Sustainable innovation and entrepreneurship in agriculture: empirical insights into the SME ecosystem

Sustainable entrepreneurship has emerged as a new interdisciplinary subject domain. It offers the opportunity to study entrepreneurship holistically by viewing ‘entrepreneurial action as a mechanism for sustaining nature and ecosystems whilst providing economic and non-economic gains for investors, entrepreneurs and societies’ (Shepherd and Patzelt, 2011: 138). The focus of sustainable entrepreneurship is on blended value, which refers to organisations pursuing blends of financial, social and environmental values across different business models (Bugg-Levine and Emerson, 2011; Zahra et al., 2014). They should develop distinct organisational capabilities to improve business processes for the global sustainable well-being and community development. We take a broader view in this chapter and define sustainable entrepreneurship in agriculture as SMEs’ engagement in the entrepreneurial process, which minimises negative environmental, economic and social impact and improves the quality of life of the local community through innovative practices. The relative cost of innovation is often more significant to SMEs than to large firms, due to limited resources (Laforet, 2013). Additionally, government policies are geared for clearer understanding of innovation outcomes and its consequences in SMEs to evaluate costs and benefits of innovation policies. As an industry sector, agriculture entails innovative production and business processes that remain viable over an infinitive period and do not degrade environment. It is an economic sector requiring a great degree of engagement and co-operation between the producer (farmer) and the seller, and the intermediary organisations. Partnerships and open dialogue that foster great alignment of the full spectrum of stakeholders with the goals of sustainable development (Moffat and Auer, 2006) are crucial for sustainable agriculture. Co-ordinated efforts of various organisations for sustainability are key to success (Jegantheesan et al., 2009). This leads to the debate of the SME ecosystem in agriculture whereby key players often require a more holistic approach through the alignment of business practices of SMEs, policies and actions of intermediary organisations and government agencies.