Roles of Sustainability-Driven Entrepreneurs in Evolution of Socio-technical Systems: Two Case Studies in New Zealand

Abstract

Socio-technical systems are challenged by sustainability problems that emerge from multifaceted situations incorporating social, cultural, institutional, and technological aspects. These situations are described as ‘wicked problems’ where any action results in new circumstances, requiring further consideration, making those systems path-dependent. Hence, a better understanding of the dynamics of such changes is required to foster sustainability transitions and avoid lock-ins in the status quo. Multiple actors, fulfilling a range of roles that vary over time, are involved in these dynamic transitions. Entrepreneurs, as one category of these actors, play a significant role for creation of variations. They introduce new practices that depart from the established norms in socio-technical regimes. Among different types of entrepreneurs, sustainability-driven entrepreneurs initiate new practices that address the complexities associated with social and environmental issues. Yet, current understanding of interactions between sustainability-driven entrepreneurs and their socio-technical system context is underdeveloped. To address this deficiency, this research builds upon previous sustainability-driven entrepreneurship literature and investigates the roles and strategies that sustainability-driven entrepreneurs have in socio-technical transitions. The research employs two embedded qualitative case studies in the retail sector and the wine industry in New Zealand to access applicable entrepreneurs and appropriate sources of information for this investigation. Among different streams of research in sustainability transition, Multi-Level Perspective (MLP) and Strategic Niche Management (SNM) are used to contextualize entrepreneurial actions and explain the dynamics of niche development, while Evolutionary Theory of Organizational Change is used to interpret interactions among various actors at the micro level. The findings contribute to the literature via four theoretical propositions. First, the research introduces a model for niche development focusing on sustainability-driven entrepreneurs’ roles, starting with entrepreneurial intentions and establishment of new organizational forms and continuing through a cyclic process between internal legitimacy of these organizational forms and their external validation, diffusion, and consensus. Second, the research suggests that sustainability-driven entrepreneurship is a hybrid phenomenon that emerges through a bricolage process where associated business models move between conforming to current institutional logics and/or taking an opposing position by pursuing a sustainability logic. Third, this research argues that sustainability-driven entrepreneurs may take strategic actions to build their new niches and gain cognitive and sociopolitical legitimacy. Their roles and strategies include system-building and institutional entrepreneurship, knowledge-sharing and collective learning with like-minded actors, and role-modeling for skeptical stakeholders. While most of these roles have been discussed in previous entrepreneurship literature, information sharing with likeminded businesses and role modeling for skeptical actors were identified as unique for sustainability-driven entrepreneurs. Fourth, this research shows that various factors such as types of innovation (technical vs. social; procedural, systemic, or mindset) and the structure of the context (diversity, complexity, and level of trust), along with wider trends of change at the landscape level, mediate the effectiveness of entrepreneurial strategies. To further advance knowledge in this field, future research should re-conceptualize the dynamic relationship between innovation (in all its forms) and its context due to the multifaceted nature of sustainability.