Sus­tain­abil­ity: The New Fron­tier of En­trepreneur­ship

Thai-American Business (T-AB) Magazine - - Front Page - Writ­ten by: Di­pak C. Jain

From the age of colo­nial­ism through the 19th cen­tury, when the play­ers were coun­tries and the met­ric of suc­cess was power, to the era of free mar­ket com­pe­ti­tion ( cap­i­tal­ism) of the late 19th and 20th cen­turies when cor­po­ra­tions be­came the play­ers, and profit was the ul­ti­mate goal, global busi­ness has evolved dra­mat­i­cally over the past 500 hun­dred years.

To­day, we have en­tered an era of en­trepreneur­ship in which cit­i­zens are the ma­jor play­ers and it is sig­nif­i­cance or pur­pose that de­fines suc­cess. And yet, the world cur­rently faces many chal­lenges: en­vi­ron­men­tal, so­cial, po­lit­i­cal, and eco­nomic is­sues dom­i­nate head­lines around the globe.

While large pub­lic and pri­vate or­ga­ni­za­tions can def­i­nitely have an en­tre­pre­neur­ial spirit that can help ad­dress these chal­lenges, in many ways it is the true en­trepreneurs of the world who are best placed to solve the world’s prob­lems. By cre­at­ing new sus­tain­able busi­ness mod­els, en­trepreneurs can pro­vide the vi­sion and ef­fi­cient solutions to a host of is­sues.

In a re­cent ar­ti­cle, The Sus­tain­able Side of En­trepreneur­ship, As­so­ciate Pro­fes­sor Maria Vic­to­ria Ti­boon from De La Salle Uni­ver­sity in the Philip­pines writes: “En­trepreneur­ship can rem­edy many world­wide chal­lenges by driv­ing economies, gen­er­at­ing em­ploy­ment, en­cour­ag­ing prod­uct de­vel­op­ment, and en­gag­ing the vul­ner­a­ble sec­tors of so­ci­ety, in­clud­ing women and youth. By of­fer­ing en­vi­ron­men­tally and so­cially su­pe­rior prod­ucts, en­trepreneurs can serve the mass mar­ket and so­ci­ety at large by con­tribut­ing to the sus­tain­able de­vel­op­ment of the econ­omy.”

In­deed, a new re­port by Global En­trepreneur­ship Mon­i­tor ( GEM) shows that so­cial en­trepreneur­ship, de­fined broadly as “any kind of ac­tiv­ity, or­ga­ni­za­tion or ini­tia­tive that has a par­tic­u­larly so­cial, en­vi­ron­men­tal or com­mu­nity ob­jec­tive,” has be­come a sig­nif­i­cant por­tion of en­tre­pre­neur­ial ac­tiv­ity in ev­ery re­gion around the world. The United States and Aus­tralia lead the way with 11% per­cent of en­tre­pre­neur­ial ac­tiv­ity clas­si­fied as “so­cial en­trepreneur­ship”, while South­east Asia, at just 3.8%, has sig­nif­i­cant po­ten­tial for growth.

And last year, Forbes magazine pub­lished an ar­ti­cle by Richard Brubaker that pro­claimed sus­tain­abil­ity as “the next big thing for en­trepreneurs”, and that “busi­ness lead­ers are look­ing at so­cial is­sues as new mar­kets, and suc­cess­ful so­cial- minded en­ter­prises as po­ten­tial in­vest­ments.”

He also notes that mar­ket trends are shift­ing to sup­port sus­tain­able star­tups. More and more, con­sumers in mar­kets around the world are will­ing to pay a pre­mium to pur­chase high- value prod­ucts, em­ploy­ees are look­ing to work for com­pa­nies that are “mak­ing a dif­fer­ence,” and gov­ern­ments are now in­vest­ing re­sources in en­tre­pre­neur­ial ecosys­tems to help en­trepreneurs.

SUS­TAIN­ABIL­ITY DE­FINED

Sus­tain­abil­ity is not about “giv­ing back;” it’s not an add- on “char­ity ac­tiv­ity” out­side an or­ga­ni­za­tion’s core com­pe­tence, and it’s not just about en­vi­ron­men­tal im­pact.

Ac­cord­ing to the In­ter­na­tional In­sti­tute for Sus­tain­able De­vel­op­ment, the def­i­ni­tion of sus­tain­abil­ity is: “For the busi­ness en­ter­prise, sus­tain­able de­vel­op­ment means adopt­ing busi­ness strate­gies and ac­tiv­i­ties that meet the needs of the en­ter­prise and its stake­hold­ers to­day while pro­tect­ing, sus­tain­ing and en­hanc­ing the hu­man and nat­u­ral re­sources that will be needed in the future.”

In other words, build­ing a sus­tain­able busi­ness takes a long- term view of growth by op­ti­miz­ing prof­its, and strives to max­i­mize pos­i­tive im­pact on peo­ple and the com­mu­nity, with­out de­stroy­ing the future.

Sasin es­tab­lished the Sasin Cen­ter for Sus­tain­abil­ity Man­age­ment ( SCSM) in 2011.

Com­bin­ing the prin­ci­ples of sus­tain­able de­vel­op­ment, cor­po­rate so­cial re­spon­si­bil­ity, and His Majesty King Bhu­mi­bol Adulyadej’s Suf­fi­ciency Econ­omy Phi­los­o­phy, the Cen­ter’s con­cept of sus­tain­abil­ity man­age­ment ad­dresses the im­por­tance of all stake­hold­ers to the long- term suc­cess of a busi­ness.

Our team, un­der the lead­er­ship of Nick Pisalya­put, stresses val­ues, lead­er­ship, and build­ing up a com­pany’s in­tan­gi­bles, such as hu­man cap­i­tal, in­tel­lec­tual re­sources and re­la­tion­ships. Most of a com­pany’s value is in these in­tan­gi­bles, so de­vel­op­ing them helps to min­i­mize the risk that the com­pany faces.

The in­ter­na­tional com­mu­nity has also for­mally de­fined sus­tain­abil­ity through the United Na­tions Sus­tain­able De­vel­op­ment Goals ( UNSDG), which were im­ple­mented start­ing on Jan­uary 1, 2016. They en­com­pass 17 goals with 169 tar­gets that ad­dress the most im­por­tant so­cial, eco­nomic, en­vi­ron­men­tal, and gov­er­nance chal­lenges for the next 15 years. They af­fect busi­ness strate­gies and pri­or­i­ties in new prod­uct de­vel­op­ment, sup­ply chain man­age­ment, mar­ket­ing, hu­man re­sources, and re­cruit­ing, all of which are among the core dis­ci­plines in our pro­grams at Sasin.

EN­TREPRENEUR­SHIP IN SOUTH­EAST ASIA

While en­trepreneur­ship ( the num­ber of Amer­i­can adults who own a busi­ness) is on the de­cline in the U. S., and has been since the 1990s ( ac­cord­ing to a 2015 re­port by the Kauff­man Foun­da­tion), en­trepreneur­ship in South­east Asia is boom­ing. An­other GEM re­port shows that the re­gion is “among the most en­tre­pre­neur­ial in the world” with 66% of peo­ple in the re­gion view­ing en­trepreneur­ship as a “pos­i­tive ca­reer choice”.

Pro­fes­sor Dou­glas Abrams, a Vis­it­ing Pro­fes­sor at Sasin who teaches a course on ven­ture cap­i­tal ( VC) and is a ven­ture cap­i­tal­ist him­self, notes that “in­creased in­vest­ments in star­tups in the re­gion since 2007 are be­gin­ning to yield re­sults.” ‘ Exit mar­kets’ ( through trade sales or IPOS) in South­east Asia are ex­plod­ing, the re­gion’s ‘ seed stage’ deal- flow pipe­line is full, and the South­east Asia en­ter­prise ecosys­tem is at an in­flec­tion point. In­vest­ment cap­i­tal worth bil­lions of dol­lars is flow­ing into the re­gion through VC funds like Se­quoia Cap­i­tal, Ar­dent Cap­i­tal, 500 Star­tups, In­spire Ven­tures, and Prof. Abram’s own Ex­para Ven­tures. And in Thai­land, the gov­ern­ment has an­nounced ini­tia­tives to “fuel the growth of en­ter­prise ecosys­tems” in the King­dom, and even Thai banks have en­tered the ven­ture cap­i­tal space.

Both the pub­lic and pri­vate sec­tors in South­east Asia, and in Thai­land in par­tic­u­lar, have a unique op­por­tu­nity to in­vest in in­no­va­tion, build ef­fec­tive ecosys­tems to sup­port all forms of en­tre­pre­neur­ial ac­tiv­ity, and en­cour­age so­cial en­trepreneur­ship.

ROLE OF BUSI­NESS SCHOOLS

Com­mu­ni­ties look to busi­ness schools to­day for lead­er­ship on a range of is­sues, not just busi­ness is­sues.

In a re­cent ar­ti­cle, For Busi­ness Schools, Be­ing Good is No Longer Good Enough, Dan Le­clair, Chief Strat­egy and In­no­va­tion Of­fi­cer for AACSB In­ter­na­tional, the world’s largest and old­est busi­ness school ac­cred­i­ta­tion or­ga­ni­za­tion, writes that:

“Lo­cal com­mu­ni­ties want more from their high- per­form­ing busi­ness schools. They want new jobs to be cre­ated, and they want busi­nesses to come and grad­u­ates to stay. In short, they want im­pact, not just per­for­mance, from the busi­ness schools they sup­port.”

He goes on to point out that the new gen­er­a­tion, the much- dis­cussed “GenY” or “Mil­len­ni­als”, are in­ter­ested in more than just money or prof­its. There is “mount­ing ev­i­dence that or­ga­ni­za­tions ar­tic­u­lat­ing a so­cial pur­pose are more ap­peal­ing to the next gen­er­a­tion of work­ers. Well, that next gen­er­a­tion of work­ers are our cur­rent gen­er­a­tion of learn­ers and our future schol­ars.”

Busi­ness school stu­dents to­day are look­ing for what I call, “suc­cess with sig­nif­i­cance” and/ or “per­for­mance with pur­pose.” They want to be part of some­thing new and au­then­tic, to cre­ate new busi­ness mod­els that are gen­uine and help pro­mote change and in­no­va­tion. And com­pa­nies and or­ga­ni­za­tions are look­ing for lead­ers that have “com­pe­tence with com­pas­sion,” so busi­ness schools are in a unique position to shape and en­cour­age this next gen­er­a­tion of en­trepreneurs and busi­ness lead­ers.

Sasin has been sup­port­ing en­trepreneur­ship and star­tups through our mai Bangkok Busi­ness Chal­lenge @ Sasin since 2002. Founded by Sasin MBA alum­nus, Kong­pan Pramoj Na Ayud­hya, and chaired by As­so­ciate Pro­fes­sor Adith Cheosakul, Ph. D., it’s the only global new ven­ture com­pe­ti­tion for post­grad­u­ate stu­dents in Thai­land. Since 2011, all busi­ness plans sub­mit­ted to the com­pe­ti­tion have been eval­u­ated on their abil­ity to ad­dress so­cial and en­vi­ron­men­tal con­cerns, and in 2014, we in­tro­duced the H. R. H. Princess Maha Chakri Sirind­horn’s Sus­tain­abil­ity Award to high­light the im­por­tance of sus­tain­abil­ity for all busi­nesses. Siam Ce­ment Group ( SCG) now leads the judg­ing panel and pro­vides the prize money for this pres­ti­gious award.

Teams in the com­pe­ti­tion also com­pete for over USD 54,000 in prize money, His Majesty the King’s Award, and Hous­ton Tech­nol­ogy Cen­ter In­no­va­tion Award. This year’s com­pe­ti­tion has at­tracted 70 teams from 17 coun­tries on 5 con- tinents, in­clud­ing 10 teams from Thai­land. Clearly, there is a strong de­sire and in­stinct for en­trepreneur­ship among to­day’s busi­ness school stu­dents.

FUTURE OF EN­TREPRENEUR­SHIP

Driven by tech­nol­ogy, in­no­va­tion, and in­stant com­mu­ni­ca­tion plat­forms, en­trepreneur­ship is rid­ing a wave of growth this cen­tury. To­day, any­one can es­tab­lish a busi­ness based on an in­no­va­tive idea. Some of to­day’s lead­ing “star­tups” like Face­book, Uber, and Airbnb, have shown how to cre­ate bet­ter so­cial net­works through eco­nomic mod­els that rely on new tech­nolo­gies and in­no­va­tive, dis­rup­tive prod­ucts. The founders of these star­tups used tech­nol­ogy and in­no­va­tion to cre­ate com­mu­ni­ties that con­nect peo­ple around the world with prod­ucts and ser­vices that they need and value.

But of course, to­day’s en­trepreneurs need to un­der­stand that they can­not ig­nore the im­pact of their busi­nesses on peo­ple and the en­vi­ron­ment. Sus­tain­abil­ity can­not be an af­ter­thought, but must be an in­te­gral part of their core busi­ness model. And more and more, it will be the en­trepreneurs who will find suc­cess as they try to solve the so­cial, en­vi­ron­men­tal, po­lit­i­cal and eco­nomic prob­lems that the world faces.

Aca­demic ex­cel­lence, busi­ness rel­e­vance and so­cial sig­nif­i­cance are at the heart of Sasin’s mis­sion. We strive to be a bridge be­tween en­trepreneurs, schol­ars, busi­ness lead­ers, pub­lic sec­tor or­ga­ni­za­tions and the com­mu­nity. Now is the time for busi­ness schools to work with gov­ern­ments and the pri­vate sec­tor to cul­ti­vate and sup­port this next gen­er­a­tion of en­trepreneurs and to de­velop and en­cour­age new sus­tain­able busi­ness mod­els.

Pro­fes­sor Di­pak C. Jain is Di­rec­tor of Sasin Grad­u­ate In­sti­tute of Busi­ness Ad­min­is­tra­tion of Chu­la­longkorn Uni­ver­sity. He can be con­tacted at di­pak. jain@ sasin. edu.

The semi­fi­nals and fi­nals of the mai Bangkok Busi­ness Chal­lenge @ Sasin will be held Fe­bru­ary 16- 18, 2017. For more in­for­ma­tion, go to bbc. sasin. edu

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