Economic and Environmental Challenges Present Entrepreneurial Opportunities

2.16.2012 Article, Entrepreneurship, School News

With a world population topping seven billion people, there are unprecedented environmental challenges, according to Dr. Stuart Hart, founder of the Center for Sustainable Global Enterprise at Cornell University. Hart spoke to a packed crowd at Wake Forest’s Kulynych auditorium on Feb. 13th.

But, as basic economics will tell you — where there are problems, there are opportunities.

“If you are entrepreneur of sort, this is the time to be alive,” said Hart. He believes the current global economic climate presents an incredible business opportunity, a chance to meet the demands of a growing population in need of new technology that meets its basic needs.

“We are going to witness a fundamental transformation and that carries with it enormous business opportunities,” he said.
Sustainability needs to be more than just a business buzz word says Hart. It’s not just government policies and non-profit donations. Sustainability needs to be the innovation that drives the marketplace.

“For the environmental side of things, we’ve relied on regulation and that hasn’t worked very well. When it comes to the social challenges we’ve relied on philanthropy,” said Hart. “While there’s been some small wins on both fronts, neither have produced the results we want to see or need.”

Creating environmental business strategies that solve problems can be successful and profitable. But, these new innovations need to penetrate the mass market in order to be sustainable. “There is more clean technology in the world than we know what to do with,” he said. “It’s about getting that technology to the people who need it the most.”

Accessibility needs to be the focus of future enterprise. “How do we get out into the rural areas? How do we create a more inclusive supply chain,” said Hart. “How do we redesign the distribution network? How do we create a business model that would make this stick in parts of the world we haven’t been before?”

Technology needs reach the world’s 4.5 billion poor and underserved, the group Hart refers to as base of the economic pyramid. “This is the breeding grown for tomorrow’s globally competitive corporation,” he said. “We need more imagination for how we try to think about commercializing it. Rather than just thinking about clean technology as something for the rich and then it trickles down, let’s flip that thinking and imagine that we start from the bottom up.”

Beginning at the base of the pyramid means there is less resistance and fewer obstacles than in a more established infrastructure, he says. This means that even in developing countries, there is an opportunity for economic success.

“We may think that poor people, [for example] can’t afford solar power, but the truth is for people living off grid in rural India, they’re burning candles and using flashlights and burning kerosene. Turns out that’s really expensive,” he said.

Hart says someone in India, living off the power grid, is paying about 80 cents a kilowatt hour for light at night. That’s about eight times what an average person in North Carolina pays, according to the U.S. Energy Information Administration.
Poor people are often forced to pay a lot of money for poor service in developing countries. That’s what creates the possibility for sustainable enterprise.

“It’s in exactly the places where people have in fact the least expendable resources where the biggest opportunities for these technologies might be, precisely because they are so badly served,” he said.

Hart says entrepreneurs need to embed themselves in these communities. Being involved will help them learn how to better fulfill those underserved needs and create sustainable enterprise.
“A business process that allows for engagement, participation, and co creation with people in the community is really crucial,” said Hart. “This is how we are going to cut our teeth to get to 21st century capitalism.

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Dr. Hart has published more than 70 papers and authored or edited seven books. He helped launch the corporate sustainability movement with his 1997 article, “Beyond Greening: Strategies for a Sustainable World.” The article also won the McKinsey Award for Best Article in Harvard Business Review.
For more information on Dr. Hart visit his blog, “Voice of the Planet”.