greening goliaths vs multiplying davids · greening goliaths vs. multiplying davids september 2005...

Greening Goliaths vs. Multiplying Davids –

Conceptual framework and empirical evidence for the relative importance of entrepreneurship and corporate venturing for sustainability innovation in the energy sector

Dr. Rolf Wüstenhagen

Tagung der VHB-Kommission Umweltwirtschaft „Innovationen für Nachhaltige Entwicklung“Oldenburg, 22. - 23. September 2005

[email protected]

Greening Goliaths vs. Multiplying Davids

September 2005

Übersicht

1. Einleitung: Warum Davids & Goliaths? 2. Konzeptioneller Rahmen: Greening Goliaths vs.

Multiplying Davids3. Chancen und Grenzen von Sustainable

Entrepreneurship4. Chancen und Grenzen von Corporate Venturing5. Schlussfolgerungen und weitere Forschung


September 2005

Motivation (1): Warum nachhaltige Energie?

Source: IPCC TAR 2001

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September 2005

Motivation (2): Warum Davids & Goliaths?

– Beispiel Schweizerischer Reisebüroverband / nachhaltigerTourismus: Fokus Förderung des Wanderurlaubes in kleinen, inländischen Öko-Hotels versus Öko-Effizienz in grossengriechischen Badehotels?

– Beispiel Forschungspolitik / Markteinführung von Solarenergie: Subventionierung des Baus von Solarfabriken durch Shell und BP versus Existenzgründungsinitiative oder Durchführung von dezentralen Selbstbaukursen für Solaranlagen?

– Beispiel Banken / Öko-Fonds: Investition in Leaders oderPioniere?

– Beispiel NGO / Mobilität: Rocky Mountain Institute’s Kooperation mit grossen Automobilherstellern oder Förderunglokaler Auto-Teil-Genossenschaften?

• Die Frage nach der Relevanz von Davids und Goliaths für die Durchsetzung nachhaltiger Innovationen hat weitreichende Bedeutung für verschiedene Akteure und Branchen


September 2005

EconomicImportance

«Market Share»

EnvironmentalQuality of

Product Range

high

low

highlow

Target

Eco-Niche

EnvironmentallySustainableMainstream Market

Multiplying Davids

GreeningGoliaths

«Large Retailer»

«WholefoodShop»

Source: Wüstenhagen 1998: Greening Goliaths vs. Multiplying Davids.


September 2005


September 2005

Strengths and Weaknesses of „Davids“ and „Goliaths“

– Entrepreneurial Spirit– Strong Motivation for

Sustainability– Environmental Credibility– Innovative

– Limited Financial Resources– Lack of Distribution Capacity– Lack of Experience

– Strong Manufacturing & Distribution Capabilities

– Established Brands– Strong Financial Resources

– Lack of EnvironmentalCredibility

– Challenged to Address „Small Markets“

– High Overhead Costs– Short-Term Bottom-Line Driven


September 2005

Ways for Goliaths to emulate David features

– Decentralized decision structures– Cooperation with environmental organisations– Corporate Venturing– Acquisition of small entrepreneurial firms– Investment in an external Venture Capital fund


September 2005

Managing the David-Goliath-Interface: The role of independent Venture Capitalists

SAM Private Equity

€86.4 mio

OCEAN POWERDELIVERY LTD.

Venture CapitalistInvestors

EntrepreneurialFirm

etc.

http://www.gerling.de/?uid=default


September 2005

Übersicht





September 2005

Sustainable Entrepreneurship

– Sustainable Entrepreneurship is a processincluding the actions and functions related to the recognition, creation and exploitation of marketopportunities and the creation of organizations to pursue them, whereby the market opportunity and the design of theorganisation correspond to the concept of sustainabledevelopment. (C. Schönwandt: „Sustainable Entrepreneurship in theRenewable Energy Sector“, PhD Thesis, Univ. Kassel, 2004)


September 2005

Two concepts of sustainableentrepreneurship

– Focus on the core technology or product– Clusters of key sustainable technologies, such as

renewable energy, materials, food, water, transport– „What does the company do?“

– Focus on the „sustainable small enterprise“– Project Start-up-to-Sustain, University of Kassel/BMBF– „How does the company do what it does?“

EmergingEnergy

EmergingEnergy

MaterialsMaterials Health &NutritionHealth &Nutrition

WaterWater

http://search.corbis.com/av.asp?i=11438209


September 2005


September 2005

Übersicht





September 2005

Corporate Venture Capital

http://www.nokianfootwear.fi/nen/PhotoLibrary/Outdoor/photoalbum_photo_view?b_start=1


September 2005

Objectives of Corporate Venture Capital (CVC) Funds

Strategic Added Value Financial AddedValue

Enhancement of innovation

Strategic assets

• Window on technology

• Increase market-orientation of corporate R&D

• Cultural changetowardsIntrapreneurship

• Leverage of customers and distributionchannels

• A (VC-like) returnand capital gain

Source: Faisst 2002

• CVC-Erfolgsbeispiele: Intel, Nokia, T Venture, Novartis


September 2005

European CVC funds in the energy sector: Sudden Death…

Name of the fund CountryType of parentcompany

Fund size

(mEUR)

Sustainableenergyexposure Status 9/05

E.On Venture Partners GER Utility 25 medium discontinued

EDF Capital Investissement FRA Utility n/a medium discontinued

Endesa Netfactory ESP Utility 400 low discontinued

MVV Innovationsportfolio / Accera GER Utility 40 high spun off

RWE Dynamics GER Utility 50 medium spun off

Suez Nov Invest FRA Utility n/a n/a discontinued

Vattenfall Europe Venture GER Utility n/a high active

Norsk Hydro Technology Ventures NOR Oil&Gas 45 high

underreview

Shell Technology Ventures NL Oil&Gas n/a low n/a

Schneider Electric Ventures FRA

Technology Manufacturer n/a medium active

Siemens Venture Capital GERTechnology Manufacturer 500 low active

BASF Venture Capital GmbH GER Chemical 100 low active


September 2005

Are we missingsomething here?

We better goback to our core

business!

Changing Minds about CVC in the Utility IndustryReflecting the Financial Market Environment

Data: DJ STOXX (www.stoxx.com)

Quelle: Wüstenhagen and Teppo (2004a)


September 2005


September 2005

Übersicht





September 2005

Schlussfolgerungen und weitere Forschung

– Greening Goliaths und Multiplying Davids sind zwei unterschiedliche Wege zur Erreichung des Ziels nachhaltiger Innovationen

– Sowohl „Davids“ als auch „Goliaths“ haben spezifische Stärken und Schwächen, wenn es um die Entwicklung und Vermarktung nachhaltiger Innovation geht

– Schnittstellenakteure wie zum Beispiel Venture Capitalists oder die Corporate Venturing-Abteilungen von Grossunternehmen können zumindest zeitweise die Brücke zwischen beiden Welten bilden

– Das Scheitern von Corporate Venturing-Initiativen im Energiesektor und die Wachstumsprobleme von Start-Ups im Bereich erneuerbare Energien bieten interessanten Forschungsbedarf


September 2005

Danke für Ihre Aufmerksamkeit!Dr. Rolf WüstenhagenVice Director, Institute for Economy and the Environment, University of St. GallenTigerbergstrasse 2, CH-9000 St. Gallen / Switzerland, Tel.: +41-76-306 43 13E-mail: [email protected], http://www.iwoe.unisg.ch

mailto:[email protected]

http://www.iwoe.unisg.ch/


September 2005

Further Reading on Sustainability, Entrepreneurship and Venture Capital

– Wüstenhagen, R. and Teppo, T. (2005): Do venture capitalists really invest in good industries? Risk-return perceptions and path dependence in the emerging European energy VC market. Int. J. Technology Management (forthcoming).

– Teppo, T. and Wüstenhagen, R. (2005): Corporate venture capital, organizational culture and industry context: the case of the energy sector, unpublished manuscript.

– Moore, B. and Wüstenhagen, R. (2004): Innovative and Sustainable Energy Technologies: The Role of Venture Capital, Business Strategy and the Environment, 13, 235-245.

– Strothotte, T. and Wüstenhagen, R. (2005): Structure of Sustainable Economic Value in Social Entrepreneurial Enterprises, in: Vinig, G.T./Van der Voort, R.C.W. (eds.): Research on Technological Innovation and Management, Volume 9 - The Emergence of Entrepreneurial Economics, Oxford: Elsevier (forthcoming).

greening goliaths vs multiplying davids · greening goliaths vs. multiplying davids september 2005...

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