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Ery Tri Djatmika, Preparing Green Entrepreneurs for Sustainable Development
Preparing Green Entrepreneurs for Sustainable Development*
Ery Tri Djatmika
Department of Management, Faculty of Economics
State University of Malang (UM)
Email: [email protected]
Abstract: Incorporating social and environmental concerns into economic actions are dealing with
responsibility of sustainable development for business and meet the needs of future generations.
This paper describes students understanding about green entrepreneur dimensions in terms of clean-
growth, socially-aware, and environmentally-save businesses. It examines appropriateness of policy
instrument models in terms of incentive, punishment, and no such policy needed models preferred
and seeks its differences. Integrating the dimensions and policy instruments are directed to achiev-
ing imminent sustainable development. This survey has analyzed data collected from 265 students
taking entrepreneurship course. Indicators developed to measure green entrepreneur dimensions
and policy instrument models using Likert scales. Percentage, paired-samples t-test, and multivari-
ate general linear model analysis were employed to answer research questions. This research re-
vealed the importance of green entrepreneur dimensions for running green business, and the need of
either incentive or punishment models as policy instruments for sustainable development. Consid-
ering role of Higher Education Institutions (HEIs) that have to take action in implementing educa-
tion for sustainable development, consequently, delivering of entrepreneurship courses in HEIs
should integrate triple bottom line as critical context of entrepreneurship education and its respon-
sibility in creating green entrepreneurs.
Keywords: green entrepreneur, sustainable development, entrepreneurship education, higher edu-
cation institution
Abstrak: Perhatian mengenai dimensi sosial dan lingkungan dalam aktivitas ekonomi merupakan
tanggung jawab terkait dengan pembangunan berkelanjutan untuk keberlangsungan bisnis dan
memenuhi harapan generasi mendatang. Artikel ini memaparkan mengenai pemahaman mahasiswa
peserta perkuliahan entrepreneurship tentang dimensi-dimensi green entrepreneur yaitu clean-growth,
socially-aware, dan environmentally-save businesses sebagai triple bottom line, dan menguji kesesuaian
model instrumen kebijakan dengan dimensi-dimensi tersebut. Data penelitian survey ini diperoleh
dari mahasiswa peserta mata kuliah entrepreneurship dan dianalisis dengan mempergunakan
persentase, uji-t sampel berpasangan, dan multivariate general linear model. Mempertimbangkan
pentingnya peran institusi perguruan tinggi dalam pengimplementasian pendidikan untuk
pembangunan berkelanjutan, maka pembelajaran entrepreneurship perlu mengintegrasikan triple
bottom line sebagai konteks kritis dari pendidikan entrepreneurship dan tanggung jawab dalam
penciptaan green entrepreneurs.
Kata-kata kunci: green entrepreneur, pembangunan berkelanjutan, pendidikan entrepreneurship,
institusi perguruan tinggi
There has been environmental shifting around velopment Conference (1992). The need of
the world within two recent decades referring trends changing should consider “green”
to Rio Declaration on Environment and De- (Croston, 2009). Problems include demo-
* The earlier version of this paper was presented at: (1) the 12th International Australian Campuses towards Sustainability
Conference Brisbane, Australia, 26–28 September 2012, and (2) Professor Speech (Pidato Pengukuhan Guru Besar) of
Universitas Negeri Malang entitle “Penyiapan Green Entrepreneurs untuk Pembangunan Berkelanjutan”, 10 October
2012, both are unpublished.
49 49
Jurnal Entrepreneur dan Entrepreneurship, Volume 3, Nomor 1 dan 2, September 2014
graphic change, urbanization, climate change, GDP is a measure of society welfare.
and globalization. It is predicted that there Creating higher GDP through heavy capital-
will be 9 billion people live by 2050, more intensive industries provokes possible massive
than half of people have already lived in cities pollution and others environmental damages.
since 2007 and accordingly cities have con- There is a relationship between GDP and
tributed 80% of CO emissions, extreme CO emissions level (Lane, 2011). Escalating
2 2
weather changing in terms of warming ten- of emissions will affect climate in negative
sions and ecological damages, critical impact way and in turn it will endangering human
of global trades economically, socially, and life and ecosystem (Sathiendrakumar, 2003).
environmentally (Loscher, 2010). Environmental pollution in terms of CO emis-
2
There are similar pattern of trends be- sions can only be minimized by either reduc-
tween GDP expenditures in fixed capital for- ing economic growth or creating green eco-
mation and CO emissions in East Asia & nomic activities. Since improving welfare is
2
Pacific Region (http://databank.worldbank.org/ through productive sectors in which the
ddp/home.do) as showed in figure 1. Gross growth of economic will stimulate higher GDP
fixed capital formation is directed for long- achieved, so activities taken for granted are
term investment such as establishing new sectors that environmentally save.
manufactures and industries intended to cre- Another problem related to economic
ate more revenues. Higher GDP can be gen- and social is unemployment levels. In the East
erated by expenditures to achieve value added Asia & Pacific Region (http://databank.
from investments. During period of 1990- worldbank.org/ddp/home.do), there is increas-
2008 in this Region at average level manufac- ing number of labor forces, from 52% in
tures sectors have contributed 35% value 1990 up to 54% in 2007, and level of unem-
added to GDP and 24% to GDP from indus- ployment rate is about 2.78% in 1990 and
try sectors. As externalities, the CO emis- getting higher up to 4.52% in 2007 as showed
2
sions produced in 2008 was twice compared in figure 2. This means that growth of labor
to 1990. Increasing expenditures in those force is greater than employment opportunity
sectors will rise up of CO emissions. If available in economy, and consequently there
2
amount of emissions continues to rise, it will will be problem of unemployment.
become a serious problem in endangering life Possible impacts of capital intensive used
system on earth. in development are related to environmental
Gross fixed capital formation (current US$) CO2 emissions from manufacturing industries and construction (million metric tons)
4500000000000 3500
4000000000000 3000
3500000000000
3000000000000 2500
2500000000000 2000
2000000000000 1500
1500000000000 1000
1000000000000
500000000000 500
0 0
1990199119921993199419951996199719981999200020012002200320042005200620072008 1990 19911992 19931994 1995 19961997 1998 19992000 20012002 2003 20042005 20062007 2008
(a) Capital Formation (b) CO Emissions
2

Figure 1 Coexisting evidence between expenditures in fixed capital formation and CO emission
2
50
Ery Tri Djatmika, Preparing Green Entrepreneurs for Sustainable Development
Labor Force (% of Total Population) Unemployment Rate (% of Total Labor Force)
55.00% 6.00%
54.50%
5.00%
54.00%
4.00%
53.50%
53.00% 3.00%
52.50%
2.00%
52.00%
1.00%
51.50%
51.00% 0.00%
199019911992199319941995199619971998199920002001200220032004200520062007 1990 19911992 19931994 19951996 19971998 19992000 20012002 2003200420052006 2007
(a) Labor Force (b) Unemployment Rate

Figure 2 Labor Force and Unemployment Rate
and ecosystem depletion, societal and unem- sible and environmentally committed, entre-
ployment including improving quality of life preneurs can provide programs, contribute
problems. Governments have responsibility ideas and expenditures to address environ-
to improve society welfare and provide solu- mental and social problems. They are directed
tions for employment opportunities, and con- by integrated value-oriented driven in the ef-
sequently it needs value added through eco- fort of making sustainable business growth
nomic activities. Referring to Kirby (2004), (Choi and Gray, 2008; Marshall and Harry,
Gurol and Atsan (2006), and Packham et al. 2005). Implementation of such development
(2010), entrepreneurial as form of economic initiatives run concurrently with the effort of
activities enable coping with unemployment achieving economic growth, by which enable
problems through creating new job opportu- to guarantee environment protection effec-
nities. At national level, growth of new ven- tively and poverty reduction (Anton, 2012).
tures is seen as a way to solve unemployment Since it is seen as an economic opportu-
problem for a wide-range areas. Entrepre- nity, be concerned with social and environ-
neurship is solution for achieving economic mental issues affect business performance and
growth that enables getting higher prosperity. sustainability. There will be economic value
Sustainable development incorporates is- obtained by entrepreneurs that build public
sues of social, environmental, and economic image about to what extent business activities
problems effectively. Integrating all those is- address social and environmental problems.
sues into economic actions taken by entrepre- Participation in community development and
neurs is related to responsibility for the devel- environmental conservation will create per-
opment including the sustainability of busi- formance advantage. Several firms have used
ness. Successful sustainable entrepreneurs meet it as branding strategy by addressing whole
triple bottom-line. They do not only creating concern about the problems to build com-
profits, but also have responsibility simulta- pany images through eco-friendly, eco-design,
neously for accomplishing environmental and and terms alike. Implementing the strategy,
social intentions. Concerning socially respon- those firms have obtained its competitive ad-
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Jurnal Entrepreneur dan Entrepreneurship, Volume 3, Nomor 1 dan 2, September 2014
vantages, and of course, it will ensure busi- propriate kinds of educational fields to stu-
ness sustainability considerably (Bowers, 2010; dents, and one of those is entrepreneurship.
Dutta et al., 2010; Pastakia, 1998). Rising problems in social and environmental
In 21st century denoted by global pres- areas as the impact of economic development
sures and almost no trade barriers among should be addressed, and therefore there is a
nations have contributed to uncertainty prob- need to change mode of actions chosen into
lems for government, business institutions, sustainable one. HEIs are drivers of develop-
and individuals (Heinonen & Poikkijoki, ment for sustainable world emphasizing on
2006). There will be more complexity faced, exchanging knowledge, innovation, knowl-
competition, and many variables that cannot edge transfer, and collaborative programs that
be controlled. Emphasizing the importance to promoting green growth (Blewitt, 2010). A
add in measurement standards about quality lot of creativity is needed to address sustain-
of life and ecology are beneficial to look at able development. It is characterized by ongo-
economic development success. Entrepreneurs ing process of invention and looking for new
are often seen as agent of development, in- opportunities that no impact on wearing out
cluding their concern on social and ecological natural resources. Furthermore, HEIs also have
aspects. Creating small and medium enter- challenge to find out solutions for a sustain-
prises tend to increase, and it is recognized as able future (Koch, 2005).
key sector for stimulating business activities in There are increasing numbers of HEIs
economy. This sector contributes opportuni- that provide entrepreneurship education for
ties for employment and encourages innova- students. This course provides opportunity
tion for economic development (Klapper, for individual development considering tak-
2004; Gliedt & Parker, 2007). From policy ing private business as career chosen. Entre-
makers’ point of view, model of economic preneurship education cannot be taught sepa-
development in terms of creating prosperity rately merely as knowledge, and in doing so,
for society should be approached through educators have to connect it to real problems
multiple track of development model. Within to learn. So, what is learnt in class and real
this model, business activities integrate three business problems is considered as vehicle to
considerations that contribute to (1) eradicat- improve quality and relevancy of entrepre-
ing poverty and improving social quality of neurship education (Richardson & Hynes,
life, (2) conserving environment, and (3) eco- 2008). Moreover, evidence from empirical
nomic growth. Consequently, economic ac- research showed that such education causes
tivities need entrepreneurs who incorporate positive impact on outcomes related to career
sustainable development issues through creat- indicated by much better quality of entrepre-
ing new ways of doing business (Dixon & neurs entering economy. Entrepreneurs with
Clifford, 2007; Salim, 2012). higher level of education have both constant
Increasing number of entrepreneurs is effort to looking for new ways and ethical
needed to accelerate society welfare through considerations in doing business (Matley,
creating employment opportunities in pro- 2008; Taatila, 2010).
ductive sectors. Higher education institutions There is consciousness among individu-
(HEIs) have strategic roles in providing ap- als that small and medium businesses can
52
Ery Tri Djatmika, Preparing Green Entrepreneurs for Sustainable Development
create employment opportunity through in- beled green as consequence of their contribu-
dividual responsibility to take action as entre- tion for sustainable development for future
preneurs. HEIs have roles in developing well and next generation (Bowers, 2010; Dutta et
prepared young entrepreneurs through entre- al., 2010; Pastakia, 1998).
preneurship courses offered to students. Like- This research examines which of three
wise, government is interested in promoting models of policy instruments preferred for
entrepreneurial culture for higher education controlling green business. These are incen-
students in which in line with rising private tive, punishment, and no such policy needed
roles in economy. Educational system is chal- models. The main question to search is
lenged to bridge through innovative ap- whether any differences among models and
proaches in delivering entrepreneurship edu- to what extent its effects on green entrepre-
cation. Entrepreneurship is seen as means to neur dimensions. Integration of dimensions
achieve competitiveness enhancement and and policy instruments are directed to achieve
prosperity. The main step is to develop entre- sustainable development. Research model is
preneurship education curriculum for ex- figured out as follows.
pected learning outcomes and experiences
such as skills, values, ethics, and entrepre-
Clean-growth
neurial attitudes development. Curriculum business
development is seen as a process to strengthen POLICY
INSTRUMENTS
innovative capacities for HEIs. Considerably,
GREEN
HEIs have to promote entrepreneurship edu- ENTREPRENEURS
cation in relation to prepare young entrepre-
neurs to address sustainability problems (Kirby, Socially-aware Environmentally-save
business business
2004; Hamidi et al., 2008; Roffe, 2010).
Integrating suggested dimensions of green
entrepreneur as mentioned in previous stud-
ies (Dixon & Clifford, 2007; Salim, 2012), Figure 3 Research Model
research model incorporates clean-growth,
socially-aware, and environmentally-save busi- Based on theoretical foundation explored,
ness dimensions. Policy instrument is included research questions are pointed out as follows.
as an external variable that control to what • To what extent students taking entrepre-
extend the degree of entrepreneur run green neurship course figure out their under-
business (Sterner, 2012). From public stand standing about green entrepreneur dimen-
point, such policy is needed. Sustainability is sions in terms of clean-growth, socially-
seen as economic opportunity and business aware, and environmentally-save business?
value. Putting it comprehensively, conducting • Which of policy instrument models more
business in clean-growth way, taking action of relevant to green entrepreneur dimensions?
social responsibility and its circumstances, and • Are there any differences among policy
conserving environment from its degradation, instrument models in terms of incentive
entrepreneurs will obtain competitive advan- model, punishment model, and no such
tage for market acceptance of products la- policy needed model?
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Jurnal Entrepreneur dan Entrepreneurship, Volume 3, Nomor 1 dan 2, September 2014
• To what extent the effects of policy instru- policy instrument models preferred to influ-
ment models preferred on green entrepre- ence green business dimensions. Accordingly,
neur dimensions? hypothesis can be written as follow.
H There are significant effects of policy in-
4
Incentive model is intended to motivate strument models preferred on clean-
entrepreneurs to run business by providing growth, socially-aware, and environmen-
incentives such as giving rewards, less tax, tally-save business dimensions.
protections, and other means if they meet
green business characteristics. On the other
METHOD
hand, punishment model is intended to charge
entrepreneurs through higher tax, sanction, Survey was employed as research design
and other means if they do not meet green to collect data from students taking entrepre-
criteria. Intention of incentive and punish- neurship course in academic year 2011/2012
ment models is the same, in which entrepre- in Faculty of Economics, State University of
neurs are expected to run green business. So, Malang (UM). This research is intended to
hypothesis can be pointed out as follow. know to what extent students taking the
H There is no difference between incentive course aware about the issue of green
1
and punishment policy instrument mo- entrepreneur’s dimensions and the effect of
dels. policy instruments on the dimensions. The
Moreover, it will be compared between number of 270 students taken randomly from
previous models with no such policy instru- 386 students from nine different classes had
ment model implemented to control whether participated in this study, and due to incom-
entrepreneurs meet green criteria or not. Since plete information of questionnaires filled, fi-
that there is no implication either in the form nal number of respondents are 265 students
of rewards or punishment for entrepreneurs (98% rate of response) to be used in analysis
when they run business, so they will do as for generalization.
they want without considering any other as- Dimensions and indicators of green en-
pects whether implicate to positive or nega- trepreneur developed and used in this re-
tive impacts to their societal and environment search are based on multiple integrated “green”
circumstances. Considerably, there will be facets for running business. These dimensions
objection for these entrepreneurs. So, hypoth- should be considered starting from input,
esis can be written down as follow. process, and output, and even outcomes of
H There is a difference between incentive business activities. Dimensions unity is impor-
2
and no such policy instrument models. tant for sustainability, not only for continuity
H There is a difference between punish- of business itself but also awareness of main-
3
ment and no such policy instrument taining environment from eradication and at-
models. tention to social circumstances. Policy instru-
Based on the results of hypothesis testing ments variable include incentive, punishment,
(H , H , and H ), it is obtained appropriate and no such policy needed models.
1 2 3
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Ery Tri Djatmika, Preparing Green Entrepreneurs for Sustainable Development
Questionnaire items developed from in- Results of instrument reliability tests ex-
dicators use five-point Likert scale options, hibit good reliability, since all Alpha Cronbach
starting from strongly disagree up to strongly coefficients above 0.70 as showed in Table 1
agree. Respondents were asked to express and 2.
their degree of agreement or disagreement on Moreover, Confirmatory Factor Analysis
each item options. Questionnaire consists of (CFA) is employed to analyze green entrepre-
two parts. The first part is concerning with neur construct unity by using LISREL 8.30
green entrepreneur dimensions composed of application software. This CFA provides in-
27 items with nine items for each dimensions. formation about loading factor coefficients
Example of item is “Entrepreneurs have to for each dimension. The aim is to know
promote clean-impact (non-destructive) strat- whether all those three dimensions enable to
egy both socially and ecologically for business form green entrepreneur construct. Construct
growth”. The second part is concerning with reliability is analyzed by using composite reli-
policy instrument models composed of 18 ability (r ) formula (Bagozzi & Yi, 1988).
c
items with six items for each model. Example Result of testing showed that three dimen-
of item is “Incentive through less taxes for sions in terms of clean-growth, socially-aware,
environmentally and socially care entrepre- and environmentally-save businesses have com-
neurs”. pletely formed construct of Green Entrepre-
Table 1 Reliability for Green Entrepreneur Dimensions
Std. Error of Std. Alpha
Dimensions n Mean
Mean Deviation Cronbach
1. Clean-growth 265 4.599581 .0208497 .3394085 0.769
2. Socially-aware 265 4.245283 .0269624 .4389169 0.796
3. Environmentally-save 265 4.485535 .0250917 .4084635 0.829

Table 2 Reliability for Policy Instrument Models
Std. Error of Std. Alpha
Models n Mean
Mean Deviation Cronbach
1. Incentive 265 4.011321 .0396865 .6460494 0.845
2. Punishment 265 3.950943 .0437335 .7119295 0.839
3. No such policy 265 2.251572 .0461420 .7511374 0.887
needed

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Jurnal Entrepreneur dan Entrepreneurship, Volume 3, Nomor 1 dan 2, September 2014
neur. A standardized solution of construct and Harry (2005), and Salim (2012) has been
testing is presented as follow. confirmed.
Clean-Growth
0.48
Business RESULT
0.72 Answering research questions 1, percent-
age analysis is implemented to find out to
Socially-Aware 0.85 Green what extent students taking entrepreneurship
0.27 Business Entrepreneur 1.00
course showing their agreement or disagree-
ment about green entrepreneur dimensions.
0.82
This includes clean-growth business, socially-
aware business, and environmentally-save busi-
Environmentally-Save
0.32
Business ness dimensions. Research finding is described
descriptively as follow (Table 3).
Figure 4 Green Entrepreneur Construct Based on above table, graphically it can
be figured out as follow (Figure 5).
CFA obtained goodness of fit statistics
that consist of degrees of freedom = 0, mini-
70.00%
mum fit function chi-square = 0.0 (P = 60.00%
50.00%
1.00), normal theory weighted least squares
40.00%
chi-square = 0.00 (P = 1.00), the model is 30.00%
20.00%
saturated, and the fit is perfect. Composite 10.00%
0.00%
reliability coefficient of the construct is r=0.84
c Strongly Disagree Fair Agree Strongly
considered reliable (Bagozzi & Yi, 1988). From Disagree Agree
construct testing done, argument of triple Clean-growth Socially-aware Environmentally-save
bottom line of green entrepreneur as men-
Figure 5 Proportion Frequency of Green Entrepre-
tioned by Choi and Gray (2008), Marshall neurs Dimensions
Table 3 Proportion of Green Entrepreneurs Dimensions
Options
Dimensions
Strongly Strongly
Disagree Fair Agree
Disagree Agree
Clean-growth 0.00% 0.46% 4.44% 29.77% 65.32%
Socially-aware 0.04% 1.01% 13.46% 45.37% 40.13%
Environmentally-save 0.00% 0.55% 6.83% 36.14% 56.48%

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Ery Tri Djatmika, Preparing Green Entrepreneurs for Sustainable Development
Most of respondents agree and strongly contribution for maintaining business growth
agree that entrepreneurs have to meet green in a clean way, contributing to community
criteria. They have pointed out the import- development, and conserving environment.
ance of considering conducting green busi- All of those are intended for improving qual-
ness and emphasized that entrepreneurs have ity of life and make it possible to keep busi-
to address economic, social, and environmen- ness sustainability. Lastly, for the third asked
tal issues. to respondents is neither incentive nor pun-
Answering research questions 2, percent- ishment models needed to control business. It
age analysis is implemented to find out re- means that there are no regulations needed to
spondents expressions about relevancy of inspect whether entrepreneurs meet green
policy instrument models to green entrepre- business criteria or not. Research finding is
neur dimensions. They were asked to express described descriptively as follow (Table 4).
their agreement or disagreement regarding Based on above table, graphically it can
statements in questionnaire. For the first model be figured out as follow (Figure 6).
of policy instrument asked to them is an
incentive model. Through the implementa- 60.00%
50.00%
tion of incentive model means that entrepre-
40.00%
neurs will be given rewards, less taxes, or
30.00%
protections if they concern with clean-growth, 20.00%
social-awareness, and environmental aspects 10.00%
0.00%
in doing business. Then, for the second asked
Strongly Disagree Fair Agree Strongly Agree
Disagree
to them is a punishment model as an opposite
Incentive Model Punishment Model No such policy needed
compared to previous one. Within this model,
Figure 6 Proportion Frequency of Instrument Policy
entrepreneurs will be punished if they do not
Models
have awareness about green business. In other
words, they will be charged through higher Most of respondents pointed out that
taxes and other means if they do not have they disagree and strongly disagree if there is
Table 4 Proportion of Instrument Policy Models
Options
Models
Strongly Strongly
Disagree Fair Agree
Disagree Agree
Incentive 0.38% 5.53% 20.82% 39.12% 34.15%
Punishment 0.75% 7.86% 21.51% 35.28% 34.59%
No such policy needed 19.37% 50.06% 18.68% 9.81% 2.08%
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Jurnal Entrepreneur dan Entrepreneurship, Volume 3, Nomor 1 dan 2, September 2014
Table 5 Summary of Policy Instruments Differences Analysis
Paired Differences
Std. Std. Error Sig.
Pairs Models Mean t df
Deviation Mean (2-tailed)
1. Incentive & Punishment .0603774 .7258473 .0445884 1.354 264 .177
2. Incentive & No Such Policy 1.7597484 1.1815137 .0725798 24.246 264 .000
3. Punishment & No Such Policy 1.6993711 1.2294522 .0755246 22.501 264 .000
no policy instrument. In other words, the Results of testing revealed that there are
regulation is needed either in the forms of two policy instrument models preferred to
incentive or punishment instruments to con- expect entrepreneurs running green business
trol business to meet criteria. Respondents in terms of incentive and punishment policy
preferred either incentive or punishment instrument models. This conclusion is rele-
models as policy instruments compared to no vant with respondents’ agreement or disagree-
such policy instrument. ment about instrument policy instruments
Answering research question 3, a paired- needed. Most of them do not agree if there is
samples t-test analysis is used to find out no such policy instrument.
differences among policy instrument models. Finally, answering research question 4,
This analysis is used to examine three hy- effect of models preferred on green entrepre-
pothesis proposed in this research. Test is neur dimensions is done through multivariate
done to know whether any differences among general linear model executed by using SPSS
policy instrument models. Results of analysis application software version 16.0. This ana-
are presented as follows (Table 5). lysis enables to include multiple dependent-
Differences among policy instrument independent variables within once simultan-
models are figured out in following table eous execution. Parameter estimates are de-
(Table 6). scribed as follow (Table 7).
Table 6 Test of Differences among Policy Instrument Models
Hypothesis (null) Results

There is no difference between:
H Incentive and punishment policy models Not Rejected (t=1.354, Sig. 0.177)
1
H Incentive and no such policy models Rejected (t=24.246, Sig. 0.000)
2
H Punishment and no such policy models Rejected (t=22.501, Sig. 0.000)
3
58