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Entrepreneurs’ Commitment to Renewable Resources and Energy Conservation

Dr. Alfred Marcus

Conserving energy and using renewable resources are among the more important activities toward which socially responsible businesses can aim. Understanding how fields in these socially important domains are established and maintained and how entrepreneurial commitment to them is sustained are therefore important issues for business and society researchers.

Entrepreneurs are individuals who recognize opportunities, coordinate and combine scarce resources, and see ventures through to fruition, but not all the ventures that entrepreneurs start culminate in success. A long and distinguished history of research in business and society shows that simply because fields are labeled socially responsible does not mean that they become successful business endeavors. Even in such socially responsible fields as energy conservation and renewable energy, entrepreneurs may give up before the fields in which they are active are fully established and achieve external recognition and widespread acceptance.

When these socially important domains are well-established, entrepreneurial commitment to them is likely to be high, but for fields to move from startup to sustained takeoff is difficult. Many hurdles must be overcome and it can take decades before fields successfully get off the ground and grow of their own accord. When the prospects for emerging fields appear to be dim, entrepreneurial commitment to them is likely to wane. A tenuous commitment means that the dedication and loyalty needed to make emerging fields recognized and well-established diminishes. People participating in them may decide to abandon the fields before they fully mature because of a lack of confidence that the fields will become well-recognized and established.

Emerging fields often encounter difficulties. They show promise but fail to fully take off. This process can unfold over a long period of time, with entrepreneurs in the field becoming frustrated and departing. To succeed, the entrepreneurs must be persistent and have considerable commitment. The reasons entrepreneurs abandon a field are many and may include controversy about the quality, reliability, and performance of the products and services they offer, technological glitches, few customers, and/or weakening government support.

Alternative pesticides and lawn and garden products  is an example of a field losing momentum in the 1990s. These products worked more slowly than conventional ones and their prices were higher. The companies that entered the field experienced technological glitches and faced dedicated and resourceful competition from established firms. By the end of the decade, many entrepreneurs had abandoned this field.

Electric cars  are another example of a field losing momentum during this period. In 1990, electric cars were seen as a potential answer to growing pollution woes, particularly in cities such as Los Angeles, which was plagued by smog. These cars had been designed in response to new clean-air legislation enacted in various states. In September of 1990, California passed new laws tightening emissions standards and mandating that two percent of all new vehicles sold had to have no exhaust. Zero-emission vehicles (ZEVs) would necessarily be electric—no other alternatives met the California standard. However, the cars had problems with their batteries, the range of the vehicles was limited, and the support of California and other states declined. When cumulative sales figures did not meet expectations, many of the entrepreneurs who had entered this field left.

The fields of energy conservation and renewable energy have always attracted interested entrepreneurs, but it is only after thorough sustainability research that entrepreneurs should commit to any given emerging field.

Alfred A. Marcus is the Honeywell/Edson W. Spencer Chair in Strategic Management  at the Technological Leadership Institute and Professor of Strategic Management and Organization at the Carlson School of Management at the University of Minnesota.

    2 comments to Entrepreneurs’ Commitment to Renewable Resources and Energy Conservation

    • I think the only way to avoid climate pollution is to provide a stimulate climate for community driven investment in wind and solar projects (i. e. through limited partnerships). However, the federal governemnt should also introduce a clear feed in tariff for renewable energies.

    • One of the biggest challanges is to change peoples habits, perhaps the best way to achieve this is to start educating children from a young age at school, hopefully creating a whole generation of adults who wish to get involved with reducing our carbon footprint and protecting the enviroment.
      Educating them at a young age may produce the entrepreneurs of the future!

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