With ‘green’ being the buzzword across all industries, greening of the business sector and development of green skills has assumed greater importance all over the world. SMEs, startups and ecopreneurs are playing a vital role in the transition to a low-carbon economy by developing new green business models for different industrial sectors. Infact, young and small firms are emerging as main drivers of radical eco-innovation in the industrial and services sectors.
What are Green SMEs
Green SMEs adopt green processes and/or those producing green goods using green production inputs. A judicious exploitation of techno-commercial opportunities and redevelopment of business models, often neglected by established companies, have been the major hallmarks of green SMEs.
For example, SMEs operating in eco-design, green architecture, renewable energy, energy efficiency and sustainability are spearheading the transition to green economy across a wide range of industries. The path to green economy is achieved by making use of production, technology and management practices of green SMEs. Impact investment platforms allows individuals to invest in environmentally sustainable companies.
Categories of Green Industries
|Environmental Protection||Resource Management|
|Protection of ambient air||Water management|
|Protection of climate||Management of forest resources|
|Wastewater management||Management of flora and fauna|
|Waste management||Energy management|
|Noise and vibration abatement||Management of minerals|
|Protection of biodiversity and landscape||Eco-construction|
|Protection against radiation||Natural resource management activities|
|Protection of soil, groundwater and surface water||Eco-tourism|
|Environmental Monitoring and Instrumentation||Organic agriculture|
|Research and Development||Research and Development|
The key motivations for a green entrepreneur are to exploit the market opportunity and to promote environmental sustainability. A green business help in the implementation of innovative solutions, competes with established markets and creates new market niches. Green entrepreneurs are a role model for one and all as they combine environmental performance with market targets and profit outcomes, thus contributing to the expansion of green markets.
Some of the popular areas in which small green businesses have been historically successful are renewable energy production (solar, wind and biomass), smart metering, building retrofitting, hybrid cars and waste recycling.
As far as established green industries (such as waste management and wastewater treatment) are concerned, large companies tend to dominate, however SMEs and start-ups can make a mark if they can introduce innovative processes and systems. Eco-friendly transformation of existing practices is another attractive pathway for SMEs to participate in the green economy.
The Way Forward
Policy interventions for supporting green SMEs, especially in developing nations, are urgently required to overcome major barriers, including knowledge-sharing, raising environmental awareness, enhancing financial support, supporting skill development and skill formation, improving market access and implementing green taxation.
In recent decades, entrepreneurship in developing world has been increasing at a rapid pace which should be channeled towards addressing water, energy, environment and waste management challenges, thereby converting environmental constraints into business opportunities.