Presentation1-ΠΤΥΧΙΑΚΗ

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ΤΙΤΛΟΣ: SMEs AND GREEN ENTREPRENEURSHIP

ΟΝΟΜΑ:ΠΑΠΠΑΣ ΗΛΙΑΣΕΠΙΒΛΕΠΩΝ ΚΑΘΗΓΗΤΗΣ:ΑΠΟΣΤΟΛΟΠΟΥΛΟΣ ΝΙΚΟΣ

ΑΜ:4042201401013

ΜΑΙΟΣ 2016

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1. THE MEANING OF GREEN ENTREPRENEURSHIP (greenness)

Sustainability is defined as : “meeting the needs of the present generation without compromising the ability of future generations to meet their own needs” (WCED, p.43).

Based on the idea of sustainability ,green entrepreneurship has turned into priority for the western societies as well as contamination of our planet increasing rapidly and natural resources seem not to be inexhaustible.

Green entrepreneurship is defined as: “the examination of how opportunities to bring into existence future goods and services are discovered ,created and exploited , by whom, and with that economic , psychological ,social and environmental consequences (Cohen &Winn, 2007).

Green entrepreneurs or eco-entrepreneurs are those who create enterprises based on the ideas of sustainability and greenness, producing and selling green products and services (Kirkwood and Walton , 2010).

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2. AIM AND CONTRIBUTION OF THE RESEARCH

The aim of this paper is to examine the way in which SMEs adapt their financial and operational plan ,in order to develop green entrepreneurship .

The novelty of this research , in comparison with other surveys , is the fact that green entrepreneurship is approached not only on the fields of energy or environmental efficiencies ,but also attempts to introduce techno-economic parameters with related questions in the questionnaires which were shared on the sample of SMEs.

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3.LITERATURE REVIEW

SMEs represent the 99% of all European business , having no more than 250 employees. They offer almost the 65% of employment in private sector ,while their contribution in value-added created is up to 50% (European Commission , 2012).

SMEs are the main reason of the increasing European wealth and growth .They are also the pioneer enterprises in innovation , research and development (European Commission , 2012).

The green process describes a new way of production ,based on green strategies and techniques. Through this process ,every product or system is produced giving priority to energy and new raw materials saving, replace input components ,reducing harmful outputs and carrying out recycling, by making outputs to inputs (Dief, 2011).

Green design is a significant factor in producing process as it helps to improve the environmental performance of the product (Knight & Jenkins, 2009).

The participation of consumers ,by revealing their preferences on products , is a way to add green design characteristics on products (Liao et al., 2013).

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3.LITERATURE REVIEW

(Dief , 2011) presented a 4step method for measuring the green productivity and elevate the greenness of each single process. The method consists of the following :1)rank the present greenness, 2)make an upgrade plan, 3)run the project and 4)preserve the improvement .

(Azzone & Noci, 2014) have proposed the (PMS) Performance Management System , which helps the greenness of manufacturing methods .

Green process in manufacturing can reduce the cost of this operation by 10,8% (Elsayed et al., 2013).

(Tsai et al., 2011) have tried in their model to explain the fact that green investment could reduce the pollution.

(Jonrinaldi & Zhang, 2010) have presented a mathematical model that could help suppliers and firms use green natural materials and green components.

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3.LITERATURE REVIEW

(Vittaldas et al., 2012) have discussed in their model about ways which could be used for the calculation of the energy that is lost during production process and also other power parameters.

(Hoogedoorn et al., 2014) reached in their research in the follow 3 conclusions: 1) The extend of SMEs joining in environmental practices differs significantly between the type of practices , the kind of firms, the sector and the country.

2) There are dissimilar influences of each firm characteristics relating to the environmental practices.

3)Small business are reluctant to invest in greenness.

Greenness in logistics is important as it can upgrade the business environmental performance.

(Lau, 2011) has made a green logistic performance index for measuring the greenness of logistic process.

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3.LITERATURE REVIEW

(Pishvaee et al., 2012) have presented a mathematical model for designing which can improve logistic greenness and reduce the cost.

The most significant factors of a long term plan of green entrepreneurship are the following:1) subsistence of desired natural resources and physical conditions,

2)subsistence of environmental preserved areas, 3)existence of PDO (Protected of design of origin)and PGI (Protected of

Geographical Indication) 4)social attachment, 5)more watchful administration of European Funds for the environment, 6)ways to expand the inputs of all European and National Funds. (Nikolaou et al., 2011;Parish, 2010)

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4.HYPOTHESES AND BACKGROUND

4 basic hypotheses and 6 secondary were examines in this research:

Hypothesis 1. SMEs cannot incorporate green strategies in their activities.

The majority of surveys show a difficulty for SMEs in adopting greenness.

(Pernini et al., 2007) found a positive relationship between size and greenness.

McKeiver &Gadenne, 2005) mentioned the cost of greening process as an inhibitor.

(Weerasiri &Zhengang ,2012) have focused on the short term management of SMEs ,supporting tha it does not help the greening process of SMEs.

(Condon , 2004;Walker et al., 2007) supported that scale economies and resources help only large business to involve in greenness.

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Hypothesis 2. Entrepreneurs believe in the positive feedback (willingness to pay more) of their green products, by consumers environmentally

aware.

Most surveys show that consumers are willing to pay more for environmentally friendly products and services.

Consumers are willing to support eco-firms ,by paying a premium for green products and services (Hu et al., 2010).

(Laroche et al., 2001) discussed of the changing purchasing and shopping behavior to more ecological terms.

According to (Speer,1997), consumers are willing to pay an average 5% premium for green products and services.

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Hypothesis 3. The States (Greek Government) support the efforts of green entrepreneurs (SMEs) to incorporate green strategies.

Government policies and fundation:

Creation of the Development Law which is updating so far. The current National Strategic Reference Framework which framework is set until 2020. The Guarantee Fund for SMEs has a complementary and supportive role providing guarantees on SMEs

loans.

Hypothesis 4. European Funds have contribution in the greenness process of SMEs. European Union policies and fundation:

The programme LIFE is a European Union's programme which target is the implementation of eco-friendly initiatives.

The Marco Polo programme started in 2003 and its aim was the funding of cargo transportation in a manner that reduces the environmental impacts.

The Structural Funds and the Cohesion Fund are European financial tools that help the poorer regions of the European Union.

The European Regional Development Fund (ERDF) aims to increase the competitiveness of SMEs and interregional cooperation too.

The JEREMIE programme helps by providing loans to SMEs in order to improve the business climate. The CIP programme finance European SMEs in order to help them follow more green practices and be more

innovative in their activities.

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Hypothesis 5. The turnover (size) of firms is positively related to their greening process.

The size influence the following environmental strategies (Bianchi &Noci, 1998). Most views converge on a positive relationship between size (turnover) and

greening process (Pernini et al., 2007;Uhlaner et al., 2012). The annual turnover influence positively the greening process (Westwood, 1990).

Hypothesis 6. The sector where the enterprises belong, strongly affects green strategies.

The business sector the firm belongs is relevant to the level of greenness followed. Resource-intensive sector and material sector (construction , manufacturing) seem

to be positive related to greenness ( Orsato 2006;Williamson 1991 ). A reason that makes firms on material sectors adopt environmental practices is the

fact that they accused of the more environmental damage in comparison with the less resource intensive business (Williamson et al. 2006).

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Hypothesis 7. The old firms are more reluctant in adopting green strategies.

The firm age is also a parameter that influence the investment of SMEs in greenness (Hoogendoorn et al., 2014 ).

(Neubaum et al. 2004 ) have proposed that the new firms because of their financial difficulties and the general existence insecurity might be more environmentally immoral and by extension more negative in green strategies.

However, (Hockerts & Wustenhagen, 2010) suggest that the newest firms are more environmentally sensitive.

Hypothesis 8. The newest firms have fewer possibilities getting external financing for green strategies.

Small and large enterprises differ in the access on financial resources (Ang 1991;Berger and Udell 1998).

It is difficult for small firms to adopt greenness because of the financial costs ( Pacheco et al. 2010 )

The lack of financial resources make small firms have low performance in greenness ( Bradford &Fraser, 2008).

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4.HYPOTHESES AND BACKGROUND Hypothesis 9. The firms with bigger turnovers believe much more in green

(management) business plan, especially for the new enterprises.

Hypothesis 10. There is correlation between the firm age ,the existence of a business plan and the beliefs of entrepreneurs in the importance of having a business plan containing green strategies, especially for the new enterprises.

The ''rich'' SMEs see positively the greenness processes because of their ability to spend more for communication, advertisement and promotion of their new ''green'' products (Westwood, 1990).

Environmental Management is turning to a strategic matter for SMEs (Klassen & McLaughlin, 1993).

Greenness targets must be part of the annual business plan of SMEs and also the results of greenness progress must be checked annually too (Hunt, 1990).

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5.METHODOLOGY AND DATA

In this study we present the results of a field research that was conducted on Greek area (Tripolis, Arcadia).

Data were collected through the use of a questionnaire that was distributed on Greek professionals.

This questionnaire was collected through the personal (direct) method, as we expected a bigger percentage of filled questionnaires. The questions were designed in a proper way to measure the green entrepreneurship, while we encourage the entrepreneurs to fill all the questions.

In order to eliminate possible wrongs, we used closed questions, where the entrepreneurs had to choose among different answers. We used at most a Likert scale in order to measure the accordance or not with several proposals.

We used the cronbach’s alpha as a measure of internal consistency (reliability).

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5.METHODOLOGY AND DATA We conducted a pilot survey (collected 15 questionnaires) in order to avoid possible

errors on the questionnaire. In that way, we were able to augment both the questionnaire’s and the survey’s efficiency and reliability.

We used the spent money, the time and the effort in the most efficient way possible to achieve success in our survey. Then, we distributed our questionnaires on entrepreneurs at random, ensuring for lack of bias.

The questionnaires were encoded using specific numbers for each answer given, in order to quantify our quality variables.

We examined the descriptive statistics of several variables to describe our sample.

Several regression analyses were used to examine if there are several important relations among the variables used. The last part of our analysis included the examination of several correlations among the variables.

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5.METHODOLOGY AND DATA

Legal form Percentage

Personal enterprise 37%

General partnership 30%

Limited partnership 20%

Limited liability

company

13%

Firm age Percentage

0-3 years 8%

3-6 years 17%

6-9 years 22%

9-12 years 25%

12 and more years 28%Staff Percentage

1-5 people 22%

6-10 people 45%

11-15 people 24%

16-20 people 7%

21 and more people 2%

Sector Percentage

Trade 45%

Construction 19%

Food and drink 21%

Services 15%

Turnover Percentage

0-50.000 5%

50.001-100.000 10%

100.001-150.000 15%

150.001-200.000 29%

200.000 and more 41%

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RESULTS Hypothesis 1. SMEs cannot incorporate green strategies in their activities. Energy upgrading process as a beginning priority = 0.736 + 0.551*Incorporation of Energy

strategies and policies (0.028) (0.000)

Environmental protection as a beginning priority = 1.145 + 0.495*Incorporation of environmental strategies/policies. (0.001) (0.000)

The results indicate that there is a strong positive and statistical significant relation between the variables.

We reject the null hypothesis, that the SMEs cannot incorporate green strategies at their activities.

Hypothesis 2. Entrepreneurs believe in the positive feedback (willingness to pay more) of their green products, by consumers environmentally aware.

Increase of sales after the adoption of green practices = 0.846 + 0.443*Willingness of consumers (0.001) (0.000)

We accept the null hypothesis, as our results indicate that the consumers are willing to pay more in order to by a green product.

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RESULTS Hypothesis 3. The States (Greek Government) support the efforts of green

entrepreneurs (SMEs) to incorporate green strategies.

Sustainable development through the adoption of policies/strategies = 3.120 + 0.285* Government (States) Motivations for energy upgrading +

(0.000) (0.001) 0.141*Government (States) Motivations for environmental protection (0.102)

Our results indicate that there is a positive and statistically significant linkage with the given motivations for energy upgrading to the SMEs, while the help (motivation) from the government relating to the environmental protection is found positive but statistically insignificant. The results are contradictory and we are not able to have a clear result.

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RESULTS Hypothesis 4. European Funds have contribution in the greenness process of SMEs.

Sustainable development through the adoption of policies/strategies = 5.419 + (0.000) 0.054*European funding programme for energy upgrading - (0.642) 0.695*European fundation for environmental protection (0.012) Based on these results we are able to disagree with the examined null hypothesis.

Hypothesis 5. The turnover (size) of firms is positively related to their greening process.

Though, the relation is not significant, which means that we cannot have a clear result.

Incorporation of energy

strategies/policies

Incorporation of

strategies/policies for

environmental protection

Turnover 0.013 0.118

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RESULTS

Hypothesis 6. The sector where the enterprises belong, strongly affects green strategies.

As the relation is not significant we cannot have clear results.

Hypothesis 7. The old firms are more reluctant in adopting green strategies.

Even if we find that there is a negative correlation, we are able neither to accept nor to deny the examined hypothesis, as the results are not significant.


strategies/policies

Incorporation of strategies/policies

for environmental protection

Sector -0.009 -0.060


strategies/policies

Incorporation of



Firm age -0.115 -0.038

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RESULTS Hypothesis 8. The newest firms have fewer possibilities getting external financing for

green strategies

Due to the statistically significant correlation, we are able to accept the examined hypothesis.

Hypothesis 9. The firms with bigger turnovers believe much more in green (management) business plan, especially for the new enterprises.

The enterprises’ turnover is negatively correlated with the importance of the business plan and its relation with the environmental protection. Though, this correlation is not significant which means that may not exist. So, our results are not clear in linkage with the examined hypothesis.

European funding programme for

energy upgrading

European funding to adopt



Firm age -0.280** 0.014

Importance of the business plan

containing policies/strategies

for energy upgrading


for environmental protection

Turnover -0.182 -0.143

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RESULTS Hypothesis 10. There is correlation between the firm age ,the existence of a business plan and

the beliefs of entrepreneurs in the importance of having a business plan containing green strategies, especially for the new enterprises.

The operational time of the enterprise is related to the business plan at 5% level. This means that the existence of a business plan augments the operational time of the business.

So even if the correlation coefficients are negative, there seems to exist a relation with the existence of a business plan.

Business plan

Firm age 0.457**


containing policies/strategies for

energy upgrading

Importance of the business

plan for environmental

protection

Existence of business plan -0.285** -0.281**

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CONCLUSIONS This research concludes that Green Entrepreneurship is not a basic priority and

target in the business plan of the SMEs in Greece.

There is not a central government plan in order to help this kind of entrepreneurship.

Entrepreneurs try and finally manage to incorporate some kind of greenness in their enterprises (SMEs)

Entrepreneurs believe that consumers are willing to pay for green products, increasing their sales volume.

From the research is also found that the entrepreneurs are not well informed of the fundation and motivations that are given from the local states (Government) and the European Union, as they don't take many advantages of them.

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