Have we for so long interpreted capitalism too narrowly? As we seek to answer this question, we ought to think clearly about the role and mission of an entrepreneur within this dimension. Do entrepreneurs exist only to maximize profits? Sometimes yes, sometimes no. However, if we hold the former view about entrepreneurs, we may end up with the risk of creating a one-dimensional individual pursuing a one-dimensional mission in the free-market. Is such an approach good in our pursuit of a well-functioning market rid of preventable market failures? No.
In the past decades, economic theory has always insisted on the possibility of making a contribution to society by acquiring as much as possible for oneself. It postulates that, when you ‘squeeze out’ as much as you can, everybody else will still get his or her maximum. The result of this policy is all out there. Things do not seem right all around us, and an excuse pegged on “market failure” is simply not enough. If we are part of a well-functioning market, natural resource depletion, species extinction, and inequality will simply not thrive in such a system.
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Traditional entrepreneurs v. climate entrepreneurs
We live in a world with two kinds of people: those who exist to maximize profit and those who are not very interested in profit maximization. The latter group of entrepreneurs is often totally committed to making a difference in the world. They can be described as businesspersons driven by social or environmental objectives. They want to contribute to their environment and to the wellbeing of people around them. They achieve this objective by creating sustainable businesses, which may sometime make money and most times not incur losses. Climate entrepreneurs are among this category of ‘non-loss’ enterprises.
Based on my observation at the Kenya Climate Innovation Center- an incubation center for climate enterprises in Kenya- climate enterprises contribute to societal well-being in various ways. Some of them provide cheaper and safer (to humans and the environment) alternatives in production, energy systems, agricultural techniques, etc. Others just give away their labor, skills, and time in providing a service that is useful to society and the environment. In most cases, these enterprises may or may not try to recover the money spent in the service provision. Others might recover some costs, or all of it, or even go beyond full cost recovery. At that point, the business enters the path of limitless possibilities. Now the questions is this: does it mean that before making the breakthrough, a climate enterprise does not really contribute much? The process of moving from the world of philanthropy to the world of business often takes time. This is why it is important for us to take a break out of our auto-pilot shaped by the current cultural environment of present stock markets, which prevents us from fully recognizing the important role these enterprises play in the marketplace. We ought to give the climate and social entrepreneurs the visibility they need.
Supporting climate entrepreneurs in the economy
Climate entrepreneurs can become very powerful players in the national and regional economies. However, this is not the case yet. We have failed not because the enterprises lack the capacity to grow, but because we have neither recognized their existence nor have we created opportunities for them in the marketplace. In the mainstream market, a climate entrepreneur might be considered ‘abnormal’, and hence barred from opportunities in the economy. The majority of the population may not even be aware of them or may not pay any attention to them, because our eyes have been blinded by the one-dimensional approach to capitalism.
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It is, therefore, our duty to build supportive institutions, policies, regulations, norms, and rules that can help climate entrepreneurs exploit the mainstream market more effectively. This is very important due to the rising social and environmental problems in our societies today. We are aware that, by its very nature, the neoliberal free market is unprepared to address these issues. In fact, the market is often identified as a major cause of environmental problems, health problems, inequalities, etc. Due to the lack of adequate capacity to solve these challenges, the responsibility of ameliorating such ‘market failures’ is often handed over to the public sector.
As we seek to make a meaningful contribution to the betterment of human and environmental welfare, we have to broaden our interpretation of capitalism and enlighten the free market concept by giving full recognition to climate entrepreneurs. If we achieve this, climate enterprises can be able to join the market and make it work for environmental and social goals. Let’s get serious now about climate entrepreneurs; their ability to make a significant change to this world cannot be underestimated.