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Professor New Entrepreneurship Centre of Expertise Wellbeing Economy & New Entrepreneurship Inaugural lecture, in abbreviated form delivered on 22 January 2025 Cor Beyers
Author’s Note: Please follow us on: https://www.linkedin.com/company/bwno/ Front cover design: Jana Beyers Publisher: Centre of Expertise Wellbeing Economy & New Entrepreneurship at Avans University of Applied Sciences First edition, published in 2025. A PDF version of this book can be downloaded for free from https://www.bwno.nl/lectoraten/nieuwondernemerschap. Copyright 2024–2025 This work is licensed under a Creative Commons “Attribution-NonCommercial-ShareAlike 4.0 International” license. To my wife Henélia and our wonderful children Johann and Jana, with gratitude. To my wife Henélia and our wonderful children Johann and Jana, with gratitude. Author’s Note: Please follow us on: https://www.linkedin.com/company/bwno/ Front cover design: Jana Beyers Publisher: Center of Expertise Wellbeing Economy & New Entrepreneurship at Avans University of Applied Sciences First edition, published in 2025. A PDF version of this book can be downloaded for free from https://www.bwno.nl/lectoraten/nieuwondernemerschap. Copyright 2024–2025 This work is licensed under a Creative Commons “Attribution-NonCommercial-ShareAlike 4.0 International” license. cbna ISBN: 978-0201529838 9 780201 529838 To my wife Henélia and our wonderful children Johann and Jana, with gratitude. Author’s Note: Please follow us on: https://www.linkedin.com/company/bwno/ Front cover design: Jana Beyers Publisher: Center of Expertise Wellbeing Economy & New Entrepreneurship at Avans University of Applied Sciences First edition, published in 2025. A PDF version of this book can be downloaded for free from https://www.bwno.nl/lectoraten/nieuwondernemerschap. Copyright 2024–2025 This work is licensed under a Creative Commons “Attribution-NonCommercial-ShareAlike 4.0 International” license. cbna ISBN: 978-0201529838 9 780201 529838 ISBN: 978-0201529838
Part I The Prelude 3 1 Introduction 4 2 Research Group New Entrepreneurship 6 2.1 The Vision of BWNO 6 2.2 New Entrepreneurship 7 2.3 Conclusion 8 Part II The Responsible Ventures of the Entrepreneur 9 3 Living within Planetary Boundaries 10 3.1 Concern for Our Planet 10 3.2 Green Growth versus De-Growth 12 3.3 Finance in Planetary Boundaries 15 3.4 The Position of the Entrepreneur 16 3.5 Conclusion 16 4 An Economy of Well-Being 17 4.1 Enhancing Household Well-being 17 4.2 Main Initiatives Towards the Well-being Economy 19 4.3 Policymakers Impact on Well-being 19 4.4 Corporate Responsibility and Firm Contributions to Well-being 20 4.5 Conclusion 22 5 Collective Agency for Change Management 23 5.1 Living within Transitions 24 5.2 The Mandala of Agency 25 5.3 Individual Agency: Reclaiming Control and Aligning Values Mindset 26 5.4 Collective Agency 27 5.5 Systemic Transformation 27 5.6 Case Study 28 5.7 Conclusions 29
Part III The Strategic Position of the Entrepreneur 31 6 The Entrepreneur 32 6.1 A Historical View on the Evolution of Entrepreneurial Theory 32 6.2 The Position of the Entrepreneur in Economic Theory 33 6.3 A Definition of Entrepreneurship 34 6.4 Conclusion 35 7 Entrepreneurial Behaviour and Commitment to Sustainability 36 7.1 Innovation by Design 37 7.2 Sustainability Initiatives 38 7.3 Sustainable Business Modelling 39 7.4 Circular Business Models 41 7.5 Challenges Incorporating Sustainable Business Modelling 41 7.6 Conclusion 42 8 Regenerative Leadership 43 8.1 The Essence of Regenerative Business Practices 44 8.2 Systemic Barriers to Regeneration 44 8.3 Visionary Leadership 45 8.4 Managing Directors as Regenerative Leaders 46 8.5 Case Study: Transforming towards Regenerative Practices 48 8.6 Conclusion 49 Part IV Reflections and Contributors 51 9 Conclusion 52 10 Members of the Research Group 53 11 Acknowledgements 58 Bibliography 59
The subtitle of this book, Escaping the Matrix: Innovative Leadership for Sustainable Change, was intentionally chosen as a reference to the movie The Matrix. This film captivated me with its concept of humans unknowingly living in a simulated reality created by intelligent machines, believing the illusion to be the real world. Its thought-provoking narrative inspired me to question many aspects of my own life and the world around me. The metaphor of The Matrix extends beyond the simulated reality depicted in the film; it serves as a lens through which to examine the structures and paradigms that shape our society. Much like the characters who awaken to the true nature of their world, we must recognise and challenge the systems that confine us, including the economic systems that prioritise short-term profit over sustainability, the social systems that perpetuate inequality, and the cultural norms that discourage meaningful change. Entrepreneurship offers a pathway to ”escape” these constraints to enable us to reshape our realities through innovation and leadership. In this book, I focus on two critical aspects of entrepreneurship: Responsible Ventures and the Strategic Position of the Entrepreneur. These themes form the foundation for examining how entrepreneurs can act as change agents, navigating complex societal challenges while maintaining ethical and sustainable practices. The insights presented here will not only inspire individual entrepreneurs but also set the research priorities for the New Entrepreneurship research group. Responsible Ventures of the Entrepreneur Part 2 of the book delves into how entrepreneurs can venture responsibly on their journeys as catalysts for change. Drawing from Amartya Sen’s concept of ‘functionings’ (Sen, 1999), we will explore how entrepreneurship is not merely about material success but about enhancing quality of life by creating the freedom to achieve meaningful goals. Entrepreneurs have the unique ability to step out of comfort zones, challenge the status quo, and transform their ecosystems. ”I had wanted to make history move ahead in the same way that a child pulls on a plant to make it grow more quickly. I believe we must learn to wait as we learn to create. We have to patiently sow the seeds, assiduously water the earth where they are sown and give the plants the time that is their own. One cannot fool a plant any more than one can fool history.” - Václav Havel (1990) Chapter 1 4 Chapter 1. Introduction
For that to happen, the entrepreneur must not only understand the challenges we face such as climate change, and social inequality, but also engage in deep introspection. This involves critically examining their own values, motivations, and aspirations and considering how these align with the broader societal impact they wish to achieve. Responsible venturing requires entrepreneurs to ask themselves not only what they want to accomplish but also why and how they will achieve this. Thus, balancing personal ambitions with social and environmental responsibilities. Strategic Position of the Entrepreneur In Part 3, the focus shifts to the strategic role entrepreneurs play within society. Entrepreneurs are uniquely positioned to tackle pressing challenges such as climate change, inequality, and rapid technological advancements. Through their ability to innovate and with a clear vision, they can create value that transcends financial gain. They can reshape industries and drive systemic change. This part examines entrepreneurial behaviour and leadership attributes that enable entrepreneurs to fulfil their role effectively. By thinking long-term, entrepreneurs can make a lasting impact. They can use their influence to inspire change that would impact the society they live and work in. The Centre of Expertise Wellbeing Economy and New Entrepreneurship (CoE BWNO), seeks to ensure that change makers such as entrepreneurs do not feel isolated and to support them through the transitions they encounter. Unlike in The Matrix, where individuals adapt to an inferior situation at great personal cost, these individuals can drive systemic change, creating a more sustainable future for society. In the following chapter we will first give a brief background of the position of New Entrepreneurship within Avans University of Applied Sciences (UAS) as research group within CoE BWNO and the thematic focus that New Entrepreneurship will have for the following years. 5 Chapter 1. Introduction
“I was born not knowing and have had only a little time to change that here and there.” - Richard Feynman (1999) Avans has articulated its vision for practice-oriented research and its impact, emphasising collaboration with various stakeholders. The title of this vision, ”Knowledge in Development,” was chosen deliberately to reflect the dynamic role and influence Avans’ aims to achieve as a knowledge institution. Avans is motivated to contribute to the development of people and organisations, create knowledge through co-creation, and support major transitions for social and ecological sustainability, both now and in the long term. Avans focuses its research efforts on a limited number of internally and externally assessed thematic priorities, linked to the Sustainable Development Goals (SDG). One of these themes is Well-Being Economics which is addressed in CoE BWNO. 2.1 The Vision of CoE BWNO CoE BWNO envisions a sustainable future for everyone. This vision is carried forward through six research groups namely Impactful Value Chains, Unthinkable Marketing, New Entrepreneurship, Sustainable Finance and Accounting, Economy in Common and Laws and Regulations. These six groups are connected by three core focus areas, as shown in Figure 2.1. Research on materials and nature is vital for promoting sustainable economic growth. By studying sustainable resource management, circular economy models, and green innovations, researchers can develop strategies that allow for economic growth while safeguarding the planet’s health. Data and digitalisation in the economy is another crucial research area, particularly as the digital revolution continues to reshape industries and societies. This research can reveal how digital innovations such as artificial intelligence enhance efficiency, and boost competitiveness. Digitalisation promotes smarter decision-making and can lead to better resource optimisation. Chapter 2 6 2.1 The Vision of BWNO
Figure 2.1: BWNO focus areas (Source: Created by the author) Finally, research on people and collaboration emphasises the social dynamics that contribute to economic success. Exploring how human relationships and collaboration foster productivity, creativity, and innovation is essential for developing inclusive and innovative economies. 2.2 New Entrepreneurship To support the broader CoE BWNO focus areas, the New Entrepreneurship research group concentrates on three key elements believed to drive sustainable innovation in businesses: Collective Agency, Regenerative Leadership, and Entrepreneurial Behaviour (see Figure 2.2). The goal is to deliver practice-oriented research that arises from realworld questions and problems, focusing on improving key themes that drive sustainability, particularly in areas such as energy and digital transitions, the circular economy, and social enterprises. From this basis five main research questions were developed that will guide our research namely: • How do entrepreneurs overcome barriers and leverage opportunities to contribute to sustainable economic development and the circular economy? • What leadership styles and traits are most effective in balancing profitmaking with environmental responsibility to drive the success of green ventures? • How do green entrepreneurs utilize digital transformation, co-creation, and R&D investments to foster innovative and scalable sustainable solutions? • How can change management strategies and organisational culture be adapted to support transitions toward sustainable business models and practices? • How does digitalisation enable entrepreneurs to innovate and scale sustainable solutions while addressing the challenges of the green economy? 2.2. New Entrepreneurship 7 Figure 2.1: BWNO focus areas (Source: Created by the author) Finally, research on people and collaboration emphasises the social dynamics that contribute to economic success. Exploring how human relationships and collaboration foster productivity, creativity, and innovation is essential for developing inclusive and innovative economies. 2.2 New Entrepreneurship To support the broader BWNO focus areas, the New Entrepreneurship research group concentrates on three key elements believed to drive sustainable innovation in businesses: Collective Agency, Regenerative Leadership, and Entrepreneurial Behaviour (see Figure 2.2). The goal is to deliver practice-oriented research that arises from realworld questions and problems, focusing on improving key themes that drive sustainability, particularly in areas such as energy and digital transitions, the circular economy, and social enterprises. From this basis five main research questions were developed that will guide our research namely: • How do entrepreneurs overcome barriers and leverage opportunities to contribute to sustainable economic development and the circular economy? • What leadership styles and traits are most effective in balancing profit7 2.2 New Entrepreneurship
Figure 2.2: A framework illustrating the strategic approach and core research directions of the Research Group New Entrepreneurship. (Source: Created by the author) 2.3 Conclusion The New Entrepreneurship research group plays a pivotal role in addressing real-world challenges by generating knowledge and solutions that support businesses and society in navigating complex transitions. By focusing on sustainable innovation through collective action, leadership, and entrepreneurial behaviour, this group aims to contribute meaningfully to the well-being economy and sustainability goals set by Avans and its stakeholders. Next, we will explore responsible entrepreneurial ventures, focusing on their role in addressing the impact of human activities on planetary boundaries and fostering a wellbeing economy. It then delves into the concept of collective agency, focusing on how entrepreneurs can assert authority and responsibility in environmental, social, and economic dimensions. The sequence of the topics discussed can be seen in Figure 2.3 Figure 2.3: The sequence of the topics discussed (Source: Created by the author) • How does digitalisation enable entrepreneurs to innovate and scale sustainable solutions while addressing the challenges of the green economy? Figure 2.2: Entrepreneurial Innovation Pathway: A framework illustrating the strategic approach and core research directions of the Research Group New Entrepreneurship. (Source: Created by the author) 2.3 Conclusion The New Entrepreneurship research group plays a pivotal role in addressing real-world challenges by generating knowledge and solutions that support businesses and society in navigating complex transitions. By focusing on sustainable innovation through collective action, leadership, and entrepreneurial behaviour, this group aims to contribute meaningfully to the well-being economy and sustainability goals set by Avans and its stakeholders. 2.3. Conclusion 9 Next, we will explore responsible entrepreneurial ventures, focusing on their role in addressing the impact of human activities on planetary boundaries and fostering a well-being economy. It then delves into the concept of collective agency, focusing on how entrepreneurs can assert authority and responsibility in environmental, social, and economic dimensions. The sequence of the topics discussed can be seen in Figure 2.3 Figure 2.3: The sequence of the topics discussed (Source: Created by the author) 8 2.3 Conclusion
In this chapter, we explore the idea of green growth as a potential pathway to sustainable development. Green growth advocates for a model of economic expansion that does not come at the expense of our ecological systems. Drawing from concepts such as the planetary boundaries framework, the risks of exceeding our ecological limits will be examined and how green growth strategies might offer a balanced way forward. The potential for innovation and systemic change to decouple growth from environmental harm will be discussed. 3.1 Concern for Our Planet David Bohm was theoretical physicist renowned for his contributions to quantum mechanics and was also recognised as a philosopher with insights into the dynamics of thought and consciousness. As a philosopher, Bohm’s fascination with cognitive processes led him to postulate that human’s conventional perception tends to exhibit itself in a fragmented reality. In his quest to remove this limitation, he proposed the concept of the Rheomode. The name of the linguistic construct is derived from the Greek term for ”flow,” aimed to more accurately mirror the interconnected and dynamic nature of the universe, as seen in physics. The Rheomode sought to foster a language that moves away from static categorisation, but rather encouraging a perception of the world that is coherent and unified. ”I’ve often heard people say: ‘I wonder what it would feel like to be on board a spaceship,’ and the answer is very simple. That’s all we have ever experienced. We are all astronauts on a little spaceship called Earth.” - Buckminster Fuller (1969) Planetary Boundaries wonder what it would feel like to be on board a ry simple. That’s all we have ever experienced. e spaceship called Earth.” e idea of green growth as a potential pathway . Green growth advocates for a model of not come at the expense of our ecological h as the planetary boundaries framework, the cal limits will be examined and how green a balanced way forward. The potential for to decouple growth from environmental harm l physicist renowned for his contributions to Chapter 3 10 3.1 Concern for Our Planet
Bohm’s introduction of the Rheomode underscores a very important point: our discourse about global issues, such as climate change, often isolates us from the very problems we seek to solve. By referring to the planet in terms of an ”overheating earth”, we detach ourselves from our integral role within the problem. Yet, we are part of the planet which implies that we are also overheating. Bohm advocated for a shift towards a more holistic perspective. In that way the continuous flow of reality helps us understand our part and responsibility in global challenges. When considering our position within the planet we conclude that we are endangering our own ecosystem by utilising more resources than is feasible. In the Science published article by Richardson et al. (2023), they explain the Holocene period which allowed the global environmental functions and life-support systems to remain similar over the past ~10,000 years. In 1760, during the Industrial Revolution in the United Kingdom, a process began that endangers our ecosystem by pushing beyond the planet’s natural boundaries. The concept of planetary boundaries identifies nine critical Earth system processes that must remain within certain limits to ensure a stable and habitable planet. For each of these boundaries, scientists have identified control variables that act as indicators of the state of these processes. In Figure 3.1 an overview of the current state of the control variables for all nine planetary boundaries are shown. Figure 3.1: The current status of the nine Planetary Boundary systems and processes. The length of the wedges represents the current status with respect to the planetary boundary (green) and the high-risk line (orange). Smooth fading indicates an uncertainty range, while dashing means that there is no quantification of the current state beyond the planetary boundary. (Source: Richardson et al. (2023)) the Science published article by Richardson et al. (2023), they e locene period which allowed the global environmental functio pport systems to remain similar over the past ~10,000 years. I the Industrial Revolution in the United Kingdom, a process bega ers our ecosystem by pushing beyond the planet’s natural boun e concept of planetary boundaries identifies nine critical Earth ses that must remain within certain limits to ensure a stab ble planet. For each of these boundaries, scientists have ide l variables that act as indicators of the state of these proces 3.1 an overview of the current state of the control variables anetary boundaries are shown. 3.1: The current status of the nine Planetary Boundary s ocesses. The length of the wedges represents the current statu t to the planetary boundary (green) and the high-risk line (o h fading indicates an uncertainty range, while dashing mean s no quantification of the current state beyond the planetary bou (Source: Richardson et al. (2023)) 11 3.1 Concern for Our Planet
Not only have we transgressed six of the nine planetary boundaries, but we are at high risk with another two of them. Large uncertainty exists on the implications of transgressing the planetary boundaries, but it is believed to have a detrimental affect or even catastrophic outcome for large parts of the world. It remains uncertain whether the collapse will occur gradually or if the system will reach a tipping point, leading to sudden and irreversible catastrophic outcomes. Regardless of the trajectory, it is evident that the impact on human well-being will be profoundly negative. 3.2 Green Growth versus De-Growth To ensure that the ecosystem returns to a balanced state, several economic strategies or policy frameworks exist to integrate environmental sustainability with economic decisionmaking (Rifkin (2019); OECD (2011); United Nations Environment Programme (2011); Jackson (2009); Latouche (2009); Daly (1991)). In Figure 3.2, a few of these policies are depicted on a scale of the desired economic growth. In the rest of this section a comparison of the combined green growth strategies (CGG) with de-growth will be discussed. For clarity in the discussion, both terms are defined: De-growth refers to a deliberate reduction in economic activity to achieve sustainability, while CGG focuses on fostering economic growth by decoupling it from environmental degradation and promoting investment in the green economy. Figure 3.2: Economic strategies or policy frameworks that exist to integrate environmental sustainability with economic decision-making on a one dimensional scale from a low to high economic growth spectrum (Source: Created by the author) Since its adoption in the 20th century, the Gross Domestic Product (GDP) has been the dominant measure of economic output, capturing the total monetary value of goods and services produced within a country over a specific period. Originally intended as a wartime measure, GDP’s popularity among economists grew as it provided a clear, singular metric for economic health. As van den Bergh (2009) explains, GDP emerged as a ”symbol of progress” in the post-war era, with increases in GDP often equated to enhancements in societal well-being. However, as Costanza et al. (2009) argues, this heavy reliance on GDP has overshadowed critical dimensions of development, including social and environmental factors, thereby presenting an incomplete picture of true progress. We are not separate from the planet; we are intrinsically a part of it. As the planet deteriorates, so too does our own condition. we are at high risk with another four of them. Large uncertainty exists on the implications of transgressing the planetary boundaries, but it is believed to have a detrimental affect or even catastrophic outcome for large parts of the world. It remains uncertain whether the collapse will occur gradually or if the system will reach a tipping point, leading to sudden and irreversible catastrophic outcomes. Regardless of the trajectory, it is evident that the impact on human well-being will be profoundly negative. We are not separate from the planet; we are intrinsically a part of it. As the planet deteriorates, so too does our own condition. 3.2 Green Growth versus De-Growth To ensure that the ecosystem returns to a balanced state, several economic strategies or policy frameworks exist to integrate environmental sustainability with economic decision-making (Rifkin (2019); OECD (2011); United Nations Environment Programme (2011); Jackson (2009); Latouche (2009); Daly (1991)). In Figure 3.2, a few of these policies are depicted on a scale of the desired economic growth. In the rest of this section a comparison of the combined green growth strategies (CGG) with de-growth will be discussed. For clarity in the discussion, both terms are defined: De-growth refers to a deliberate reduction in economic activity to achieve sustainability, while CGG focuses on fostering economic growth by decoupling it from environmental degradation and promoting investment in the green economy. Figure 3.2: Economic strategies or policy frameworks that exist to integrate environmental sustainability with economic decision-making on a one dimensional scale from a low to high economic growth spectrum (Source: Created by the author) 12 3.2. Green Growth versus De-Growth
Over time, GDP growth and economic growth have been used interchangeably, though many economists now question the feasibility of continuous growth. Kenneth Boulding, for example, compared the earth to a spaceship with finite resources, warning that indefinite growth is unsustainable. He argued that growth must eventually reach equilibrium, foreshadowing today’s debates on de-growth and green growth. Boulding (1968) was particularly concerned with whether resources could keep up with exponential GDP growth, as illustrated in Figure 3.3. This highlights the importance of exploring alternative models of progress that prioritize environmental sustainability and social equity alongside economic growth. Figure 3.3: World Economic Growth in terms of GDP [1820 - 2018] (Source: Created by the author based on data from the Maddison Project Database (Bolt and van Zanden) (2020)) In a counter argument, other economist have tried to decouple economic growth in terms of monetary value from material use to escape the finite resource restrictions posed (Jackson and Victor, 2019). Yet, there are challenges with decoupling. For instance, despite improvements in carbon dioxide (CO2) emissions per unit of economic output, nett carbon emissions continue to rise. To achieve the necessary reductions in carbon emissions to avoid climate breakdown requires a rate of decoupling that significantly exceeds historical technological achievements. An even greater objection comes from Vogel and Hickel (2023). The authors judge the pursuit of green growth as ”misleading and represent a form of greenwashing”. From their analysis they found that with current decoupling rates, countries would on average take over 220 years to reduce CO2 emissions by 95%. nite resources, warning that indefinite growth is unsustaina that growth must eventually reach equilibrium, foreshadowing on de-growth and green growth. Boulding (1968) was part ed with whether resources could keep up with exponentia as illustrated in Figure 3.3. This highlights the importance o rnative models of progress that prioritize environmental sustai ial equity alongside economic growth. ure 3.3: World Economic Growth in terms of GDP [1820 - 2 : Created by the author based on data from the Maddison se (Bolt and van Zanden) (2020)) counter argument, other economist have tried to decouple ec 13 3.2. Green Growth versus De-Growth
Another criticism on decoupling is Jevons’ Paradox, also called the rebound effect, which states that efficiency gains lead to lower costs and increased consumption, ultimately negating the environmental benefits of efficiency improvements. Sorrell (2009) revisited Jevons’ Paradox, presenting empirical evidence from various sectors showing how energy efficiency improvements often lead to increased energy consumption, particularly due to lower costs that stimulate greater usage. While Jevons’ Paradox presents a compelling argument, it’s crucial to consider the context and the broader system in which efficiency improvements occur. For instance, policy pathways can mitigate the rebound effect (Vivanco et al., 2016). Azevedo (2014) shows evidence from econometric studies examining price elasticity, income elasticity, and substitution elasticity that indicates rebound effects in developed economies. These effects tend to be moderate which suggests that well-designed energy efficiency policies can achieve energy savings, though the actual savings may be somewhat less than those predicted by straightforward engineering analyses. Even considering these criticisms, technology improvements does lead to partial decoupling. Innovation is seen as an important vehicle towards green growth. Andabaka et al. (2019) found a positive correlation between higher rates of economic growth and eco-innovation. Although innovation does not result in full decoupling, it does have a complementary relationship with reduction of consumption and is therefore as important as de-growth strategies in achieving consumption within the planetary boundaries. Not only are innovations in technical fields contributing to the reduction of resource use, but business model innovations, such as Product-Service Systems, are also positively impacting resource utilisation (Geissdoerfer et al., 2020). As highlighted above, the topic of decoupling is highly controversial. The discussion extends beyond the decoupling of resource use from economic growth, challenging the very assumption that economic growth is essential for improving quality of life. Opponents of green growth suggest that quality of live can be achieved independently from economic growth. Figure 3.4 illustrates the positions of both green growth as well as that of de-growth. Green growth promoters argue that strict environmental policies might lead to economic shrinkage which could lead to social unrest. True sustainability is not about choosing between green growth or de-growth; it’s about transcending these paradigms to innovate new pathways that restore balance. 14 3.2. Green Growth versus De-Growth
The challenge for green growth to succeed lies in securing sufficient financial backing to empower and scale the efforts of entrepreneurs driving sustainable innovation. This need for investment will be discussed in the next paragraph. Figure 3.4: Positions of both green growth and de-growth (Source: Created by the author) 3.3 Finance in Planetary Boundaries The purpose of the global financial system is to allocate the world’s savings to their most productive uses, ideally channelling a greater share toward sustainable development. In the context of green growth, understanding the role of financial investment is crucial to transitioning towards a sustainable economy. As Christophers (2019) outlines, institutional investors such as large banks, asset managers, and pension funds, continue to channel significant capital into fossil fuel industries, despite increasing awareness of climate risks. Christophers highlights the complexity of this investment landscape, where financial actors are often reluctant to shift funds away from fossil fuels due to perceived economic stability and returns in these assets. This inertia poses a considerable challenge to achieving green growth objectives, as maintaining these investments conflicts with planetary boundary limits. In order to realise the large-scale benefits of new green technologies and avoid investments that worsen environmental crises, the finance industry must reshape their investment focus. To support a transition aligned with sustainability, reallocating capital toward renewable energy sectors is essential, fostering green innovation and systemic shifts that reduce environmental impact. Green growth promoters argue that strict environmental policies might lead to economic shrinkage which could lead to social unrest. The challenge for green growth to succeed lies in securing sufficient financial backing to empower and scale the efforts of entrepreneurs driving sustainable innovation. This need for investment will be discussed in the next paragraph. Figure 3.4: Positions of both green growth and de-growth (Source: Created by the author) 15 3.3 Finance in Planetary Boundaries
3.4 The Position of the Entrepreneur Entrepreneurs face an inherently challenging dilemma: choosing between green growth and de-growth. Green growth promotes economic expansion through sustainable practices, seeking to decouple growth from environmental harm. In contrast, de-growth emphasises reducing overall economic activity to achieve sustainability, advocating limits on consumption and production to stay within ecological boundaries. Entrepreneurs must navigate this tension, balancing the pursuit of economic growth with the principles of de-growth that call for scaling down activities to protect the planet. A key consideration is whether businesses fully understand the strategic importance of decision-making within their operations. Applying the 80-20 rule suggests that businesses need not prioritise all areas equally, creating opportunities for de-growth in specific parts of their activities without jeopardising overall viability. This selective approach could enable companies to adopt more sustainable practices while maintaining their competitiveness. Another critical aspect is the extent to which businesses are informed about the potential of the circular economy. Investing in circular models allows companies to transition toward sustainability without abandoning the principles of the market economy. This involves practical steps such as reducing energy consumption and environmental footprints, designing out waste and pollution, and extending product lifespans. The circular economy offers a compelling framework for businesses to align profitability with ecological responsibility, fostering innovation while contributing to environmental sustainability. 3.5 Conclusion As we consider the positions of green growth and de-growth, illustrated in Figure 3.4, we are reminded that the quest for sustainable development is a delicate balance. This balance seeks to harmonise the pursuit for well-being with the preservation of our planet. Thus, we stand at a crossroads, where wisdom in the correct strategy which is tailored to each sector is needed. Entrepreneurs play a pivotal role in this dynamic, both as consumers of raw materials and as contributors to waste production. While de-growth offers a vital framework for maintaining activities within planetary boundaries, green growth, including the circular economy, emerges as a pragmatic enabler for fostering sustainable economic development. However, the actions of entrepreneurs do not occur in a vacuum. As discussed, financing green growth is often constrained by systemic reluctance to redirect funds from the entrenched fossil fuel economy, creating barriers to transformative change. In the next chapter, closer attention will be given to the concept of a well-being economy. 16 3.4 The Position of the Entrepreneur
“Economic growth without investment in human development is unsustainable and unethical ” - Amartya Sen (1999) In this chapter, we will focus on the well-being economy, which intention it is to ensure human well-being and sustainable development. As we will see, the concept of a well-being economy is complex. Since 2016, the University of Utrecht and Rabobank Research are publishing The Well-being Indicator which measures and weighs eleven dimensions that reflect the well-being of the Netherlands namely: safety, environment, health, subjective well-being, work-life balance, housing, education, material prosperity, civic engagement, social relationships, and jobs (RaboResearch and Utrecht, 2024). In the last report of 2023, they found that well-being in the Netherlands slightly declined during the COVID-19 pandemic and then slightly increased afterwards. Underlying factors such as job security, income, and personal development have steadily improved, while subjective wellbeing, housing, and health are worse off than in 2019. Even though perception of households might be different, the overall well-being in the Netherlands has changed little over the past three years. 4.1 Enhancing Household Well-being In the previous chapter, it became clear that economic growth, environmental sustainability, and social responsibility are interdependent and must be considered holistically through an approach known as systems thinking. As discussed, the overuse of natural resources is likely to lead to a decline in the well-being of all. Even though we recognise the importance of everyone, the individual’s position is often neglected. The Competitive Exclusion Principle, as described by Gause’s Law, provides a compelling analogy for understanding certain dynamics in social justice, particularly in relation to access to resources and opportunities. Just as in ecological systems where two species cannot coexist if they compete for the same resources, in societies, individuals or groups that compete for limited resources may face similar challenges. In a social justice context, this principle can highlight how systemic inequalities, and structural barriers create a competitive environment where not all groups have equal chances to succeed. my of Well-Being tment in human development is unsustainable on the well-being economy, which intention being and sustainable development. As we being economy is complex. Since 2016, the bank Research are publishing The Well-being d weighs eleven dimensions that reflect the amely: safety, environment, health, subjective ousing, education, material prosperity, civic s, and jobs (RaboResearch and Utrecht, 2024). y found that well-being in the Netherlands VID-19 pandemic and then slightly increased s such as job security, income, and personal proved, while subjective well-being, housing, 2019. Even though perception of households Chapter 4 17 4.1 Enhancing Household Well-being
The 1987 report by the World Commission on Environment and Development (1987), also known as the Brundtland Commission, defined sustainable development as meeting the needs of the present without compromising the ability of future generations to meet their own needs . This definition underscores the importance of balancing economic, social, and environmental factors in development. Well-being, in its broadest sense, should integrate and balance these three aspects, suggesting that achieving it requires selflessness in a context of limited resources. There exists ambiguity in the term well-being. McGregor and Pouw (2017) proposed that for the individual there are three dimensions of wellbeing namely a material dimension, a relational dimension and a subjective dimension. Individuals as agents in the economy will make choices to reach the maximum utilisation whilst balancing these three dimensions. By implication, agents are not acting in isolation and their actions will influence the lives of others. Thus, people do not just seek to live well in terms of improving their own individual well-being, but that they must seek to live well together with others. Overall, we see that the subjective dimension primary contributes to the ambiguity. This subjectivity is described by Haybron and Tiberius (2015) as a multifaceted concept that should be understood and promoted in line with the individuals’ own values and conceptions of what makes life good for them. The authors promote ”pragmatic subjectivism” as an approach to well-being where individuals contribute to policy making with their views on values and well-being. The focus on personal welfare and values is crucial for well-being policy to be effective. It calls for policies that genuinely promote citizens’ well-being as they themselves understand and value it. While respecting individual values in a democratic society is essential, it is also important to acknowledge potential challenges to this approach. Firstly, competition exists between households and companies for scarce resources such as nature, land, clean air, and water. Additionally, the Tragedy of the Commons illustrates how an excessive focus on individual well-being can lead to the neglect of common goods and shared resources. This risk is heightened by the difficulty in identifying genuine values amidst societal pressures, marketing, and other external influences that shape individuals’ expressed preferences and values. A well-being economy is founded on the principle that the economy’s core purpose is to serve both people and the planet. Creating such an economy requires ensuring that everyone has access to sufficient resources to lead a dignified and fulfilling life. 18 4.1 Enhancing Household Well-being
These challenges highlight the need for a more comprehensive approach to prosperity in which one balances individual well-being with the collective good. In response, various initiatives have emerged to redefine how we measure and achieve welfare on a broader scale, integrating social, environmental, and economic dimensions. 4.2 Main Initiatives Towards the Well-being Economy Efforts to establish a well-being economy are not new, with numerous alternatives to GDP emerging over the years. These initiatives reflect an evolving understanding of societal progress, moving beyond traditional economic indicators to incorporate social, environmental, and subjective well-being measures. Initially, individual indicators were developed to assess specific dimensions of well-being, such as living conditions, happiness, or sustainable development. Over time, these efforts grew into comprehensive indexes that integrate multiple indicators into a single, holistic measure. These indexes provide nuanced insights into prosperity, enabling comparisons of broad well-being across regions and time-frames. By shifting focus from narrow economic growth to multifaceted societal progress, these measures highlight the importance of balancing environmental sustainability, economic stability, and social equity (ESB, 2019). Despite the growing emphasis on sustainability and well-being, they often remain peripheral to core economic decision-making. The Dutch government’s continued reliance on GDP as the primary metric for budgetary and policy priorities underscores this challenge. While progress has been made, embedding sustainability and well-being at the heart of economic policy requires a deeper commitment to redefining prosperity. 4.3 Policymakers Impact on Well-being As was seen in the previous section, policymakers in the Netherlands started to understand the importance to create a climate of well-being for all. Since 2018, Statistics Netherlands (CBS) has been publishing the Monitor of the Well-Being economy annually, responding to a request from the House of Representatives (Tweede Kamer). This comprehensive dashboard encompasses three primary dimensions: the quality of life (”here and now”), future capital (”later”), and cross-border impacts (”elsewhere”), alongside monitoring the SDGs. The monitor lead to an aggregation of over 430 indicators. Given the dashboard’s extensive nature and wealth of data, a crucial question emerges: how can policymakers effectively distil key insights and actionable policies from such a broad array of indicators? Another concern is the extent to which policymakers will force their perception of well-being on residents. Haybron and Tiberius (2015) warn for a paternalistic approach to well-being as such policies could neglect the individuals’ rights to make their own choices. Especially when we consider that policymakers may not know what is good for the individual. Amartya Sen’s conception of a well-being economy emphasises the importance of individual freedom and capability in defining and achieving well-being within a socially and ecologically just society (Sen, 1999). 19 4.2 Main Initiatives Towards the Well-being Economy
Except for its subjective nature, other criticism towards well-being as an economic indicator exists. Classical welfare economists argue that it does not give a rigorous framework for policymakers in which decisions can be valued based on its Pareto efficiency; ensuring that some individuals are not worse of while improving the well-being of others. Moreover, the aim of classical welfare economics is to optimise efficiency and is a crucial component of social welfare, thus allowing for an equal distribution of resources among people. Policy that is not inclusive leads to rejection by individuals and to a mistrust in policymakers. Therefore, it is well advised to adhere to the voice of the individual. Even though wellbeing is subjective by nature, it is important that policymakers seek to rectify the growing inequality that arises from classical economic theory as well as the utilisation of the GDP as a primary indicator for a country’s success. A balancing act indeed. The debate continues over whether the solution is found in complex metrics like the Monitor of the Well-Being Economy or in adjusting established economic theories to account for the pricing of externalities, non-market transactions, inequality, and unsustainable business practices. To enhance transparency and harmonise reporting practices, the European Union introduced the Corporate Sustainability Reporting Directive (CSRD) alongside the European Sustainability Reporting Standards (ESRS) (Commission, 2024). The latter is a set of standards encompassed within the CSRD. Key objectives of the CSRD are to support the EU Green Deal’s ambitious target of achieving climate neutrality by 2050 and to foster the incorporation of sustainability considerations into corporate business strategies. The ESRS framework ensures mandatory reporting criteria across three domains: environmental, social, and governance. Especially, as we will see in the following section, the perception is that businesses focus solely on profit and therefore, the desire is for businesses to adapt their business models, leading to positive environmental and social outcomes. 4.4 Corporate Responsibility and Firm Contributions to Well-being Corporate social responsibility (CSR) initiatives discussed under the broader framework of John Elkington’s Triple Bottom Line (Slaper et al., 2011), are often designed to address not just economic benefits (like profits) but also to improve social and environmental outcomes. This aligns directly with the principles of a well-being prosperity which seeks a balance between economic performance and the health, education, and environmental quality that affect overall societal well-being. Among the different characteristics of CSR, Crane et al. (2014) names ”internalising or managing” negative externalities to ensure social welfare. Yet, since the start of the early concepts of CSR in the 1950’s, there is a feeling that firms have made minor progress. Several possible reasons for the lack of progress exists, including that businesspeople cannot be trusted, they are ill-equipped to deal with social issues, their corporations are not equipped to do so, and it is not their responsibility (ibid.). Scholars like Friedman (1970) argue that the only social responsibility of business is to use its resources and engage in activities designed to increase its profits. For him, the corporate executives are employees of the owners of the business, namely the shareholders. Hence, their primary duty is to those owners. He further believes that by internalising externalities, executives are imposing taxes and deciding how to spend tax revenue, roles that should belong to the government and not private individuals or entities. 20 4.4 Corporate Responsibility and Firm Contributions to Well-being
Contrarily, scholars such as Mintzberg (1983) make a case for CSR. He places a strong emphasis on stakeholder responsibility and believes that businesses, especially large corporations, wield significant power and influence that come with societal responsibilities. For Mintzberg there is no doubt that businesses can achieve commercial success by addressing social issues through their core operations, creating a synergy between profitability and social good. He argues that businesses should avoid harming and, where possible, should actively work to benefit society. A likely reason for a lack of progress in CSR is an interplay between ambition and moral culpability faced by many managers. Personal ambition can blind individuals to the moral ramifications of their actions. When faced with challenges that threaten your success, career, or life, you truly discover what matters most to you, what you’re willing to give up, and the compromises you’re prepared to accept (George et al., 2007). Galpin et al. (2015) rightly states that sustainability solutions depend upon leaders being intentional in promoting a “culture of sustainability” within their organisations. The authors remind us that just like any effective shift in corporate culture, establishing a culture of sustainability necessitates actions across various organisational levels. They propose that such a transformation should be initiated by the senior leadership team; however, to be truly effective, these initiatives need to be supported by practical measures that extend throughout the entire organisation. For leaders to be effective in incorporating sustainable business practices, Broman and Robèrt (2017) propose a Framework for Strategic Sustainable Development (FSSD) which includes five levels: 1. System: How the system functions within the global system. 2. Success: Success usually is defined within the vision statement of the company. 3. Strategic guidelines: Guidelines for how to approach the vision. 4. Actions: Concrete actions that have been prioritised into the strategic plan. 5. Tools: Support for decision making, monitoring, and disclosure of actions. Yet, it all starts from a believe that sustainable manufacturing is possible. In his TED Talk, Ray Anderson (2009) explains how his company was able to largely replace extractive by renewable; they moved from linear to cyclical; from fossil fuel energy to renewable energy; and from wasteful to wastefree. In addition, they realised an upside for the business. Product quality improved through innovation. Their people are more motivated through a shared higher purpose, retaining people and attracting quality employees. As well as a tremendous amount of goodwill that no amount of advertising could have achieved. 21 4.4 Corporate Responsibility and Firm Contributions to Well-being
4.5 Conclusion The common understanding thus far is that current business practices have led to the overutilisation of Earth’s resources, thereby creating an unsustainable ecosystem for its inhabitants. It is evident that relying solely on profit-driven models is no longer sufficient to address the complex, interconnected challenges that we face today. To foster a sustainable future, there is a pressing need to shift toward a well-being economy that prioritises the balance between economic gains, social well-being, and environmental stewardship. This transition requires a collective effort involving policymakers, businesses, and individuals who understand that prosperity must be redefined to encompass more than financial metrics. Corporate Social Responsibility, well-being indicators, non-financial reporting such as CSRD, and the Framework for Strategic Sustainable Development illustrate the steps that institutions and organisations can take to align their actions with sustainability goals. Is should be important for businesses and entrepreneurs that these efforts move beyond rhetoric and become an integral part of everyday business strategies. A culture of sustainability should be intentionally fostered at all organisational levels, beginning with leadership, but also engaging all employees to ensure that sustainability becomes a shared value and guiding principle. To effectively address these challenges, concepts from well-being economics must be implemented, and the role of the entrepreneur becomes increasingly important in contributing to this transformation. Entrepreneurs have the ability to innovate, disrupt, and lead the way in building a more sustainable and equitable economy. An economy that benefits not only shareholders but also society at large. In the next chapter, we will explore how entrepreneurs can contribute to such systemic change, focusing on collective agency; a values based process. 22 4.5 Conclusion
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