (Geels, 2011).
The green entrepreneurs, or ecopreneurs as often called by some
authors (Kirkwood and Walton, 2010), are those who start busi-
nesses based on the principle of sustainability with strong under-
lying green values and who sell green products or services. These
private sector investments in green business do not just generate
private profits but also (create) large positive externalities for so-
ciety, especially when they do not contribute only to the creation of
a small niche market, but have the potential to be scaled up to reach
the sustainable transformation of an entire industry. Farinelli et al.
(2011) states that green entrepreneurs are of crucial importance to
the economy as they make significant contributions to job creation.
They are also recognized as engines of change and have been
credited for introducing innovation, adapting to new ideas and
responding to changes more rapidly, flexibly and efficiently than
larger companies. Through his review, Sarkar (2013) demonstrates
that that eco-innovations and their eco-specific promotional and
developmental efforts stimulate sustainable development of eco-
industries and enhance the green growth.
What makes green entrepreneurs exceptional in the business
world is the strong connection between their business and per-
sonal passions and values. Most of them share a fundamental belief
in the importance of the environmental and social awareness above
strict economic success. A survey of 10 case studies of green en-
trepreneurs carried out by Allen and Malin (2008) revealed three
key sociological constructs in green business: personal motivation
and mission (passion and humility); locality (community); and a
forward-thinking orientation in terms of sustainability (taking the
long view).
And while entrepreneurial activity has been an important force
for economic, social and environmental sustainability, Pacheco
et al. (2010) points out that its efficiency is dependent upon the
nature of market incentives that must encourage sustainable
practices. This is specifically true for the emerging economies
where entrepreneurs primarily think of how to survive the open
market competition. Thus, the institutional, structural, social and
economic factors play a critical role in whether entrepreneurs
invest in new business ventures associated with natural resources
(Nikolaou et al., 2011). Pacheco et al. (2010) discussed over different
models of collective actions that proved to be successful in
improving competitiveness of sustainable behaviours, including
partnership with the industry and civil sector. Ashraf et al. (2014)
showed that networking has had a positive effect on carbon per-
formance carbon performance of companies in emerging econo-
mies. Lorek and Spangenberg (2014) stress the role of non-
governmental organisations, suggesting their ability to stimulate
bottom up action and mobilise the pressure necessary for institu-
tional changes through networking and advocacy.
377
It has been well documented by several authors that education
plays an important role in diffusing entrepreneurial values and
fostering aspirations. Education can foster activities on raising
SMEs' and entrepreneurs' awareness of the scale and implication
of the transition towards a green economy and tackling SME
knowledge and skill gaps in relation to green technologies,
practices and business models. Bonnet et al. (2006) demonstrates
that it is possible to successfully combine entrepreneurship,
sustainability and project education in a subject for undergradu-
ate engineering students. Lans et al. (2014) postulate that worlds
of higher education for entrepreneurship and for sustainability
can reinforce each other and lay the knowledge foundation for
sustainable entrepreneurs. Lourenco et al. (2013) examined rela-
tionship between nascent entrepreneurs' intentions to exploit
learning and the extent of a profit-first mentality. He showed that
there is a strong relationship between perception of learning
benefits and intentions of nascent entrepreneurs to exploit those
benefits.
Former Communist countries such as China, the former Soviet
Union and Eastern European Countries are in the process of tran-
sition from a centrally planned economy to a free market. These, so
called, transition economies undergo economic liberalization,
where market forces set prices rather than a central planning or-
ganization. In transition economies, where many economic activ-
ities still need to be developed, the introduction of green
technologies and processes can take place simultaneously with the
development of key economic sectors, thereby ensuring an organic
and gradual assimilation of green economy principles.
In his critical review on sustainable entrepreneurship,
Levinsohn (2013) noticed a lack of discussion over the ways in
which entrepreneurs contribute to the various areas of society that
are in need of development. Tan (2001) reports that development
of sustainable entrepreneurship in transition economies was not in
the focus of the recent academic research despite the struggle en-
trepreneurs have to grow economies while, at the same time,
preserving the natural resources, as well as some good practices
which can be encountered. Kronenberg and Bergier (2012) have
notices that, in general, examples from developed countries are
cited when making reference to good practice in sustainable
development while there is limited access to case studies from
transition economies. They also conclude that SMEs have not
received enough attention in research although they constitute the
largest share of businesses in transition economies. This is
confirmed by the extensive literature review carried out by the
authors which has revealed a clear gap in information on the nature
of entrepreneurship, especially small and medium enterprises, and
innovation activities in economies in transition. Kronenberg and
Bergier (2012) point out the importance of research in transition
economies, arguing that entrepreneurs can learn best from each
other's experience, as they can relate better to the lessons-learned
and recommendations given than to the case studies from devel-
oped countries.
This paper aims to introduce a discussion on sustainable
entrepreneurship in countries with economies in transition by
using small and medium enterprises as case studies. Some of the
questions that authors explore are:
 What is the role and mode of operation of public policies in
transition economies in encouraging entrepreneurship, espe-
cially green entrepreneurship?
 Is the risk management different in transition economies from
that of mature economies? If it is, what is the level of differ-
ence? If transition economies are considered to be high risk
environments, how does that influence the entrepreneurship
creativity?
378 I. Silajdzic et al. / Journal of Cleaner Production 88 (2015) 376e384
 Is the role of knowledge acquisition for transition economy
companies always leading to a competitive advantage, espe-
cially taking into account that the low labour costs are
perceived as a key competitive advantage in transition
economies?
 Does entrepreneurship in such economies generate positive
social results? What is the impact of culture on risk-taking in
transition economies?
 What is the role of sustainability in entrepreneurship in tran-
sition economies?
The conclusions of this paper aim to provide better insight into
specificities of entrepreneurial activity in the transitional econo-
mies, identify the leading factors that stimulate or limit entrepre-
neurship and development of green economy.
2. Methodology
The research was based on the qualitative data collection and
analysis segmented into three different steps.
The first step included a review of available literature and sta-
tistical data on entrepreneurial environment in the country
which has revealed information on:
 cultural and social norms related to entrepreneurship,
 legal framework,
 current state of entrepreneurship,
 current sectors with more entrepreneurs,
 access to finance,
 available education and training for entrepreneurs,
 supporting organisations and intermediaries.
The second step involved structured interviews with repre-
sentatives of government, civil society, business sector and
academia, identified as potential stakeholders, to understand the
society's perception of green entrepreneurship and get insight
into their knowledge of and views on the current entrepreneurial
environment for green business. The following questions were
asked:
 How would you define the term “green entrepreneurship”?
 Are you familiar with the legal framework intended to support
and promote “green entrepreneurship”?
 Are you familiar with small and medium enterprises that are
considered “green entrepreneurs”?
 Are you familiar with the training programs for green
entrepreneurs?
 Are you familiar with some instruments for investing in and
promoting “green entrepreneurship”?
 What do you perceive as advantages and possibilities for the
development of “green entrepreneurship”?
 What do you perceive as main obstacles for the development of
“green entrepreneurship”?
The third step involved the analysis of case studies on green
entrepreneurship that helped to acquire a deeper understanding
of the entrepreneurship environment from the aspect of green
entrepreneurs and understand motives, challenges and obstacles
they faced in developing their businesses. Three case studies have
been analysed:
 Case 1: ecotourism village
 Case 2: green travel agency
 Case 3: organic buckwheat production and processing
The analysis consisted of structured interviews with the busi-
ness owners and visits to their premises to get a feeling of their
working environments. The following issues were analysed:
 Basic information about the business: name, address, business
description, number of employees, business development
timeline;
 Financial information about the business;
 Policies, incentives and regulations;
 Overall rationale and motivation;
 Strengths, challenges and constraints;
 Impacts: social, environmental, economic;
 Scale of benefits;
 Lessons and recommendations.
3. Results and discussion
3.1. Entrepreneurship environment in the country
The term and concept of “Green Entrepreneurship” or “Green
Business” is officially not recognized in B&H and its two admin-
istrative entities Federation of Bosnia and Herzegovina (FB&H)
and Republika Srpska (RS). There is no relevant legislation that
would promote this specific type of (doing) business and thus no
framework for green entrepreneurship exists other then general
business start-up legal framework including the entity Laws on
Development of Small Businesses/Small and Medium Enterprises
(Official Gazette FB&H, 2006; Official Gazette RS, 2008). Ac-
cording to the FB&H entity law, SMEs are those that employ less
then 250 persons and whose annual turnover is up to 20 million
EUR and/or whose annual balance sheet does not exceed 15
million EUR. According to the RS entity law, SMEs are those
companies that employ up to 249 persons, and whose annual
turnover is up to 25 million EUR and/or whose annual balance
sheet does not exceed 21.5 million EUR.
The quantitative analysis of entrepreneurship presence in B&H
was based on the official annual statistical data from the Institute of
Statistics of the RS and the Institute of Statistics of the FB&H. An
insight into the Annual Yearbooks for the last three years reveals
that no statistical data on the business activity classified as
“entrepreneurship” is available (Institute for Statistics FB&H, 2012;
Institute for Statistics RS, 2012).
The Law on Companies (Official Gazette FB&H, 2005; Official
Gazette RS, 2009) embeds the idea of entrepreneurship through
the definition of a company stating that a company is a legal entity
that independently carries out activities of production, trade or
services for gaining profit. The Law defines different forms of orga-
nization of companies including general partnerships, limited part-
nership, joint-stock company, and limited liability company (Official
Gazette FB&H, 2005; Official Gazette RS, 2009). This indicates that
the information on the number of entrepreneurs organised in a form
of small and medium enterprises should be searched for among
companies that are registered as limited liability companies.
Information presented in Table 1 and Table 2 (Institute for
Statistics FB&H, 2012; Institute for Statistics RS, 2012) suggests
that approximately 45,000 private limited liability companies,
assumed to be represented mainly by small and medium-sized
enterprises including crafts, have been established in B&H. This is
approximately 65% of the total number of legal entities established
in the country. A slightly increasing trend in the number of pri-
vately owned limited liability companies in the last three statisti-
cally covered years can be observed. All this might lead to the
conclusion that small and medium companies contribute to the
economic development of the country.
 I. Silajdzic et al. / Journal of Cleaner Production 88 (2015) 376e384 379

Table 1 Table 3
Registered legal entities in B&H classified by the form of ownership. Comparison of indicators for starting a business in B&H and the region.

Type of legal entities Federation B&H RS Indicator B&H Croatia Serbia Montenegro OECD

2009 2010 2011 2009 2010 2011 Procedures (number) 11 6 6 6 5

Time (days) 37 9 12 10 13
Public companies 109 103 65 200 201 195
Cost (% of income per capita) 14.9 7.3 7.7 1.6 4.7
Joint stock companies 717 707 701 2245 2248 2237
Paid-in Min. Capital (% of 29.1 13.4 0.0 0.0 14.1
Limited liability companies 28,547 29,290 30,250 13,871 14,377 14,904
income per capita)
General partnerships 8 8 8 175 176 166
Othera 14,238 15,209 16,391 6502 7053 7671 Overall rank 163 86 84 51
Total 43,619 45,317 47,415 22,993 24,055 25,173
a
Other include: Business associations, General cooperatives, Specialized co-
operatives, Institutions, Legislative and executive authorities, Funds, Other financial agreements with international development banks and organi-
organizations, Court and judicial authorities, Associations, Foundations, Religious
organizations/communities, Foreign non-governmental organizations, Representa-
sations, such as: European Bank for Reconstruction and Devel-
tive bodies of foreign entities, and other legal forms. opment, United States Agency for International Development,
European Investment Bank, German Development Bank, and
others, for the placement of loans to support the development
Looking at the type of economic activity of limited liability of SMEs. For example, European Bank for Reconstruction and
companies classified per sector, it can be observed that the service Development has placed a credit line within a domestic bank for
sector prevails with a share of 55%, followed by the non-economic investments in renewable energy projects. Other examples are
activities with 23%, and production activities with 22%. The credits backed up by a 50% guarantee from United States Agency
sector structure of legal entities indicates that entrepreneurs for International Development for investments in agricultural
choose to do business with less risk, easily started without major production. Other available sources of financing: (i) microcredit
capital investments, and requiring less specialized knowledge organizations controlled by the entity banking agencies, (ii)
and training. leasing as a relatively new form of business in B&H, and (iii) in-
The entire business start-up process is burdensome, costly and vestment funds, but they all have limited activity in the last years.
lengthy, when compared to that of the other countries in the region. Credit guarantees as indirect financial instruments are still in the
According to the 2013 World Bank Report on Doing Business, B&H development phase.
is ranked as 163rd out of 185 countries based on the set of in- By adopting the European Charter for SMEs, B&H adopted the
dicators that measure and benchmark regulations applying to do- recommendations of the Charter on the training of entrepreneurs
mestic small to medium-size businesses through their life cycle through its education system. This was followed by the reform and
(World Bank, 2013). Table 3 summarizes the key indicators for the implementation of these recommendations by introducing
starting a business in B&H and benchmarks against regional and new programs and course contents in the educational system. The
high-income economy averages provided by the Organisation for issue of entrepreneurship in the education system is also treated
Economic Cooperation and Development (OECD, 2011). Just for differently, depending on the education level and content of the
comparison, the ease of doing business ranking of Serbia is 86, of curriculum in which education is being conducted. Promotion of
Croatia is 84, and that of Montenegro is 51. According to the in- entrepreneurship and education of young entrepreneurs in sec-
formation received from the relevant authorities, the new company ondary schools is also envisaged in the reform, as well as concrete
registration system that will limit the company registration process activities and pilot projects in vocational schools. Universities and
to 5 days has recently been introduced in 16 courts in major cities faculties are beginning to introduce postgraduate studies on
and towns in B&H. entrepreneurship and management, as well as many types of short
Entity Governments disburse loans and grants through entity seminars for those with fewer opportunities or those not interested
owned investment banks with the aim of fostering development in formal studies within the regular programs. Informal education
of SMEs by financing different activities of private businesses, on entrepreneurship is conducted by the cantonal employment
supporting development of incubators and business zones, in- agencies, civil sector organisations (CSOs), employers' associations
centives for employing new employees, etc. Banks claim that they and chambers of commerce, with the involvement of educational
have already provided a large number of loans to small and me- and scientific institutions.
dium enterprises, but still have enough capital remaining for The infrastructure to support the supporting development of
financing of business activity. At the same time, banks are reluc- entrepreneurship is rapidly emerging. There are various agencies
tant to provide long-term loans. The banks require from SMEs for entrepreneurship development, business associations, clusters
excessive guarantees for small loans, and their procedures are and incubators, however there is a lack of coordination in devel-
slow and complicated. Some of the banks in B&H have special oping an adequate environment for the business support. Five
Regional Development Agencies operate in B&H: ARDA (North-
West B&H); NERDA (North-East B&H); REZ (Central B&H); REDAH
(Herzegovina; South B&H); SERDA (Sarajevo area). Republika
Table 2
The ownership structure of legal entities in B&H.
Srpska (RS) established the Agency for the Development of Small
and Medium Enterprises (SMEs) with 4 regional and 20 local
Type of legal entities Federation B&H RS
agencies, creating a basic network for supporting the development
2009 2010 2011 2009 2010 2011 of SMEs in RS. FB&H does not have similar initiative. Other non-
State 1655 1659 1654 1136 1167 1222 profit organisations that provide support to entrepreneurs do
Social 8 8 8 e e e exist in B&H, such as the ED Centre in Tuzla, LiNK in Mostar, As-
Private 28,959 29,687 30,651 15,268 15,891 16,613 sociation of Entrepreneurs and Employers in Zepce, Srebrenica
Cooperative 392 399 405 394 401 419
Business Centre (SBC), etc. They have all been established with the
Mixed 338 333 327 1034 1042 1024
No ownership 12,267 13,231 14,370 5161 5554 5895 mission of providing support to the development of entrepre-
neurship throughout the country in line with the EU trends of
Total 43,619 45,317 47,415 22,993 24,055 25,173
entrepreneurship development.
380 I. Silajdzic et al. / Journal of Cleaner Production 88 (2015) 376e384
3.2. Society's perception of green entrepreneurship
Relevant entity government bodies in the sector of economy and
industry are not familiar with the concept of environmentally
sustainable business and sometimes even associate green entre-
preneurship with activities that should be solely promoted by
ministries responsible for environment. Once acquainted with the
concept, they generally have a positive attitude towards the
development of green business. However, they do not have plans
to include specific activities aimed at promoting this aspect of
entrepreneurship.
Interviews with 24 civil sector organisations have revealed that
those working in the business development sector are not familiar
with the concept of “green entrepreneurship”. Most of them (18)
consider that there is not enough interest in the development of
green business (two of them think that there is low interest, four
could not respond to this question) and they do not intend to focus
their activities on encouraging entrepreneurs to work in an envi-
ronmentally sustainable way (all except one CSO). On the other
hand, environmental organisations have more information about
the concept and its benefits, however, they are not familiar with the
legal framework nor are they aware of any success stories in this
field - only 3 CSOs answered that they have, yet limited, knowledge
on the legal framework. When asked about specific sectors that
could be attractive for green entrepreneurship, 5 CSOs responded
with sustainable construction (use of natural materials in con-
struction, use of sustainable methods of wood cutting, etc.), 16 CSOs
identified organic farming (organic growth of grains/vegetables/
fruits, growth of medicinal plants, beekeeping), 11 of them
mentioned accompanying activities (restaurants of organic food,
eco-villages, etc.), and 12 pointed to the tourism sector, provided it
was founded on a healthy lifestyle.
Interviews with the owners of 22 small and medium enterprises
revealed some interesting findings about the entrepreneurship
environment in the country. 14 interviewees responded that diffi-
culties in finding a job on the open market was the primary reason
for them to start their own business while only 2 of them consid-
ered it to be a new opportunity. This leads to the conclusion that
existing social structures along with difficulties in finding a job
primarily encourage individuals to entrepreneurial ventures out of
necessity. When asked about their interest to develop green busi-
ness as an additional work component, 6 interviewees responded
negatively while 16 of them responded they have no interest in this
type of business.
When asked about the key obstacles in making decisions about
starting their own business, they responded with a variety of an-
swers, including cultural factors, for example the fear of risk (17
such responses), where, in their opinion, green entrepreneurship is
represented by few cases and this risk is taken only by those people
who care for the nature and prefer a healthy lifestyle anyway.
Starting a business in B&H is generally very difficult and the ma-
jority of people are discouraged from the very beginning, as re-
ported by 15 companies. Other responses included: public
incentives being very scarce (4), bank loans being difficult or
impossible to obtain (6), taxes and other duties being high (8), and
very little or no administrative support or assistance being pro-
vided in starting a business (5). They stressed that entrepreneurs
prefer to rely on family and individual equity rather than obtaining
a loan under favourable terms from banks, micro-credit organiza-
tions, leasing companies and other institutions engaged in lending.
On one hand, individuals with ideas for starting a business face
financial burdens and complicated bureaucratic procedures (10
similar responses) and on the other, individuals with capital to start
a business often face a lack of information and entrepreneurial
education or vision for channelling their investments (4 similar
responses). As a result, many of the newly opened businesses fail in
the early stage of their activities.
Interviews carried out with the teaching staff at the University
of Sarajevo have revealed that the term “green entrepreneurship” is
not widely used among the academic staff e out of 20 interviewed
staff members, 2 were fully familiar with the terms “green entre-
preneurship” and “green business”, 2 were partially familiar, 12
responded with “No” and 4 chose to reply with “I am not sure”. The
educational system in B&H in the last 10 years is constantly under
reform and some environmental subjects were introduced in reg-
ular curricula. Courses related to eco-efficiency, cleaner production,
cleaner technologies, life-cycle analysis, industrial pollution pre-
vention, organic production of food, green design are found in the
university curricula at Mechanical Engineering, Civil Engineering,
Technology, Agricultural and Architecture Faculties of the univer-
sities across the country (i.e. University of Sarajevo). Undergraduate
and graduate programs intend to introduce environmental topics
and to relate them to the business management, as reported by all
relevant individuals interviewed. However, for the time being,
these topics are not addressed in the context of entrepreneurship,
especially not in the context of green entrepreneurship.
3.3. Analysis of case studies on green entrepreneurship
The analysis of green business sector in B&H indicates that there
are entrepreneurs who start their business to produce or offer a
product, service, or process that benefits the environment or pro-
motes a healthy lifestyle. The analysis of such three case studies is
given in Table 4.
Information obtained through interviews with owners
confirmed the findings of the previous analysis of the entrepre-
neurship environment. All of the above mentioned entrepreneurs
operate within the eco-tourism sector and organic farming.
Some entrepreneurs started their business out of passion for
environment and a healthy lifestyle, while others simply recog-
nised the growing market potential for environmentally respon-
sible business. Those entrepreneurs use the term “green” or “eco”
to enable customers to distinguish their business from other types
of entrepreneurs who do not pursue profit goals by means of
ecologically or socially oriented businesses.
The employment capacity is quite similar, with 4e6 permanent
employees with an addition of 10e12 seasonal workers or free-
lancers. Two of three started operating in early 2000's without
any feasibility study or market research. The remaining business
started operating in 2008 and extended its activities in 2010 based
on market research and developed business plan (this was the case
with highest investment).
While some businesses required large investments, others did
not have any start-up capital except for their human efforts and
readily available natural resources. Only the eco-village used bank
loan for financing, while the other two businesses used their own
funds to start operating. In cases of large investment capital, the
investors could not count on the government support and therefore
they relied on individual bank loans. None of the interviewees
could provide any information on RoI (return on investment) and
all of them responded that selling their products and services was
the only source of business financing. When asked about their
strengths, they recognized an opportunity to develop a new
approach to tourism based on organic and eco concepts, B&H
pristine and wild nature and potentials for organic production.
The support from the government or business organisations has
been missing since they started operating. Better cooperation be-
tween stakeholders could strengthen their market position and
lead to better results. The founders of the eco-village underlined
Table 4
Case study analysis.
Case study 1: Ecotourism village
Business description Ecotourism village constructed using renewable
materials (straw, clay and wood) in a traditional
way, employing recycling of water and energy,
using renewable energy sources for heating,
offering organic food grown by the owners and
the specific facilities for recreation, leisure, fun
and education.
Overall motivation To change the attitude of B&H citizens toward
the environment and healthy lifestyle, especially
in the light of climate change and sustainable living.
Number of employees 5 full time employees; 12 free-lancers
Starting point The original idea was to produce organic food and
have vegetarian restaurant realized in 2008. In 2010,
they extended the business activity by purchasing
land and building eco-village with their own organic
food production. The idea was supported with the
research on tourist offer and Business plan for eco-village.
Financial information Start-up capital: voluntary work by the shareholders and
up to 1 mil. EUR of private capital originating from
individual bank loans.
Rate of return on investment: still not visible
Sources of funding: Touristic offer sale.
Strengths Different approach to tourism based on organic and
eco concepts that were not available before.
Challenges and Sustainable sources of finances do not exist and present
constrains a major organizational challenge and a barrier for the
continuation of the second phase of village construction.
Social impacts Environmental education on sustainable living is one of
the aspects of the eco village project.
Environmental impacts Impacts on environment are reduced through the design,
including treatment of wastewater and its recycling, the
use of renewable materials in construction, full thermal
insulation and construction of biomass heating system,
growing organic vegetables.
Economic impacts The local community has the opportunity to sell their
products such as vegetables and milk products.
Scale of benefits Each weekend around 100e200 visitors, 10e15 team
building events per year.
Lessons and Good communication and cooperation with local
recommendations community is imperative for successful implementation
of the project. The original idea must be supported by
market research and a business plan. The process of
finding initial capital is the long-lasting, one should
lean on its own resources. Banks prefer serious
investors with precise cash flow. For success, it is
important to recognize the needs of the client. The
internet is the strongest advertisement media.
Case study 2: Green travel agency
Travel agency offering mountain walks and hikes, mountain
biking tours, rafting, canoeing, village tourism, tour skiing and
snow shoeing, and cultural heritage tours with focus on rural
areas. They offer accommodation in villages and traditional
organic meals made by the host villagers.
To replace the current perception of B&H as a country that has
gone through the war with a vision of a country that has a
lot to offer to nature travelers and adventurers.
6 full time employees; 10 seasonal touristic guides
A company was registered in 2000 by a group of hikers, who
perceived the underdevelopment of rural areas and saw potential
for the development of highland tourism. They were gathering
groups of foreigners and organizing one-day tours, slowly extending
the offer to include a variety of touristic products. Feasibility Study
was not conducted.
Start-up capital: 30,000 EUR for the purchase of equipment,
computers, vehicles, hiking gear, camera, marketing, etc.
Rate of return on investment: not available.
Sources of funding: Tours sale.
The pristine and wild nature of B&H that does not exist in
many places in Europe.
Lack of support from local authorities responsible for tourism,
who were mainly oriented on city tourism and did not see
rural areas as attractive sites for tourists.
Rural and mountain communities are included in tourism
development. The company assisted them to develop
B&B accommodation and thus helped the community growth.
The concept is based on responsible tourism movement
dedicated to promoting and preserving the natural and
cultural heritage of the highland areas.
The company has local partners within the communities
who provide the visitors with organic meals and
accommodation, and thus it provides economic benefit
to those families.
Annually around 80 tours lasting 10 days in average.
Keeping good relations with local communities and
understanding and respecting their way of life are the
key factors for the success of this company.
Better results could be achieved if the cooperation
with local governments would be stronger. Relevant
ministries for environment and tourism have to fully
implement environmental and other relevant laws
and environmental and tourism strategies.
Case study 3: Organic buckwheat production and processing
Organic production of buckwheat, calendula, artichokes
and other medicinal herbs and processing into 3 groups
of over 60 types of final products including food
products, preparations based on medicine herbs,
products made on the basis of buckwheat scales:
neck pillows, eye masks, bedding for kids and adults, etc.
To return to the nature and maintain healthy lifestyle.
4 full time employees; 10 seasonal workers
The family business started with the organic buckwheat
production in the mountain environment in 2000.
Following establishment of sales market, they extended
I. Silajdzic et al. / Journal of Cleaner Production 88 (2015) 376e384
the production to medicine herbs and opened specialized
agricultural cooperative for processing organic plants
and producing different products from the organic
plants. Feasibility Study was not conducted.
Startup capital: Business began with no working capital
and fixed assets.
Rate of return on investment: not available.
Sources of funding: Organic products sale.
The land potentials for organic production and closed
cycle of production and sales.
Long working hours of 20 h a day during the growing
season. Missing support from the government in
strengthening cooperation between relevant ministries,
producers and manufacturers.
All seasonal employees are from the local community.
The associates of the project come from all across the
country. Education for employees is free.
The closed-circuit production of buckwheat and herbs
from organic production to no-waste processing and
final placement on the market.
The project has stimulated economic development
within the community, employing directly and indirectly
about 100 people
The largest collection and distribution center of buckwheat
in B&H with around 100 cooperatives. The products are
exported to Australia, Sweden, Croatia and Slovenia.
Producers of organic, eco and bio products should
merge into one association at the state level.
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the importance of cooperation with local government as one of the
key factors for success.
All of the companies have mentioned relevant social impacts of
such business (through important environmental education, rural
community growth and employment) emphasizing the extremely
positive environmental and economic impacts on local community.
The magnitude of the benefit is significant and transcends the B&H
borders, since services are provided to many tourists from different
countries with products being sold to customers in Australia,
Sweden, Croatia and Slovenia.
The business was developed in steps, starting from the idea, that
was considered to be attractive to possible customers, to the mass
production, where each subsequent step was encouraged by the
success of the previous one. As key messages, the three businesses
have identified good communication and cooperation with local
community, need for market research and business plan develop-
ment for any business idea, use of own financial resources or
patience in dealing with banks use of internet for advertising
purposes, lobbying for development and/or implementation of
environmental and tourism strategies, as well as establishment of
associations at highest administrative levels.
4. Conclusion
Green economy investments constitute a unique opportunity for
emerging economies and countries in transition to accelerate
compliance with global standards, while ensuring sustainable
economic growth. This means that businesses in many industries
face increased environmental and social challenges. Rather than
just focussing on short-term profits, the entrepreneurs are ex-
pected to meet a triple-bottom line of economic, environmental
and social value creation. Based on the results of this research, we
can see that entrepreneurs in economies in transition do not seem
be ready to respond to these challenges, but also that government
administration in countries like B&H does not recognize its own
role in encouraging entrepreneurship, especially when dealing
with green entrepreneurship.
The results of this research summarised in Table 5 lead to
several conclusions. The current situation with green entrepre-
neurship in the country mainly suggests a lack of initiatives, i.e.
investment and promotion instruments that would foster the
development of green entrepreneurship. This indicates that the
level of risk of starting a business in transition economies is
significantly higher compared to that of developed economies,
thus requesting a higher level of entrepreneurship creativity in
order to avoid failures. However, without change in economic
frame conditions (e.g. taxes, subsidies, regulatory frameworks) it
is unlikely that environmental innovations in business will
replace the established technologies.
While barriers in starting up a business remain high due to the
lack of financial support and entrepreneurial culture, Bosnia and
Herzegovina has many advantages and a huge potential for new
entrepreneurs with innovative ideas. The pristine and wild nature,
large forests, and clean land and water represent the real strength
of the country and should be used wisely for the development of
green entrepreneurship. The sectors with most prospects for the
development of green entrepreneurship in B&H are green energy,
eco-agriculture, eco-tourism, education, consultancy and eco-
products.
The greatest responsibility rests on the government to provide
adequate instruments for existing and new green entrepreneurs
that are ready to address uncertainties and related risks and are in
need of access to financial resources. The government can provide
the necessary support to SMEs in overcoming the key barriers and
encouraging investments in the green markets. Policies should be
directed towards reducing entry barriers as well as the costs
incurred when exiting a market. Regulatory reforms, standards and
public procurements can strengthen the emerging green market.
Information campaigns and eco-labelling are also an effective tool
in promoting green business.
However, the existing B&H green entrepreneurs should not play
a passive observer role waiting for the government to take action.
Collaboration and lobbying can increase the feasibility of their
projects (Woolthuis et al., 2013). They should undertake collective
action (create networks) that will evolve them from originators of
opportunities to initiators of institutional changes (norms, property
rights, and legislation), improving the competitiveness of sustain-
able behaviours thus favouring sustainable businesses over those
that degrade the environment.
There is a clear gap in addressing the concept of sustainability in
management and business education. The transformation of
entrepreneurship related curricula in higher education institutions
must take place in order to meet the increasing social demands for
responsible business. Education should also be directed toward
decision makers in order to facilitate the creation of favourable
environment for green entrepreneurship.
The perception of green entrepreneurship among stakeholders
is characterized by a lack of knowledge and information about this
type of environmentally friendly and socially responsible business,
indicating that its positive social results are not sufficiently visible.
Additionally, transition economies, rooted in former state-level
planned economies with no free market orientation, used to sup-
port development of risk-aversion attitude, which is deeply routed
in the society and still has influence on existing and future
entrepreneurs.
The concept of green entrepreneurship is not known to the
majority of stakeholders interviewed, including governmental of-
ficials, associations and NGOs. This is closely related to the educa-
tion system that fails to address sustainability concepts. Once the
stakeholders are acquainted with the definition, the attitude be-
comes positive; however, no plans for its promotion exist in the
framework of their regular activities.
The “green oriented” businesses are present on the market. The
business idea was found in entrepreneur's passion for environment
and healthy lifestyle. However, the motivation behind the starting
up of a business was not supported by the innovative or environ-
mentally and socially responsible aspirations, but by the need to
create new income opportunities. All businesses have succeeded in
achieving the triple-bottom line of economic, environmental and
social value creation without receiving any support from the gov-
ernment. The results point out the importance of keeping good
relations with local communities and local governments for the
success of a business. The research has confirmed that key socio-
logical constructs in green business are personal motivation and
mission, locality, and a forward-thinking orientation in terms of
sustainability.
In order to create a favourable environment for introducing
green economy, a number of interventions from the legal and
financial aspect should be carried out along with strong educational
campaign for all stakeholders' levels. The government level should
be the primary target of education on green entrepreneurship in
order to provoke changes in policies and relevant development
documents. The following activities are recommended:
 policy interventions and interventions in existing strategies on
entrepreneurship development;
 increase of information flow from upper to lower levels of gov-
ernment accompanied by a strategy to achieve the maximum use
of EU funds for entrepreneurship development;
 dissemination of information on green entrepreneurship;
Table 5
Highlights of results obtained.
Entrepreneurship environment in the country
Legal framework
 The term and concept of green entrepreneurship” or green
business is officially not recognized
 No relevant legislation that would promote green
entrepreneurship
 No statistical data on the entrepreneurship type of business
activity
 65% of total number of legal entities established in the
country are private limited liability companies assumed to
be represented mainly by small and
medium-sized enterprises including crafts
 The sector structure indicates that entrepreneurs choose to
do business with less risk, easily started without major
capital investments, and requiring less
specialized knowledge and training
 The entire business start-up process is burdensome, costly
and lengthy
Society perception of green entrepreneurship
Government bodies and education sector
 Relevant entity government bodies in the sector of economy and
industry are not familiar with the concept of
environmentally
sustainable business
 They do not have plans to include specific activities directed
to promote this aspect of entrepreneurship
 Environmental topics are thought at the university but not
in relation to entrepreneurship.
Case studies analysis
Facts
Green entrepreneurs exist in the country
They use term “green” or “eco” to distinguish their business
from other types of business
Employment capacity is up to 20e25 employees
All business are self-sustainable All business have social,
environmental and economic impacts on local community
Financing
 Entity Governments disburse loans and grants through entity owned
investment banks with the aim of fostering development of SMEs
 Banks are reluctant to provide long-term loans
 Banks require from SMEs excessive guarantees for small loans, and
their procedures are slow and complicated
 Commercial banks have special agreements with international
development banks for the placement of loans to support the
development of SMEs
Civil sector organizations
 CSO from business sector are not familiar with the concept
of green entrepreneurship
 CSOs from environmental sector have basic information about
concept of green entrepreneurship
 Sectors interesting for development of green entrepreneurship:
sustainable construction (construction with the use of natural
materials, the use of sustainable methods of wood cutting, etc.),
organic farming (organic growth of grains/vegetables/fruits, the
growth of medicinal plants, beekeeping) and accompanying activities
(restaurants of organic food, eco-villages, etc.), and nature
based tourism
Weaknesses
Start-up without feasibility study or business plan
No start-up capital
No support from government or business organizations
Education and supporting infrastructure
 Reform of education system takes place in line with the
requirement for training of entrepreneurs from European
Charter for SMEs
 Concrete activities and pilot projects in vocational schools
are available
 Postgraduate studies on entrepreneurship and management
are available
I. Silajdzic et al. / Journal of Cleaner Production 88 (2015) 376e384
 Informal education on entrepreneurship is conducted by
cantonal employment agencies, civil sector organizations
(CSOs), employers' associations and chambers of commerce
 Various agencies for entrepreneurship development,
business associations, clusters and incubators are available
Small and medium enterprises
 Difficulty of finding a job primarily encourage
individuals to entrepreneurial ventures out of necessity
 Existing entrepreneurs have no interested to green their
business
 Key obstacles for business startup are: fear of risk,
administrative difficulties, difficulty to obtain bank loans,
high taxes and other duties, and very little or no
administrative support
 Individuals with capital to start a business often face a
lack of information and entrepreneurial education or vision
for channeling their investments
Strengths
Pristine and wild nature
Potentials for organic production
Exporting potential
Good communication and cooperation with local government
Use of social tools for promotion and advertisement
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384 I. Silajdzic et al. / Journal of Cleaner Production 88 (2015) 376e384
 conducting trainings/workshops/seminars on green
entrepreneurship;
 exchange of knowledge with experts/entrepreneurs from
various EU countries with success stories; emphasizing the use
of benchmarking and the exchange of best practices since there
is a clear added value to be gained from learning from others'
experiences;
 connecting successful green business through an association
while building its capacity to defend rights and promote the
work of green entrepreneurs in the country;
 introduction of demonstration projects.
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