Decent Work and Economic Growth [1st ed.] 9783319958668, 9783319958675

Citation preview

Encyclopedia of the UN Sustainable Development Goals Series Editor: Walter Leal Filho

Walter Leal Filho · Anabela Marisa Azul Luciana Brandli · Amanda Lange Salvia Tony Wall  Editors

Decent Work and Economic Growth

Encyclopedia of the UN Sustainable Development Goals Series Editor Walter Leal Filho

The problems related to the process of industrialization such as biodiversity depletion, climate change, and a worsening of health and living conditions, especially but not only in developing countries, intensify. Therefore, there is also an increasing need to search for integrated solutions to make development more sustainable. The current model of economic growth used by many countries is heavily based on the exploitation of natural resources, which is not viable. Evidence shows that a more careful, that is, a more sustainable, approach to the use of our limited resources is needed. The United Nations has acknowledged the problem, and among other measures, it produced a set of documents at the UN Conference on Sustainable Development (Rio+20), held in Rio de Janeiro, Brazil, in 2012. In 2015, the UN General Assembly approved the “2030 Agenda for Sustainable Development.” On January 1, 2016, the 17 Sustainable Development Goals (SDGs) of the Agenda officially came into force. These goals cover the three dimensions of sustainable development: economic growth, social inclusion, and environmental protection. There are to date no comprehensive publications addressing the SDGs in an integrated way. Therefore, the Encyclopedia of the UN Sustainable Development Goals is being published. It encompasses 17 volumes, each devoted to one of the 17 SDGs. More information about this series at https://www.springer.com/series/15893

Walter Leal Filho • Anabela Marisa Azul • Luciana Brandli • Amanda Lange Salvia • Tony Wall Editors

Decent Work and Economic Growth With 144 Figures and 85 Tables

Editors Walter Leal Filho European School of Sustainability Science and Research Hamburg University of Applied Sciences Hamburg, Germany Luciana Brandli Faculty of Engineering and Architecture The University of Passo Fundo Passo Fundo, Brazil

Anabela Marisa Azul Center for Neuroscience and Cell Biology Institute for Interdisciplinary Research University of Coimbra Coimbra, Portugal Amanda Lange Salvia HAW Hamburg Hamburg, Germany

Tony Wall International Centre for Thriving University of Chester Chester, UK

ISSN 2523-7403 ISSN 2523-7411 (electronic) ISBN 978-3-319-95866-8 ISBN 978-3-319-95867-5 (eBook) ISBN 978-3-319-95868-2 (print and electronic bundle) https://doi.org/10.1007/978-3-319-95867-5 © Springer Nature Switzerland AG 2021 All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Series Preface

The United Nations General Assembly agreed and approved in September 2015 the document “2030 Agenda for Sustainable Development”, which contains a set of measures aiming to balance economic progress and protection of the environment, while at the same time remain aware of the need to address the many disparities still seen between industrialized and developing countries. The Agenda document consists of 17 Sustainable Development Goals (SDGs). These Goals build on the successes of the Millennium Development Goals, while including new areas such as climate change, economic inequality, innovation, sustainable consumption, peace and justice, among other priorities. The goals are interconnected – often the key to success on one will involve tackling issues more commonly associated with another. The 17 SDGs are: SDG 1, placing an emphasis on ending all forms of extreme poverty. SDG 2, which aims to end hunger and achieve food security with improved nutrition SDG 3, focusing on ensuring healthy lives and promoting well-being for all SDG 4, touches on one of the most important areas, namely inclusive and quality education SDG 5, focusing on gender equality SDG 6, which emphasizes the need for clean water and sanitation SDG 7, advocates the need for affordable and clean energy SDG 8, sustaining inclusive and sustainable economic growth with productive and decent working conditions for all SDG 9, which intends to foster industry, innovation, and infrastructure SDG 10, being about reducing inequalities among countries SDG 11, an attempt to ensure that human settlements and cities are inclusive, safe, resilient, and sustainable SDG 12, with a focus on sustainable consumption and production patterns SDG 13, with an emphasis on the need for climate action SDG 14, raises the need to preserve life below water, especially rivers and oceans SDG 15, draws attention about the need for a greater care about life on land

v

vi

Series Preface

SDG 16, which advocates peace, justice, and strong institutions SDG 17, a cross-SDGs effort to foster the partnership for the goals and their delivery The SDGs and their specific objectives are very complex. The mandate of the Encyclopedia of the UN Sustainable Development Goals is, therefore, to clarify and explain a wide range of terms associated with each SDG. It does so by gathering and presenting inputs provided by experts from across all areas of knowledge and from round the world, who explain each term and their implications, drawing also from the latest literature. With 17 volumes and involving in excess of 1,500 authors and contributors, the Encyclopedia of the UN Sustainable Development Goals is the largest editorial project on sustainable development ever undertaken. We hope that this publication will be helpful in fostering a broader understanding of the SDGs, and that this process may inspire and support a wide range of initiatives aimed at their implementation, thus realizing the “2030 Agenda for Sustainable Development”. Hamburg University of Applied Sciences Germany

Walter Leal Filho

Volume Preface

The promotion of an inclusive and sustainable economic growth is known to be one of the keys towards the well-being of nations and – inter alia – of individuals. It is also one of the many drivers in the quest towards the implementation of the UN Sustainable Development Goals. From a macro perspective, trends towards the promotion of adequate work conditions have improved considerably over the past two decades. Due to a combination of legislation, peer pressure, and for simple economic reasons, the quality of the work environment has been raised and, inter alia, the productivity of the labor force. On the other hand, it is noticeable that the COVID-19 pandemic and its aftermath will lead to a decrease in economic growth and to higher levels of unemployment until a vaccine is found and reaches people across all continents. The fact that the global economy is expected to be growing at slower rates means that employment opportunities are likely to be reduced and unemployment and gender pay gap may be exacerbated. Therefore, it is important that due emphasis is given towards understanding and addressing the stressors which hinder sustainable economic development and which lead to a depletion in the quality of working conditions. In addition, there is a perceived need to identify, test, and implement measures which may lead to improved working conditions and provide a working environment which is healthy and safe. In this context, it should be mentioned that preserving the natural environment is one of the keys to support long-term economic growth, as the natural environment plays an important role in supporting a wide range of economic activities, that is, not only those which depend on natural resources such as timber or fisheries, but also on the integrity of ecosystem services such agriculture and transport in waterways. The SDGs as a whole and SDG8 in particular provide a new opportunity and offer a new impulse towards bringing the matter of economic growth and employment higher on the international agenda. The vision of a sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all can only be realized if both public and private actors work hand in hand and if all relevant stakeholders are involved. With this volume, we hope to be fostering a better understanding of the many factors which influence economic growth and the provision of adequate work conditions. This may, in turn, lead to a stronger driver to work towards

vii

viii

Volume Preface

better and wider opportunities for gainful employment, with due considerations to vulnerable groups in the population on the one hand, and women, young people, and marginalized population groups on the other. We also hope that the contributions in this volume will provide a timely support towards the implementation of SDG8 and foster global efforts towards providing decent working conditions, and by doing so, offer a basis for sustained economic growth. October 2020

Walter Leal Filho Anabela Marisa Azul Luciana Brandli Amanda Lange Salvia Tony Wall

List of Topics

Section Editor: Dmitry Kurochkin Community-Based Socioeconomic Development Programs: A Catalyst for SDGs Corporate Spatial Responsibility and Sustainable Development Goals Creative Strategies for Sustainable Development in Small Cities Debt and Sustainable Development Decent Work in China Decent Work Promotion in India Decent Work: Conceptualization and Policy Impact Emerging Trends in Productive Employment Empirical Studies of Sex Trafficking Foreign Direct Investment and Decent Work in Sub-Saharan Africa Globalization, Democracy, and Inequality Job Supplies in Disadvantaged Neighborhoods: Role of Universal Work Maternity Protection at Work: Decent Work for All During Pregnancy and New Motherhood Public Policies for Just Transition: Local Content, Employment, and Human Capital SDGs Patterns Across the Globe: From Theory to Practice Smart Tourism and Smart Destinations for a Sustainable Future Supply Chain Accountability Through Extraterritorial Tortious Litigation Supporting Sustainability for a Decent Work and Economic Growth in Ghana Sustainability and Collective Bargaining from an Environmental Approach

Sustainable Premium Ready Meals for a Daily Nutritional Diet: Human Population Growing Demand Tourism and the Sustainable Development of the Baltic Sea Region Women and Agriculture: Addressing Hidden Work in Land-Based Livelihoods Women, Growth, and Empowerment Worker-Driven Initiatives to Tackle Modern Slavery Section Editor: Edurne A. Inigo Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals Competencies for Sustainable Entrepreneurship Contribution of Enterprises in Achieving the Sustainable Development Goals Corporate Social Responsibility Manager: Job Roles, Challenges, and Individual Competencies Degrowth and the Sustainable Development Goals Development of Skills for Technological Change in ASEAN-5 Entrepreneurship: Opportunity Identification and Entrepreneurial Behavior Inclusive Business Models: Building Business Ecosystems for Resolving Deep-Rooted Sustainability Problems Innovation Systems for Sustainability Responsible Research and Innovation Social Entrepreneurship and Sustainable Development ix

x

Sustainable Business Models Sustainable Business Strategies Sustainable Entrepreneurship: Composing Individual Processes and Collaborative Transformations Sustainable Innovation: Creating Solutions for Sustainable Development Sustainable Investment: Mobilizing Financial Capital for Sustainable Development Transitions to Sustainable Development Typologies of Sustainable Business Understanding Market Failure in the Developing Country Context Section Editor: Marco Tortora Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth and Structural Changes in Developing Countries Anthropocene and Migration: Challenges in the Twenty-First Century Decent Work for Women Through Digital Social Network Fair Trade Movement and Market Development for Decent Work and Economic Growth Gender Inequality and Female Entrepreneurship in Developing Countries Health Status and Economic Growth Islamic Microfinance: A Tool of Alleviating Poverty and Ensuring Economic Peace Migrant Entrepreneurship Under Institutional Voids Social Agriculture and Its Related Tourist Activities Social Dialogue and the Future of Work Technical and Vocational Education and Training (TVET) in South Asia Section Editor: Nerise Johnson Creativity, Innovation, and Sustainable Development Green Business in the Context of the Sustainable Development Migrant Workers, Decent Work, and Economic Growth Social Business in the Context of Sustainable Development

List of Topics

Section Editor: Rimjhim M. Aggarwal Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies Conceptualizing Green Economies: Origins, Evolution, and Imperatives Decoupling of Economic Growth from Environmental Degradation Ecotourism and Sustainable Development Environmental Injustice and Economic Growth for Proof Processing Extraction Rates and the Environmental Impacts of Economic Growth in the Twenty-First Century Gender Roles, Cultural Norms, and Role of Income in Perceived Value: Women and Unpaid Work Manual Scavengers and Sustainable Development Material Footprint and Its Role in Agenda 2030 Poverty Reduction: Concept, Approaches, and Case Studies Preserving Culture in Meeting Sustainable Development Social Business for Sustainable Development: Cases from Bangladesh Section Editors: Rimjhim M. Aggarwal and Sonja Rewhorn Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies Section Editor: Rosa Maria Fernandez Discussing Approaches to Standard of Living Future-Proofing Oceans for Food Security and Poverty Alleviation Global Structures of Inequality and Unequal Distribution of Wealth Section Editor: Sonja Rewhorn Economic Importance of Agriculture for Poverty Reduction in Nigeria Factors of Production, Economic Growth, and Sustainable Development Human Trafficking as a Conflict Financing Measure

List of Topics

International Perspectives on Living Wages for Sustainable Livelihoods: Project Glow (Global Living Organisational Wage) Migrant Domestic Workers in the UK: Struggle and Resistance Moral Economy of Decent Work Sustainable Technology Impact on Agricultural Production Section Editor: Tony Wall Eradicating Child Labor: Ending Economic Exploitation of Children as an Objective of Sustainable Development Human Rights Compliance Assessment (HRCA) Precarious Work and Sustainable Development Protection of Labor Rights Recruitment and Use of Child Soldiers in International Law: Prohibition and Elimination Section Editor: Wim Lambrechts Corporate Social Responsibility and the Sustainable Development Goals (SDGs) Decreasing Youth Unemployment as a Way to Achieve Sustainable Development Demographic Challenges and Sustainable Development Domestic Material Consumption, Our Modern Economies, Lifestyles, and Environmental Sustainability

xi

Economic Growth, Technological Progress, and Employment Ethical and Sustainable Sourcing: Toward Strategic and Holistic Sustainable Supply Chain Management Inclusive Employment: A Global Concern Inclusive Growth in India: Issues and Challenges Informal Employment International Labour Organization: A Short History Life Cycle Sustainability Assessment Nurturing Career Development for Human Resource Sustainable Development Perceptions and Challenges of Design for Sustainable Behavior Remediation Programs for Decent Work Responsible Management for Innovative and Sustainable Firms in the Age of Complexity Socio-economic Impact Measurement and the World Business Council for Sustainable Development (WBCSD) Value Creation in a Circular Economy: An Interdisciplinary Approach Section Editors: Wim Lambrechts and Sonja Rewhorn Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living Importance of the Public Service in Achieving the UN SDGS

About the Editors

Walter Leal Filho (B.Sc., Ph.D., D.Sc., D.Phil., D.L., D.Litt., D.Ed.) is Professor and Director of the European School of Sustainability Science and Research, whose Headquarters are at the Hamburg University of Applied Sciences in Germany. He also holds the Chair of Environment and Technology at Manchester Metropolitan University, UK. He is Founding Editor of the International Journal of Sustainability in Higher Education and heads the Inter-University Sustainable Development Research Programme (IUSDRP), the world’s largest network of universities engaged on sustainable development research. He is also Editor-in-Chief of the World Sustainable Development series with Springer. Prof. Walter Leal serves on the editorial board of various journals. He has in excess of 400 publications to his credit, among which are groundbreaking books such as Universities as Living Labs for Sustainable Development: Supporting the Implementation of the Sustainable Development Goals, Social Responsibility and Sustainability, and Handbook of Sustainability Science and Research. He has nearly 30 years of field experience in project management and has a particular interest in the connections between sustainability, climate change adaptation, and human behavior.

Anabela Marisa Azul is a Researcher at the Center for Neuroscience and Cell Biology (CNC) and the Institute for Interdisciplinary Research at the University of Coimbra (III-UC, Portugal). She graduated in Biology at the UC, where she completed her Ph.D. degree in Biology, xiii

xiv

About the Editors

specialization in Ecology, with collaboration from Ludwig-Maximilians-Universität München (LMU, München, Germany). Anabela became an Associate Researcher (Ciência 2009) at the Centre for Functional Ecology (CFE-UC), where she remained until 2014. There, she developed a holistic approach for advancing translational research that combined the sustainable development with innovation in food production and public scientific awareness (from early childhood). She currently is interested in functional attributes of fungi in the domain of metabolism, aging, and disease and approaches for knowledge coproduction in metabolism and sustainability research. She has coauthored over 40 scientific publications and book chapters, four books for children, two comics, and an animation. Luciana Brandli Ph.D., is an Associate Professor at the University of Passo Fundo, Brazil, working in the Ph.D. Program in Civil and Environmental Engineering. Her current research interests include sustainability in higher education and green campus, management of urban infrastructure and sustainable cities, and the Agenda 2030 for Sustainable Development. She supervises a number of master’s and doctoral students on engineering, environment, and sustainability issues and has in excess of 300 publications, including books, book chapters, and papers in refereed journals. Amanda Lange Salvia has a degree in Environmental Engineering from the University of Passo Fundo, Brazil, and graduate studies focused on sustainable cities and universities. Her work centers on the Sustainable Development Goals, the role of universities towards sustainability, and the impacts of climate change. Amanda has experience with international studies assessing aspects related to the 2030 Agenda and sustainability in higher education. She is a reviewer for various journals and is also a member of the editorial board of the International Journal of Sustainability in Higher Education.

About the Editors

xv

Tony Wall is Founder and Head of the International Centre for Thriving, a global-scale collaboration between business, arts, health, and education to deliver sustainable transformation for the common good. He is passionate about thriving and has published 200+ works, including articles in quartile 1 journals such as The International Journal of Human Resource Management and Vocations and Learning as well as global policy reports for the European Mentoring & Coaching Council in Brussels. Overall, his leadership and international impact in these areas have attracted numerous accolades including the prestigious Advance-HE National Teaching Fellowship and three Santander International Research Excellence Awards.

About the Section Editors

Rimjhim M. Aggarwal School of Sustainability Arizona State University Tempe, USA

Rosa Maria Fernandez Department of Social and Political Science Economics Programmes University of Chester Chester, UK

Edurne A. Inigo Communication, Philosophy and Technology Social Sciences Group Wageningen University and Research Wageningen, The Netherlands Deusto Business School University of Deusto San Sebastian, Spain xvii

xviii

About the Section Editors

Nerise Johnson Leadership and Management QA Higher Education London, UK

Dmitry Kurochkin Faculty of Arts and Sciences Harvard University Cambridge, US

Wim Lambrechts Department of Marketing and Supply Chain Management Open University of the Netherlands Heerlen, The Netherlands

Sonja Rewhorn School of Social Sciences and Global Studies Faculty of Arts and Social Sciences The Open University Milton Keynes, UK

About the Section Editors

xix

Marco Tortora Polimoda Fashion Institute Florence, Italy Fair Association Florence, Italy

Tony Wall International Centre for Thriving University of Chester Chester, UK

Contributors

Kazi Mezbah Uddin Ahamad Department of Economics, Mawlana Bhashani Science and Technology University, Tangail, Bangladesh Meherun Ahmed Asian University for Women, Chattogram, Bangladesh O. F. Ajayi Department of Economics, Faculty of Social Sciences, Obafemi Awolowo University, Ile Ife, Osun State, Nigeria T. O. Akinbobola Department of Economics, Faculty of Social Sciences, Obafemi Awolowo University, Ile Ife, Osun State, Nigeria Hans-Hermann Albers Technical University Berlin, Berlin, Germany María Alló Jean Monnet Research Group on Competition and Development_C+D Group, Department of Economy, Faculty of Economics and Business, University of A Coruna, A Coruña, Spain Lorena Arocha Wilberforce Institute, University of Hull, Hull, UK Md Mahfuz Ashraf Entrepreneurship and Innovation, Crown Institute of Higher Education, North Sydney, Australia Nicolas Attamah Economics Department, Enugu State University of Science and Technology, Enugu, Nigeria Péter Bagoly-Simó Geography Department, Humboldt-Universität zu Berlin, Berlin, Germany

Geography

Education,

Margarida Bandeira Morais Department of Geography and Environment, London School of Economics, London, UK Maria Barreiro-Gen, University of Gävle, Gävle, Sweden University of A Coruna, A Coruna, Spain Alhaji S. I. Barrie Balance of Payment Analysis and External Relations Section, Research Department, Bank of Sierra Leone, Freetown, Sierra Leone Alistair Beames Operations Research and Logistics Group, Wageningen University, Wageningen, The Netherlands Maira Begalli Federal University of ABC (UFABC), São Bernardo do Campo, SP, Brazil xxi

xxii

Kehinde Mary Bello Department of Economics, University, Ile-Ife, Nigeria

Contributors

Obafemi Awolowo

Julia Bello-Bravo Department of Food Science and Human Nutrition, Michigan State University, East Lansing, MI, USA Maria Paula Bertran Ribeirão Preto Law School, University of São Paulo, Ribeirão Preto, Brazil Hitesh Bhatia School of Business and Law, Navrachana University, Vadodara, Gujarat, India Nancy Bocken The International Institute for Industrial Environmental Economics (IIIEE), Lund University, Lund, Sweden TU Delft, Industrial Design Engineering, Delft, the Netherlands School of Business and Management, Lappeenranta University of Technology, Lappeenranta, Finland Sharon Bolton University of Stirling, Stirling, UK Anelí Bongers Faculty of Economics and Business, Department of Economics and Economic History, University of Malaga, Malaga, Spain Yakubu Aliyu Bununu Department of Urban and Regional Planning, Ahmadu Bello University, Zaria, Nigeria Brendan Burchell University of Cambridge, Cambridge, UK Sergio Canalda Criado University Pompeu Fabra, Barcelona, Spain Xuebing Cao Keele Business School, Keele University, Staffordshire, UK Laura Carballo Piñeiro Nippon Foundation Chair on Maritime Labour Law and Policy, World Maritime University, Malmö, Sweden Deborah Casalin Law and Development Research Group, University of Antwerp Law Faculty, Antwerp, Belgium Consuelo Chacartegui University Pompeu Fabra, Barcelona, Spain Roshni Chattopadhyay Advanced Centre for Women’s Studies, Tata Institute of Social Sciences, Mumbai, India Nikos Chatzistamoulou School of Economics and Research Laboratory on Socio-Economic and Environmental Sustainability – ReSEES, Athens University of Economics and Business, Athens, Greece Hong Yuh Ching Centro Universitário FEI, São Bernardo do Campo, Brazil Noushin Farjana Huda Chowdhury Department of Economics, Mawlana Bhashani Science and Technology University, Tangail, Bangladesh Shahana Afrose Chowdhury Kazi Shahid Foundation, Dhaka, Bangladesh Hermes Augusto Costa Faculty of Economics, Center for Social Studies, University of Coimbra, Coimbra, Portugal

Contributors

xxiii

Samara da Silva Neiva Center for Sustainable Development/Research Centre on Energy Efficiency and Sustainability (Greens), University of Southern Santa Catarina (UNISUL), Florianópolis, SC, Brazil Felipe Dall’Orsoletta University of Brasília, Brasília, Brazil José Baltazar Osório Salgueirinho de Andrade Guerra Center for Sustainable Development/Research Centre on Energy Efficiency and Sustainability (Greens), University of Southern Santa Catarina (UNISUL), Florianópolis, SC, Brazil Sara Aparecida de Paula Federal University of ABC (UFABC), São Bernardo do Campo, SP, Brazil Nina de Puy Kamp Leigh Day, London, UK Nikolay A. Dentchev Vrije Universiteit Brussel, Brussels, Belgium Gustavo Di Cesare Giannella Federal University of ABC (UFABC), São Bernardo do Campo, SP, Brazil Alberto do Amaral Júnior University of São Paulo Law School, São Paulo, Brazil Felix Kwabena Donkor College of Agriculture and Environmental Sciences, University of South Africa (UNISA), Johannesburg, South Africa Youssef Abdul Razzak Doughan Faculty of Agricultural and Food Sciences, American University of Beirut, Beirut, Lebanon Anna Maria Dzienis Department of East Asian Economic Studies, World Economy Research Institute, Collegium of World Economy, SGH Warsaw School of Economics, Warsaw, Poland Noraida Endut Centre for Research on Women and Gender (KANITA), Universiti Sains Malaysia (USM), Penang, Malaysia Gamze Erdem Türkelli Research Foundation – Flanders (FWO) (File Number: 12Q1719N), University of Antwerp Law and Development Research Group, Antwerp, Belgium Abentin Estim Borneo Marine Research Institute, Sabah, Kota Kinabalu, Sabah, Malaysia

Universiti Malaysia

Olushola Fashola Staffordshire Business School, Staffordshire University, Stoke-on-Trent, UK Julia Fernando Aston Business School, Aston University, Birmingham, UK Sergio Luiz Braga França Laboratory of Technology, Business Management and Environment (LATEC), Fluminense Federal University, Niteroi, Brazil Michael Francis Politics and International Relations, University of Chester, Chester, UK

xxiv

Leonardo Freire de Mello Federal University of ABC (UFABC), São Bernardo do Campo, SP, Brazil Tara Freude Faculty of Sustainability, Leuphana University, Lüneburg, Germany School of Sustainability, Arizona State University, Tempe, USA Paulo Guilherme Fuchs Centre for Sustainable Development/Research Centre on Energy Efficiency and Sustainability (Greens), Instituto Federal de Santa Catarina (IFSC), University of Southern Santa Catarina (UNISUL), Florianopolis, Brazil Carmen Gago-Cortés Economic Development and Social Sustainability Research Group (EDaSS), Department of Business, Faculty of Economics and Business, University of A Coruna, A Coruña, Spain Fabio Gerab Centro Universitário FEI, São Bernardo do Campo, Brazil Hebatallah Ghoneim Faculty of Management Technology, German University in Cairo, Cairo, Egypt Carlo Giannetto Department of Economics, University of Messina, Messina, Italy Joost Goedhart Operations Research and Logistics Group, Wageningen University, Wageningen, The Netherlands Ana M. M. Gonçalves Department of Life Sciences, Marine and Environmental Sciences Centre (MARE), University of Coimbra, Coimbra, Portugal Department of Biology and CESAM – Centre for Environmental and Marine Studies, University of Aveiro, Aveiro, Portugal Meena Gopal Advanced Centre for Women’s Studies, Tata Institute of Social Sciences, Mumbai, India Hali Healy Department of Anthropology and Development Studies, University of Johannesburg, Johannesburg, South Africa Pasi Heikkurinen Sustainability Research Institute, School of Earth and Environment, University of Leeds, Leeds, UK Faculty of Agriculture and Forestry, Department of Economics and Management, University of Helsinki, Helsinki, Finland Jan Hurst East of England, UK A. H. M. Belayeth Hussain Centre for Research on Women and Gender (KANITA), Universiti Sains Malaysia (USM), Penang, Malaysia Department of Sociology, Shahjalal University of Science and Technology (SUST), Sylhet, Bangladesh Edurne A. Inigo Communication, Philosophy and Technology, Social Sciences Group, Wageningen University and Research, Wageningen, The Netherlands Deusto Business School, University of Deusto, San Sebastian, Spain

Contributors

Contributors

xxv

Nazari Ismail Department of Business Strategy and policy, Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia Mohamed Jabbie Balance of Payment Analysis and External Relations Section, Research Department, Bank of Sierra Leone, Freetown, Sierra Leone Emerson Abraham Jackson Centre of West African Studies, University of Birmingham, Birmingham, UK Model Building Analysis Section, Research Department, Bank of Sierra Leone, Freetown, Sierra Leone Elijah E. S. Jackson Social Worker, Greater London Area, United Kingdom Hudson F. Jackson Business and Finance Department, Coopers School, Bromley, UK Nushrat Jahan Sher-e-Bangla Agricultural University, Dhaka, Bangladesh David Jakubowicz Laboratory of Technology, Business Management and Environment (LATEC), Fluminense Federal University, Niteroi, Brazil Zhe Jiang The York Management School, University of York, York, UK Matthew Johnson Faculty of Business, Economics and Social Sciences, University of Hamburg, Hamburg, Germany Christopher Ulua Kalu Economics Department, Nnamdi Azikiwe University, Awka, Nigeria Argyris Kanellopoulos Operations Research and Logistics Group, Wageningen University, Wageningen, The Netherlands Phoebe Koundouri School of Economics and Research Laboratory on Socio-Economic and Environmental Sustainability – ReSEES, Athens University of Economics and Business, Athens, Greece Harold Krikke Department of Marketing and Supply Chain Management, Open University of the Netherlands, Heerlen, Netherlands Elena G. Kropinova Immanuel Kant Baltic Federal University/Albertina, Kaliningrad, Russia Jayant Kumar Department of Business Economics, Faculty of Commerce, The Maharaja Sayajirao University of Baroda, Vadodara, Gujarat, India Knut Laaser University of Stirling, Stirling, UK Brandenburg University of Technology Cottbus–Senftenberg, Berlin, Germany Wim Lambrechts Department of Marketing and Supply Chain Management, Open University of the Netherlands, Heerlen, The Netherlands Maurizio Lanfranchi Department of Economics, University of Messina, Messina, Italy Thomas Lans Education and Learning Sciences, Wageningen University and Research, Wageningen, The Netherlands

xxvi

Contributors

Liliana Lizarazo Rodríguez University of Antwerp, Antwerpen, Belgium Thomas B. Long Centre for Sustainable Entrepreneurship, University of Groningen/Campus Fryslân, Leeuwarden, The Netherlands Asunción López-Arranz University of A Coruña, A Coruña, Spain Rodrigo Lozano University of Gävle, Gavle, Sweden Rob Lubberink Business Management and Organisation, Wageningen University, Wageningen, The Netherlands Anne Namatsi Lutomia Department of Entomology, Michigan State University, East Lansing, MI, USA Jameson Henry MacQueen Center for Sustainable Development/Research Centre on Energy Efficiency and Sustainability (Greens), University of Southern Santa Catarina (UNISUL), Florianópolis, SC, Brazil Hadia Majid Department of Economics, Lahore University of Management Sciences, Lahore, Pakistan Hiroaki Matsuura Shoin University, Atsugi, Japan Brian Matthews The University of British Columbia, Canada

Vancouver, BC,

Grzegorz Mazur Institute of International Business and Economics, Poznań University of Economics and Business, Poznań, Poland Ingrid Molderez KU Leuven, Brussels, Belgium Benedetto Molinari Faculty of Economics and Business, Department of Economics and Economic History, University of Malaga and RCEA, Malaga, Spain María Jesús Muñoz-Torres University Jaume I, Castellón de la Plana, Spain Julia Muraszkiewicz Trilateral Research, London, UK Mahreen Mustafa Asian University for Women, Chattogram, Bangladesh Saleem Mustafa Borneo Marine Research Institute, Universiti Malaysia Sabah, Kota Kinabalu, Sabah, Malaysia Breno Henrique Tomiyoshi Nakao Center for Sustainable Development/ Research Centre on Energy Efficiency and Sustainability (Greens), University of Southern Santa Catarina (UNISUL), Florianópolis, SC, Brazil V. P. Nirmal Roy Indian Institute for Human Settlements, Bengaluru, Karnataka, India Abu Hanifa Md Noman Department of Finance and Banking, Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia Tolulope Olarewaju Staffordshire University, Stoke-on-Trent, UK

Business

School,

Staffordshire

Contributors

xxvii

E. R. Osagie Research group HRM, HAN University of Applied Sciences, Nijmegen, The Netherlands Sigamani Panneer Department of Social Work, School of Social Sciences and Humanities, Central University of Tamil Nadu, Thiruvarur, Tamil Nadu, India Prabha Panth Department of Economics, Osmania University, Hyderabad, India Bindhulakshmi Pattadath Advanced Centre for Women’s Studies, Tata Institute of Social Sciences, Mumbai, India Sajeda Pervin Institute for Advanced Studies, University of Malaya, Kuala Lumpur, Malaysia Agnieszka Piasna European Trade Union Institute, Brussels, Belgium Xose Picatoste Department of Economics, University of A Coruna, A Coruna, Spain Lisa Ploum Education and Learning Sciences, Wageningen University and Research, Wageningen, The Netherlands Project GLOW Auckland, New Zealand Andreas Pyka Department of Innovation Economics, University of Hohenheim, Stuttgart, Germany Osvaldo Luiz Gonçalves Quelhas Laboratory of Technology, Business Management and Environment (LATEC), Fluminense Federal University, Niteroi, Brazil Devendra Rana Nyon, Switzerland Carlos Eduardo Raulino Centre for Sustainable Development/Research Centre on Energy Efficiency and Sustainability (Greens), Instituto Federal de Santa Catarina (IFSC), University of Southern Santa Catarina (UNISUL), Florianopolis, SC, Brazil Ben Robra Sustainability Research Institute, School of Earth and Environment, University of Leeds, Leeds, UK Jorge Rocha Institute of Geography and Spatial Planning, Universidade de Lisboa, Lisbon, Portugal Ernesto Rodriguez-Crespo Department of Economic Structure and Development Economics, Autonomous University of Madrid, Madrid, Spain David Rönnegard Department of Philosophy, Linguistics and Theory of Science, University of Gothenburg, Gothenburg, Sweden Md Nazmus Sadekin Department of Economics, Mawlana Bhashani Science and Technology University, Tangail, Bangladesh Joakim Sandberg Department of Philosophy, Linguistics and Theory of Science, University of Gothenburg, Gothenburg, Sweden

xxviii

Contributors

Judith Sanderse Open University of the Netherlands, Heerlen, Netherlands Numa Sarker Division of Education and Innovation, Ashraf Begum, North Sydney, Australia Stefan Schaltegger Centre for Sustainability Management (CSM), Leuphana University Lüneburg, Lüneburg, Germany Michael P. Schlaile Department of Innovation Economics, University of Hohenheim, Stuttgart, Germany Center for Applied Cultural Evolution, Eugene, OR, USA Despina Sdrali Department of Home Economics and Ecology, Harokopio University of Athens, Athens, Greece Kirsten Sehnbruch London School of Economics and Political Science, London, UK Rossita Shapawi Borneo Marine Research Institute, Universiti Malaysia Sabah, Kota Kinabalu, Sabah, Malaysia Magdalena Śliwińska Institute of International Economy, University of Economics and Business, Poznań, Poland

Poznań

Zafir Somani Arizona State University, Tempe, AZ, USA S. P. Sreya Department of Social Work, School of Social Sciences and Humanities, Central University of Tamil Nadu, Thiruvarur, Tamil Nadu, India Bianca Stumbitz Centre for Enterprise and Economic Development Research, Middlesex University Business School, London, UK B. S. Sumalatha Department of Economics, Central University of Tamil Nadu, Thiruvarur, Tamil Nadu, India Andrea Lise Suriano Federal University of ABC (UFABC), São Bernardo do Campo, SP, Brazil Lech Suwala Technical University Berlin, Berlin, Germany Jagiellonian University, Cracow, Poland Edmund Tamuke Model Building Analysis Section, Research Department, Bank of Sierra Leone, Freetown, Sierra Leone Ruzanna Tarverdyan The Geneva Consensus Foundation, Geneva, Switzerland Sten Thore Centennial Fellow Emeritus, The University of Texas at Austin, Austin, TX, USA Job Timmermans Faculty of Military Sciences, Netherlands Defense Academy (NLDA), Breda, The Netherlands Michaela Tomchek University of Oxford, Oxford, UK Royal Agricultural University, Cirencester, UK

Contributors

xxix

Marco Tortora Polimoda Fashion Institute, Florence, Italy Fair Association, Florence, Italy Stella Tsani Department of Economics, University of Ioannina, Ioannina, Greece Sophie Urmetzer Department of Innovation Economics, University of Hohenheim, Stuttgart, Germany Yvonne van der Meer Aachen-Maastricht Institute for Biobased Materials, Maastricht University, Geleen, The Netherlands Madhavi Venkatesan Department of Economics, Northeastern University, Boston, MA, USA R. Wesselink Education and Learning Sciences, Wageningen University and Research, Wageningen, The Netherlands Peter Wieltschnig Trilateral Research, London, UK

A

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth and Structural Changes in Developing Countries Grzegorz Mazur Institute of International Business and Economics, Poznań University of Economics and Business, Poznań, Poland

infrastructure, building productive capacity, trade-related adjustment, and other trade-related needs) which address the complexity of developing countries’ impediments to trade and their traderelated needs. The strengthening of the initiative has also become one of the Agenda 2030 targets of making international trade “an engine for inclusive economic growth and poverty reduction” (UN 2015).

Synonyms

Introduction

Trade-related assistance; Trade-related ODA

The Sustainable Development Goals have defined a multidimensional framework for social, economic, and political transformation of developing countries. One of the most important pillars of this transformation is to create conditions in which all developing countries would enjoy sustained, inclusive, and sustainable economic growth. Only prosperous economies may lead to the decisive alleviation of poverty and social development in all its aspects. The centerpiece of economic profile of the Sustainable Development Goals (SDGs) is the target 8 which highlights the need of inclusive and sustainable economic growth and providing societies with quality job opportunities. The sustained and sustainable economic growth and development will not be succeeded without the increased access to financial services, new productive investments, and further development of infrastructure that are crucial for increasing

Definitions Aid for Trade

It is a World Trade Organization (WTO)-led initiative aimed at mobilizing and effectively directing resources to support developing countries in their trade performance and stronger participation in the global trading system. It was launched in 2006 and includes all trade-related actions/ programs of the development assistance offered by donors to developing countries. The initiative has been structured into six categories (trade policy and regulations, trade development, trade-related

© Springer Nature Switzerland AG 2021 W. Leal Filho et al. (eds.), Decent Work and Economic Growth, Encyclopedia of the UN Sustainable Development Goals, https://doi.org/10.1007/978-3-319-95867-5

2

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

productivity and the reduction of unemployment (UN 2015). Among the biggest challenges for developing countries, and for the least developed countries (LDCs) in particular, in their economic policies is to integrate strongly with the global trading system and make international trade as one of boosters of their economic growth. Although many developing countries have succeeded in trade expansion over last decades, there is still a group of countries which play a marginal role in international trade and global value chains. From this group a special attention should be addressed toward the LDCs, hosting more than one billion population, which account for only ca. 1% of global merchandize trade and only 0.69% of the world’s exports of commercial services (UNCTAD 2018; WTO 2019a). Although exports of those countries have benefited for many years from a preferential access to other countries’ markets through the generalized systems of preferences (e.g., DFQF market access schemes), in most cases they have not improved significantly their position in international trade. Those countries still face many institutional, legal, infrastructural, and structural impediments that hamper their full participation in global trading system and the full exploitation of trade as a pillar of economic growth and development. The necessity of improved export opportunities and capacities of the LDCs has been embodied in targets of the SDGs. Many of SDG targets call for the creation and/or completion of international trade rules and conditions that would fully respond to special needs of developing countries, including the LDCs in particular. The Agenda 2030 has stressed the importance of promoting “a universal, rules-based, open, transparent, predictable, inclusive, non-discriminatory and equitable multilateral trading system under the World Trade Organisation, as well as meaningful trade liberalisation” (UN 2015). The target SDG 10.2 calls to the implementation of “the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with WTO agreements” (UN 2015). Moreover, the SDG 17 includes – as operational elements for the renewed global partnership for

sustainable development – the set of trade-related targets (SDG 17.10–17.3) aimed at promoting non-discriminatory and equitable multilateral trading system, the conclusion of the WTO Doha Development Agenda (DDA), increasing the exports of developing countries and implementing DFQF market access with transparent and simple rules of origin for goods exported from the LDCs (UN 2015). Although the creation of transparent and equitable international trading system is a necessary prerequisite, it might be not enough to fully integrate some developing countries into the global system. Many countries need a special support that would help them to induce and complete structural changes, to overcome their domestic barriers, and to expand capacities in a way to fully utilize opportunities of the current global trading system. The necessity of those actions was directly embodied in the SDG 8, where the target 8.a called all signatories of the Agenda 2030 to “increase Aid for Trade (AfT) support for developing countries, in particular least developed countries, including through the Enhanced Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries” (UN 2015). Achieving this goal will be of paramount importance for improving developing countries’ position in international trade, their stronger integration with the global economy, and – ultimately and strategically – for achieving a sustained economic growth. As stated in the Agenda 2030 “International trade is an engine for inclusive economic growth and poverty reduction, and contributes to the promotion of sustainable development” (UN 2015).

Aid for Trade: The Birth of a Concept A support for stimulating trade in developing countries is not a new concept. The trade-related projects have accompanied development aid and trade preferences granted mostly by developed countries to the developing world in post-WWII period. This assistance has been however often criticized for its fragmented nature, political motivation, and the lack of beneficiaries’ ownership.

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

The recipient country exercised the little autonomy in governing the funds, and the support was often tied with political and commercial strings (Cai 2008). At the same time, developing countries were granted, since the beginning of the 1970s, unilateral trade preferences under the generalized systems of preferences by most of developed countries. Those processes were witnessed by developing multilateral trading system and progressing liberalization of trade. The multilateral trading system, developed in the second half of the twentieth century, had not fully secured interests and has not utilized the potential of many developing countries. Although the general share of developing countries in global trade has increased over latest decades and one can find many examples of impressive growth of individual emerging economies, there has still been a considerable group of countries staying behind globalization and dynamically growing international trade volumes. While in 1948, when the General Agreement on Tariffs and Trade (GATT) entered into force, the share of African countries in world merchandised exports amounted to 7.3%, at the beginning of the twenty-first century, it was only 2.4% (WTO 2019a). In the 1950s the share of all LDCs in global trade exceeded 3.0%, while at the end of the century, it dropped to only 0.49% (1999) (UNCTAD 2019a). Whichever economic indicator was chosen, the picture of continuing marginalization of the LDCs in the world economy in the last decades of the previous century was confirmed. These trends in international trade were accompanied by the stagnation of public and private capital flows into the LDCs (de Vylder et al. 2001). This also applied to the scale of international aid addressed to the group, including trade-related development assistance. Over the decade of the 1990s, according to Organisation for Economic Co-operation and Development (OECD) statistics, total bilateral and multilateral aid commitments to trade policy and administration (which is today defined as one of components of Aid for Trade) to all least developed countries amounted to only 13.8 million USD per year (0.1% of total aid commitments) (UNCTAD 2004).

3

Doha Development Agenda and Trade-Related Assistance The new round of WTO multilateral trade talks (DDA), launched in November 2001, put “development” as a central axis of future global trade architecture. The new agreement, according to expectations witnessing the launch of negotiation, was supposed to re-orient the multilateral trading system toward more supportive of development and more inclusive for developing countries (Cai 2008). The Doha Declaration (WTO 2001) that initiated new round of negotiations recognized the integration of the LDCs into the multilateral trading system as one of the most important challenges for the new round. This should be achieved by “meaningful market access, support for the diversification of their production and export base, and trade-related technical assistance and capacity building” (WTO 2001). Moreover, WTO ministers explicitly invoked to improve support for trade in developing countries by endorsing “the Integrated Framework for TradeRelated Technical Assistance to Least-Developed Countries (IF) as a viable model for LDCs’ trade development” (WTO 2001) and to increase contributions to the IF Trust Fund and other WTO extra budgetary trust funds in favor of the LDCs. The calls also included the enhancements and extension of the IF to new areas addressing supply-side constraints of beneficiary countries and to all least developed countries (WTO 2001).

Box 1. The Enhanced Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries (EIF)

In 1997 the High-Level Meeting on “Integrated Initiatives for Least-Developed Countries’ Trade Development,” held in Geneva as the aftermath of the WTO Singapore Ministerial Conference (1996) and the WTO Action Plan for least developed countries, decided to launch a new initiative on strengthening trade capacities of those countries. The new undertaking, known as (continued)

A

4

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

Box 1. The Enhanced Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries (EIF) (continued)

the Integrated Framework for TradeRelated Technical Assistance to Least Developed Countries (IF), was launched jointly by six core agencies/organizations active in trade and development: International Monetary Fund (IMF), International Trade Centre (ITC), United Nations Conference on Trade and Development (UNCTAD), United Nations Development Programme (UNDP), World Bank, and the WTO. The general aim of the initiative was to enhance the LDCs’ trade capacities and to integrate them into the global trading system through: • Assisting the LDCs in mainstreaming trade priorities into their national development plans and the Poverty Reduction Strategy Papers • Coordinating delivery of trade-related technical assistance and capacity building responding to needs defined by the LDCs (UN 2005, OECD 2019a) Although the initiative was accurate in the analysis of problems and identification of necessities to be addressed, and some actions were undertaken in several LDCs, the first years of the IF implementation unveiled some problems. The difficulties in the realization resulted mostly from different perceptions of donors and the LDCs on the objectives and purpose of the IF (better coordination vs. substantial additional funding) as well as from structural impediments to effective aid delivery as a consequence of insufficient coordination between different levels of governance (policy-makers and stakeholders in the beneficiary country, bilateral donors and multilateral agencies). The lack of ownership and insufficient prioritization of trade into development strategies hampered sufficient coordination between multilateral agencies/

organizations and bilateral donors in addressing trade capacity needs of the LDCs (Prowse 2010). In consequence, the IMF and the World Bank agreed that the IF should be enhanced and provided with additional resources, initiating the restructuration process. The Task Force (TF) for the Enhanced Integrated Framework, created by the Steering Committee of the IF, presented 1 year later specific recommendations on improvements. Works of the TF coincided with the Paris Declaration on aid effectiveness and the Declaration’s principles were inspirational for the recommendations including, i.a., stronger ownership of the IF by the LDCs and the donors or the creation of a dedicated secretariat and a funding mechanism as a response to the need of adequate funding (WTO 2006; Hoekman 2010). The revamped and re-called program – the Enhanced Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries (EIF) – was launched on first January 2007. The EIF supports the LDCs in their trade expansion by identifying priorities for their trade agendas, revealing constrains to trade and advising on key action areas (i.a., EIF coordinates essential country-specific trade analysis in the form of Diagnostic Trade Integration Studies (DTIS) and Action Matrices); assisting the LDCs in trade planning and implementation (e.g., the creation of National Implementation Units coordinating the delivery of beneficiaries’ trade strategies and policies); and providing financial resources for actions in key sectors for trade. The multi-donor EIF Trust Fund was also launched as a part of the renewed EIF. In 2008–2017 the fund allocated over 220 million USD in trade development initiatives in the LDCs (EIF 2017, 2019). Nowadays the EIF is a global Aid for Trade partnership involving “51 countries, (continued)

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

Box 1. The Enhanced Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries (EIF) (continued)

24 donors and 8 partner agencies working closely with governments, development organizations and civil society to assist least developed countries use trade as an engine for development and poverty reduction” (EIF 2019).

The orientation toward developmental aspects of trade has been a necessary step when considering that many of the poorest countries did not benefit from expanding global trade and new export opportunities. The accentuated necessity of improved assistance to trade was supposed to address also another problem faced by some of the LDCs, namely, the preference erosion. The progressing multilateral liberalization within the GATT/WTO has resulted in the erosion of preferential access regimes provided by developed countries since the beginning of the 1970s. As the WTO-based MFN liberalization progressed, the preference-granted countries started to lose their “unique” and preferential position in access to markets of preference-granting WTO members (Hoekman and Prowse 2005). The first years of the DDA negotiations exposed disagreements on the scope of the future multilateral agreement. Thus, all parties realized that concluding the DDA will be neither fast nor easy. From developing countries’ perspective, a new ambitious multilateral agreement – including deeper commitments under a broad scope of issues – was perceived as a challenge and a threat to their economies. Although many analyses estimated global gains from the DDA for both developed and developing countries, the latter set in the first row of the debate the future losses and costs of necessary adjustments. For many developing countries, and especially the least developed ones with low diversity of production/export and benefiting from preferential access to foreign markets, a non-discriminatory and ambitious liberalization on MFN basis has not been the most welcomed option (Hoekman 2010). Further

5

preference erosion, potential deteriorations in terms of trade or significant decrease in tariff revenues are among the most common worries among developing countries (Hoekman and Prowse 2005). The full utilization of deeper liberalization and new export opportunities from the DDA would also require from developing countries to undertake behind-the-border policies reforms, development of trade-related infrastructure, and capacity building. As indicated by many studies conducted at that time, supply-side constraints and weak trade facilitation institutions were among main barriers for the LDCs to benefit from granted trade preferences and fully integrate into the global trading system (Prowse 2005).

Aid for Trade: Operationalization of the Initiative and Its Scope Growing attention given to the necessity of improved and comprehensive trade-related aid was strengthened by difficulties in overcoming resistance of developing countries to expanding the DDA and ultimately the coverage of the WTO. This process coincided with some other triggers, including G-8 meeting in 2005, where leaders of G-8 countries declared “to increase (. . .) help to developing countries to build the physical, human and institutional capacity to trade, including trade facilitation measures” and committed to “granting additional support for trade capacity building to assist LDCs, particularly in Africa, to take advantage of the new opportunities to trade which will result from a positive conclusion of the DDA” (G-8 2005, p. 22(a)). In the same year, the IMF and the World Bank launched the initiative to revamp the IF into more effective program (Box 1). In consequence, the WTO Ministerial Conference in Hong Kong confirmed that Aid for Trade, as a valuable complement to the conclusion of DDA, “should aim to help developing countries, particularly LDCs, to build the supply-side capacity and trade-related infrastructure that they need to assist them to implement and benefit from WTO Agreements and more broadly to expand their trade” (WTO 2005, p. 57). At the same time, WTO members called to create a Task Force that

A

6

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

would provide recommendations on operationalizing the initiative. The Task Force (TF) came with the recommendations in July 2006, outlining priorities and operations to be employed in the Aid for Trade initiative. Firstly, the TF highlighted that the Aid for Trade requires additional, predictable, sustainable, and effective financing. Operationalizing the initiative “required substantial additional targeted resources for trade-related programmes and projects” (WTO 2006). At the same time, the TF urged also WTO DG “to seek confirmation from donors and agencies that funds are readily available for the implementation of the initiative as part of his mandate to consult on appropriate mechanisms to secure additional financial resources for Aid for Trade” (WTO 2006). This call should be citied in the context of the largest donors’ declarations announced already during the WTO Hong Kong conference (2005). According to them, the EU and its member states pledged to increase collectively the trade development assistance to 2 bn EUR per year (until 2010), the USA declared to increase their AfT grants to 2.7 bn USD/year (until 2010), and Japan announced to expand the Japanese development assistance to trade, production, and distribution in developing countries to 10 bn USD over 3 years (WTO 2006; EP 2007). The necessity of increased and predictable financing was accompanied by the need of stronger monitoring and evaluation of undertaken actions and implemented projects within Aid for Trade, which had been underlined in the recommendations. Reporting on progress and results of the AfT actions was important for ensuring the increase of financing and its effective use. Moreover, it was supposed that improved monitoring would be a strong incentive to both donors and beneficiaries to advance the AfT agenda. In practice, it was recommended that the monitoring should cover recipient countries’ trade mainstreaming in national strategies (e.g., into Poverty Reduction Strategy Papers), the identification of needs, donor responses, progress in implementing trade-related projects, and programs and their impact. On the donors’ side, the monitoring should cover the content of their commitments and the way to achieve the planned

targets. Effective monitoring is also crucial to the assessment of the outcomes (Hoekman 2010). In turn, improved and rigorous evaluation – including in-depth country assessment – is crucial for ensuring effectiveness of AfT programs in relation to the objectives (WTO 2006). An important aspect of the TF’s recommendations referred to the scope of Aid for Trade. The presented content and framework of AfT on the one hand had to be broad and comprehensive to cover all dimensions of recipients’ trade-related impediments and needs. On the other hand, the scope had to be clear enough to distinguish actions undertaken within the initiative from general Official Development Assistance (ODA) transferred to developing countries. As stated in final recommendations of the TF “projects and programmes should be considered as Aid for Trade if these activities have been identified as trade-related development priorities in the recipient country’s national development strategies” (WTO 2006, p. D). On this basis the TF identified the structure of AfT into following categories: (1) trade policy and regulations, (2) trade development, (3) trade-related infrastructure, (4) building productive capacity, (5) trade-related adjustment, and (6) other trade-related needs. Trade Policy and Regulations Many developing countries, and the LDCs in particular, do not fully utilize opportunities of the global trading system due to institutional constraints and the unsatisfactory level of expertise knowledge in trade policies and some of the complex trading regulations. As pointed by the TF, another challenge for some of those countries has been the inadequate attention to trade as a tool of development and insufficient trade mainstreaming in national development strategies. Those impediments are often correlated with a low private sector involvement in defining trade needs (WTO 2006). The sustained and sustainable development requires multidimensionality into policy design, as underlined and addressed within the SDGs. Trade as an engine of growth should be included in the general development strategy. Therefore, the policy in this aspect should be shaped through sophisticated approach including

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

the identification of complementarities, systemic spillovers, trade-offs, and unintended consequences of policy decisions. Any compartmentalized approach reduces the effectiveness of both aid and trade policies (da Silva 2017). The list of actions and projects foreseen to support developing countries in trade policy and regulations includes, i.a., training of trade officials, analysis of policy proposals/positions and their impact, and support for national stakeholders to articulate commercial interest and identify trade-offs, dispute issues, institutional and technical support to facilitate implementation of trade agreements and to adapt to rules and standards (OECD 2006). At technical level this category includes, e.g., support to aid recipients’ ministries and departments responsible for shaping trade policy, adoption of trade-related legislation and regulatory reforms, or covering costs associated with mainstreaming trade in development strategies (Lammersen and Hynes 2016). In general, this category of Aid for Trade should help countries to develop their trade analysis and strategies, negotiate trade agreements (both in bilateral/ regional and multilateral (WTO) dimensions), and implement their outcomes (OECD/WTO 2019b). The support for a complete and strong involvement of developing countries into the international trading system and trade negotiations is not only crucial to AfT-related SDG 8.a but should also strongly contribute to another SDG 16.8 aimed at broadened and strengthened “participation of developing countries in the institutions of global governance” (UN 2015). Trade Development The category of trade development, in some statistical classifications (OECD) treated as a subsection of the category of “building productive capacity,” includes support for those activities and projects that enable the recipient country to “formulate and implement a trade development strategy and create an enabling environment for trade; stimulate the trade of domestic firms and encourage investments in trade-oriented industries” (Aloso 2016). This category underlines the importance of trade-related business development and includes support to trade-related projects/

7

programs aimed at improving the business climate, privatization, assistance to banking and financial services, agriculture, forestry, fishing, industry, mineral resources, and mining or tourism. The scope of activities includes, i.a., investment promotion, analysis and institutional support for trade in services, development of trade-related public-private sector networking, trade promotion, and market analysis and development (WTO 2006; TAC/EC 2017) Trade-Related Infrastructure Insufficient trade-related infrastructure remains one the most important impediments to developing countries’ trade performance. The most of studies including comprehensive examination of barriers to trade, conducted also under the auspices of the IF, have pointed that supply-side barriers are among the largest constraints to integration with the global trading system (Prowse 2005). Poor transport and communication infrastructure isolate countries, impede to tackle their market remoteness, and inhibit participation in global production networks. Transport accessibility and costs determine a country’s ability to participate in the global economy and trade, and the developed infrastructure is a crucial condition for trade expansion (Limão and Venables 2001; Hallaert 2013). Poor trade-related infrastructure effectively prevents the utilization of trade preferences granted by developed countries in access to their markets. Although the big share of a development assistance has been allocated since many years to development of infrastructure (in 2006–2017 ODA disbursements to trade-related infrastructure amounted to 204.7 bn USD, of which more than half to transport and storage; OECD 2019b), there are still serious deficiencies in this aspect among developing countries. The existing enormous infrastructural needs do not refer only to transportation but also include telecommunications networks or energy supply. While physical connectivity is a prerequisite for the movement of goods and services to local, regional, and global markets, digital networks and connectivity intertwine with the physical one and become integral element of the global trading infrastructure.

A

8

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

“Accessible and affordable digital connections are indispensable for trade connectivity” (OECD/ WTO 2017). Also, electricity production and supplies are of primary importance. OECD studies point that electricity is more significant binding constraint for economic development and trade than road or air infrastructure (OECD/WTO 2019b). The availability and reliability of energy supply affect substantially production costs and determine export competitiveness and trade performance (Lammersen and Hynes 2016). This category of AfT underlines the necessity of support to development of trade-related infrastructure in reference to transport (in all its types: roads, railways, port infrastructure) and storage, ITC networks, and electricity supply. The expansion of infrastructure should also include transregional networking, as many developing countries are still isolated not only from global markets but even from their regions and neighboring countries The critical importance of infrastructure for economic development and trade expansion has also been strongly emphasized in the SDGs. This has been embodied not only in the SDG 8.a, calling to improved efforts for Aid for Trade, but also – in a very explicit form – in the SDG 9. The target 9.1 refers to the development of “quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure.” The same SDG also includes target 9.a, aimed at supporting and facilitating “sustainable and resilient infrastructure development in developing countries through enhanced financial, technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing States” (UN 2015). Although those targets regard the general economic infrastructure, a vast majority of this will have an undoubtedly positive effect on trade competitiveness of developing countries Building Productive Capacity Another important category of AfT are actions aimed at building productive capacity of developing countries, which then is strictly correlated with export capacity and significantly contributes to trade. It includes programs and projects that

support to expand and increase productivity in existing sectors (e.g., agriculture, fishing) and stimulate development of new sectors within the economy. Thus, those activities should help to overcome the problem of supply-side constraints of developing countries and expand their export diversification. The improvement of productive capacities is a crucial element for achieving a sustained economic growth and the successful implementation of the Agenda 2030. For many developing countries, including the LDCs in particular, agriculture remains a key economic sector. Increasing productivity within this sector, which requires improvements in technologies, management, and financing through expanded access to credits, is a key step in realization of SDGs related to hunger, food security, and sustainable agriculture. At the same time, the increasing tradability of agriculture products brings new export opportunities (Lammersen and Hynes 2016). Building productive capacities means also the expansion of new sectors and rising economic diversification. This process requires broader access to financing – and in consequence – strengthened capacities of domestic financial sector. In this context this AfT category includes also activities that lead to improved access for local business to banking, insurance, and financial institutions. Activities undertaken within this category support, i.a., central banks, financial intermediaries, credit lines, micro-credit, and credit cooperatives. The expansion toward new sectors requires also a healthy business and investment environment, which may be supported by trade and business associations and development of publicprivate sector networking (Lammersen and Hynes 2016). Diversification of the developing countries’ economies/export is one of the crucial elements on their way toward stronger integration with the global trading system. Merchandize export concentration remains one of the sub-indexes, illustrating the country’s exposure to trade shocks, that define the economic vulnerability and the category of the least developed countries (UN 2019). Export concentration in a few primary commodities not only exposes the country to external shocks

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

but also negatively influences job opportunities, which is strongly visible in many African countries. Higher diversification of the export basket, including more manufactured products or services, remains an important objective for developing countries, especially those with predominantly commodity-dependent economies (OECD/WTO 2019b). In this context, the support for building productive capacity is a key element toward more diversified economy and export. Trade-Related Adjustment Although trade has a potential to act as a powerful booster for the economic growth and development and many analysis (e.g., assisting the DDA negotiations) estimated positive net effects of further multilateral liberalization also for developing countries, developing countries have to confront with adjustment costs. Further deeper and more comprehensive liberalization, including broad range of issues, requires consequent domestic trade and economic reforms and assisting adjustments. While some of estimated gains are rather a medium- or long-term perspective, adjustment costs may appear from the very beginning of necessary reforms and the implementation of commitments. For example, the trade liberalization and tariff cuts result in the erosion of revenues from trade taxes. It is a challenge especially for the LDCs where national budgets very often strongly rely on revenues from customs duties. In some cases, the share of those revenues constitutes 40–50% (e.g., Afghanistan, Botswana, Central African Republic, Namibia, Nauru; 2006–2017, WB 2019) or even extreme level of ca. 83% as for Somalia (2017). Decreasing revenues from trade taxes require compensatory incomes from other sources. This should trigger efforts to reform the domestic tax system and to broaden the tax base. Developing countries need additional support in these reforms and even ad hoc aid in providing budget incomes (e.g., through budget support) (Oxfam 2002; Prowse 2005; WB 2019). Other adjustments may refer to macroeconomic challenges such as changes in terms of trade, stability of exchange rates, or difficulties with balance of payments. Those issues require a special attention and appropriate responses from supportive

9

economic and monetary policies (Prowse 2005). Another challenge of crucial importance is to tackle with potential adjustments in social policies. Trade liberalization may lead to changes in labor market. This requires, e.g., ad hoc support in the case of growing (structural) unemployment within some less competitive sectors and appropriate labor market regulations enabling labor shifts between companies and sectors. Moreover, this should be often supported with an appropriate educational policy, providing people with new and necessary skills and knowledge. Necessary adjustments may also involve improvements in publicprivate coordination and support for the development of financial sector or policies strengthening innovation, entrepreneurship, and the reallocation of resources (OECD/WTO 2019b). Summarizing, this category includes those trade-related activities that support developing countries “to put in place accompanying measures that assist them to benefit from liberalized trade” (WTO 2006). Other Trade-Related Needs The sixth category of Aid for Trade merges all trade-related support – after the category’s name – not included in the previous sections. Some representation of actions classified within this category may be derived from OECD/DAC data classification methodology that generally bases on the AfT categories identified by the Task Force in 2006 (each AfT category has been linked to codes in the general Creditor Reporting System (CRS), to which donors report on all their development assistance). The inclusion condition here – as defined by the TF – is that those activities should be explicitly identified as trade-related priorities in the recipient country’s national development strategies (however, the same rule applies also to the previous categories 3–5). To give some examples, this category may refer to programs supporting trade in sectors not comprised in the other five categories (e.g., vocational training or public sector policy programs) or larger crosssectoral programs with important subcomponents in other AfT categories (CRS requires the use of one single code per reported program, so this category enables the classification in such cases) (TAC/EC 2017)

A

10

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

Aid for Trade in Practice

Concluding Summary

Since the launch of the initiative in 2006, the total value of both AfT commitments and disbursements has more than doubled, having increased from 25.6 bn USD and 19.6 bn USD, respectively, in 2006 to 58.0 bn USD and 42.9 bn USD in 2017. At the same time, the share of assistance classified as Aid for Trade in total ODA, addressed to all developing countries, has increased from 17.6% in 2006 to 26.3% in 2017. The biggest recipients of the Aid for Trade disbursements have been the least developing countries and the low-mediumincome countries which have absorbed two-thirds of the total AfT support (excluding also aid classified as unallocated by income groupings). The vast majority of disbursements – almost 80% of all AfT assistance – has been transferred to Asia and Africa (41.0% and 38.5%, respectively), followed by Europe (10.0%), Americas (8.6%), and Oceania (1.9%). The leading beneficiaries of the trade-related support at the national levels have been India (13.3% of AfT disbursed globally in 2006–2017), Vietnam (11.7%), and Turkey (10.8%). Top ten recipients (Fig. 1) have received three-fourth of global AfT in 2006–2017. More than half of the provided support has been allocated to development of economic infrastructure (53.2% of total AfT), followed by the building productive capacities (with a leading support for agricultural sector as well as banking and financial services). The distribution to specific sectors varies across the world’s regions, addressing local impediments to trade and meeting individual countries’ needs. In Asia and Oceania, the majority of support has been allocated to transport and storage. The same sector has been the biggest beneficiary in Africa, but at this continent another important sector that is strongly supported is agriculture. The aid to agriculture constitutes also one-fourth of total disbursements allocated in Americas, followed by energy and transport and storage. In Europe – contrary to other regions – the largest share of Aid for Trade has been transferred to banking and financial sector (UNCTAD 2019, OECD 2019b).

The successful implementation of the Agenda 2030 requires a holistic approach and multidimensionality of actions. One of the most important pillars within its realization is to exploit fully developing countries’ economic and trade potential. Although the list of SDGs does not include a specific goal on trade, the Agenda refers repeatedly to the importance of international trade for economic development. There are defined targets in different SDGs relating explicitly to international trade, and many other targets are coincided with open and transparent international trading system. These targets simultaneously address two aspects of international trade: the institutional (global) framework, of which the main aim is to create trade rules in favor of developing countries, and the international trade in its functional form, dealing with all aspects of moving goods and services across borders, such as physical infrastructure (da Silva 2017). The full participation in global trade together with broader opening of the economies and export expansion have been recognized as important triggers and contributors to social and economic development and essential prerequisites for the success of the Agenda 2030. The target 8.1 relating to Aid for Trade has embodied the severely invoked necessity of stronger support for developing countries, and the LDCs in particular, in expanding their traderelated potential. Although many preferences granted to those countries for many years, some of them could not fully utilize the given opportunities and forge their potential into successful trade strategy, export expansion, and ultimately economic development. The six mentioned categories provide a multidimensional approach and address the majority of varied trade-related impediments and needs of developing countries. “Such a holistic approach has been the essence of the success of the Aid-for-Trade Initiative, together with its flexibility to adapt to changes in the trade and development landscape and its inclusive partnerships with different donor communities, the private sector and civil society” (Lammersen and Hynes 2016).

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

11

A

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth and Structural Changes in Developing Countries, Fig. 1 Aid for Trade – statistical

outlook 2006–2017. (Source: Own calculations on (OECD 2019b; UNCTAD 2019b))

12

Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth

The initiative, launched over a decade ago, needs further attention and adjustments to changing conditions within the international trade and economy. New emerging approaches to AfT underline the importance of stronger engagement of private sector into the initiative at all levels of its implementation, such as identification of needs, sharing good practices, implementing and scaling up actions with donors and governments, and providing feedback on the actions’ results. Another important challenge is to enhance a regional dimension of the initiative, which still faces many barriers (Lammersen and Hynes 2016; da Silva 2017). In this context regional programs and strategies related to AfT should be complement and reinforcing aspects of actions implemented at the national level.

Cross-References ▶ Fair Trade Movement and Market Development for Decent Work and Economic Growth Acknowledgments The research was performed within the 2019/2020 Visiting Professor Scholarship at the Department of Political Sciences, Communication and International Relations of the University of Macerata (Macerata, Italy).

References Aloso JA (2016) Aid for Trade: building productive and trade capacities in LDCs. CDP Policy Review no 1. https:// www.un.org/development/desa/dpad/wp-content/uploads /sites/45/publication/CDP-review-2016-1.pdf. Accessed 30 Oct 2019 Cai XF (2008) Aid for Trade: a roadmap for success. Denver J Int Law Policy 36(3/4):283–324 da Silva JM (2017) How can Aid for Trade help advance the sustainable development goals? Sustain Dev Goals Bridges Afr 6 (5). https://www.ictsd.org/bridges-news/ bridges-africa/news/how-can-aid-for-trade-help-advancethe-sustainable-development. Accessed 27 Oct 2019 de Vylder S, Nycander GA, Laanatza M (2001) The least developed countries and World Trade Sidastudies no 5. https://www.sida.se/contentassets/331c79ccea944d 6ba7b408486e59b56e/no.5-the-least-developed-count ries-and-world-trade_1622.pdf. Accessed 30 Oct 2019 EIF (2017) EIF annual report 2017. Inclusive trade for sustainable development in the world’s poorest

countries. https://www.enhancedif.org/sites/default/ files/eif_annual_report_2017_web.pdf. Accessed 24 Oct 2019 EIF (2019) Enhanced integrated framework. https://www. enhancedif.org/en/who-we-are. Accessed 24 Oct 2019 EP (2007) Report on the EU’s Aid for Trade (2006/ 2236(INI)), 29 March 2007. http://www.europarl. europa.eu/sides/getDoc.do?pubRef¼-//EP//NONSGML +REPORT+A6-2007-0088+0+DOC+PDF+V0//EN. Accessed 4 Nov 2019 G-8 (2005) Gleneagles summit official documents: Africa. http://worldjpn.grips.ac.jp/documents/texts/summit/200 50708.O1E.html. Accessed 15 Nov 2019 Hallaert JJ (2013) The future of Aid for Trade: challenges and options. World Trade Rev 12(4):653–668. https:// doi.org/10.1017/S1474745612000730 Hoekman B (2010) Aid for Trade: why, what, and where are we? World Bank. http://siteresources.worldbank.org/ INTRANETTRADE/Resources/239054-12730922811 33/Bernard_Hoekman_Aid_For_Trade.pdf. Accessed 12 Nov 2019 Hoekman B, Prowse S (2005) Economic Policy responses to preference erosion from trade as Aid for Trade. The World Bank research working paper no. WPS 3721. World Bank, Washington, DC Lammersen F, Hynes W (2016) Aid for Trade and the sustainable development agenda: strengthening synergies. OECD development policy papers no. 5. https:// www.oecd.org/development/aft/Aid4Trade-Sustainabl eDevAgenda.pdf. Accessed 8 Nov 2019 Limão N, Venables AJ (2001) Infrastructure, geographical disadvantage, transport costs, and trade. World Bank Econ Rev 15(3):451–479 OECD (2006) Aid for Trade: making it effective. Paris. https://read.oecd-ilibrary.org/development/aid-for-trade_ 9789264028609-en#page1. https://doi.org/10.1787/978 9264028609-en OECD (2019a) The integrated framework for trade related assistance to least developed countries (IF). https://www. oecd.org/dac/aft/theintegratedframeworkfortraderelate dassistancetoleastdevelopedcountriesif.htm. Accessed 23 Oct 2019 OECD (2019b) Aid-for-trade statistical queries. https://www. oecd.org/dac/aft/aid-for-tradestatisticalqueries.htm. Accessed 15 Nov 2019 OECD/WTO (2017) Aid for Trade at a glance 2017. Promoting trade, inclusiveness and connectivity for sustainable development. https://www.oecd-ilibrary.org/deve lopment/aid-for-trade-at-a-glance-2017_aid_glance2017-en. Accessed 5 Nov 2019 OECD/WTO (2019a) Aid for Trade: is it working? http:// www.oecd.org/dac/aft/45581702.pdf. Accessed 8 Nov 2019 OECD/WTO (2019b) Aid for Trade at a glance 2019. Economic diversification and empowerment. https://www. oecd.org/dac/aft/aid-for-trade-at-a-glance-22234411.htm. Accessed 12 Nov 2019 Oxfam (2002) Rigged rules and double standards: trade, globalization and the fight against poverty. Oxfam

Anthropocene and Migration: Challenges in the Twenty-First Century International. http://en.oxfam.ru/upload/iblock/1ca/ 1ca3150c5e7d8c64ba45287978f0d4df.pdf. Accessed 7 Nov 2019 Prowse S (2005) “Aid for Trade” Increasing support for trade adjustment and integration – a proposal. Paper presented at the OECD Global Forum on Trade with the support of the World Bank, the Government of Barbados and the University of the West Indies Special and Differential Treatment: Thinking Outside the Box Barbados, 28–29 June 2005. http://www.ceim.uqam.ca/ggt/ IMG/pdf/OECD_Aid_for_Trade_2005.pdf. Accessed 5 Nov 2019 Prowse S (2010) Aid for Trade: supporting trade preference reform. Center for Global Development Working Paper 224, 28.09.2019. https://papers.ssrn.com/sol3/papers. cfm?abstract_id¼1694144. Accessed 8 Nov 2019 TAC/EC (2017) Aid for Trade report 2017. Review of progress by the EU and its member states. TAC/EC, Brussels UN (2005) Integrated Framework (IF) for trade-related technical assistance for least developed countries. An IF manual: integrating LDCs into the international trading system. United Nation, New York/Geneva UN (2015) Transforming our world: the 2030 agenda for sustainable development. https://sustainabledevelopment. un.org/content/documents/21252030%20Agenda%20for %20Sustainable%20Development%20web.pdf. Accessed 2 Oct 2019 UN (2019) Least developed countries – EVI indicators. https://www.un.org/development/desa/dpad/least-deve loped-country-category/evi-indicators-ldc.html. Accessed 28 Oct 2019 UNCTAD (2004) The least developed countries report 2004. Linking international trade with poverty reduction. UNCTAD, New York/Geneva UNCTAD (2018) Achieving the sustainable development goals in the least developed countries. A compendium of policy options. UNCTAD/ALDC/2018/4. https:// unctad.org/en/PublicationsLibrary/aldc2018d4_en.pdf. Accessed 2 Oct 2019 UNCTAD (2019a) UNCTADStat. https://unctadstat. unctad.org/. Accessed 5 Nov 2019 UNCTAD (2019b) SDG pulse – policies to promote trade. https://sdgpulse.unctad.org/policies-to-promote-trade/ #Ref_Oecd2019b. Accessed 15 Nov 2019 WB (2019) World Bank open data. https://data.worldbank. org/. Accessed 14 Nov 2019 WTO (2001) Ministerial declaration adopted on 14 November 2001. WT/MIN(01)/DEC/1 WTO (2005) Doha Work Programme. Ministerial Declaration adopted on 18 December 2005. WT/MIN(05)/ DEC WTO (2006) Recommendations of the Task Force on Aid for Trade. WT/AFT/1. https://docs.wto.org/dol2fe/ Pages/FE_Search/FE_S_S009-DP.aspx?language=E& CatalogueIdList=58379&CurrentCatalogueIdIndex= 0&FullTextHash=&HasEnglishRecord=True&HasFr enchRecord=True&HasSpanishRecord=True WTO (2019) World trade statistical review 2019. WTO, Geneva

13

Anthropocene and Migration: Challenges in the Twenty-First Century Leonardo Freire de Mello, Gustavo Di Cesare Giannella, Sara Aparecida de Paula, Maira Begalli and Andrea Lise Suriano Federal University of ABC (UFABC), São Bernardo do Campo, SP, Brazil

Definition Anthropocene literally means “Humankind Era.” In an analytical perspective, the Anthropocene summarizes the impact of human society activities in the environmental dynamics of the planet. The Planet Earth balance of energy is controlled diverse processes such as temperature, phosphorus and nitrogen cycles, emissions of greenhouse gases vegetal and animal species biodiversity, and soil and water use, among others. These processes combined with social dynamics such as agriculture and urbanization may change the environment. The Anthropocene shows that humankind turned into a potential power of transformation, and this is clearly seem in the transformations planet is passing by, which include rise of average temperature and higher frequency and intensity of disasters, for example. In the other hand, Anthropocene either means human society needs to face the consequences of its impact. One of these impacts is the migration/displacement influenced or caused by global environmental changes, which may be seem as an adaptation action or either as a loss of life means of survival. Mobility has been part of human history, still though, it gains new challenges and perspectives when it is inserted in the Anthropocene, which is the main goal of this paper.

Introduction Migration is one of those patterns that can be seen from the beginning of the human experience to the present. The history of the world includes

A

14

Anthropocene and Migration: Challenges in the Twenty-First Century

significant stories of human migration in every era, and always climate changes had a lot to do with many of those displacements. The spread of Homo Sapiens from Africa more than 100,000 years ago is suggested to have been caused by “abrupt changes in climate that may have rendered large parts of North, East, and West Africa unsuitable for hominin occupation” (Carto et al. 2009). During the Neolithic Period, nomadic huntergatherers transitioned to agricultural economies in form of systems of pastoral animal breeding and systems of slash-and-burn cultivation, transforming the human history in multiple regions (Purugganan and Fuller 2009; Larson et al. 2014). In different moments, human populations have migrated to improve their personal situation, leaving behind hazardous environment or conflicts. Before 1500, overseas contacts were of minor importance, but with the development of maritime shipping and, subsequently, with the establishment of trade between the European continent and the new colonies, mercantilism came to occupy a prominent place in economic development. In the three centuries after the voyage of Columbus, two million people migrated from Europe to the Americas, and nearly eight million Africans were brought to the Americas as slaves (Manning 2013). The Atlantic slave trade was one of the first mass migration movements of the preindustrial era. The steam engine marked the beginning of the Industrial Revolution, and steam-powered factories required mass of workers who moved from rural areas to towns. Railways transported the Industrial Revolution worldwide, as well as steamboats, and changed our lives. It became easier to cross large distances, to move workers to where they were needed for extraction of raw materials, and to move those raw materials out of the country for sale (Wolmar 2009). The rural exodus was the second case of a mass migration process accelerated in the early Industrial. Later, when the countryside was almost depopulated, migrants from the colonies and then from other countries would be the main suppliers of cheap workforce.

The twentieth century saw Empires collapsing, new nations emerging, the Russian Revolution, and two World Wars. All this involved mass migration across Europe and towards the United States. The First World War was the turning point to migratory policies as government controls increased at all levels of society and migration involved millions of people. The forced resettlements during and after the war led to a refugee crisis and the adoption of the Nansen Passport, by many nations, as a trend of increased interest to connect people to passports and citizenship. The Second World War caused millions of deaths and forced millions of people to flee ethnic and political persecution. The redrawing of national boundaries altered the political and economic landscape of post-war Europe and brought a massive migration of refugees, and many exiles tried to return to their countries. Because of the development of new technologies, the acceleration of the globalization process after the Second World War made it possible to connect distant regions of the world and redefined these interactions. The world became smaller, but while trade boundaries were characterized by progressive flexibility, lowering barriers to international trade, the individual’s freedom to move became more selective and was increasingly hampered (Gerbeau 2017). For a century, we lived off the legacy of rapid innovation which allowed our cities to sprawl and grow exponentially. A huge infrastructure transformation adapted the city to the car and shaped the modern mobility. High demands on agriculture, increased by this population explosion, and the intense consumption of goods adopted by the modern society have been achieved through resource-intensive farming systems and transportation, which caused massive deforestation, water scarcities, land degradation, and high levels of greenhouse gases emitted. In a short period of time, the past 50 years, deforestation increased to give way to monocultures systems affecting the people and animals where trees are cut. Growing vegetation worldwide does not compensate for the damage caused by loss of natural cover in tropical regions such as Brazil and Indonesia, and devoted to agriculture

Anthropocene and Migration: Challenges in the Twenty-First Century

does not help to store carbon, such as forests, so the consequences for the sustainability and biodiversity of these ecosystems remain. The biggest contemporary challenge today is how to reduce the effects of the global physical and biological transformations caused by human activities in a new geological era called the Anthropocene: an epoch defined by nuclear bombs and nuclear tests, plastic pollution, and huge increase in natural disaster occurrences, whose impacts are already perceived through the rising number of displaced populations. Environmental changes and their effects as consequences of the natural resources exploitation have been measured since the 1870s, but it was not until the 1970s that Nobel award winners scientists Paul Crutzen, Mario Molina, and F. Sherwood Rowland recognized the dangers of ozone-depleting chemicals and the urgent need to prevent the sun’s ultraviolet radiation from reaching the Earth’s surface, because ozone, together with ordinary molecular oxygen, is able to absorb the major part of the sun’s ultraviolet radiation . In August 2019, the International Commission on Stratigraphy (ICS), a working group within the International Union of Geological Sciences (IUGS), which has scientists from 121 countries and regions, voted in favor of recognizing the Anthropocene as a new geological era, but an official decision will only be made in 2021 after the team agree on when the global geological impact happened (McRae 2019). In order to define a new geological era, the study must present two main criteria. First, they have to document long-lasting changes to the Earth, and, second, they need to agree about the Global Boundary Stratotype Section and Point (GSSP), the “golden spike,” a global geological impact in natural material that can be pinpointed to a specific year (MacDonald 2015). So far, the Anthropocene working group has begun the process of selecting samples of global changes to the Earth system for analysis, in order to identify the golden spike. The whole process is expected to last 2 or 3 years. At a certain moment in the mid-twentieth century is a potential candidate because of the distinctive signals like a

15

significant change to global climate; the rise of sea level; and chemical perturbation to the cycles of carbon, nitrogen, and other elements; plastic, aluminum, and artificial radionuclides from nuclear explosion are some of the signals in recent strata (University of Leicester 2016). Although scientists agree humans have altered the environment, some of them believe that having a single starting date for the new era “impedes rather than facilitates scientific understanding of human involvement in Earth system change,” said University of Leicester archaeologist Matt Edgeworth (McRae 2019). Whether scientists agree about the beginning of the Anthropocene, the consequences are already been faced by humans and nature. Greenhouse gases released due to deforestation, produced by agricultural practices and livestock, burning of fossils fuels like coal, oil, and gas and during the industrial process, trap and hold heat in the Earth’s atmosphere leading to a global warming effect. Some of the known side effects of Greenhouse gases emissions are the rising temperatures across the globe; melting glaciers, permafrost, and snowpack on mountains at a faster rate; making droughts last longer and become more extreme; making tropical storms more severe due to warmer ocean water temperatures, loss of fauna, and plant diversity affecting ecosystems; and, more recently, adding environmental stressors to conflicts causing mass migrations. As confirmed by the Intergovernmental Panel on Climate Change (IPCC), changes in climate pose a main threat to human security and can be an important factor of human mobility, especially for the most vulnerable parcel of the world’s population whose livelihoods depend on natural systems or live in low-lying coastal regions, arid, or mountain areas (Van Bavel 2013; Adger et al. 2014). Extreme weather events displace population when homes are destroyed or condemned or when there is an economic interruption, but not all displacements are permanent, and not all the climate changes lead to permanent migration. The decision to migrate is influenced by an array of factors, and understanding the equation is important if we want to build resilient communities.

A

16

Anthropocene and Migration: Challenges in the Twenty-First Century

Mobility and Anthropocene Human beings have been migrating since the dawn of time, whether seeking for new economic opportunity; to study; to escape persecution, human rights violations, war, and political, religious, or ethnic persecution; and, more recently, due to environmental factors connected to climate change, whether out of choice or out of necessity. The International Organization for Migration (IOM) defines a migrant as “an umbrella term, not defined under international law, reflecting the common lay understanding of a person who moves away from his or her place of usual residence, whether within a country internally displaced people (IDP) or across an international border, temporarily or permanently, and for a variety of reasons” (IOM 2019). Although a legal migrant has the authorization to stay in a state pursuant to the local law, an illegal migrant has no authorization nor protection under any law. The United Nations High Commissioner for Refugees (UNHCR) defines refugees as “someone who is unable or unwilling to return to their country of origin owing to a wellfounded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group, or political opinion,” are protected in international law, and must not be expelled or returned to situations where their life and freedom are at risk (UNHCR 1951). The twenty-first century has seen a different type of migrants: the climate migrants. According to the United Nations Migration report, the number of displaced people grew from 173 million in 2000 to 244 million in 2015, to 258 million in 2017, and 272 million in 2019 (United Nations 2017, 2019). In 2018, 17.2 million people in 148 countries were fleeing from natural disasters, while 764,000 people in some African and Middle East nations were leaving because of severe drought (IDMC 2019). Gases like carbon dioxide, chlorofluorocarbons, methane, nitrous oxide, and ozone are known as greenhouse gases, and their accumulation in the Earth’s atmosphere reduces the outgoing infrared radiation causing a rise in the atmosphere’s temperature. Carbon dioxide (CO2)

is considered the most important greenhouse gas and its concentration increases yearly. The most expressive contributors to carbon dioxide emissions are electricity, heat production, transportation, and manufacturing (Ritchie and Roser 2019). Harris (1997) suggests that the standard conception of economic development relates to increasing mass consumption to similar levels achieved by the United States and some European economies. However, the environmental implications of the global spread of mass consumption for resource use and the absorption of environmental waste are devastating. Since the colonization period, developing countries are being used as natural resources providers for the developed countries in order to feed the global appetite for mass consumption. So the primary consequence of this equation is that the developing countries are stressing and even eliminating their natural resources to support the consumerist way of life of the richest parcel of the world population (Gore 2015). The production of the largest emitters of greenhouse gases is unequally distributed in the world (Gore 2015). In general, developed countries have higher CO2 emissions (World Population Review 2019; The World Bank Data 2019), but they are not the most vulnerable countries when experiencing climate change effects (ND Gain Country Index 2019). Add poverty, political instability, conflicts, and population growth to the worsening climate patterns and the result is an increase in human mobility, a global challenge that will test the limits of local and international governance. Slow-onset environmental process causing environmental degradation, deterioration, and destruction is a major cause for displacement, as it is natural disasters. People might have a choice to leave or be forced to do so. Although there are many situations where climate migrants cross the state’s borders in massive migration, millions of people have been internally displaced. In 2018, the UNHCR registered 41.3 million of internally displaced people, of which 17.2 million were displaced within their own country in the context of climate change and/or natural disasters (IDMC 2019). According to the Internal Displacement

Anthropocene and Migration: Challenges in the Twenty-First Century

Monitoring Centre (IDMC), from 2008 to 2018, 265.3 million people were internally displaced by disasters (IDMC 2019). In developing countries, people fleeing rural areas towards urban communities pose threats to already limited local capacities and resources. There will be an increased demand on housing, jobs, health care, water, and electricity, all leading to a fast and unplanned urbanization, aggravating social economic inequalities. People who choose to move have no legal protection as there are no international laws to protect climate migrants. Thus, migrating away from the effects of climate change has a characteristic of inequality between those living in richer developed countries (also who emit more greenhouse gases) and those living in poorer developing countries. While in developed countries people will make their choices more economically and socially secure and will have support from local or national government, in developing countries, migrants have no access to any resources other than their own family or friends network, to restart their livelihood.

Law Challenges After the Second World War, instruments were initially designed to address the post-war situation of refugees in Europe, such as the United Nations Convention Relating to the Status of Refugees (1951), as well as the United Nations High Commissioner for Refugees (UNHCR). Currently, migratory movements are widely discussed, and the new national migration policy has brought changes in relation to the economic-social order of migrants in the world. It should first be clarified that the concepts of nationality and citizenship are different. Nationality is the broader right that binds its holder to a particular state, while citizenship is a set of rights deriving from nationality, because it is linked to the way a person acts in a particular state. The 1949 Geneva Conventions and their Additional Protocols of 1977 constitute the main instruments of international humanitarian law, also known as the law of war or the law of

17

armed conflict, whose origins are confused with the origin of international law itself, since the relationship between states were essentially military in nature. International human rights law, on the other hand, is more recent and has become part of the national legal system after the Second World War, protecting individuals from violations committed by the state itself or through its agents. Nowadays, migratory movements are widely discussed, and, with population growth, city growth and development of various government programs have provoked debates among scholars in the area, members of the political body, and the population. In this context, the environmental refugee, a term popularized by El-Hinnawi in 1985 in a publication of the United Nations Environment Programme (UNEP), defined as “those who were forced to leave their traditional habitat, temporarily or permanently, because of a marked environmental disturbance (natural and/or triggered by people) has endangered their existence and/ or seriously affected their quality of life” (El-Hinnawi 1985). Contemporary migratory phenomena present some specificities related to their complexity, since migratory turnover is related to the circulation of capital, goods, and people, and, today, this labor turnover contributes to meet local demands, especially based economy in services (Baeninger 2017). If in the past migration was mainly characterized by its economic aspects and as a response to conflict, today the number of people displaced due to environmental factors is three times higher than for conflict (IDMC 2016). This means that a systematic approach is required in which economic issues, elements of conflict, as well as environmental dynamics and related vulnerabilities are considered. In 2015, the European Commission adopted a European agenda on migration, proposing immediate measures to address the situation and actions to better manage migration flows and issued guidelines on migration. In the context of migration policies, the 2016 New York Declaration on Refugees and Migrants

A

18

Anthropocene and Migration: Challenges in the Twenty-First Century

points to climate change, natural disasters, and other environmental factors as drivers of migration. In the Global Climate Agenda of the governments and international/regional institutions, the inclusion of human mobility took part in the 2015 Paris Agreement. In the European context, the 2009 Report and Recommendation of the Council of Europe Parliamentary Assembly on environmental migration, there are initiatives to recognize the legal status of environmental displaced persons, in addition to the project organized at the University of Limoges in 2005, Appel de Limoges sur les réfugiées écologiques (et environnementaux), which proposes the recognition and proclamation of an international status for environmental refugees (Capdeville et al. 2018). For all those reasons, it is also important to analyze the traditions of international and national law to understand their current challenges.

Internal Displacements The Anthropocene is, in short, a context of widespread environmental changes on the planet driven by human activities. This implies in highest incidence of extreme weather events and environmental disasters, such as hurricanes and cyclones, as well as floods and droughts. The greater intensity and frequency of such events cause increasing challenges for society, especially the most vulnerable people. From a demographic perspective, human mobility has become one of the most important and determining driving forces in society transformations (Hunter 2000). In the contemporary context, this debate is being increasingly accentuated by considering, for instance, the frequent occurrence of conflicts and the rise in refugee numbers. However, there is a wider and not so present discussion that deserves attention. According to IDMC (2016, 2017, 2018, 2019), the number of displaced people due to environmental disasters is on average three times higher than by conflicts. Moreover, these movements are mainly internal and forced (Obokata et al. 2014).

The category of internally displaced persons is then formed. Importantly, displacements must be analyzed and understood as a set of complex elements of different spatial and temporal scales that interact with each other (Hugo 1996; Adamo 2009; Black et al. 2011). Hugo (1996) explains that much of the degradation of the least developed countries is associated with the historical trajectory of colonial exploitation, for example. Thus, it is necessary to highlight that this complexity makes individuals, households, and communities not affected in the same way (Laczko and Piguet 2014; Hugo and Bardsley 2014). Thus, to understand how displacements follow, it is essential to understand the physical, environmental, social, and demographic characteristics that surround different societies. For this, the concept of vulnerability is essential, and it is what differs internal displacement from migration. While displacement is forced and acts as a last resort to survival, migration is planned and can be a measure of adaptation. The concept of vulnerability was conceived within the natural sciences and therefore related to physical vulnerability and disaster risk. For example, coastal zones and urban agglomerations – 80% of the world’s population live within 100 km of coastal zones – and most megacities are within this perimeter (Blackburn and Marques 2013). It was in the second half of the twentieth century that different areas of the human and social sciences began to study what they called social vulnerability. Thus, we note that there are certain items of analysis that are central and relate to the historical and social structure of a given location, which can be analyzed from the perspective of different scales. Factors include race and ethnic characteristics, socioeconomic group or class, gender, and age (Cutter and Finch 2008). Embedded in them are sub-elements such as family structure, family income, whether the household is proper, whether there is dependence on the rural system, and employment conditions (formal and informal). These characteristics of spatial composition and distribution are part of the demographic

Anthropocene and Migration: Challenges in the Twenty-First Century

component (Guzmán et al. 2013), and they are always associated with socioeconomic factors. From a demographic perspective, age is central, as is gender in environmental issues. Vulnerability is greatest in poorer groups, which are mostly composed by women (UNFPA 2009). In certain societies, women still play a central role in subsistence food production, so when there is long-term environmental change or a disaster, the effect on water pollution and soil erosion causes an increase in hunger and loss of fertile land, which involves the need to move, in many cases (Tacoli 2009). From an economic perspective, certain types of socioeconomic systems are more sensitive to environmental issues such as those in which there is a high dependence on agriculture and natural resources and in coastal areas, among others (Mcleman and Hunter 2010). Access to resources such as water, energy, sanitary infrastructure, employment type, educational level, poverty rate, and housing material can mean increased resilience or vulnerability (Guzmán et al. 2013). These considerations help to understand some of the key features surrounding displaced people by environmental disasters. Migrations caused by environmental changes are concentrated in Northern Global countries, while displacements are concentrated in the South (Adamo 2009). Regarding to internally displaced persons, most immediate displacement disasters such as floods and cyclones occur in Asia Pacific, mainly China, India, the Philippines, and Bangladesh (IDMC 2017, 2018, 2019). Slow-onset disasters (especially drought) are concentrated in African countries such as Somalia, Congo, and Nigeria (IDMC 2018, 2019). Both types of disasters are associated with the Anthropocene, both of which are the result of planetary imbalances driven by greenhouse gas emissions through human activities. In addition, the vulnerabilities built by this framework are interconnected. Drought is not only associated with physical elements such as the lack or high intensity of the rainfall cycle but also connects with the way the soil is used, which in this case focuses on monoculture and the large use of artificial fertilizers that emit nitrous oxide (IDMC 2019).

19

Political and economic choices, as well as their resulting inequality, determine how impacts are felt in different ways. Somalia, for example, is the country with the largest number of droughtdisplaced persons and also has a large number of conflict-displaced persons (IDMC 2018). The country faces a historical calamity of corruption, territorial and ethnic conflicts, and a high level of social inequality. This set of elements makes room for belligerent groups (Ogallo et al. 2018). In addition, the country’s two most important economic sectors – agriculture and aquaculture – are the hardest hit. Another interesting example is India, which faces the flooding problem of coastal zones and river deltas, affecting local food production. In addition, the country also faces ethnic conflicts in certain regions. India as well as Somalia has a colonial heritage and high rates of economic and social inequality (IDMC 2018, 2019) which magnifies risks and vulnerabilities. Finally, internal displacement is a problem, whereas it mostly happens in countries with significant social complexities. This is because in this context, displacement does not refer to a mode of adaptation but perpetuates the challenges faced by the most vulnerable groups. Associating Anthropocene with mobility infers the need to build a systematic analysis, so internal displacement is not a direct causality but the result of a set of paradoxes and contradictions in the society that drives environmental change and does not receive impacts in a homogeneous way.

Conclusions An analytical approach of Anthropocene and migration shows a variety of challenges. First of all, Anthropocene shows that transformations are occurring in a global scale. Still though, it does not mean a homogeneous process. Indeed, the causes of environmental changes, mainly emissions of greenhouse gases, are very diverse in different regions. As mentioned in the paper, the most expressive contributors to greenhouse gases emissions are electricity and transportation, and

A

20

Anthropocene and Migration: Challenges in the Twenty-First Century

this second one is predominant in the richer countries. In the other hand, mobility is also a heterogeneous process. Discussing migration/displacement and environment shows that mobility is influenced by the intensity and frequency of disasters (slowonset disasters and immediate disasters). However this understanding must be connected in how people are more vulnerable or not to disasters and its effects. By this reason, the paper brought up some important challenging discussions. The first discussion is already mentioned: the differences between how different societies influence in the balance of Earth processes and also how they receive and perceive the environmental changes and its impacts, such as disasters. The second one is posed by bureaucracy challenges: there is no defined concept for a person who is forced to move by disasters; sometimes it is called climate refugee or environmental-displaced person. In this aspect, as showed by data, most of displacements occur internally, which represents an issue for the refugee definition. The third challenge is about data. It is quite difficult to have a precise data about migration and displacements caused by disasters. This is an issue because disasters are not only associated with environment but either with social dynamics like political and economic conditions. The other issue occurs with slow-onset disasters which are even more difficult to analyze. Despite the mentioned challenges, the biggest one concerns the survival of societies facing huge transformations in the planet. This means that it is necessary an approach for action considering small, mid and long terms for adaptation.

Cross-References ▶ Domestic Material Consumption, Our Modern Economies, Lifestyles, and Environmental Sustainability ▶ Extraction Rates and the Environmental Impacts of Economic Growth in the Twenty-First Century ▶ Global Structures of Inequality and Unequal Distribution of Wealth

References Adamo S (2009) Environmentally induced population displacements. IHDP update, pp 13–21 Adger W et al (2014) Human security. In: Climate Change 2014: impacts, adaptation, and vulnerability. Part A: global and sectoral aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge/New York Baeninger R (2017) Migrações transnacionais de refúgio no Brasil. In: Lussi C (Org) Migrações Internacionais: Abordagens de Direitos Humanos. CSEM, Brasília Black R, Kniveton D, Schmidt-Verkerk K (2011) Migration and climate change: towards an integrated assessment of sensitivity. Environ Plan 43:431–450 Blackburn S, Marques C (2013) Mega-urbanisation on the coast: global context and key trends in the twenty-first century. In: Pelling M, Blackburn S (eds) Megacities and the coast. Routledge, New York Capdeville F, Prieur M, Lavieille J (2018) O Projeto de Convenção de Limoges sobre o Estatuto Internacional dos Deslocados Ambientais. In: Jubilut L et al (Orgs) Refugiados Ambientais. Editora UFRR, Boa Vista Carto SL, et al (2009) J Hum Evol 56(2):139–151. 13p. https://doi.org/10.1016/j.jhevol.2008.09.004. Cutter S, Finch C (2008) Temporal and spatial changes in social vulnerability to natural hazards. Proceedings of the National Academy of Sciences 105(7):2301–2306 El-Hinnawi E (1985) Environmental refugees. United Nations Environment Programme – UNEP, Nairobi Gerbeau YM (2017) Mass migration across the world System’s history. https://www.e-ir.info/2017/08/01/ mass-migrations-across-the-world-systems-history/. Accessed 17 Dec 2019 Gore T (2015) Extreme carbon inequality- Why the Paris climate deal ,must put the poorest, lowest emitting and most vulnerable people first. Published online at oxfam. org. https://www.oxfam.org/en/research/extremecarbon-inequality. Accessed 17 Dec 2019 Guzmán JM, Schensul D, Zhang S (2013) Understanding vulnerability and adaptation using census data. In: Martine G, Schensul D (eds) The demography of adaptation to climate change. New York, UNFPA Harris J (1997) Consumption and the environment – overview essay. In: Goodwin NR, Ackerman F, Kiron D (eds) The consumer society. Island Press, Washington, DC Hugo G (1996) Environmental concerns and international migration. Int Migr Rev 30(1):105–131 Hugo G, Bardsley DK (2014) Migration and environmental change in Asia. In: Piguet E, Laczko F (eds) People on the move in a changing climate. Springer, Dordrecht Hunter L (2000) The environmental implications of population dynamics. RAND Corporation, Santa Monica Internal Displacement Monitoring Centre (2016) Global report on internal displacement – GRID 2016. IDMC, Geneva

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies Internal Displacement Monitoring Centre (2017) Global report on internal displacement – GRID 2017. IDMC, Geneva Internal Displacement Monitoring Centre (2018) Global report on internal displacement – GRID 2018. IDMC, Geneva Internal Displacement Monitoring Centre (2019) Global report on internal displacement – GRID 2019. IDMC, Geneva IOM (2019) Glossary in migration. https://www.iom.int/ glossary-migration-2019. Accessed 17 Dec 2019 Laczko F, Piguet E (2014) Regional perspectives on migration, the environment and climate change. In: Piguet E, Laczko F (eds) People on the move in a changing climate. Springer, Dordrecht Larson GD et al (2014) Current perspectives and the future of domestication studies. Proc Natl Acad Sci USA 111:6139–6146 MacDonald F (2015) Earth has entered a new epoch, and we caused it. https://www.sciencealert.com/humansstarted-dominating-earth-s-ecosystems-way-earlierthan-we-thought. Accessed 17 Dec 2019 Manning P (2013) Migration in world history. Routledge, London Mcleman R, Hunter L (2010) Migration in the context of vulnerability and adaptation to climate change: insights from analogues. Wiley 1:450–461 McRae M (2019) Expert panel: humans really have started a new geological epoch on earth. https://www. sciencealert.com/an-influential-panel-of-geologistsvoted-to-bring-us-closer-to-a-new-age-in-earth-shistory. Accessed 17 Dec 2019 ND Gain Country Index (2019). https://gain.nd.edu/ourwork/country-index/. Accessed 17 Dec 2019 Obokata R, Veronis L, Mcleman R (2014) Empirical research on international environmental migration: a systematic review. Popul Environ 36:111–135 Ogallo L et al (2018) Climate change projections and the associated potential impacts for Somalia. Am J Clim Change 7:153–170 Purugganan MD, Fuller DQ (2009) The nature of selection during plant domestication. Nature 457:843–848 Ritchie H, Roser M (2019) CO2 and Greenhouse gas emissions. OurWorldInData.org. Accessed 16 Dec 2019 Tacoli C (2009) Crisis or adaptation? Migration and climate change in a context of high mobility. Environ Urban 21(2):513–525 The World Bank Data (2019) GDP per capita (current US$). https://data.worldbank.org/indicator/NY.GDP. PCAP.CD?type¼shaded&view¼map. Accessed 17 Dec 2019 UNFPA (2009) State of the world (2009) Facing a changing world: women, population and climate. https:// www.unfpa.org/sites/default/files/pub-pdf/state_of_world_ population_2009.pdf. Accessed 10 Dec 2019 UNHCR (1951) Convention and protocol relating to the status of refugees. https://www.unhcr.org/en-us/ 3b66c2aa10. Accessed 17 Dec 2019 United Nations, Department of Economic and Social Affairs, Population Division (2017) International

21

migration report 2017: highlights (ST/ESA/SER.A/ 404) United Nations, Department of Economic and Social Affairs, Population Division (2019) International migration report 2019 University of Leicester (2016, August 29) ‘Anthropocene’: potential new geological time interval. ScienceDaily. www.sciencedaily.com/releases/2016/08/160829094255. htm. Accessed 17 Dec 2019 Van Bavel J (2013) The world population explosion: causes, backgrounds and -projections for the future. Facts Views Vis ObGyn 5(4):281–291 Wolmar C (2009) Blood, iron and gold: how the railways transformed the world. PublicAffairs, New York World Population Review (2019) CO2 emissions by country population. http://worldpopulationreview.com/coun tries/co2-emissions-by-country/. Accessed 17 Dec 2019

ASEAN-5 ▶ Development of Skills for Technological Change in ASEAN-5

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies Hong Yuh Ching and Fabio Gerab Centro Universitário FEI, São Bernardo do Campo, Brazil

Definitions Reporting quality is a central issue for providing a true and fair view of a company’s sustainability performance and works as a signal to boost sustainability legitimacy. Quality is one distinguishing characteristic, and it refers to the underlying, unobservable ability of the signaller to fulfill the needs of a receiver observing the signal. This chapter aims at contributing to the implementation of the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development. A good quality

A

22

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

disclosure attempts to gain and maintain legitimacy, to gain support of the stakeholders, and to reduce information asymmetry, thus promoting sustained and sustainable economic growth (Goal 8). Sustainability calls for a company to respond not only to its shareholders but also to other stakeholders, including employees, trade unions, contractors, suppliers, customers, creditors, affected communities, government, and NGOs (Jenkins and Yakovleva 2006; Azapagic 2004). In response to this, an increase in the number of sustainability reports is a fact. Corporate social responsibility (CSR) communication takes on a crucial role in addressing social and environmental issues and in effectively engaging in dialog with the stakeholder group investors and the society (Lock and Seele 2015). Because sustainability reports (SR) are about voluntary disclosure by companies and do not follow any mandatory reporting criteria, the stakeholders find difficulty in determining which firms are “good” (Mahoney et al. 2013). Moreover, these reports are being perceived as non-credible communication tools for many readers (Chen and Bouvain 2009), and these have been criticized for showing little actual substance or that disclosures have been minimal (Lyon and Maxwell 2011; Moseñe et al. 2013). Although the reporting quality has improved over the past 10 years, it is still patchy (Corporate Register 2013). On the other hand, investors are no longer satisfied with financial information and claim for an enhanced transparency. They need to trust in a company’s sustainable business conduct before investing in it, and the sustainability reporting would be of good value (Jenkins and Yakovleva 2006; Lock and Seele 2015). The theoretical framework of this chapter considers three theories – signaling, stakeholder, and legitimacy. The information affects the decision-making processes used by individuals in households, businesses, and governments, and they make decisions based on public information, which is freely available, and private information, which is available for only a subset of the public. However, when this latter happens (private information), information asymmetry

will occur (Connelly et al. 2011b). The disclosure of sustainability reporting can diminish informational asymmetries between the firm and its stakeholders and is used as a communication tool to win their support (Chiu and Wang 2015). The firms send signal about quality by issuing quality CSR reports to seek legitimacy from their receivers (Connelly et al. 2011b). Hahn and Kuhnen (2013) also agree that reporting quality is a central issue for providing a true and fair view of a company’s sustainability performance and works as a signal to boost sustainability legitimacy. However, relatively little attention has been paid to disclosure quality of sustainability reporting. Quality is one distinguishing characteristic, and it refers to the underlying, unobservable ability of the signaler to fulfill the needs of a receiver observing the signal (Connelly et al. 2011b). The purpose of this practical research undertaken is to examine the quality of information disclosed in the SR of Brazilian companies considering signaling, legitimacy, and stakeholder theories, i.e., to what extent proactive SR disclosures are interrelated to attempt to gain and maintain legitimacy, to gain support of the stakeholders, and to reduce information asymmetry. This chapter also provides a useful method for evaluating disclosure quality, i.e., a score system that measures the quality of these reports. To test these theoretical arguments, a longitudinal approach was adopted to analyze 218 companies’ sustainability reports over a 7-year period and statistical analysis used to investigate the evolution of their quality. Social, economic, and environmental dimensions do not unfold over one financial year; with a longer period of analysis, the quality of SR reports may be identified more consistently (Mahadeo et al. 2011), and it may also help in observing whether there is a trend (Legrand and Coderre 2012). For Lozano and Huisingh (2011), there are dynamic and simultaneously interrelations within and between these three dimensions and not only at certain points in time but also over time. This chapter also adds to the scarce evidence on sustainability reporting in Brazil.

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

Brazilian companies listed at Indice de Sustentabilidade Empresarial (ISE) were chosen for three reasons: this price index has entered into a mature phase (has been operational since 2005 and is the fourth stock index created after New York DJSI, London FTSE4Good, and Johannesburg JSE); there is an additional demand to strengthen disclosure quality regarding their sustainable activities; and extant literature regarding ISE is still incipient (Corrêa et al. 2012; Macedo et al. 2012; Ching et al. 2013). After a literature review on signaling, legitimacy, and stakeholder theories, the research method is presented in the section soon after. In this section, the score system developed to evaluate sustainability reports is presented. Following the sections of the descriptive statistics and the results, the conclusion is presented in the final section with recommendations for further development.

Literature Review Among the theories that explain sustainability reporting practice, Hahn and Kühnen (2013) found studies adopting stakeholder, signaling, and legitimacy theories, as well as institutional theory. However, these studies mostly refer to isolated theoretical reference points instead of embracing different theoretical explanations regarding sustainability reporting. On the other hand, the application of signaling theory is often found in corporate finance (Dionne and Ouederni 2011), marketing (Wells et al. 2011; Mavlanova et al. 2012), and human behavior (Gregory et al. 2013). Some aspects of the three theories – signaling, legitimacy, and stakeholder – were combined to discuss the results of this paper. Economic-Based Disclosure Theories (Especially Voluntary Disclosure and Signaling Theories) Dye (1985) and Verrecchia (1983) state that firms voluntarily disclose information to reduce information asymmetries between managers and stakeholders to communicate the firm’s good performance. To reduce information asymmetry, the

23

better-informed groups try to credibly transmit information about themselves to the less-informed groups (Connelly et al. 2011a; Spence 2002). Signaling can be seen as an extension of the voluntary disclosure theory. The signaling timeline includes two actors – the signaler, a person or firm, which sends the information the receivers would find useful, and the receiver, who observes and interprets the signal – as well as the signal itself (Connelly et al. 2011b). The core of signaling theory consists of the analysis of different types of signals that a signaler sends to the receiver and the situations in which they are interpreted and used. Signals convey information about signaler characteristics, and the receiver examines them to evaluate signaler credibility (Spence 2002). For Janney and Folta (2006), the extent to which signaling is effective depends, in part, on whether receivers scan the environment for signals. The signaling theory suggests that “good” corporate citizens issue stand-alone CSR reports to eliminate information asymmetries that may prevent them from reaping benefits of their actions. Yet, signaling suggests that firms use stand-alone CSR reports as a signal of their superior commitment to CSR (Mahoney et al. 2013). Some signaler characteristics are more likely to enhance the effectiveness of a signal, and credibility is a way to reflect the extent to which a signaler is honest (Davila et al. 2003). External stakeholders will seek information from auditors, providing independent assurance of corporate responsibility (CR) information and showing that the company is as serious about CR data as it is about its financial information (KPMG 2013). According to Connelly, Certo, Ireland, and Reutzel (2011b), the signaling theory is useful for describing behavior when two parties (individuals or organizations) have access to different information – one party, the sender and insider, must choose whether and how to communicate (or signal) that information, and the other party, the receiver and an outsider, must choose how to interpret the signal. These authors state that signaling theory focuses mainly on actions insiders take to intentionally communicate positive, imperceptible qualities of the insider.

A

24

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

Insiders could potentially inundate outsiders with observable actions, but not all these actions are useful as signals. Sociopolitical Theories of Disclosure Sociopolitical theories including political economy, legitimacy theory, and stakeholder theory suggest that CSR is a function of social and political pressures facing the corporation (Patten 1992). Legitimation is the process whereby a corporation justifies its right to continue to operate to its conferring public. Legitimacy can be characterized as a generalized perception or assumption that the actions of an entity are either desirable or appropriate within some socially constructed system of norms, values, beliefs, and definitions (Suchman 1995). Its theory states that the greater the likelihood of adverse shifts in a corporation’s conferring public’s perceptions of how a socially responsible corporation is, the greater the desirability on the part of the corporation to adopt legitimation tactics in an attempt to manage these shifts in social perceptions (O’Donovan 2000). Legitimacy also refers to the degree to which the broader public or stakeholders regard a firm’s actions as both appropriate and useful (Suchman 1995) or when the firm’s performance is socially accepted and judged to be fair and worthy of support (Eugénio et al. 2013). To continue to exist, a corporation will act to remain legitimate in the eyes of those it considers have the ability to affect its legitimacy (Marquis and Qian 2014; Wei et al. 2017). In other words, the theory is based on the idea that companies must act within the bounds of what the society identifies as socially acceptable behavior to continue operating (O’Donovan 2002) and show adherence to social norms and expectations (Nikolaeva and Bicho 2011). The firms have to voluntary conform to moral, social values and norms while demanding market-related resources such as information sharing, access to financial and human capital, and endorsements from the stakeholders (Wei et al. 2017). This is critical for firm survival because it ensures continuous inflow of external resources and support from various stakeholders (Suchman 1995). However, when societal expectations of

the firm’s behavior differ from the perception of its behavior, the society could revoke the organization’s license to continue operating (Eugénio et al. 2013). According to legitimacy theory, it is necessary to achieve society’s approval for the company to survive (Campbell et al. 2002). For Lindblom (1994), legitimacy is a status that comes from the harmony between a corporation’s value system and that of society. Corporations that consider sustainability crucial to their success might be interested to show their sustainability commitment to stakeholders (internal and external) by providing an extensive sustainability report. O’Donovan (2002) suggested that companies need to behave as what is expected from society to maintain its business activities. This need of behaving as expected from society stimulates companies to disclose information as a legitimizing tool (Cho and Patten 2007) and use documents to change society’s perception toward them (Deegan 2002; Gray et al. 1996). Konar and Cohen (2001) say that companies tend to comply with environmental regulations and portray an image of environmental responsibility, which in turn is rewarded by the market. Therefore, SR can be seen as one of those documents that legitimize the behavior of a company, enforcing the legitimacy theory. However, attempts to develop a repeatable empirical instrument which tests for legitimacy theory using different samples did not display consistent findings (Campbell et al. 2002). The identification of important stakeholders that the organization attempts to influence their perception, usually through sustainability information disclosures, has its roots in the stakeholder theory (O’Donovan 2000). In meeting the demands of various stakeholder groups, a company manager may not accord all stakeholders the same level of importance (Chiu and Wang 2015). The focus of stakeholder theory is to gain approval for corporate decisions by groups whose support is required for the organization to achieve its objectives (Tricker 1983). Patten (1992) and Roberts (1992) state that while there is an obvious overlap between stakeholder and legitimacy theories, legitimacy theory offers a broader perspective in attempting to explain

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

environmental disclosures than stakeholder theory, which is more focused on corporations. The common thread between stakeholder theory and legitimacy theory is obviously identifying important stakeholders (O’Donovan 2000). While stakeholder theory addresses the different interest groups that influence a company, legitimacy theory more broadly refers to society as a whole that demands sustainable business conduct (Cotter and Najah 2012). The acceptability of a company in society is directly linked to stakeholder thinking (Hahn and Kühnen 2013). The long-run survival of the company requires the support of its stakeholders, and a principal function of the manager is to handle stakeholders’ needs, expectations, and demands, as well as to balance conflicts among them (Chiu and Wang 2015). To manage legitimacy, corporations must be able to identify who these stakeholders are and what are their needs or demands. Methods to Measure the Quality of Sustainability Reports The need for independent assurance has a purpose of enhancing the reporting quality. Despite being voluntary, many companies seek out assurance, motivated by a need to demonstrate credibility with external stakeholders (KPMG 2013). Unfortunately, this neither captures the amount of sustainability information disclosure nor the quality of the information disclosed. Score systems can be seen as a method to provide perceived credibility to the readers regarding the amount of disclosure in the reports. Some scholars and organizations have developed score systems to measure reporting quality. Skouloudis and Evangelinos (2009) developed a score system, where each of the Global Reporting Initiative (GRI) topics/indicators was allocated a score between 0 and 4 points as follows: 0 point, when a specific topic was not mentioned; 1 point, brief or generic statements; 2 points, more detailed coverage; 3 points, extensive coverage; and 4 points, when coverage was full and systematic. The United Nations Environment Programme (UNEP) (2002, 2006) also used 0–4 scores, where “0” means no relevant coverage, or nothing

25

sufficiently significant to suggest that the company is taking this issue seriously and “4” means the reporting is serious, systematic, and extensive, and it is clear how reporting is linked to general business decision-making and core processes. Daub (2007) used a rating between 0 and 3 to assess to what degree the reporting fulfills the criterion, where 0 ¼ no meaningful information is provided on the specific criterion; 1 ¼ patchy information is provided; 2 ¼ the reporting provides good information on the criterion; however, one relevant area/indicator is not addressed; and 3 ¼ the reporting includes full information on the criterion. In his study, 33 individual criteria were broken down into 4 main categories, combining a number of meaningfully associated criteria. KPMG (2013) and Chiu and Wang (2015) chose, instead, to use criteria or facets to analyze the quality of SR reporting. KPMG (2013) sought to assess against seven criteria, while the latter used five facets. Ching et al. (2013) also constructed their own score system, and it will be used in this paper because of the fact that the dimensions and aspects of triple bottom line are used in an equitable way. This will be detailed in the next section.

Research Method This section is divided in the following subsections: method to calculate the scores and use of content analysis, sample selection and study period, and statistical tools used. Method to Calculate the Scores As said above, the method used by Ching et al. (2013) created four levels to calculate the scores based on GRI G3 Guidelines. The bottom level has 79 information/indicators: 9 indicators in the economical dimension (EC1 to EC9), 30 in the environmental dimension (EN1 to EN30), and 40 in the social dimension (LA1 to LA14, HR1 to HR9, SO1 to SO8, and PR1 to PR9). These 79 information/indicators were aggregated, in an upper level, by aspects, and the scores, in each aspect, were calculated using the arithmetic mean of their respective indicators. Moving up, the

A

26

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

aspects were aggregated by dimension, and their scores were composed using the arithmetic mean of their respective aspects. Finally, the overall score (OS), gathering the scores of the three dimensions, is the top level. An exception was made for the social dimension, where there is one more level, category, between aspect and dimension levels. The information present in the reports was classified in the same way as Ching et al. (2013) did on their study: (a) when all information was disclosed, a score of 1 was given; (b) when almost all information was disclosed, 0.75; (c) when the information was partially reported, 0.5; (d) when the information was briefly disclosed, 0.25; and (e) when no information was reported, 0. This classification allowed to get a final score for each company. By using arithmetic mean, each indicator could be aggregated into its respective aspect, each aspect into its respective subcategory, each category into its respective category, and all categories into one final level. This was possible because the methodology guarantees that each information disclosed has the same weight, despite the number of indicators related to each aspect/category. The different scores between the companies can be exemplified as follows: when there is no disclosure regarding the information, the score for it was 0 and its level was considered “no coverage.” “Sketchy” is when the information is not presented in a coherent and systematic way in the report, so its score is 0.25. For illustration, in Bradesco’s 2009 report (financial company), this company received financial aid from the government (EC4), but it was not detailed how much or how this financial aid was received. When the company presents the information in a coherent and systematic way, but still misses relevant aspects, it was given 0.5, and it was considered “systematic” level. As an example, Coelce (an energy company) did not split how much energy was saved because of improvements in efficiency programs (EN5). When the information is complete, but with little or no evidence that it affects the way the company conducts its business, it was given 0.75 and

considered “extensive” level. It was observed on Tractebel’s 2008 report (energy), on indicator LA5, about the minimum period for notifications about operational changes to the employees. There is no such minimum period. Finally, score 1 is given for “integrated” information, showing high importance for the company. Most of the companies received score on indicator EN22, about disposal of waste, an important point for sustainable analysis. To mitigate potential bias with content analysis in this study, two raters scored the reports following the criteria described. Possible discrepancies were analyzed together to standardize the analysis. This method provided robustness to our criteria and classification. Terminology, Sample Selection, and Study Period The terminology used for sustainability reporting varies between companies, and there is no single globally accepted definition. The most common terms to name the report are “corporate responsibility,” “corporate social responsibility,” “integrated report,“and “sustainability report,” although the latter was used by 43% of companies in the KPMG Survey (2013). The majority of the reports of this sample (over 50% of the total) are presented as a specific sustainability report. The KPMG survey (2013) shows that 51% included sustainability information in their annual financial report, while in the Fortune Global 250, 54.4% reported separately, and only 20% were included in the financial report (Kolk 2008). The second type of report is presented as Annual Report and Sustainability (less than 40% of the total). The remarkable aspect is the emergence of integrated reports in 2012 onward. Even when these companies do not label themselves as integrated report, this was considered as so in this study. They have incorporated some contents of integrated reporting into their reports, such as governance, operating context, strategic planning, and/or organizational overview. The sample is composed of 50 different companies listed at ISE for the period of 2008–2014, in a total of 218 reports. All of them were downloaded from the companies’ websites.

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

Statistical Tools Used Initially, the sustainability overall score (OS) and its dimensions (economical, environmental, and social) will be addressed. Descriptive analysis and test for normality will be presented followed by correlation analysis among dimensions and also with report year. Linear regression analysis between report year and sustainability scores will be investigated. Finally, linear regression between OS and company reporting experience was reported.

Results and Discussion The descriptive analysis of SR’s quality during the 7-year observation period is shown in Table 1. A total of 218 reports being 25 in 2008, 25 in 2009, 29 in 2010, 35 in 2011, 31 in 2012, 34 in 2013, and 39 in 2014. There has been a mild turnover of companies in the ISE list. Just for illustration, of the 25 companies that published reports in 2008, 17 of them published in 2009, 2010, and 2011, 16 in 2012, and 14 in 2013 and 2014 (see Table 5). Eight new firms were added in 2009, an equal number of firms deleted in the same year, five additions in 2010, while one was deleted. The same analysis can be done for other years. Same 14 companies were present in all the years of this period. The importance given by the companies to be part of ISE price index, and therefore be perceived as “sustainable companies” by the society, investors, and stakeholders, might be a justification for this increase in number of companies listed. While these companies have to meet the demands of the group of investors (note:

27

since its creation in 2005 till end of 2017, ISE presented a rentability of 185% vs. 113.7% of the benchmark of Brazilian Stock Exchange, called Ibovespa), they also seek legitimacy from the society for their sustainable business conduct. Such legitimacy is potentially threatened if society perceives that a company is not operating in an acceptable way (Hahn and Kühnen 2013). For illustration, the “license to operate” in ISE was revoked for the company Vale in 2016 because of the tragedy in Mariana, state of Minas Gerais (fall of tailings dam). Petrobras’ license was revoked in 2009 for refusing to meet a federal norm. The scores observed in a set of 218 reports show slight score differences across the years and point to a gradual and consistent year-byyear increase. These results are in line with the G250 companies that achieved a quality score of 59 out of a possible 100 (KPMG 2013), but they contrast with Skouloudis and Evangelinos (2009) results, with scores climbing to 25% in 2006 from 21% in 2005. The increase in the OS year by year can be an indication of this quest for legitimacy by the companies. Moreover, looking at the average scores of the sustainability dimensions (see Table 2), there are slight differences between them, ranging from 0,56 (the highest) to 0,473 (the lowest) average scores for economic and environment dimension, respectively. Both Jarque–Bera and Shapiro–Wilk tests were applied for the overall score and for the sustainability dimensions separately, considering all 218 companies’ reports and assuming a 0.05 significance level. These tests indicated that the overall score and the dimensions results are not

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies, Table 1 Description of the overall score results Subset All companies 2008 2009 2010 2011 2012 2013 2014

N 218 25 25 29 35 31 34 39

Mean 0.513 0.404 0.499 0.480 0.548 0.556 0.530 0.537

Median 0.544 0.419 0.561 0.458 0.565 0.609 0.587 0.563

Std. deviation 0.197 0.213 0.202 0.155 0.194 0.189 0.205 0.194

Std. error 0.013 0.043 0.043 0.029 0.033 0.034 0.035 0.031

A

28

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies, Table 2 Description of the overall score results Subset Overall Economic Environment Social

N 218 218 218 218

Mean 0.513 0.560 0.473 0.506

Median 0.544 0.576 0.495 0.538

Std. deviation 0.197 0.214 0.242 0.222

Std. error 0.013 0.014 0.016 0.015

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies, Table 3 Nonparametric correlation analysis among all sustainability dimension and report year Spearman correlation Sig. (two-tailed) Economic Environmental Social Year a

Economical 1 0.566b 0.654b 0.211b

Environmental 0.566b 1 0.678b 0.116

Social 0.654b 0.678b 1 0.133a

Year 0.211b 0.116 0.133a 1

Correlation is significant at the 0.05 level (two-tailed) Correlation is significant at the 0.01 level (two-tailed)

b

normally distributed. So, to measure the correlation between the variables, Spearman correlation was used and the results are seen in Table 3. All three sustainability dimensions are positively correlated. The correlation coefficients are around 0.6 but strongly significant. This indicates that, in general, when the disclosure in one dimension improves, the scores of the disclosure in the other two dimensions follow this improvement. Report year has a weak, but still significant, positive correlation with economic and social dimensions. This result indicates that the disclosures of these dimensions are improving throughout the years. To investigate how the disclosure in the three sustainability dimensions is similar, Kruskal–Wallis test was applied. This analysis indicates the existence of significant differences among dimension scores. Post hoc multicomparison test for Kruskal–Wallis, suggested by Daniel (1978) and Siegel and Castellan (1988), shows that the disclosure concerning the economic dimension is a little better than in environmental dimension, using a 0.05 significant level. This result confirms what Lozano and Huisingh (2011) state that there are simultaneous interrelations at equilibrium between these dimensions over time. The companies realize that there

are different perceptions for different constituencies to get legitimacy, and this equilibrium can be seen as a good practice. Stakeholder theory suggests that businesses have to consider different expectations of a wide group of constituents having an interest in corporate activities (Hahn and Kühnen 2013). The quality displayed in the economic dimension can be of interest to investors and shareholders. On the other hand, the social and ethical behaviors can be of interest to society and environmental groups. To investigate whether sustainability reports’ disclosure had a consistent increase during the studied period, a linear model was used. For paired data, simple linear regression analysis can be applied, despite the fact that the OS and its dimensions may not be normally distributed. Table 4 shows the linear regression between report year and overall score. This regression has statistical significance at 0.05 level. It shows that the overall score presents an average 0.018  0.007 increment per year. In the same table, the linear regression between year and the economic and social dimensions was tested at a 0.05 significant level. It resulted in 0.023  0.007 yearly improvements in the economic dimension score, whereas for the social dimension, this improvement was 0.016  0.008. This means

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

29

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies, Table 4 Linear regression between year and sustainability report cores Dependent variable Overall Economic Social

Model (Constant) year (Constant) year (Constant) year

Unstandardized coefficients B Std. error 35.268 13.340 0.018 0.007 46.687 14.389 0.023 0.007 −32.112 15.139 0.016 0.008

Standardized coefficients Beta 0.180 0.218 0.145

t 2.644 2.682 3.245 3.284 −2.121 2.155

Sig. 0.009 0.008 0.001 0.001 0.035 0.032

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies, Table 5 Years of reporting in the observed period (2008–2014) Year All companies 2008 2009 2010 2011 2012 2013 2014 Total Mean Median Std. deviation Std. error

1st 25 8 5 8 0 1 3 50 0.414 0.405 0.185 0.026

2nd 0 17 7 4 8 2 1 39 0.537 0.563 0.192 0.031

Year Nth report 3rd 4th 0 0 0 0 17 0 6 17 3 4 9 4 2 9 37 34 0.511 0.557 0.504 0.561 0.162 0.178 0.027 0.031

that report quality for OS and for these two dimensions has increased. However, concerning environmental dimension, the regression did not show statistical significance. In contrast with the above results, the quality varies significantly. Marquis and Qian (2014) state that Chinese reporting has been criticized for its low quality, CSR itself has been criticized for showing little actual substance or disclosures have been minimal (Lyon and Maxwell 2011; Moseñe et al. 2013), and although the reporting quality has improved over the past 10 years, it is still patchy (Corporate Register 2013). Huang and Wang (2010) analyzed 162 sustainability reports from 2002 to 2008 and found that its quality has polarized. The next question researched is whether this increase in the quality results from the ability of

5th 0 0 0 0 16 4 5 25 0.566 0.650 0.217 0.043

6th 0 0 0 0 0 14 5 19 0.537 0.593 0.219 0.050

7th 0 0 0 0 0 0 14 14 0.573 0.642 0.216 0.058

Total 25 25 29 35 31 34 39 218 0.513 0.544 0.197 0.013

the companies in writing good reports year after year because of a gain in experience. The company experience in reporting was identified, for each company, as the first report on the 2008–2014 period, the second report in this period, up to the seventh report. It means that one company that published three reports during the 7-year period, regardless of the year published, will have the first, second, and third reports. The seventh report will be associated with the last one for companies that published reports in the 7-year period. This is shown in Table 5. For illustration, 25 companies published reports in 2008 (first report); 17 of them published in 2009 (second report), 2010, and 2011; 16 in 2012 (fifth report); and 14 in 2013 (sixth report) and 2014 (seventh report) (see the numbers in bold in diagonal). Of the total of 50 companies

A

30

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

that publish the first report, 11 companies published only 1 report, 2 published 2 reports, 3 published 3 reports, 9 published 4 reports, 6 published 5 reports, 5 published 6 reports, and 14 published for all the 7 years (2008–2014). It is possible to note the effort by the companies to send signal to investors and stakeholders through the sustainability reports. Seventy-eight percent of the companies that started to publish SR in 2008 are still doing so in 2014. Descriptive analysis of the companies grouped by the years of reporting is shown at the bottom of Table 5. The results show an improvement in the mean OS with an increase in number of years in reporting. Kruskal–Wallis test was applied to detect significant differences in the OS across the experience (Nth report). These intercomparison tests reveal that, at a 0.05 significance level, there are differences in the OSs. Post hoc test for Kruskal–Wallis shows that the seventh reports of OS are better than the first reports, meaning that companies are improving its quality in writing a good report. A better disclosure of SR information can be regarded as an instrument to shape the perceived legitimacy of the company, as also stated by Campbell et al. (2002). At the same time, greater and better exposure to the stakeholders could influence a company’s need to actively secure its legitimacy by signaling sustainability efforts in respective reports. For Hahn and Kühnen (2013), companies might want to reduce this information asymmetry by proactively securing their sustainability activities to ensure legitimacy. In addition to the above findings, using linear regression between OS and company reporting experience, Table 6 shows that the OS presents an average 0.024  0.007 increment for each report in the company years of report as years go by (statistical significance at 0.05 level).

Conclusion The purpose of this practical research undertaken is to examine the quality of information disclosed in the sustainability reports (SR) of Brazilian companies considering signaling, legitimacy, and stakeholder theories, i.e., to what extent proactive SR disclosures are interrelated to attempt to gain and maintain legitimacy, to gain support of the stakeholders, and to reduce information asymmetry. The companies are gradually assimilating the assumptions of these theories and turning them into business practices. There is a steady increase in the number of sustainability reports published, the amount of information reported, and the quality of disclosure. For Hahn and Kühnen (2013), all three theories can indeed help explain the proliferation for SR in the last decade. Signaling, legitimacy, and stakeholder theories are complex, involving many variables which cannot be easily measured or controlled, and some issues and problems are posited in this paper. One of these issues is the fact that companies do seek to employ a whole range of media to obtain legitimacy, reach their stakeholders, and reduce information asymmetry, rather than just voluntary sustainability reports. Within these boundaries, this paper attempts to consider these theories to inform the empirical approach by examining the quality of SR. Sustainable practices as well as reportings, because they help overcome asymmetric information about firms’ intents and behaviors, can be an effective means for them to achieve social acceptance. Based on signaling and legitimacy theories, the authors suggest that the improvement in sustainability reporting quality acts as an important signal to gain legitimacy when information asymmetry happens during the legitimacy process. It seems to be more and more important for the

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies, Table 6 Linear regression analysis between overall score (dependent) and years of report (independent) variables Model Constant YYears of report

Unstandardized coefficients B Std. error 0.436 0.026 0.024 0.007

Standardized coefficients Beta 0.225

t 16.560 3.391

p-value 0.000 0.001

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

companies to build a company culture of good reporting and use this reporting process to generate value and trust for their stakeholders, to build a meaningful relationship with them. Furthermore, by improving the quality of sustainability information and thus signaling sustainability efforts over time, companies may create even more conditions for their legitimacy. Other dimensions of sustainability reporting may also have similar signaling effects in information asymmetry conditions. The disclosure for economic and social dimensions is better than the environmental dimension, and the quality improvement over time was the result of synergies and interlinkages more between these two dimensions of sustainability and to a lesser extent because of the environmental dimension. This should enhance firm’s legitimacy with social and economic audiences. Society and stakeholders exerting pressure for better and more detailed disclosure must encourage greater and better quality of the reporting. The results of this paper are of interest for several reasons: • Extend and broaden the use of signaling in studying its use on sustainability reporting. • The use of three theories is an appropriate framework for empirical analysis of sustainability reporting disclosure quality in Brazil. • It adds to the scarce evidence of sustainability reporting in Brazil. Firms should view investing in sustainability reporting disclosure as a strategy for obtaining business legitimacy as a practical implication of this chapter. Finally, viewing corporate performance using only economic measures is not regarded as sufficient, and, therefore, it should be measured also against social and environmental criteria. Shareholders may not want to invest in companies that are not following a socially responsible path. Similarly, stakeholders are concerned about whether a company is acting in an environmentally friendly way. Suggestion for further studies is to compare these results with the firms listed in other

31

sustainability stock indices. It is possible that companies may seek to address its legitimacy gaps, to influence their stakeholders, or even to reduce the asymmetry of information in ways other than through quality of disclosure in their sustainability reports. This might be one limitation of this study. As stated initially, a good quality disclosure of sustainability reports attempts to gain and maintain legitimacy, to gain support of the stakeholders, and to reduce information asymmetry, thus promoting sustained and sustainable economic growth.

Cross-References ▶ Contribution of Enterprises in Achieving the Sustainable Development Goals ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

References Azapagic A (2004) Developing a framework for sustainable development indicators for the mining and mineral industry. J Clean Prod 12:639–662. https://doi.org/ 10.1016/S0959-6526(03)00075-1 Campbell D, Craven B, Shrives P (2002) Voluntary social reporting in three FTSE sectors: a comment on perception and legitimacy. Account Audit Account J 16:558–581. https://doi.org/10.1108/ 09513570310492308 Chen S, Bouvain P (2009) Is corporate responsibility converging? A comparison of corporate responsibility reporting in the USA, UK, Australia, and Germany. J Bus Ethics 87:299–317. https://doi.org/10.1007/ s10551-008-9794-0 Ching HY, Gerab F, Toste T (2013) Analysis of sustainability reports and quality of information disclosed of top Brazilian companies. Int Bus Res 6(10):62–77. https://doi.org/10.5539/ibr.v6n10p62 Chiu TK, Wang YH (2015) Determinants of social disclosure quality in Taiwan: an application of stakeholder theory. J Bus Ethics 129:379–398. https://doi.org/ 10.1007/s10551-014-2160-5 Cho CH, Patten DM (2007) The role of environmental disclosures as tools of legitimacy: a research note. Acc Organ Soc 32:639–647. https://doi.org/10.1016/j. aos.2006.09.009 Connelly BL, Ketchen DJ Jr, Slater SF (2011a) Toward a “theoretical toolbox” for sustainability research in marketing. J Acad Mark Sci 39:86–100

A

32

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies

Connelly BL, Certo ST, Ireland RD, Reutzel CR (2011b) Signaling theory: a review and assessment. J Manag 37(1):39–67. https://doi.org/10.1177/ 0149206310388419 Corporate Register (2013) CR perspectives 2013, global CR reporting trends and stakeholder views. Corporate Register, London Corrêa R, de Souza MTS, Ribeiro HCM, Ruiz MS (2012) Evolução dos níveis de aplicação de relatórios de sustentabilidade (GRI) de empresas do ISE/Bovespa. Sociedade, Contabilidade e Gestão 7(2):24–40 Cotter J, Najah MM (2012) Institutional investor influence on global climate change disclosure practices. Aust J Manag 37:169–187. https://doi.org/10.1177/ 0312896211423945 Daniel WW (1978) Applied nonparametric statistics. Houghton Mifflin Company, Boston Daub CH (2007) Assessing the quality of sustainability reporting: an alternative methodological approach. J Clean Prod 15(1):75–85. https://doi.org/10.1016/j. jclepro.2005.08.013 Davila A, Foster G, Gupta M (2003) Venture capital financing and the growth of startup firms. J Bus Ventur 18:689–708. https://doi.org/10.1016/S0883-9026(02) 00127-1 Deegan C (2002) The legitimising effect of social and environmental disclosures: a theoretical foundation. Account Audit Account J 15:282–311. https://doi.org/ 10.1108/09513570210435852 Dionne G, Ouederni K (2011) Corporate risk management and dividend. Financ Res Lett 8(4):188–195. https:// doi.org/10.1016/j.frl.2011.05.002 Dye RA (1985) Disclosure of nonproprietary information. J Account Res 23(1):123–145. https://doi.org/10.2307/ 2490910 Eugénio TP, Lourenço IC, Morais AI (2013) Sustainability strategies of company TimorL: extending the applicability of legitimacy theory. Manag Environ Qual Int J 24(5):570–582. https://doi.org/10.1108/MEQ-032011-0017 Gray R, Kouhy R, Lavers S (1996) Corporate social and environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Account Audit Account J 8(2):47–77. https://doi.org/10.1108/ 09513579510146996 Gregory CH, Meade AW, Thompson LF (2013) Understanding internet recruitment via signaling theory and the elaboration likelihood model. Comput Hum Behav 29(5):1949–1959. https://doi.org/ 10.1016/j.chb.2013.04.013 Hahn R, Kuhnen M (2013) Determinants of sustainability reporting: a review of results, trends, theory, and opportunities in an expanding field of research. J Clean Prod 59:5–21. https://doi.org/10.1016/j.jclepro.2013.07.005 Huang T, Wang A (2010) Sustainability reports in China: content analysis. In: International conference on future information technology and management engineering, Changzhou, 9–10 October. https://doi.org/10.1109/ fitme.2010.5654711

Janney JJ, Folta TB (2006) Moderating effects of investor experience on the signaling value of private equity placements. J Bus Ventur 21(1):27–44. https://doi.org/ 10.1016/j.jbusvent.2005.02.008 Jenkins H, Yakovleva N (2006) Corporate social responsibility in the mining industry: exploring trends in social and environmental disclosure. J Clean Prod 14:271–284. https://doi.org/10.1016/j.jclepro.2004.10.004 Kolk A (2008) Sustainability, accountability and corporate governance: exploring multinationals’ reporting practices. Business Strategy and the Environment 17:1–15. https://doi.org/10.1002/bse.511 Konar S, Cohen MA (2001) Does the market value environmental performance? Rev Econ Stat 83:281–289. https://doi.org/10.1162/00346530151143815 KPMG (2013) The KPMG Survey of Corporate Responsibility Reporting 2013 Retrieved from https:// blogmaterialityreporting.files.wordpress.com/2013/12/ kpmg-corporate-responsibility-reporting-survey-2013. pdf. Legrand S, Coderre F (2012) Determinants of GRI G3 application levels: the case of the Fortune Global 500. Corp Soc Responsib Environ Manag 20:182–192 Lindblom CK (1994) The implications of organizational legitimacy for corporate social performance and disclosure. In: Critical perspective on accounting conference, New York Lock I, Seele P (2015) Analyzing sector-specific CSR reporting: social and environmental disclosure to investors in the chemicals and banking and insurance industry. Corp Soc Responsib Environ Manag 22:113–128. https://doi.org/10.1002/csr.1338 Lozano R, Huisingh D (2011) Inter-linking issues and dimensions in sustainability reporting. J Clean Prod 19:99–107 Lyon TP, Maxwell JW (2011) Greenwash: environmental disclosure under threat of audit. J Econ Manag Strateg 20(1):3–41 Macedo MAS, Corrar LJ, De Siqueira JRM (2012) Analise comparativa do desempenho contábil financeiro de empresas sociambientalmente responsáveis no Brasil. Revista de Administração e Contabilidade da Unisinos 9(1): 13-26. https://doi.org/10.4013/base.2012.91.02 Mahadeo JD, Oogarah-Hanuman V, Soobaroyen T (2011) A longitudinal study of corporate social disclosures in a developing economy. J Bus Ethics 104:545–558. https://doi.org/10.1007/s10551-011-0929-3 Mahoney LS, Thorne L, Cecil L, LaGore W (2013) A research note on standalone corporate social responsibility reports: signaling or greenwashing. Crit Perspect Account 24:350–359. https://doi.org/ 10.1016/j.cpa.2012.09.008 Marquis C, Qian C (2014) Corporate social responsibility reporting in China: symbol or substance? Organ Sci 25(1):127–148. https://doi.org/10.1287/ orsc.2013.0837 Mavlanova T, Benbunan-Fich R, Koufaris M (2012) Signaling theory and Information asymmetry in online commerce. Inf Manag 43:240–247. https://doi.org/ 10.1016/j.im.2012.05.004

Assessment of the Sustainability Reports: Evidence from Brazilian Listed Companies Moseñe JA, Burritt RL, Sanagustín MV, Moneva JM, Holyoak JT (2013) Environmental reporting in the Spanish wind energy sector: an institutional view. J Clean Prod 40(1):199–211. https://doi.org/10.1016/j. jclepro.2012.08.023 Nikolaeva R, Bicho M (2011) The role of institutional and reputational factors in the voluntary adoption of corporate social responsibility reporting standards. J Acad Mark 39(1):136–157. https://doi.org/10.1007/s11747010-0214-5 O’Donovan G (2000) Legitimacy theory as an explanation for corporate environmental disclosures. PhD thesis in business, Victoria University of Technology, Melbourne O’Donovan G (2002) Environmental disclosures in the annual report: extending the applicability and predictive power of legitimacy theory. Account Audit Account J 15:344–371. https://doi.org/10.1108/ 09513570210435870 Patten D (1992) Intra-industry environmental disclosures in response to the Alaskan oil spill: a note on legitimacy theory. Acc Organ Soc 17(5):471–475. https://doi.org/ 10.1016/0361-3682(92)90042-Q Roberts RW (1992) Determinants of corporate social responsibility disclosure: an application of stakeholder theory. Acc Organ Soc 17(6):595–612. https://doi.org/ 10.1016/0361-3682(92)90015-K Siegel S, Castellan NJ (1988) Nonparametric statistics for the behavioral sciences, 2nd edn. McGraw-Hill, New York Skouloudis A, Evangelinos KI (2009) Sustainability reporting in Greece: are we there yet? Environ Qual Manag 19(1):43–60. https://doi.org/10.1002/tqem.20235

33

Spence M (2002) Signaling in retrospect and the informational structure of markets. Am Econ Rev 92(3):434–459. https://doi.org/10.1257/00028280260136200 Suchman MC (1995) Managing legitimacy: strategic and institutional approaches. Acad Manag Rev 20(3):571–610 Tricker RI (1983) Corporate responsibility, institutional governance and the roles of accounting standards. In: Bromwich M, Hopwood AG (eds) Accounting standards setting – an international perspective. Pitman, London United Nations Environment Programme (UNEP) (2002) Trust us: the global reporters 2002 survey of corporate sustainability reporting. http://www.sustain ability.com/library/trust-us. Accessed 23 Aug 2012 United Nations Environment Programme (UNEP) (2006) Tomorrow’s value: the global reporters 2006 survey of corporate sustainability reporting. www.sus tainability.com/library/global-reporters-methodology#. UFHmStWe61k. Accessed 23 Aug 2012 Verrecchia RE (1983) Discretionary disclosure. J Account Econ 5:179–194. https://doi.org/10.1016/ 0165-4101(83)90011-3 Wei Z, Shen H, Zhou KZ, Li JJ (2017) How does environmental corporate social responsibility matter in a dysfunctional institutional environment? Evidence from Chin. J Bus Ethics 140(2):209–223. https://doi. org/10.1007/s10551-015-2704-3 Wells JD, Valacich JS, Hess TJ (2011) What signals are you sending? How website quality influences perceptions of product quality and purchase intentions. MIS Q 35(2):373–383. https://doi.org/10.1007/s10551-0152704-3/fulltext.html

A

B

Bad Work ▶ Precarious Work and Sustainable Development

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies Sten Thore1 and Ruzanna Tarverdyan2 1 Centennial Fellow Emeritus, The University of Texas at Austin, Austin, TX, USA 2 The Geneva Consensus Foundation, Geneva, Switzerland

Definitions Spurred on by the success of the joint European Commission, European Parliament, Club of Rome, Organization for Economic Co-operation and Development (OECD) and World Wildlife Fund (WWF) high-level conference entitled “Beyond GDP” held in 2007; the Beyond GDP initiative is about developing indicators that are as clear and appealing as GDP, but more inclusive of environmental and social aspects of progress. Economic indicators such as GDP were never designed to be comprehensive measures of prosperity and well-being. We need adequate

indicators to address global challenges of the twenty-first century such as climate change, poverty, resource depletion, health, and quality of life.

A Quest for Integrated Solutions to Meet Multiple Goals Sustainable development is indeed the most significant collective challenge facing humanity. Since Rio Summit, international community has inspired to integrate the multiple social, economic, and environmental dimensions within a single framework (see United Nations, General Assembly 2012; United Nations 2015, 2015a, b, c, d). Nonetheless, no country has yet succeeded (see United Nations 2013b). Prevailing governance systems tend to separate these pillars at policy, planning, and management levels. This disconnect has led to a widening of inequality, both at global and national levels, pervasive social tension, alarming pace of climate change, and environmental degradation (United Nations University Institute of Advanced Studies (UNU/IAS) 2002; United Nations Commission on Sustainable Development (UNCSD) Secretariat 2011a, b). Although economic, social and environmental objectives are often complementary, there is no natural trade-off between them. The choice among these objectives inevitably leads to

© Springer Nature Switzerland AG 2021 W. Leal Filho et al. (eds.), Decent Work and Economic Growth, Encyclopedia of the UN Sustainable Development Goals, https://doi.org/10.1007/978-3-319-95867-5

36

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

stakeholders’ conflicts. Addressing it without compromising our shared prosperity and the right to development of future generations requires a significant alteration of macroeconomic governance and calls for innovative policy responses toward the achievement of SDGs. The Brundtland Commission report defines Sustainable Development, as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (see The World Commission on Environment and Development 1987). We recall, that Pareto efficiency or Pareto optimality is a situation that cannot be modified so as to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off. Consequently, from an analytical perspective, attaining of sustainable development goals, and meeting the needs of the present without compromising the ability of future generations to meet their own needs actually makes a case of looking for Pareto optimum solutions, in which increase in benefit can be achieved without worsening other benefits. A Pareto optimal solution provides the best mix of results in any decision so as to create maximum human satisfaction (Goodland and Ledec 1987). Moreover, integrated analysis and evaluation of positive and negative impact of policy scenarios on the three pillars of sustainable development within one analytical framework involves a multiple-input and multiple-output framework. Due to the non-commensurate nature of policy and performance variables and the absence of market prices reflecting social and environmental costs and benefits, traditional analytical tools fail to capture the multidimensional character of the analysis. (see United Nations Research Institute for Social Development (UNRISD) (2011)) The approach proposed here turns to data envelopment analysis (DEA) first introduced by A. Charnes, W. Cooper, and E. Rhodes, (1978), to be a powerful analytical tool for evaluating the progress of countries toward the achievement of sustainable development goals. It is an attempt to use DEA (mathematical programming) models as a nonparametric alternative to currently used

econometric models and links operations research with general economics as an aid to decisionmaking. The DEA is a nonparametric method in operations research and economics for the estimation of production frontiers. DEA evaluates the performance of a population of entities called decisionmaking units (DMUs) and policy-making units (PMUs) – countries, regions, cities, schools, hospitals, banks, enterprises, etc. aiming to find the best production and transformation practices. DMUs are responsible for converting inputs to outputs. It thus provides a new analytical tool for evaluating ex-post performances and accomplishments of countries in their socioeconomic and environmental development and provides a basis for ex-ante planning of future activities. See A. Emrouznejad, B.R. Parker, and G. Tavares (2008) who list more than 4200 papers and book chapters by 2500 authors that treat a wide variety of uses and developments of DEA (including country and regional development evaluations) in more than 42 different countries. See also William W. Cooper, L.M. Seiford and K. Tone (2007) and W.W. Cooper, L. Seiford, E. Thanassoulis and S. Zanakis (2004b); Seiford and Thrall (1990). A distinguishing feature of DEA is that it can handle multiple non-commensurate input/output variables interacting in complex and unknown ways. The DEA is a “black-box” technique used when there is insufficient knowledge of causal relationships; or there is a lack of consensus on the alternatives. It is capable of addressing managerial, social, and economic issues and provides useful results for conducting ex-post evaluations of performances of decision
/policy-making units that enable decision-makers to develop ex-ante measures directed to improving future performances. DEA is also a benchmarking tool for identifying the best production/transformation practices. The ultimate goal is to improve these processes of inefficient PMUs (countries) given their mix of resources and products in comparison to countries on a frontier of possible performance with a similar mix of indicators. However, due to the complexity of the socioeconomic and environmental systems under analysis, populated by a variety of

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

cross-sectoral relations and feedbacks, the assessment of progress toward sustainability with a single metric is a very difficult task. Whereas a conventional single index (such as a consumer price index) is well understood, recent applications have tended to increase the coverage of the index to include sweeping concepts like “social progress” or “social happiness. We feel uncertain about the merits of these efforts and believe stakeholder participation seems a safer and more objective way forward. To be efficient and effective, an appropriate sustainable development measurement framework is needed to address the specific needs of policy-makers in monitoring progress in this field of growing importance (Fig. 1). The difficulty of nailing down the exact meaning of such composites is compounded by the challenge to determine the individual weights of each contributing factor. How do you rate the weight of basic nutrition compared to the weight of unpolluted air? And why should these weights be the same for all nations, for the USA as well as poor countries in Africa? Ours is scientific indeed and we make a paradigm case of frontier economics. In DEA models, a multi-input, multi-output situation is reduced to a ratio of a single “virtual” output and a single “virtual” input by applying multipliers or weights to observed inputs and outputs. In DEA models weights are chosen so as to

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies, Fig. 1 Weights in Best Practice versus Benefit-of the doubt approach

37

maximize the efficiency of the PMU (country) under consideration. Weights are model solutions that maximize the index value for each country, subject to the constraint, that when those same weights are applied to the data of any other country, that other countries’ efficiency ratio cannot exceed “unity.” That is, no PMU (country) is permitted to have an efficiency score higher than 100%. The endogenously selected weights maximize the weighted sum of the index value of the country performance and provide information that can be used to guide trade-offs between different inputs/outputs or to determine the results of increases/decreases in their corresponding amounts. One of the features of DEA models is that it permits each PMU to be seen in the best possible light, compared to others in the comparison set. Comparing the results of both developed and developing nations, we propose a measure of the effectiveness of policy in converting the GDP of a nation into the UN goals. The most successful nations in this respect (and they include some quite poor nations) provide benchmarks against which the efforts of other less successful ones can be compared. In a fashion, the new measure accomplishes what generations of economists have tried to achieve: constructing an expanded measure of growth that includes societal, environmental, and sustainability characteristics as well. It does this

B

38

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

by abandoning two fundamental assumptions of classical economics: the standard notion that an index should feature given and fixed weights of the individual components to be measured (rather than determining these weights through mathematical programming), and that nations always act rationally and optimally (rather than acknowledging the possibility of suboptimal or even irrational behavior). There is a wide consensus among development partners on the need for moving away from inputoriented monitoring systems and include outputbased impact monitoring in order to shift the emphasis in assistance programs to a more systematic focus on development results, along with a more explicit linkage of development priorities and resources to results (Fig. 2). The DEA characterizes each DMU by a single summary relative efficiency score. The definition of efficiency is based on the engineering concept of total factor productivity as the ratio of the weighted sum of outputs to the weighted sum of inputs whereby a multi-input, multi-output situation is reduced to a ratio of a single “virtual” output and t a single “virtual” input through the use of inner product of virtual multipliers-weights by observed inputs and outputs. Parting ways with conventional index calculations (see Maragos and Despotis (2002)), however, rather than using fixed and predetermined Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies, Fig. 2 DEA Input- OutputOutcome Framework

weights throughout, we have determine the optimal weight to be given to each factor, thus enabling us to form the ratio between the optimally weighted outputs and the optimally weighted inputs. For both the outputs and the inputs, an index of the component factors has to be constructed. The present approach provides multiple advantages in terms of political acceptance and easy to communicate: • Better description of reality than equal weighting: Weights are not pre-assigned, they are calculated from data. • Sensitive to national policy priorities: weights are endogenously determined by the observed performance. • No other weighting scheme yields higher composite score (such that overall relative performance index is as high as possible). • Benchmark is not based upon theoretical bounds, but a linear combination of observed best performances incentive generating rather than punishing laggards. • Weights may help to define trade-offs between policy priorities. The model transcends standard measures to more comprehensive economic, social, and environmental attributes. In fact it is the added value of our model to the literature in this domain that we

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

expanded the notion of efficiency of decisionmaking units decision (DMUs) to the effectiveness of policy-making units (PMUs). This approach is flexible, and it is applicable to evaluating the performance and competitiveness of all sorts of decision-making units: such as regions, cities, projects, and enterprises; schools; banks; etc. that are engaged in transforming multiple inputs to multiple outputs: “Frontier” PMUs (nations in our example) are able to coordinate available tools to achieve an optimal mix of social-economic goals thus defining the frontier of the doable. The others are sub-frontier, falling short of the doable. The task of distinguishing between the two is an empirical one. Employing methods of operations research, here we determine numerically the envelope to a given set of data points. The envelope is the frontier and a surface in many dimensions (one dimension for each policy goal and each policy instrument). Rather than packing all given data into a single dubious index, the envelope spells out all the desired aspects of the performance explicitly. For sub-frontier units, we calculated its possible improvement. Global rankings of nations in terms of a single index easily become “elitist” or even plain undemocratic in that they highlight the

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies, Fig. 3 EffectivenessEfficiency-Productivity Cycle

39

achievements of a few advanced mainly Western winners, whereas the majority of poor and developing nations are left in the backwaters. Within the proposed framework, the frontier includes nations from all continents. Some of them are quite poor. So, “best practice” becomes a quite democratic concept. Most importantly, our model suggests how things could be improved and some indication of corrective policy. The peer analysis thus provides a powerful diagnostic, identifying a few role models showing the way toward improved performance. The weights of both the achievements and the policy efforts are determined by mathematical programming. Employing methods of operations research, here we determine numerically the envelope to a given set of data points. Country’s performance-policy implementation is evaluated on the basis of: • Effectiveness: (i) Ability to state desired goals (ii) Ability to achieve desired goals • Efficiency: (i) Benefits realized (ii) Resources used • A multi-factor productivity: (i) (weighted sum of outputs)/(weighted sum of inputs) (Fig. 3)

B

40

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

A key constructs of a DEA are the envelopment surface and the efficient projection path to the envelopment surface. The DEA proceeds by constructing an empirical surface (frontier-benchmark) composed of the best practice performers and then measures the efficiency relative to that frontier. DEA identified inefficiencies for those DMUs not on the frontier providing the amount of additional output that could have been produced if the DMU in question operated using the “technique” of the best practice provider. And identifying the group of peers the DEA enables to learn from best practice frontier. DEA also provides reference units for inefficient DMUs. Reference units are hypothetical units on the efficient surface, which can be regarded as target units for inefficient units. A reference unit is traditionally found in DEA by projecting an inefficient DMU radially to the efficient surface (Fig. 4). Term “radial” means that an efficient frontier is tried to reach by incorporating the values of the current outputs and/or decreasing the values of the current inputs in the same proportion.

GDP and Beyond As long as economists have calculated the GDP of a nation, there has been the recognition that it Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies, Fig. 4 Understanding the Envelopment Procedure

does not measure societal progress beyond pure economic and financial indicators. Already in his 1934 report to the US Congress, Simon Kuznets cautioned that GDP does not measure “welfare.” Again, in his 1971 Nobel memorial lecture, he reiterated that “the welfare of a nation can scarcely be inferred from a measurement national income.” In order to overcome this shortcoming, impressive efforts have been spent since then to develop some kind of generalized GDP incorporating environmental and other non-market factors. In our study Diagnostics for a Globalized World, we have discussed a list of suggested extensions of the calculation of GDP (Thore and Tarverdyan 2015, Chap. 9). A recent inventory catalogued almost 300 composite indicators, including indices of “sustainable net benefit,” “ecological footprint,” “genuine progress,” and even a “happy planet index” (see ibid.) With a media blitz in April 2015, Harvard professor M. Porter launched his new “social progress index,” an impressive attempt to capture the full dimensions of “social happiness” even extending the calculations to reflect personal freedom and choice. The SPI index is published by the nonprofit Social Progress Imperative. For another effort along similar all-inclusive lines, see the reference World Economic Forum, 2018.

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

In the pages to follow, we shall show how it is possible to extend the reach of the GDP without sacrificing its conventional definition. Rather than looking for new and ever more diffuse aggregates, we shall simply seek to document how countries in the contemporary world are able to combine an expanding GDP with achieving the UN range of economic, environmental and social development goals (the SDGs). Our results are brought together in the calculation of an “effectiveness rating” of policy for each country. The format of analysis proposed here hails back to the classical theory of economic policy as laid out in the early 1950s by Jan Tinbergen (Tinbergen 1952, 1956). In that spirit we view GDP as an intermediary “means” influencing the SDGs (“targets”). Furthermore, following Tinbergen, we shall postulate a social welfare function of the goals, to be maximized by the policy-maker. Optimal policy, however, does not necessarily coincide with actual policy. In the real world, the actual goal achievements of a country often fall short of the optimal ones. To understand and capture this, we need to abandon Tinbergen’s assumptions of general equilibrium, allowing deviations between optimal behavior and actual behavior. The economic and social policy of a country may be badly coordinated, or misdirected. It may be chaotic or even entirely without control (as during rebellion or war). The rankings will recognize equilibrium or disequilibrium behavior. Countries in disequilibrium will be ranked according to their relative success in reaching the optimal SDGs. Their shortcomings in reaching each SDG will be calculated. To characterize the economic performance of a nation, we propose then not one single measure (GNP) but two: GNP and the rating of its SDG policy effectiveness. Standard calculations of GDP provide no clue as to how a nation could possibly improve its performance. They meekly record actual achievements, whether in the upper range or the lower range. The great advantage of the effectiveness rating of policy to be defined here is that it is diagnostic: it holds specific suggestions as to how the sustainability achievements of the nation could be improved,

41

Doubting the Blessings of Economic Growth The idea that economic growth sows the seeds of its own destruction is an old one. It was a main theme of Thomas Malthus, who argued that improved living conditions in a region or a country will always be wiped out by a corresponding increase in population (see Malthus 1798, An Essay of the Principle of Population, London 1798). Malthus actually formulated a mathematical law to this effect: the means of subsistence increases linearly, but the population, if unchecked, increases exponentially. In the contemporary world, many countries in Africa display the ailments that Malthus predicted, with a current total population of 1.2 billion people (the figure having doubled since 1990). The explosion in population was made possible by dramatic medical progress and in the cultivation of new and high-yield crops. Yet, there is widespread poverty and human misery. According to FAO, one third of the population in sub-Saharan countries is undernourished. The UN Population Fund writes: “In today’s world, gaps in wealth have grown shockingly wide. Billions of people linger at the bottom, denied their human rights and prospects for a better life. At the top, resources and privileges accrue at explosive rates. . .” (Worlds Apart, State of the World Population 2017, New York, 201700 ). The great German naturalist Alexander von Humboldt, traveling in America, saw another unfortunate consequence of economic growth: The rapid deforestation and the destruction of the forest’s undergrowth dried the land, and it became barren. The damage done by such human intervention was already “incalculable” (see Humboldt 1814–1829, Personal Narrative of Travels to the Equinoctial Regions of the New Continent, London 1814–1829). Humankind had the power to destroy the environment, and the consequences could be catastrophic. The Club of Rome report The Limits to Growth, 1972 (Meadows 1972), presented the rapid economic growth the world was experiencing at the time, as a key reason for the increase in global environmental problems such as pollution,

B

42

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

shortage of raw materials, and the destruction of ecosystems. The same ideas were formalized by Georgescu-Roegen in his The Entropy Law and the Economic Process 1971, one of the founding works of the discipline of ecological economics. To avoid the rapid destruction or global resources, some of Georgescu-Roegen’s followers advocated national policies of “Zero percent economic growth” (see Georgescu-Roegen (1971)). Today the world is confronted by yet another danger: global warming caused by the exploration and burning of fossil fuels and the accumulation of harmful gases in the stratosphere. The Swedish Nobel laureate S. Arrhenius had already in 1896 predicted the coming of global warming due to an increase of atmospheric carbon dioxide (the greenhouse effect) (see Arrhenius 1896). The Luddites in eighteenth-century England experienced another negative side of growth: jobs lost in the textile industry due to the introduction of new weaving technology. Later generations of workers saw layoffs in the wake of the increasing mechanization of industrial jobs in the steel industry and in the manufacture of automobiles. More generally, technological change increases worker productivity and thus creates an incentive for management to reallocate (or layoff) workers. In the modern age, the advent of new communication and information technology has created new possibilities of distributing and organizing production on a global scale. Globalization has razed the city of Detroit, destroying some of the best paid industrial jobs in the world (the other side of the coin: the bustling IT industry in the city of Bangalore, the “Silicon Valley of India”). Some recent studies have argued that economic inequality has been on the increase in the developed world during the last 50 years, blaming the capitalist system itself (e.g., see Piketty 1997, 2013). Technological innovation if successful bolsters the bottom line of farms, traders, and corporations. If the increased profit is returned to the owners, it will “trickle down” to consumers. But if it invested instead, worker productivity hopefully increases, but wages may respond only gradually. Overall inequality in the economy increases, both in the distribution between the

returns to capital and labor and in the vertical income distribution. Present-day tech giants like Apple, Google, and Amazon pose other questions. The phenomenon of hyper-growth (the presence of vast economies of scale in Internet-based enterprises) not only aggravates the trend toward inequality but also accelerates the flight of corporations to distant tax heavens. There is also the recent concern that the ever-growing data banks built by these giants undermine personal privacy. To sum up, where does the incessant quest for an increasing GDP in every nation lead us? Theories are no longer enough, we need empirical evidence. The present paper describes the kind of calculations that will be possible, once the necessary data become available (United Nation (2013a); United Nations (2014)). Our research builds on the follow up work of B. Golany and S. Thore (1997a, b) on evaluating the socioeconomic performance of nations, Competitiveness of Nations and Socio-Economic Performance of Nations, recognizing that there is no a natural trade-off for a nation between productivity and say social policy and that it is a matter of policy choices and prioritization in the framework of given strategic development goals of countries and the work of K. Lovell (1995) on measuring the macroeconomic performance of the Taiwanese economy.

The SDG Achievement Index Once the SDG achievements of a country have been measured, the next obvious step is to form some kind of index assessing its performance in comparison with other countries. For reasons now to be presented, however, a conventional index calculation will not do. The “index” that we are referring to here would be an omnibus representation of the total societal, environmental, and sustainability achievements of a country, a kind of modern version of what an older generation of economists used to call “social welfare” or “social utility.” The great Dutch economist Jan Tinbergen, one of the fathers

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

of economic statistics and econometrics, called for the coordination of available policy tools to maximize “social utility.” Once having specified the social welfare function “as precisely as possible,” he said, one should then “use it for finding the socioeconomic optimum” (quoted from his Nobel lecture, 1969). In the spirit of Tinbergen (1987), we now propose to aggregate the SDG data for a single nation into a representation of its “social utility.” In a fashion, we shall actually be able to draw on some of the thinking about these things 100 years ago. Let us indeed assume that there exists a “utility function” (Fig. 5). Our great advantage is that the SDGs provide an internationally recognized list of the various dimensions of social utility and that SDG data for most countries are currently being collected. In other words, we can construct a cardinal utility function – a measure of an overall social welfare of the SDG achievements of each nation, say V ¼ VðYÞ

ð1Þ

43

where Y ¼ (Y1, Y2, . . .. Ys) is the column vector of the SDGs currently measured. Returning to the idea of an “index,” one would in the first instance be tempted to form V(Y) as a linearly weighted average of the SDG observations, say V ¼ S mrYr where mr is the weight of each SDG indicator r ¼ 1,2, . . ., s. Conventional index calculations assume fixed and given weights, as, for instance, in the calculation of a cost-of-living index. Calculations of “social happiness” and similar welfare aggregates (see section “GDP and Beyond” above) also use fixed weights to its various components, usually determined by “experts.” How to rate the weight of basic nutrition (SDG II) compared to the weight of the right to free assembly (SDG XVI)? Why should these weights be the same for all nations, for the rich as well as the poor ones? An assumption of fixed SDG weights would be manifestly at variance with reality. Actually, the very idea of linearity is difficult to uphold. The SDGs are often substitutable at the margin in the sense that some shortcomings of one

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies, Fig. 5 Impact of Policies on Globalization and SDGs

B

44

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

goal may be compensated by a more plentiful provision of one or several other goals. National goals emerge through a process of reconciliation between many competing points of view. Assuming mathematical regularity and differentiating (1), it should be possible to determine the exact amount of marginal improvement of one SDG that is required to offset a given shortfall of another. The marginal rate of substitution between two goals can be represented graphically as the slop of an indifference curve. Along each such indifference curve, the social preference V ¼ constant. The slope of the indifference curve at a given point indicates the rate of substitution between the SDGs. The curves are taken to be convex toward the origin, describing a negative substitution effect: as the coverage of one goal gets smaller, the policymaker needs to be compensated by a greater achievement in terms of one or more other goals. To what extent should drilling be limited to help preserve fish stocks and the pristine nature of the polar regions (SDG XIV), or expanded to provide employment and income opportunities for the local population (SDG VIII)? The answer will always be a compromise, weighing the desirability of two societal goals against each other.

Calculating the Effectiveness of Policy The purpose of the calculations is to investigate the success (or lack of success) of nations in converting their gross domestic product (to be denoted X) into the development goals Y. We shall calculate the effectiveness ratio of each nation, calculated as the ratio between total economic and social welfare achieved, and the imputed economic and social cost. Mathematically, mlogY=UðXÞ

ð2Þ

where U(X) is the shadow cost (to be defined) of the gross domestic product. In simple words, the effectiveness of a nation is calculated as the ratio between total economic and social welfare obtained and the shadow cost of total GDP. Also introduce the condition

mlogY=UðXÞ  1

ð3Þ

The aim of economic and environmental policy is to make this ratio as large as possible – to maximize the economic and social preference function for any given level of social costs. The general idea here is that the ratio (3) signals the relative success of policy: it is equal to 1 in case the maximally doable of all goals is actually being achieved, and less than one if one or several of these goal posts remain unfulfilled. A ratio greater than one would somehow indicate that the social utility exceeded the imputed cost so that utility could be obtained for free without cost – which does not make sense. Consider now a list of countries, say j ¼ 1,2, . . ., n. Denote their recorded levels of GDP by Xj, j ¼ 1,2,.., n and their SDG achievements by (the vectors) Yj, j ¼ 1,2,., n. As to total shadow costs U (X), we shall simply assume that they are linear in the gross domestic product
U Xj ¼ nj Xj þ wj ð4Þ where nj and wj are constants to be determined. In order to determine the effectiveness ratio of one particular country, say country j ¼ 0, we form the fractional programming problem max mlogY0 =ðn0 X0 þ w0 Þ subject to
mlogYj = nj Xj þ wj  1, j ¼ 1, 2, . . . , n

ð5Þ

In words, program (6) seeks to determine the virtual weights m and the constants n and w so that the effectiveness ratio mlogY0/U(X0) for the country currently being evaluated becomes as large as possible, while seeing to it that, using the same weights and constants to calculate the effectiveness ratio of every other country, all these ratios are meaningful, that is, none of them is permitted to exceed 1.

The Effectiveness Frontier The general idea of seeing GDP as a possible enabler of increased achievements of a variety of economic and social goals can be illustrated

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

geometrically. Plot all observations (logYj, Xj), j ¼ 1,2, . . ., n in a multidimensional space, with one such point for each country. Next construct the hull (or simply “the envelope”) to the plotted points. It is the locus of tightest closure around the observations. Geometrically, the envelope is a surface in many dimensions. Rather than compressing all given data into a single dubious index of economic progress or happiness, the envelope demonstrates all the desired dimensions of the performance of nations explicitly. Some of the observed points are located on the envelope. They “span” the envelope. Calculate the effectiveness ratio mlogYj/nXj for each observed point. There is this remarkable result: points reaching a perfect effectiveness score (equal to 1) lie on the envelope. Points scoring less than 1 lie below the envelope. Thus, the envelope marks the frontier between the achievable and the non-achievable. The frontier itself traces the locus of the maximally achievable. In order to establish what has now been said, we need briefly to review the basic notions of socalled data envelopment analysis (DEA). To any set of observations, one can actually construct two different envelopes: the conical hull and the convex hull. The so-called CCR model of DEA as developed by Charnes et al. (1978) fitted the conical hull to the observations – a multidimensional plane passing through the origin. In our own work (Cooper, Thore, and Tarverdyan (2010) and Thore and Tarverdyan (2014)), we showed how the optimization of an economic and social effectiveness score for a large population of countries actually geometrically boils down to determining their conical hull. Similarly, we now demonstrate how the optimization of the SDR effectiveness score (3) implies calculating the convex hull of the observations (logYj, Xj), j ¼ 1,2, . . ., n. In other words, we have in front of us a case of the so-called BCC model of DEA, as developed by Banker, Charnes, and Cooper (1984). The envelope then consists of linear facets formed by drawing a number of supporting hyperplanes (each facet lies on or above all observations).

45

Hence, if for a given country, it turns out that the effectiveness rate equals 1, it follows that θ* also equals 1. No scaling-up the achievements of the country is needed in order to reach the envelope. It already lies on the envelope. But if the effectiveness is less than one, then it follows that θ* > 1 and some scaling-up θ* greater than 1 is indeed needed. The scaling-up process yields a hypothetical observation (θ* logY0, X0) that would have been obtained for an imaginary country with the same given GDP but with enhanced goal achievements. It lies on the frontier but is not an actual observed country. Like all points on the envelope, it can be constructed as a weighted average of the set of observations that span the envelope. It can be viewed as a “composite country.” To the policymaker, it may suggest alternative policies that would improve the current suboptimal performance. A fairly short list of countries spans the envelope. They are the “peers” of the country currently evaluated. The model achievements of the present country is a simple weighted average S (logYj) lj * of the achievements of its peers. It can be referred to as “best practice.” Each frontier country exceeds or equals the results of all the others along at least one dimension. Also a developing country can participate in the definition of the frontier.

Diagnostics The calculations suggested here are attractive because they include not only a statistical record of goal the achievements of a nation but also suggestions what might be done to improve those achievements. The effectiveness ratio tells a story about the success, shortcomings, or even failure of the nation’s economic, social, and sustainability policy. The list of peers provides an example of how a few other countries in similar circumstances have been able to be accomplish more. The policy implications are these: First, the effectiveness ratio spells out the relative success or failure of a country to realize its frontier potential. Second, the list of peers should give a hint to the policy-maker where one could look for

B

46

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

inspiration to improve policy. One peer country may have instituted a national program of vaccination against tuberculosis. Another may have taken successful measures to slow an ongoing process of desertification, brought on by inappropriate agriculture. Third, the weights lj * of the peers are also important. The two or three peers with the largest weights may be the ones that hold the most obvious clues as to how the current performance of a country may be improved. The difficulties of improved performance should not be underestimated, however. A peer country may enjoy fruits of natural endowments (like plentiful mineral resources) or wise government (based on peace and democracy) that may be impossible or politically unfeasible to copy. In too many countries, tribal chasms or outright war may exclude rational policy. The policy-maker may sometimes have to resign to the verdict of the effectiveness ratio.

Concluding Comments Over time, the interests of economists change. Even our entire understanding of what “economics” is and what it should be evolves with time. With the birth of macroeconomics, the concept of national income and the calculation of GDP became the keystone to the understanding of the business cycle and the health of the industrialized countries in the West in the mid-twentieth century (see Pearce 1980). In the post-colonial era, other subjects are crying out for attention: poverty, education, health, and the environment. This evolution of concern is well reflected by a series of UN conferences leading to the formulation, in 2000, of the 8 UN Millennium Development Goals (MDGs) and the subsequent reformulation, in 2015, of the 17 UN Sustainabile Development Goals (SDGs) (see United Nation 2006; United Nations 2009). Since economists started calculating the GDP of nations, a long line of suggestions have been forwarded to recognize economic progress in more general terms. A number of indices are currently being published by international organizations and other bodies measuring various

aspects of social progress or “social happiness.” In the same vein, one could imagine some kind of overarching master index merging the GDP calculations with data for the UN sustainable development goals. We believe that the construction of such an omnibus index would be a great mistake, essentially confounding two different kinds of entities confronting economic policy-makers: means and ends. The UN sustainable development goals must all be considered ultimate ends of national and international policy-making. A growing GDP can be helpful in achieving many of those ultimate goals, like education, better health, environmental cleanups – but there is no guarantee that nations will respond positively to opportunities at hand. As recent events in the Middle East demonstrate, governments may use an increasing proportion of GDP on armaments to be used on its own citizens, bombing hospitals, and turning already existing housing into rubble. In these pages we have outlined a format for extending the conventional calculation of the GDP of a country to include an assessment of its achievements (positive or negative) in reaching the UN sustainability development goals. In this assessment, GDP is considered to be a (possible) means to improve its achievements of the goals. Following Tinbergen’s Nobel admonitions (Tinbergen 1969), we do maximize a social welfare function of all the sustainability goals (see Adler et al. 2010; Thore 2014; Thore et al. 2015; Thore and Tarverdyan 2008; Thore and Tarverdyan 2009; Thore and Tarverdyan 2015). If one wants to, one may consider this function as an “index.” The dramatic difference here, however, is that the weight of each goal in forming the index is not taken as a given constant but rather as an unknown, to be determined by fractional programming – calculating the optimal weights. Our procedure draws on the techniques of frontier analysis (see Charnes 1952; Charnes et al. 1994; Cooper et al. 2004a; Cooper et al. 2005; Cooper et al. 2006). Rather than nominating winners and losers in some quest for an ever-growing GDP, one instead looks for the nations that are able to convert their GDP most effectively into the sustainable development goals (SDGs). These are

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

the “frontier” nations, defining the frontier of the doable. The others are sub-frontier, falling short of the doable. Frontier analysis determines the envelope to a given set of data points. Processing data on the achievements (or lack of achievements) in reaching the UN millennium goals, it is possible to split all nations into two groups: those located at the envelope and those that are falling behind. Frontier economics recognizes the presence of conventional idealized equilibrium economics or the presence of sub-frontier decision-making. The task of distinguishing between the two is seen as an empirical one: order is not postulated but is a matter of testing, of examining the data. The frontier nations are not ranked. They all represent “best practice.” To belong to this select group, you have to outperform the others in term of at least one of the SDGs. Even small or poor nations may accomplish this. “Best practice” is a quite democratic concept, not just for the elite. But most nations will turn out to be sub-frontier. They fall short of the doable. To each suboptimal nation one calculates its “peers” – the small number of frontier nations that are “closest” to the nation currently considered. Each peer outperforms the nation currently considered in terms of at least one goal but may otherwise fall short of its other accomplishments. We believe that identifying a nation’s peers is both equitable and helpful. The peers are not necessarily the masters of the world, but they feature goal achievements that can suggest a potential for improvements for others.

References Adler N, Yazhemsky E, Tarverdyan R (2010) A framework to measure the relative socio-economic performance of developing countries. Socio Econ Plan Sci 44(2):73–88 Arrhenius S (1896) On the influence of carbonic acid in the air upon the temperature of the ground. Philos Mag J Sci 41:237–276 Banker RD, Charnes A, Cooper WW (1984) Some models for estimating technical and scale inefficiencies in data envelopment analysis. Manag Sci 30(9):1078–1092 Charnes A (1952) Optimality and degeneracy in linear programming. Econometrica 20(April):160–170

47

Charnes A, Cooper WW, Rhodes E (1978) Measuring the efficiency of decision making units. Eur J Oper Res 2:429–444 Charnes A, Cooper WW, Lewin YY, Seiford LM (1994) Data envelopment analysis: theory, methodology and applications. Kluwer, Boston Cooper WW, Seiford LM, Zhu J (2004a) Handbook on data envelopment analysis. Kluwer, Boston Cooper WW, Seiford LM, Thanassoulis E, Zanakis SH (2004b) DEA and its uses in different countries. EJOR 154(2):337–344 Cooper WW, Seiford LM, Zhu J (2005) DEA: past accomplishments and future prospects. J Prod Anal 28 (3):151–163 Cooper WW, Seiford LM, Tone K (2006) Introduction to data envelopment analysis and uses: with DEA-solver software and references. Springer, New York Cooper WW, Seiford LM, Tone K (2007) Some models and measures for evaluating performances with DEA: past accomplishments and future prospects. J Prod Analy Springer 28(3):151–163 Cooper WW, Thore S, Tarverdyan R (2010) A utility function approach for evaluating country performances with DEA – the twin goals of decent work and a fair globalization. In: Hockley LR (ed) Global operations management. Nova Science Publishers, New York, pp 49–72 Emrouznejad A, Parker BR, Tavares G (2008) Evaluation of research in efficiency and productivity: a survey and analysis of the first 30 years of scholarly literature in DEA. Socio Econ Plan Sci 42(3):151–157 Georgescu-Roegen N (1971) The entropy law and the economic process. Harvard University Press, Cambridge, MA Golany B, Thore S (1997a) The economic and social performance of nations: efficiency and returns to scale. Socio Econ Plan Sci 31:191–204 Golany B, Thore S (1997b) Restricted best practice selection in DEA: an overview with a case study evaluating the socio-economic performance of nations. Ann Oper Res 73:117–140 Goodland R, Ledec G (1987) Neoclassical economics and principles of sustainable development. Office of Environmental and Scientific Affairs. The World Bank, Washington, DC, p 60 Humboldt A (1814–1829) Personal narrative of travels to the equinoctial regions of the new continent. Longman, Rees, Orme, Brown, and Green, Paternoster Row, London Lovell K (1995) Measuring the macroeconomic performance of the Taiwanese economy. Int J Prod Econ 39 (1–2):165–178 Malthus T (1798) An essay of the principle of population. Johnson, London Maragos E, Despotis D (2002) Comparing, multiobjective mathematical programming methods in the light of data envelopment analysis. J Interdiscip Math 5(3):221–230 Meadows D (1972) The limits to growth. A report for the Club of Rome. Universe Books, New York

B

48

Beyond GDP: Saving the Planet by Measuring the Effectiveness of Policies

Pearce DW (1980) The MIT dictionary of modern economics. The MIT Press, Cambridge, MA Piketty T (1997) L’Économie des Inégalités (the economics of inequality). Editions la Découverte, Paris Piketty T (2013), Le Capital au XXIe siècle, Paris, Editions du Seuil, coll. « Les Livres du monde » Seiford LM, Thrall RM (1990) Recent developments in DEA: the mathematical programming approach to frontier analysis. J Econ 4:7–38 The World Commission on Environment and Development’s (1987) The Brundtland commission report our common future. Oxford University Press, Oxford Thore S (2014) Global optimization of economic and social policy. In: Encyclopedia of business analytics and optimization. https://doi.org/10.4018/978-1-46665202-6.ch099 Thore, S., and Tarverdyan, R. 2016. The sustainable competitiveness of nations Technol Forecast Soc Chang 106: 108–114 Thore S, Tarverdyan R (2008) Using data envelopment analysis to screen the possibility of a fair globalization. Port J Manag Stud XIII:129–151 Thore S, Tarverdyan R (2009) Using data envelopment analysis to quantify ILO objectives and identify policies conducive to decent work in a globalized world. Socio Econ Plan Sci 43:151–164 Thore S, Tarverdyan R (2015) Diagnostics for a globalized world; world scientific-now publishers series in business: volume 7 http://www.worldscientific.com/ worldscibooks/10.1142/9421 Thore S, Golany B, Tarverdyan R, Adler N., Yazhemsky E. (2015) Measuring the SDGs progress with DEA; brief for GSDR 2015. https://sustainabledevelopment.un.org/ content/documents/6729140-Thore-Measuring%20the %20SDGs%20Progress%20with%20DEA.pdf Tinbergen J (1952) On the theory of economic policy. North Holland, Amsterdam Tinbergen, J. (1956). Economic policy: principles and design. Amsterdam: North-Holland. On the internet, see http://repub.eur.nl/resource/pub_16740/index.html Tinbergen J (1969) The use of models: experience and prospects. In: Lindbeck A (ed) Nobel lectures, economics 1969–1980. World Scientific Publishing, Singapore 1992 Tinbergen J (1987) Revitalizing the United Nations system. In: Waging peace series, booklet 13. Nuclear Age Peace Foundation, Santa Barbara UNFPA (United Nations Population Fund) (2017) State of World Population 2017 – Worlds Apart: Reproductive health and rights in an age of inequality. UNFPA, New York. United Nations (2006) Delivering as one, report of the secretary-General’s high-level panel on UN systemwide coherence. United Nations, New York United Nations (2009) Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System. 21 September. New York, United

Nations. http://www.un.org/ga/econcrisissummit/docs/ FinalReport_CoE.pdf. Accessed 19 Jan 2012 United Nations (2013a) A new global partnership: eradicating poverty and transform economies through sustainable development, the report of the high-level panel of eminent persons on the Post-2015 development agenda, http://www.un.org/en/development/desa/policy/ untaskteam_undf/HLP%20P2015%20Report.pdf United Nations (2013b) MDG gap task force report 2013 – the global partnership for development: the challenge we face. Sales no. E.13.I.5 United Nations (2014) A world that counts. Mobilizing the data revolution for sustainable development, report prepared at the request of the United Nations SecretaryGeneral, by the Independent Expert Advisory Group on a Data Revolution for Sustainable Development. Available from http://www.undatarevolution.org/wpcontent/uploads/2014/11/A-World-That-Counts.pdf United Nations (2015) Transforming our world: The 2030 Agenda for Sustainable Development, United Nations General Assembly resolution 70/1, 25 September 2015. Available at https://sustainabledevelopment.un.org/ post2015/transformingourworld United Nations (2015a) UN General Assembly 2015, Transforming our world: The 2030 Agenda for Sustainable Development, A/RES/70/1 (21 October). www. refworld.org/docid/57b6e3e44.html. Viewed 3 Aug 2017 United Nations (2015b) Global sustainable development report. United Nations Department of Economic and Social Affairs, New York United Nations (2015c) Millennium development goals and beyond 2015. Available at www.un.org/ millenniumgoals United Nations (2015d) A life of dignity for all: accelerating progress towards the millennium development goals and advancing the United Nations development agenda beyond 2015 report of the secretary-general. Available from http://www.un.org/millenniumgoals/ pdf/A%20Life%20of%20Dignity%20for%20All.pdf United Nations Commission on Sustainable Development (UNCSD) Secretariat. (2011a). IFSD: Issues related to an intergovernmental body on SD. RIO 2012 issue briefs no 3 (October). http://www.uncsd2012.org/rio20/content/ documents/209Issues%20Brief%203%20 - %20IFSD% 20SD%20Body_final_final_111111.pdf. Accessed 19 Jan 2012 United Nations Commission on Sustainable Development (UNCSD) Secretariat. (2011b). Regional, national and local level governance for sustainable development. RIO 2012 issue briefs no 10 (December). http://www. uncsd2012.org/rio20/content/documents/229draft_15 Dec7 pm_formatted73 0am.pd. Accessed 19 Jan 2012 United Nations, General Assembly (2012) The future we want. Resolution 66/288 of 27 July 2012. Available from http://www.un.org/ga/search/view_doc.asp?symbol¼A/ RES/66/288&Lang¼E United Nations Research Institute for Social Development (UNRISD). (2011). Green economy and sustainable

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals development: bringing back the social. UNRISD Submission to the UNCSD, 1 November. http://www. unrisd.org/80256B42004CCC77/(httpInfoFiles)/ 44AC8E087556E45AC12579 3D0056E4B7/$file/ UNCSD%20input_UNRISD.pdf. Accessed 19 Jan 2012 United Nations University Institute of Advanced Studies (UNU/IAS) (2002) International sustainable development governance: the question of reform: key issues and proposals. UNU/IAS final report, august 2002, prepared for the world summit on sustainable development. http://www.uncsd2012.org/rio20/content/docu ments/ISDGFinalReport.pdf. Accessed 19 Jan 2012 World Bank (2008) Annual review of development effectiveness 2008: shared global challenges. Independent Evaluation Group, Washington, D.C World Economic Forum (2018) The inclusive development index 2018: summary and data highlights, released January 22

49

occurring processes that do not deplete natural capital. Biomass from organisms is used as a feedstock to produce various valuable products. The biorefinery is central to the biobased economy allowing for the optimal utilization of the different chemical components extracted and processed from biomass. The term “‘biobased economy” is also used to refer to an entire economy of multiple supply chains at national and or even regional scale. The word “‘economy” in the term empathizes the synergy and interaction between different businesses all using biobased technologies throughout their supply chains.

Overview

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals Alistair Beames, Joost Goedhart and Argyris Kanellopoulos Operations Research and Logistics Group, Wageningen University, Wageningen, The Netherlands

Synonyms Bioeconomy

Definitions The biobased economy concept is broadly defined here as a shift towards more sustainable production practices that utilize biological processes and/or biotechnology throughout the product supply chains. The prefix “biobased” indicates that organisms are the foundation of what is being produced. Ideally, the biobased economy should as far as possible replace production practices that require the use of fossil and mineral resources, with naturally

Biomass is the feedstock from which biobased products are produced. There are various forms of biomass including crops, algae, bacteria, yeast, fungi, and organic waste streams. Organic waste can include leaves, tree, and shrub clippings from road and green area maintenance, flower clippings from floriculture, timber waste from wood processing, municipal wastewater sludge, and animal manure from livestock. Microorganisms such as algae, bacteria, and yeast can be grown on unconventional feedstock such as saltwater. The starting point for biomass production is photosynthesis. Photosynthesis uses sunlight to convert carbon dioxide (CO2) and water into oxygen, and chemical energy. The chemical energy is used for the growth of the plant or microorganism. The accumulated mass of the plant is referred to as biomass. Biomass can be used to produce fuels, raw materials, and finished products. In principle, using biomass as an alternative to fossil fuels, fossil raw materials, and minerals presents a clear advantage of displacing the extraction and consumption of these limited resources. Fossil fuels are derived from crude oil, coal, and lignite, which were formed from biomass being trapped in the earth’s crust under pressure for hundreds of millions of years. Crude oil, for example, is currently extracted from the subsurface and processed into a range of products including fuels, such as petroleum and diesel,

B

50

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

chemicals and plastics. The extraction process itself and the processing of the fossil fuels requires energy and material inputs. At the same time, the production and use of fossil fuels release unwanted emissions, such as Green House Gases (GHGs), into the environment. Atmospheric CO2 is one of the GHGs emitted during the combustion of petroleum or diesel. Essentially, the use of fossil fuels results in the large carbon stocks deep beneath the earth’s surface being extracted and converted into energy and atmospheric CO2, among other emissions. GHG emissions increase radiative forcing or in other words trap incoming heat from the sun. In turn, the increase in CO2 and other emissions contribute towards global warming and ultimately climate change. It would require hundreds of millions of years for carbon released into the atmosphere by the use of fossil fuels, to be sequestered by plants and returned to the subsurface, without human intervention. Fossil resources are therefore considered to be nonrenewable and follow a cycle over a long time horizon of hundreds of millions of years (Bertine and Goldberg 1971; McKendry 2002). The benefits of the transition towards a biobased economy and its contribution towards achieving the sustainable development goals have been emphasized by the EU commission (EC 2011). The biobased economy can contribute to lower carbon emissions and helps to mitigate the effects of climate change (Sustainable Development Goal 13: Climate action). Moreover, the biobased economy provides the opportunity for creating highly skilled jobs and new business models in the agricultural, forestry, and agri-business sectors. Ultimately, this will stimualte economic growth and result in decent employment (Sustainable Development Goal 8: Decent Work and Economic Growth). Unlike fossil fuels, biofuels derived from biomass grown recently on the earth surface do not deplete the stock of fossil resources in the subsurface and do not emit the trapped stock of carbon as atmospheric CO2. Instead, biomass production sequesters atmospheric CO2 and temporarily stores the carbon element. Biomass is used to produce biofuels and biomaterials and the stored carbon is converted back to

atmospheric CO2 when the biofuel is combusted or when the biomaterials degrade. In short, biomass-derived products replace fossil fuels and fossil resources allowing the stock of carbon to remain in the subsurface. In theory, by having a short cycle of carbon between plants, biofuels, and the atmosphere, there is no net increase in atmospheric CO2 and the energy derived from it for human purposes is renewable (Sustainable Development Goal 7: Affordable and Clean Energy). Converting different forms of biomass into the desired products requires some processing steps and the use of land. In some cases, biomass processing may require inputs beyond what can be provided by organisms. It is of course possible to imagine biobased products that have unwanted consequences for the environment and that in some cases could be less desirable in terms environmental damage than conventional fossilbased products. A fair comparison of biobased products to fossil-based products that reflects the potential trade-offs between making this switch, requires considering all the necessary resources inputs and emissions throughout the life of the products compared. The potential trade-offs between replacing conventional products with biobased products are discussed throughout the chapter. The ‘Concepts’ section first provides an explanation of the different sequential steps in deriving biobased products, namely, biomass production and biomass conversion. The ‘Concepts’ section starts with an overview of biobased product supply chains followed by an explanation of the components that make up such chains. The concepts come together in the theoretical underpinning of the biobased economy, namely, the Biomass Value Pyramid. The Biomass Value Pyramid is a general principle reflecting the value and quantity of different biobased value streams that can be produced in a biorefinery. An explanation of biorefineries gives the reader a sense of how the concepts and principles are applied in practice and what needs to be considered. The ‘Concepts’ section concludes with a discussion on closing material loops in the biobased economy. The ‘Future Developments’ section concludes the chapter by

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

discussing the potential advantages and challenges of the biobased economy in the future.

Concepts Organisms, such as plants on the earth’s surface, capture and store energy from sunlight by accumulating biomass. Higher-order organisms such as animals indirectly consume the energy from sunlight and nutrients from the soil, when they consume biomass in the form of plants or other organisms that directly or indirectly consumed plants. Biomass from plants is also the starting point for most biobased products (Langeveld et al. 2012). Efficiently harnessing energy from crop biomass and maximizing the yield of raw materials from crop biomass requires an understanding of which inputs deliver the greatest yield of the desired end-product. Comparing the environmental performance of biobased products to products derived from fossil resources requires both accounting for the yield per input and the upstream energy and material required per input (Muñoz et al. 2014). Biobased Supply Chains A supply chain consists of all parties involved, directly or indirectly, in the flow and transformation of goods and services from the origin of the product through to the customer. Supply Chain Management is concerned with the management and control of the flows of material, information, and finances in supply chains to provide the desired levels of service to eventual customers. In the biobased economy, biomass is produced, harvested, collected, and transported

51

before it is converted into the desired products. How the quantities of material are stored and transported and where the different actors should be located is the domain of Supply Chain Management. Biomass supply chains can be divided into three phases, each of which includes multiple processing steps. The three phases include upstream, midstream, and downstream (De Meyer et al. 2014). Generally speaking, the upstream phase is where biomass is produced, such as a farm; midstream is where the biomass is converted into products such as bioenergy, biofuel, biobased chemicals, or bioplastics and finally downstream is where the product is eventually consumed. Figure 1 is a flow diagram adapted from De Meyer et al. (2014) showing the three phases in a biobased product supply chain. Within the three phases are processes beginning with biomass production sequentially followed by harvesting and then pre-treatment and so on. There are also flows that are not sequential. This might, for example, refer to left over or residual materials that can be reused in one of the previous processes or further downstream. According to De Meyer et al. (2014), the key barrier for the bioenergy sector, which is also more generally relevant to the biobased economy, are the costs of biomass supply to the conversion facilities. Biobased supply chains have three additional considerations, which are unique to biomass. Firstly, biomass production (the first process in the upstream phase) is largely influenced by seasonality and weather conditions. If farms producing biomass are effected by extreme drought or flooding in a given year, this has consequences for every other process upstream and eventually the final delivery to the

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals, Fig. 1 Flow chart representing the biobased product supply chain (Adapted from De Meyer et al. 2014)

B

52

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

customer. Secondly, biomass is perishable and storing raw biomass for prolonged periods has the risk of unwanted natural biodegradation and fermentation occurring (Rentizelas et al. 2009; Gold and Seuring 2011). Thirdly, biomass products are also commodities for which prices can fluctuate. If the price of a given type of biomass in a given year is higher due to more competition from other industries, this will affect the entire supply chain. In fact, in 2006 and 2007, the increased investments in and subsidization of biofuel by the EU and US governments increased demand for commodity crops, such as corn, globally. In this case, the increased competition for biomass to produce biofuels resulted in food price increases (Langeveld et al. 2012). Biomass Production Plants, algae, some bacteria, yeast, and fungi use chlorophyll to convert sunlight, water, and CO2 into chemical energy and oxygen. Plants use chemical energy and nutrients from the soil for maintenance and growing proteins, fats, and fibers. What remains of the chemical energy used for maintenance and growth is stored as carbohydrates. Certain crop species of plants are more efficient at this process than others; however, the availability of necessary water and nutrients, the climate conditions, and the prevalence of pests also largely influence crop yields. The availability of water is a key limiting factor in dry climates where crops are rain fed. Some crops are better suited to dryer conditions. Crop species can be divided into three different categories according to the way carbon is fixed and photorespiration occurs, namely, C3, C4, and CAM. Carbon fixation and photorespiration are necessary for plant growth but photorespiration in particular is also a wasteful process. The “C” in the terms C3 and C4 refers to the carbon element in the molecules produced in the first step of the photosynthetic pathway of the plant species. CAM refers to Crassulacean Acid Metabolism. C3 plants include cotton and wheat, C4 plants include maize and sugar cane, and CAM plants include cacti species. Generally, C3 species are

suited to all climates but are most efficient at carbon fixation in cooler wet climates, C4 are generally suited to warmer climates, and CAM species are best suited to very hot and dry climates. C4 and CAM plants are generally more efficient at accumulating energy in the form of carbohydrates than C3 plants. In other words, the yield over a fixed period for a given area (e.g., 1 ha) of C4 crop is greater that a C3 crop. This is because C4 and CAM plants have mechanisms for minimizing the energy they spend on photorespiration that C3 plants do not have. The hotter and dryer the climate, the more C3 plants will consume energy for photorespiration, that would have otherwise been stored as carbohydrates. Appropriately choosing the most suitable crop for warm and dry regions increases the chance of a maximum yield per area (Zhu et al. 2008). Climate is a factor that cannot be controlled and is region specific. Nutrients on the other hand can be controlled. Nutrients can be a limiting factor for the growth of the plant. Nutrients can be classified in two categories: macronutrients and micronutrients. Plants require a larger proportion of macronutrients than micronutrients. Micronutrients are only required in small quantities. Macronutrients include calcium, magnesium, nitrogen, phosphorus, potassium, and sulfur. Micronutrients include copper, iron, manganese, and zinc. A study by Hoskinson et al. (2007) compared the nutrient concentrations contained in corn harvest residues (corn stover) and calculated the equivalent microand macronutrient removal by the corn stover. The macronutrients removed from the soil by the corn stover were in the order of approximately 42 kilograms per hectare (kg/ha), 4 kg/ha, and 34 kg/h of nitrogen, phosphorus, and potassium, respectively. The micronutrients removed by the corn stover were in the order of approximately 6 gram per hectare (g/ha), 258 g/ha, and 46 g/ha of copper, iron, and zinc, respectively. Maximizing crop production requires that nitrogen, phosphorus, and potassium are always available in the soil. Synthetic fertilizers consist of the combination of the three macronutrients and can be applied to the soil to make sure

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

the macronutrients are always available. Manufacturing synthetic fertilizers, however, requires energy inputs. The industrial production of nitrogen fertilizer requires taking nitrogen from the atmosphere and fixing it using the Haber process, which is very energy intensive. Phosphorus is manufactured from phosphate rock, which is mined from beneath the earth surface. Potassium is also mined and is manufactured from potash deposits. Plants are also vulnerable to being consumed by other organisms. Pesticides to protect the crops from molds, insects and small animals that would otherwise damage the crop are produced from petrochemicals which originate from fossil resources below the earth surface. The transport of fertilizer and pesticide throughout their supply chains is an indirect input required for crop biomass. Plowing the soil, harvesting the eventual crop, and storing it also requires energy in the form of fuel as well as materials that the harvesting, transport, and storage assets are constructed from. In an ideal biobased economy, the indirect energy inputs and materials input for transport, fertilizer, and pesticide production would come from biobased sources and not fossil fuels. The energy, fossil materials, and mineral inputs that are not biobased in origin should also be accounted for in a holistic view of the efficiency and performance of biomass crop production. Similarly, when comparing fossil-based products to biobased products, the upstream energy and material inputs for the fossil products should also be accounted for. The same is true for GHG emissions emitted throughout the life cycles of products being compared. Switching from an economy largely dependent on fossil resources to a biobased economy that minimizes the dependence on fossil fuels might require more available land for biomass production. In a broad sense, this switch away from extracting the stock of fossil resources in the subsurface to utilizing surface space for biomass production will result in a certain degree of land-use change (Langeveld et al. 2012). Assessing the consequences of such land use changes with respect to, e.g., GHG emissions and biodiversity loss are important

53

considerations and require advanced quantitative analysis and decision support tools. The increase in global agricultural production since the Green Revolution of the 1950s and 1960s is predominantly due to production system efficiency and the development of synthetic fertilizers, selective breeding, and pesticides. Since the Green Revolution, global cereal production has increased 200% with only a 30% increase in area for cultivating cereal crop (Pingali 2012; Wik et al. 2008). What is still not clear is the extent to which existing cropland can provide feedstock to replace fossil fuels and how much additional cropland needs to be set aside for the Biobased economy. Biomass Conversion Biomass needs to be harvested before it is collected, transported, stored, and eventually converted to products. This subsection explains the conversion phase with reference to three particular biobased products, namely, biogas, bioethanol, and polylactic acid (PLA). Biogas

Biogas is a renewable energy sources which can be produced from various forms of biomass feedstock including crops, manure, or other organic waste such as food waste or flower clippings. The feedstock is put into a digester tank or reactor without sunlight or oxygen where it is fermented. Anaerobic bacteria degrade the feedstock releasing methane and CO2 in the process. The remaining residue that is not converted to methane and CO2 is referred to as digestate and is rich in minerals such a phosphate that can be used as fertilizer. Certain configurations of different kinds crop and organic waste stream deliver greater yields. Depending on the process, the reactor can also be heated to increase the yield. The biogas can then be combusted in a combined heat and power plant to generate heat and electricity. Bioethanol

Bioethanol is a fuel typically produced from high sugar/starch biomass crops such as sugarcane and corn. Molasses, which is a side product

B

54

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

from converting sugarcane and sugar beet into sugar, can also be used as a feedstock. Bioethanol is produced in three stages, namely, pretreatment, conversion of sugars to ethanol, and finally purification. In the pretreatment phase, the sugars contained in the biomass are made available by milling and grinding the feedstock. Enzymes can be added to the mixture to further break down the feedstock. The second phase involves putting the preprocessed feedstock into a fermentation tank and allowing yeasts to convert the sugars in the feedstock into ethanol. Finally, the converted feedstock is purified via distillation. Distillation involves heating up the converted feedstock so that the ethanol can be separated from the water and yeasts. Bioethanol can then be used in combustion engines in vehicles as an alternative to petrochemical fuels. Polylactic Acid (PLA)

PLA is a biodegradable plastic produced from high sugar/starch biomass crops and typically corn. Other crop biomass may also be suitable such as rice, sugarcane, sugarbeet, wheat, and sweat potato. The feedstock is processed through a series of reactors to first convert the sugars into lactic acid and then to convert the lactic acid into PLA. The first phase of producing lactic acid requires putting the feedstock into a fermentation tank with bacteria and ammonium, which can be derived from biobased sources. The bacteria convert the feedstock into CO2, ethanol, and ammonium lactate. The ammonium lactate then needs to be separated into lactic acid and ammonia. This can be achieved via a process called electrodialysis, where the ammonium lactate is passed through an electrically charged membrane. The second phase of converting lactic acid into PLA can be achieved via one of either two processes, namely, direct polymerization or ringopening polymerization (Vink et al. 2003). The three examples above require varying degrees of processing and inputs including energy, solvents, materials, and machinery. The costs of producing each of the examples therefore also vary. The Biobased Value Pyramid discussed below suggested a value hierarchy between different biobased products.

Biobased Value Pyramid The conversion of biomass to energy and materials requires inputs. The more refined the eventual product, the more inputs are required and the greater the financial cost per unit (ton or cubic meter, etc.) of eventual product. Not only does it cost more to further process biomass into higher value products but it also requires more energy and material inputs. At the same time, using biomass for producing heat and electricity destroys the chemical chains in biomass, that could have otherwise been converted into more valuable materials. A fundamental principle of the Biobased economy is the biobased pyramid (Fig. 2). There are various interpretations of the Biobased Value Pyramid but the interpretation adopted here suggests that the most valuable biobased products should be prioritized according to a cascade. This means, biomaterials and pharmaceuticals from biomass should be prioritized over food and feed production, which in turn should be prioritized over energy production. The assumption is that residual biomass stock and organic waste, from biomaterial and pharmaceutical products, can then be used for food ingredients and animal feed. In turn, what cannot be utilized for

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals, Fig. 2 The Biobased Value Pyramid representing the cascading value of different biobased products as a general rule-of-thumb. The arrangement of the rungs can vary. (Adapted from Langeveld et al. 2012)

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

food ingredients and animal feed can then be fermented and converted into biofuels and biogas. Exergy Another concept which can explain prioritizing the production of more refined products over energy production is Exergy. Exergy preservation seeks to preserve the embedded complexity and embedded effort of the original product. In the case of biobased products, the use of biomass for biofuel and biogas which is eventually combusted does not preserve the embedded complexity of biomass as well as products which convert the chemical chains in biomass to more complex chemical chains. Exergy is also called Availability or Work Potential and is the maximum useful work that can be obtained from a system at a given state in a given environment. In other words, the most work you can get out of a system. Another way of defining exergy is the degree of disequilibrium between a system and its surroundings, or the capacity to cause change by exchange with the environment. A system can only produce work or exert change in the environment as long as it is at disequilibrium (thermally, mechanically, or chemically) with the surroundings. The concept of Exergy was developed out a need to understand how a limited amount of energy could be used optimally and transformed into the maximum amount of work. The basis for the concept is the first two laws of thermodynamics. The First Law of Thermodynamics is the application of the conservation of energy principle: energy can never be created or destroyed, although it can be transformed. Even if it is transformed the total energy balance is always conserved. When considering an isolated system, energy is never lost. An isolated system permits no exchange of matter or energy with the surroundings. An open system allows for exchanges of matter and energy with the surroundings. Therefore, in an open system, the change in energy in the system is the net sum of heat and work exchanged between the system and the surroundings. The Second Law of Thermodynamics states that entropy, a measure of disorder in a system, always increases in the universe (and

55

in nature) and it is irreversible. The universe is transforming towards greater and greater disorder. The energy in the universe, although it will always be conserved, is therefore becoming less useful as we move through time. Entropy can be observed on a much smaller scale. For example, when gas is uncontained, it diffuses into the surroundings without the reverse process ever spontaneously occurring. Entropy, in most engineering examples, involves the unintended and irreversible loss of energy in the form of heat loss (Zisopoulos et al. 2015, 2016). All production chains, including biobased product supply chains, are not isolated and entropy is therefore occurring. Exergy analysis can be used to locate the losses or inefficiencies of a system. In other words, exergy analysis can determine where in a process or production chain, a product is being transformed in such a way that potential work is being lost. The food processing industry, for example, uses exergy analysis to pin-point inefficiencies in the use of energy and materials. The advantage of exergy analysis is that it provides a composite indicator, in joules, that allows both the use of energy in processes and the conversion of materials to be combined in a single indicator (Banasik et al. 2017; Zisopoulos et al. 2017). The concept itself is also interesting as a rule-of-thumb, by which the conversion of energy or materials will always result in a net loss of energy. Energy loss can be avoided by trying to maintain the chemical chains produced by biomass and not destroying them for heat energy. Biorefinery Biorefineries are central to the biobased economy as a whole, allowing for the efficient processing and use of various by-products generated from biomass. Cherubini (2010) defines biorefineries as the sustainable processing of biomass into a spectrum of marketable products and energy. With the use of a biorefinery, it is possible to extract valuable components from the biomass and transform them into a vast array of chemicals, materials, feed, fuel, and energy. ‘Biorefinery’ is an all-encompassing term for technologies that are able to make sustainable use of biomass.

B

56

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

Therefore, biorefineries are considered the key component for the biobased economy. Extraction of valuable components from biomass takes place over multiple processing units within the biorefinery. The first step is often a pretreatment to ease the processing of the biomass in later steps. The next step in the biorefinery is the extraction of the valuable products from the biomass and then converting them into usable products. Conversion of the components can also be performed to increase the economic value of the end-product. The processing units within the biorefinery are performed through four main types of processes: biochemical, thermochemical, chemical, and mechanical process (de Jong and Jungmeier 2015). Every unit within the biorefinery needs resources such as energy, water, chemicals and produces by-products. These extra resources could have high impact on the economic feasibility and environmental sustainability of the biorefinery. A careful selection of the process step is vital, since costs can easily rise with the use of expensive chemicals. Additionally, a process step alters the characteristics of the feedstock which can influence the operating conditions of the following steps in the biorefinery. The integration of processing steps can reduce the energy and chemicals needed for the processing of biomass. Three different types of biorefineries are described in Kamm and Kamm (2004), phase I, II, and III biorefineries. Phase I biorefineries only accept one type of feedstock and are only able to produce one type of product. There is no flexibility in the process. A common example of a phase I biorefinery is dry-milling ethanol plants. Grain or corn is used as feedstock and the output is ethanol, feed co-products, and carbon dioxide (Kamm and Kamm 2004). The quantity of products produced is fixed to the amount of feedstock given to the biorefinery. Phase II biorefineries are able to produce a spectrum of products, in different quantities depending on demand, from one type of feedstock. By controlling the operating conditions of the biorefinery, the quantity of produced products can be shifted. Wet-milling is a common example of a technology used in phase II biorefineries. It can process either grain or corn and is able to

produce starch, high fructose corn syrup, ethanol, corn oil or feed dependent on the demand (Kamm and Kamm 2004). Biorefineries that can handle different types of feedstock and produce multiple products are called phase III biorefineries. Phase III biorefineries are difficult to achieve due to the complex variety of biomass. Generally speaking, the more homogenous the input, the easier it is to process. Therefore, current reseach into phase III biorefineries is focused on different types of biomass that shows similarity in their composition. The lignocellulosic biorefinery is a phase III biorefinery that is widely researched and developed (Michels and Wagemann 2010). Its input is fibers from plant material that consists mostly of cellulose, hemicellulose, and lignin. Through processing steps, these components can be converted into more valuable chemicals such as glucose and furfural (Fernando et al. 2006). The current strategic goal of biorefinery is mostly focussed on the production of biofuel from biomass; however, biofuel is a low value product (Bozell and Petersen 2010). When looking into the value-pyramid, it is clear that chemicals have higher economic impact, thus could increase the financial incentives to stimulate the development of biorefineries. Determining which chemicals to manufacture is complicated by the plethora of possible conversion technologies and chemicals (Bozell and Petersen 2010). In 2004, NREL and PNNL published a list of 12 potentially lucrative chemical building blocks that can be produced from biomass (Werpy et al. 2004). The 12 chemical building blocks can subsequently be further converted into high-valued chemicals or materials. In 2010, this top 12 list was revised, with new high potential chemicals being addedd and chemicals with less economic potential being removed (Bozell and Petersen 2010). The revised list includes 10 chemical building blocks as opposed to the original 12. Closing Material Loops and Reverse Logistics Material loops and the reuse of organic waste can occur across a supply chain or between different actors at different locations. Conventional

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

supply chains can also be referred to as open-loop supply chains and involve the flows of material and eventual products form the producer to the customer. Managing an open-loop supply chain requires coordinating the various actors across the supply chain including material suppliers, manufacturers, transporters, warehouses, retailers, and eventually customer interaction. Open-loop supply chains do not, however, involve the end-of-life (EOL) management of a product. If the supply chain also includes the collection of the used products and packaging, then it is referred to as a closed-loop supply chain. The process of managing the EOL of a product including the collection of the used product for reuse, recycling, or disposal is referred to as reverse logistics (Khor and Udin 2012; Govindan et al. 2015; Govindan and Soleimani 2017). Biobased supply chains in which residual biomass, materials, and eventual organic waste are utilized can be described as closed-loop supply chains. The so-called first generation of biofuels were generated from the most valuable parts of plant that are rich in sugars and oils and best suited for food. Second-generation biofuels, however, are derived from crop residues, such as corn stover and the fibrous and woody part of plants that are not suitable for human consumption. Third-generation biofuels are derived from microalgae which are potentially more efficient at converting solar radiation to chemical energy than crop biomass. Food waste is also generated throughout the food supply chain. Part of the solution is to more accurately match the supply of food with the demand for food. In Europe, 21% of food produced goes to waste along the supply chain – 9% between agriculture and postharvest handling, 4% during storage, 5% during processing and packaging, and 3% during distribution (MacArthur et al. 2015). Once the consumer has purchased the product, they dispose of another 11% as waste instead (MacArthur et al. 2015). In total, approximately 33% of consumable food is wasted (MacArthur et al. 2015). In the Netherlands, the waste streams are often given to animals, fermented or incinerated. Forty percentage of

57

food losses in the Netherlands are incinerated (Rood et al. 2017). Fermentation or incineration allows some of the energy to be recuperated. However, organic waste could rather be used in higher value products in order to utilize the proteins, minerals, and fibers that would otherwise be destroyed (Rood et al. 2017). Food, unlike technical material products, are restricted in their reuse due to food safety considerations, and therefore, there are only very limited possibilities for highvalue reuse. A general rule-of-thumb would be to use food in its existing form by sending it to a food bank, for example, before converting it into an alternative product for human consumption. After that, it can be used as animal feed, feedstock for bioenergy, or compost. In this case, a closedloop supply chain ensures the product’s complexity or exergy is preserved for as long as possible.

Future Developments At a nation state level, countries without vast fossil fuel resources, can switch to energy portfolios with a greater share of renewables which would include the production and use of biofuels. The switch to a biobased economy can ensure greater resource security by reducing dependency on fossil fuel exporting nations. Bioenergy could also potentially be used to balance peak demand in electricity networks when there is not enough wind to drive wind turbines (Jiang et al. 2017). Bioenergy can serve as readily available energy storage that can be utilized when other forms of renewable energy cannot meet demand. Other industries beyond the energy sector, such as pharmaceuticals, would also have greater protection from increases in global oil prices if their feedstock could be largely biobased. However, the question remains as to how vulnerable supply-chains dependent on biomass commodities are to changes in demand for food crops and unpredictable weather events. The switch to a biobased economy, which no longer extracts chemical energy in the form of fossil fuels from the subsurface, will require land for biomass production. The key challenge is to first maximize the output of value streams by

B

58

Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

intelligently producing biomass and intelligently configuring biorefineries and the overall supply chains. A potential limiting factor is, however, available land resources for biomass production. An increase in demand for biomass also carries the risk of land-use change and natural habitat or natural capital destruction. Emerging technologies such as third-generation biofuels or the use of cyanobacteria to convert sunlight and CO2 into useful chemicals might provide the solution to using less surface area and not requiring fertile soil. At a global level, the biobased economy has been described as providing clear advantages in terms achieving the United Nations Sustainable Development Goals (El-Chichakli et al. 2016). Progress towards eleven of the seventeen goals can be achieved by reducing dependence on fossil fuels, reducing carbon emissions and enhancing natural resource security (El-Chichakli et al. 2016; Bennich and Belyazid 2017). The biobased economy is cross-sectoral, spanning from agricultural production through to energy, chemicals and finished products (Staffas et al. 2013). Investments in the biobased economy, by the European Union, for example, create the potential for new markets and greater employment throughout the union’s economy (Fritsche and Iriarte 2014).

Cross-References ▶ Circular Economy ▶ Conceptualizing Green Economies: Origins, Evolution, and Imperatives ▶ Domestic Material Consumption, Our Modern Economies, Lifestyles, and Environmental Sustainability ▶ Ethical and Sustainable Sourcing: Toward Strategic and Holistic Sustainable Supply Chain Management

References Banasik A, Kanellopoulos A, Claassen GDH, BloemhofRuwaard JM, van der Vorst JG (2017) Closing loops in agricultural supply chains using multi-objective

optimization: a case study of an industrial mushroom supply chain. Int J Prod Econ 183:409–420 Bennich T, Belyazid S (2017) The route to sustainability – prospects and challenges of the bio-based economy. Sustainability 9(6):887 Bertine KK, Goldberg ED (1971) Fossil fuel combustion and the major sedimentary cycle. Science 173 (3993):233–235 Bozell JJ, Petersen GR (2010) Technology development for the production of biobased products from biorefinery carbohydrates – the US Department of Energy’s “top 10” revisited. Green Chem 12(4):539– 554 Cherubini F (2010) The biorefinery concept: using biomass instead of oil for producing energy and chemicals. Energy Convers Manag 51(7):1412–1421 de Jong E, Jungmeier G (2015) Biorefinery concepts in comparison to petrochemical refineries. In: Industrial biorefineries & white biotechnology. Elsevier, New York, pp 3–33 De Meyer A, Cattrysse D, Rasinmäki J, Van Orshoven J (2014) Methods to optimise the design and management of biomass-for-bioenergy supply chains: a review. Renew Sust Energ Rev 31:657–670 EC (2011) Bio-based economy in Europe: state of play and future potential. European Commission. https://ec. europa.eu/research/consultations/bioeconomy/bio-basedeconomy-for-europe-part2.pdf El-Chichakli B, von Braun J, Lang C, Barben D, Philp J (2016) Policy: five cornerstones of a global bioeconomy. Nature 535(7611):221 Fernando S, Adhikari S, Chandrapal C, Murali N (2006) Biorefineries: current status, challenges, and future direction. Energy Fuel 20(4):1727–1737 Fritsche UR, Iriarte L (2014) Sustainability criteria and indicators for the bio-based economy in Europe: state of discussion and way forward. Energies 7(11):6825– 6836 Gold S, Seuring S (2011) Supply chain and logistics issues of bio-energy production. J Clean Prod 19(1):32–34 Govindan K, Soleimani H (2017) A review of reverse logistics and closed-loop supply chains: a journal of cleaner production focus. J Clean Prod 142(Part 1):371–384 Govindan K, Soleimani H, Kannan D (2015) Reverse logistics and closed-loop supply chain: a comprehensive review to explore the future. Eur J Oper Res 240:603–626 Hoskinson RL, Karlen DL, Birrell SJ, Radtke CW, Wilhelm WW (2007) Engineering, nutrient removal, and feedstock conversion evaluations of four corn Stover harvest scenarios. Biomass Bioenergy 31(2– 3):126–136 Jiang Y, van der Werf E, van Ierland EC, Keesman KJ (2017) The potential role of waste biomass in the future urban electricity system. Biomass and bioenergy 107:182–190 Kamm B, Kamm M (2004) Principles of biorefineries. Appl Microbiol Biotechnol 64(2):137–145

Businesses Khor KS, Udin ZM (2012) Impact of reverse logistics product disposition towards business performance in Malaysian E&E companies. J Supply Chain Cust Relatsh Manag 1 Langeveld H, Sanders J, Meeusen M (2012) The biobased economy: biofuels. Materials and chemicals in the postoil era. Routledge, London MacArthur E, Zumwinkel K, Stuchtey M (2015) Growth within: a circular economy vision for a competitive Europe. Ellen MacArthur Foundation, Cowes McKendry P (2002) Energy production from biomass (part 1): overview of biomass. Bioresour Technol 83 (1):37–46 Michels J, Wagemann K (2010) The German lignocellulose feedstock biorefinery project. Biofuels Bioprod Biorefin 4(3):263–267 Muñoz I, Flury K, Jungbluth N, Rigarlsford G, i Canals LM, King H (2014) Life cycle assessment of bio-based ethanol produced from different agricultural feedstocks. Int J Life Cycle Assess 19(1):109–119 Pingali PL (2012) Green revolution: impacts, limits, and the path ahead. Proc Natl Acad Sci 109 (31):12302–12308 Rentizelas AA, Tolis AJ, Tatsiopoulos IP (2009) Logistics issues of biomass: the storage problem and the multibiomass supply chain. Renew Sust Energ Rev 13 (4):887–894 Rood T, Muilwijk H, Westhoek H (2017) Food for the circular economy. PBL publication number: 2878. PBL Netherlands Environmental Assessment Agency., The Hague Staffas L, Gustavsson M, McCormick K (2013) Strategies and policies for the bioeconomy and bio-based economy: an analysis of official national approaches. Sustainability 5(6):2751–2769 Vink ET, Rabago KR, Glassner DA, Gruber PR (2003) Applications of life cycle assessment to NatureWorks™ polylactide (PLA) production. Polymer Degradation and stability 80(3):403–419 Werpy T, Petersen G, Aden A, Bozell J, Holladay J, White J, Manheim A, Eliot D, Lasure L, Jones S (2004) Top value added chemicals from biomass. Volume 1-results of screening for potential candidates from sugars and synthesis gas. Department of Energy, Washington, DC

59 Wik M, Pingali P, Brocai S (2008) Global agricultural performance: past trends and future prospects. World Bank, Washington, DC Zhu XG, Long SP, Ort DR (2008) What is the maximum efficiency with which photosynthesis can convert solar energy into biomass? Curr Opin Biotechnol 19(2):153– 159 Zisopoulos FK, Moejes SN, Rossier-Miranda FJ, van der Goot AJ, Boom RM (2015) Exergetic comparison of food waste valorization in industrial bread production. Energy 82:640–649 Zisopoulos FK, Ramírez HAB, van der Goot AJ, Boom RM (2016) A resource efficiency assessment of the industrial mushroom production chain: the influence of data variability. J Clean Prod 126:394–408 Zisopoulos FK, Rossier-Miranda FJ, Van der Goot AJ, Boom RM (2017) The use of exergetic indicators in the food industry–a review. Crit Rev Food Sci Nutr 57 (1):197–211

Bioeconomy ▶ Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals

Business Models for Sustainability (BMfS) ▶ Sustainable Business Models

Businesses ▶ Contribution of Enterprises in Achieving the Sustainable Development Goals

B

C

Career

Circular Economy

▶ Nurturing Career Development for Human Resource Sustainable Development

▶ Conceptualizing Green Economies: Origins, Evolution, and Imperatives

Closed Loop Supply Chains Career Behavior ▶ Nurturing Career Development for Human Resource Sustainable Development

Child Associated with an Armed Force or Armed Group ▶ Recruitment and Use of Child Soldiers in International Law: Prohibition and Elimination

Child Combatant ▶ Recruitment and Use of Child Soldiers in International Law: Prohibition and Elimination

▶ Value Creation in a Circular Economy: An Interdisciplinary Approach

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living Emerson Abraham Jackson Centre of West African Studies, University of Birmingham, Birmingham, UK Model Building Analysis Section, Research Department, Bank of Sierra Leone, Freetown, Sierra Leone

Synonyms Collective employment agreements; Employee negotiations; Industrial relations; Package bargaining

Child Recruitment ▶ Human Trafficking as a Conflict Financing Measure

Disclaimer: Views expressed in this chapter are those of the author and do not reflect any of the named institutions for which he is associated.

© Springer Nature Switzerland AG 2021 W. Leal Filho et al. (eds.), Decent Work and Economic Growth, Encyclopedia of the UN Sustainable Development Goals, https://doi.org/10.1007/978-3-319-95867-5

62

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

Definitions There are different textbook definitions provided about the concept of collective bargaining, and references have been drawn to some of them in the body of this chapter. For simplicity and clarity of understanding, the author has provided a firsthand or stand-alone definition of the concept as outlined below: • Collective bargaining can be thought of as a process, which involves negotiation between an employer and representative groups of a workforce. The above definition demonstrates a compendium of functioning activities that enable the existence of smooth operation to exist in the workplace environment – the relevance of this topical discourse, which is related to the SDG agenda item of “Decent Work and Economic Growth” will be very well received as the intensity of the impact of Corona Virus 2019 (notably referred to as “COVID-19”) unveil itself once life begin to normalize.

Introduction: History, Theoretical Underpinning, and Processes The collective bargaining agreements terminology as used nowadays was first coined in 1891 by Beatrice Webb – this is connected with the field of industrial relations, which commenced in Britain (Wilkinson et al. 2015). This has been done to enhance welfare conditions for workers, who during the rise of trade union activities in the eighteenth century needed some level of protection to support issues pertaining to illegal dismissal, severance packages, decent pay level that takes account of changed economic conditions like demand and supply-side shocks, which normally result in inflationary pressures. With the rise of industrial revolution in the United States, the enactment of the “National Labor Relations Act” of 1935 then made it quite illegal for employers to deny union rights to an employee (Pope 2006; Atleson 1983). This

was seen as wise move to protect vulnerable employees from being dismissed without much protection to defend their rights while in employment. Moving on at the international level, the “Universal Declaration of Human Rights,” which was sanctions by the United Nations General Assembly in 1948 (Nurser 2005; Feldman 1999), then paved the way for a form of universal protection for humanity, particularly in terms of voicing out concerns while in paid employment. The announcement of such a universal declaration was seen as a way of recognizing the inherent dignity and rights of everyone across the world, and is also considered the engine of peace, freedom, justice, and tranquility when dealing with negotiations on employee-employer matter. These, to a greater extent, have been widely expressed in the United Nations Peace, Justice and Strong Institutions goal (related to SDG agenda item number 16), which is hoped by 2030 will be received universally so as to bring sustained peace and easy means of co-existence in the universe. There is a need to avoid the situation of “bargaining impasse,” which seem to be quite common prior to the announcement of the Universal declaration of human rights; such uneasy action normally results in total loss to both employees involved and the organization as well – the unrecognized state of trade union groups was mostly seen as the root cause of bargaining impasse in dealing with employees’ concerns within an organizational setting. As emphasized in the preamble of the declaration of Human rights charter, it is very essential that institutions of all types (be it public or private sector) must seek to avoid employees’ recourse to strike actions as a last resort. Such decision involving strike actions normally have devastating consequences to both employers (whose productivity can almost be seen in a state of wreckage, particularly with the prolongment of trade union strike actions) and also to employees, which include loss of earnings, and ultimately deprivation of access to livelihoods for families and communities at large. The concept of collective bargaining agreements is widely encompassing, but as emphasized in Newland’s (1968) study, the central issue seems

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

to gravitate within two theoretically led categories, namely, “economic matter and rights and obligations of the parties.” In a world where the main reason for a person’s passion to engage in employment is to address livelihood needs – either in pursuit of the self or addressing family needs – it means that the economic matter would seem to take priority in negotiating better deal to address economic well-being and prosperity. In many situations, both union representatives and employers would normally present a case that maximizes their share of limited, but fixed resources. In this vein, the fact that resources are perceived to be limited meant that each party would be very highly prepared to exercise their power to maximize greater share of the negotiation process. On a more theoretical standpoint, collective bargaining agreements can be linked into three levels of classification: “mandatory, permissive and illegal” – the concept which Saylordotorg (Online) also defined as “the process of negotiations between the company and representatives of the union.” In the case of mandatory bargaining, one would consider it to fall within topical concerns like wages, health and safety at work, management rights, work conditions, and benefits. On most occasions, permissive discussions are not something that seen to be categorized, but can be discussed, and these may include concerns around drugs testing or resources like access to cellular

Step 1 Preparatiton of objectives - Union negotiation team selected

Step 2 Timeline for negotiations and setting ground rules

63

phones that would normally require employees to perform specific task(s), but for which there are no legally enforcing requirements. Illegal topics are normally viewed as discriminatory to employeeemployer collective bargaining negotiating processes, and hence are treated cautiously, except where trivial issues are said to dominate the dynamics of collaborative bargaining discourses. In view of the aforementioned discussion about collective bargaining agreements, the entire process of engagement would typically involve five steps as outlined below. Figure 1 presents a case of the five different stages of collective bargaining processes as would be expected during negotiation between employer and employees, normally represented through selection of trusted union members, who would be expected to speak on behalf of staff issues or concerns. The first stage basically involves preparation of union representatives – they are usually expected to present staff concerns to an employer. It is therefore essential that union members selected are very well au fait with the organizational structure, particularly staff concerns presented to an employer. Despite not expected to be fully trained in negotiation, those represented should be able to demonstrate such quality, given the trust placed upon them to speak on behalf of staff concerns, which in most cases will gravitate around welfare and pay conditions in view of price dynamics or inflation trend. Equally,

Step 3 Each party presents proposals

Step 4 Proposals presented and discussed, with possibility for new meetings taking place.

Step 5 Details settled, contract written and voted on by union members

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living, Fig. 1 Steps in collective bargaining agreements. (Source: Adapted from Saylordotorg Online)

C

64

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

the employer would normally be prepared to receive staff concerns/demands and, ultimately, prepare for amicable compromises on items presented by union representatives. Step two addresses timeline for which negotiation is expected to conclude – there is an expectation of ground rules to be set upon, which means that points raised by union members can be negotiated in a manner that is expected to address staff concerns. Despite union members are not expected to make decision(s) about the employer’s offer, there is an anticipation for them to present a firm case that is capable of addressing employees’ concerns in a bid to avoid delay and the possibility of a call to bargaining impasse. Lack of amicable negotiation can give rise to series of economic strike action, which is more common in institutions given the situation of staff disgruntlement about deplorable welfare conditions during their employment in an organization. There are ramifications, which can result from economic strike as staff, with support from national union consultation, will be inclined to organize series of sit-down strike actions. Instead of attending to work duties, union representatives can request a situation where staff members are instructed through majority vote to take no action on operational activities until proper negotiation is actioned between the employer and union representatives. In step three, detailed proposals are presented on the table for discussion by both parties. This normally involves an opening statement, with a view that both parties will be prepared to display rationality in a bid to allowing things to work in the best interest of an organizational goal. This is not a point where parties are expected to accept offers made, but an opportunity to scrutinize offers, with a view of scheduling further meeting (s), which in this case will give rise to Step four. In Step four, proper consultation will be expected to convene in the best interest of both parties, bearing in mind that an employer will only present a confirmed offer with consideration given to resource limitation. It is therefore expected details of such situation should be tabled for discussion, which will enable union representatives develop rational understanding about the reality

of what the employer is really capable of offering, given prevailing circumstances of resource constraints, particularly for competitively private sector organizations. In the event an agreement is arrived at by all parties concerned as mentioned in stage four, there is the possibility that a new contract can be drawn, setting out details of issues discussed and settlements agreed upon by both the employer and union representatives. At stage five, written contracts are then drawn. At this point, it is incumbent on union representatives to explain details of an employer’s offer to staff – this can be done through an open meeting or at departmental level so as to allay staff worries about their concerns and well-being. With reference to ILO (2015a), the concept of Collective Bargaining is construed as a process “incorporating all agreements in writing regarding working conditions and terms of employment concluded between an employer, a group of employers or one or more employers’ organisations, on the one hand, and one or more representative workers’ organisations, or, in the absence of such organisations, the representatives of the workers duly elected and athorised by them in accordance with national laws and regulations, on the other.” It is believed that a written collective bargaining agreement should take cognisance of the following: • Binding signatories of those on whose behalf the agreement was or is to be conducted. • The undertakings should be applicable to all classes of employees’ concerns, except in a situation where the agreement specifically provide for the contrary. • Signed agreement(s) should take precedence over individual contracts of employment, while also recognizing stipulations in individual contracts that are more favorable to employees.

Economic Rationality for Collective Bargaining There is a need for collective bargaining agreements to be made an integral part of society’s

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

endeavors in a bid to enhance welfare conditions for the benefit of those in employment. Across the global community, living conditions seem to be taking a dynamic trajectory given cost-push pressure on production of goods and services, and more recent is the case with COVID-19. Invariably, there is a direct pass-through effect of such cost-push pressure from producers to consumers or economic agents, which normally comes in the form of high prices paid for the consumption of services and goods consumed. Equally and most importantly, with the rapid change in prices of goods and services purchased by consumers, it is almost impossible for people to afford the means to meet decent living, more so the sustainability of addressing basic welfare needs associated with housing and other essential items. When one looks at the objective focus of institutions like central banks across the world, which are geared toward utilizing professional expertise to explore economic realities like forecast outcomes (using a range of macroeconomic variables) in assessing price dynamics, it is but certain for efforts to be explored by union representatives in setting up collaborative bargaining agreements that support decent and sustained living conditions for humanity (see Jackson et al 2018; Jackson 2018; Jackson and Tamuke 2018; Tamuke et al. 2018; Jackson et al. 2019). The essence of collective bargaining as rooted from the SDG 2030 agendas is to address concerns bothering around improved working conditions, in a bid to maximize the most favorable returns to both employers and employees. The rationality for decent economic well-being needs to be given high priority in the under-developed economies, where very little seem to be done in protecting employees’ sustained welfare. Lag effects in addressing the reality of economic wellbeing in these economies is somehow understandable, if one is to take the driving seat of becoming an employer – considering the pressure of fluctuations in global outlook of core economic indicators. This in reality would reveal itself through series of supply-side shocks, which normally emanate from the global community, for example, exchange rate issues, seen as the key driver of

65

frequent price fluctuations in weak economies, despite policy measures set in place to stabilize prices (See Jackson et al. 2020; Jackson and Jabbie 2020a; Bangura et al. 2012). Decent welfare for people is an essential part of life and, most importantly, the need for people to develop motivation in support of organizational objectives. Sustainable living is an essential element of the UN SDGs; it is seen as the core of decent living and prospect for growth in the global economy. This situation is very hard to achieve in developing economies, particularly weak economies in the Sub-Saharan African (SSA) region, because of their susceptibility to shocks – such situations can be blamed on the overreliance on import of essential and basic commodities to sustain lives, instead of efforts being devoted to improve the productive sector, otherwise referred to as the “real sector” in economics. Due to the prevalence of the aforementioned structural weaknesses, it is seen for many of these economies that, even with the use of considered policy measures actioned by policy-led institutions like central banks, it is still a hard thing to realize economic stability in the short run, which is considered an essential ingredient for decent livelihood sustainability as addressed in the SDG8 charter. In many of the SSA economies for example, it may be seen that policy measures are more or less undermined given myriad of structural problems faced by many of the region’s weak economies – for example, unproductive and weak real sector as seen more lately in post war-torn countries like Sierra Leone and Liberia (Jackson 2019; Jackson and Jabbie 2020a).

Collective Bargaining and Its Linkages with the UN SDGs On reflection of the concept of collective bargaining agreements as linked with the United Nations 17 proposed Sustainable Development Goals [SDGs], efforts should be stepped up to address inequality of welfare conditions faced by people in the global community. Given the experience of open democracy as practiced in developed economies like the UK and the USA, the voices of pressure groups in championing

C

66

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

collective bargaining agreements seem to be working, particularly with the emergence of diversified range of pressure groups like feminist actions, who have also witnessed a new wave of critical concept around issue like intersectionality (see Jackson and Jabbie 2020b; Jackson and Jackson 2020), senior citizens, and many more. On the contrary, such economies seem not to have gotten firm grip of the essence of collective bargaining agreement; this is partly due to low level of education that is lacking among citizens, and in many cases, selfishness on the part of those in authority to judiciously invest in human development, considered an essential tool for sustainable growth and development (Jackson et al. 2020; Jackson 2015, 2018a, b). On dissection of the 17 agendas for SDGs, which are expected to be in full operation by the year 2030, it seems very clear that at least seven of these are directly associated with the concept of collective bargaining agreement as elucidated below: • SDG1 – this goal is the first of the proposed agendas; it emphasizes on the need to eradicate poverty for all in the given time set for the SDGs to be completely rolled out. This to some extent may seem to be a difficult thing to achieve, but with concerted efforts, particularly those in global economic governance, it can be achieved. The word poverty has different connotation if one is to dissect deeply into it. Researchers across the world have attested to poverty being a global issue, as opposed to what is perceived of its high prevalence in the underdeveloped economies (Le Blanc 2015; Kumi et al. 2014). Poverty here can be measured on various dimension, which in this case would include the capacity for people to be able to afford basic amenities like housing and subsistence to maintain life for a given period of time, notably within a month until the next wage or salary is to be received. Due to the disentangling nature of unions’ voices in developing economies, it is very hard for those assigned the responsibility of negotiating to achieve the goal of pursuing an agreement that will meet the concerns of those in the

workforce. While it is understandable that the fractured nature of economies in the underdeveloped world is unstable to firm up agreements with employers on a trend that is consistent with inflationary pressures, it is but vital that the basic needs of humanity is given serious consideration. • SDG3 – collective bargaining agreements in all cases is done with the ulterior motive of ensuring negotiations are done in the best interest of promoting “Good health and Well-being” for those whose voices cannot easily be heard. In this regard, the move to embrace SDG3 must endeavor to address concerns that embrace wider remit on collective bargaining arrangements. This should take into consideration aspects on employee-employer relations that incorporate activities like human resource development to capacitate employee’s prospect of growth in the workplace (see, Jackson et al. 2020; Jackson 2015). • SDG8 – in the pursuit of promoting economic growth in an economy, there should also be a focus on ensuring workers avail decent living and working conditions that is commensurate with the prevailing economic condition as dictated by individual economies across the world. Most of the time, living standard condition is always on a divergent path with employee conditions of service. On a honest note, it would seem very unreasonable for the blame to be directed at employers, particularly those in the public service sector, more so in the developing economies where the forces of political hegemony is making it hard for employers to listen to the deplorable conditions endured by employees. On a normal note, human conscience would tend to be skewed toward giving in to concerns raised by employees, but the reality and level of economic stagnation (in most cases recession) as seen in developing economies around Africa may even result in a situation where employers may feel inhibited to adhere to serious concerns raised by employees. In reality, the continued deteriorating state of human welfare, especially those purportedly seen to be in employment, is a cause for serious action in a

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

bid to address decent working conditions as emphasized in the SDG 8 agenda. In this case, employers would need to manifest honesty in their dealings with union representatives when negotiating conditions that are pertinent to enhancing welfare – a supposedly vital element in sustaining employees’ motivation to develop high standard of culture in the workplace. While it is believed that employees can endure a deplorable state of employment conditions because of risks attached in finding comparable decent work, research have also shown that most people would prefer to operate in the underground world of work, which in this case is referred to as “Informal Employment” (Jackson 2020). This then results in a situation whereby government would be the overall looser, with huge cost outlay on job seekers allowances being paid and also, informal uptake of work, for which no proceed of revenue is expected to be generated by the government. • SDG10 (Reducing Inequality) – This is an area of pertinent concern to staff during their time of employment within an organization. The SDG10 agenda is spelt out in a way that stresses the importance of reducing inequality. In this case, employers may need to take heed in listening to staff concerns as opposed to downplaying the reality of their concerns, which on most occasions would end up in dispute and prolonged grievances bottled up by employees. It is therefore essential that SDG10 agenda is clearly promoted to all institutions, whether a public or private establishment, to address sufficiently the possibility of exploring ways in which issues or concerns can be possibly dealt with through collective bargaining agreements. In this vein, a focus on the mandate of SDG10 agenda should be a sufficient way through which issues pertaining to inequality can be addressed – this is currently being manifested through such operations like gender inequality and nepotism, which are very common in developing economies in the SSA region (Jackson and Jackson 2020). In this regard, the unnoticed facts about gender pay gap should

67

also be made an integral part of the remit of discussion in collective bargaining agreements between employees and employers in a bid to creating semblance of fairness in the workplace environment. • SDG11 (Sustainable Cities and Communities) – This is very critical to collective bargaining agreement, given the high cost placed on employees who normally take up employment in large cities. Statistics and various research evidence have shown that increase population sizes in large cities is also posing serious threat to standard of living in the foreseeable future, given the fact that more people are inclined to relocate into inner cities in pursuit of greener pastures (Charlton 2016; Cobbinah et al. 2015). This also has its ramifications, where rural environments are left in a state of squalidness, thereby increasing the risk of a reduced focus on food security, more so in many of the underdeveloped economies around the world. In this regard, high priority needs to be devoted to segment living cost allowances, which are normally negotiated in employees packages – this will help address the reality of insurmountable costs placed on those who live and travel to work in large cities, where costs are considerably higher – this is a real attestation throughout the global economy and it includes things like housing, transportation, and other accessible amenities like car parking, etc. • Peace, Justice and Strong Institutions – This requires strengthening of the rule of law that seeks to promote equality of justice for all in the workplace. In this regard, the use of agenda item 16 must be utilized effectively to promote laws that embraces employers’ good relation in improving working standards for employees, regardless of position or responsibilities in the workplace environment. Issues pertaining to unfair dismissal must be addressed under the remit of Peace, Justice and Strong Institutions agenda item, particularly with focus on developing economies where employees are used as slaves to work for almost nothing, while employers, particularly those in the corporate environment, are made to package huge profits at the expense of communities’ downfall.

C

68

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

• SDG17 (Partnership for the Goals) – In a bid to promote collaborative bargaining agreements cohesively, it is vital that this agenda is utilized effectively to embrace relevant SDG agendas. This will make it possible for humanity to live decent life, while in their active working age. The above are thought of as essential tools in driving the way forward in addressing human sustained welfare, given the failure of those in governance to disregard concerns raised by union representative, particularly in the workplace environment to negotiate decent living conditions.

Policy Approach to Reaching Agreements in Collective Bargaining In a bid to promoting good relationship in collective bargaining agreements, it is but necessary that governments across the globe make it a mandatory call through the national labor ministry to protect employee-employer relationships. Employees are normally placed in a vulnerable state, particularly in developing economies where employers in the informal sector are seen to be taking advantage of workers’ vulnerability due to the deprived state of these economies (Jackson 2020). In this regard, employment laws should be directly linked in ensuring industrial relations is made an integral part of the workforce, and most importantly a situation where employees’ rights are treated seriously. This should take account of wider areas of concerns pertaining to wage/salary, linked to inflationary pressures, which means that workers will be better placed in the event of an economy not performing well, where prices of goods and services moving at an escalated rate, to the disadvantage of welfare loss to those in low income level employment. As addressed in the SDG1 and 3 agendas, governments in the global economy and more so developing countries around the SSA region should be made aware about the essence of life, which is to ensure that purpose of people engaging in work is to alleviate living conditions, and ultimately, reducing the chances of being in poverty.

In this regard, there should be an effort made by governments and international partners like the International Labour Organisation and the United Nations to emphasize the interconnectedness of the various SDGs that embodies improvement in welfare conditions for people in the 2030 charter. In this regard, reference should always be linked to the “Manual on Collective Bargaining and Dispute Resolution,” more so for those working in the Public Services (ILO 2015b) so as to reinforce evidence of good practices in preventing disputes between employees and employers generally in the workplace environment. Such approach is also in line with the Articles 7 and 8 of the ILO Convention, which is done as a way of addressing dispute issues and resolution on labor relations in the Public Services – such articles can also be made universally accepted even for those in the private sector that feel very unprotected when it comes to dealing with fair treatment on issues pertaining to collective bargaining agreements (also part of the SDG8 charter on Decent Work and Economic Growth).

Conclusion and Recommended Points In a bid to promoting decent work, which also accounts for prospect for economic growth and prosperity in the global community, it has been made clear from the onset of this chapter that favorable collective bargaining agreement is essentially vital to promote sustainable living for those in employment. In this regard, there is a need for collective efforts to be made, whereby all the relevant SDG agendas should be made interconnected to address a situation of cohesiveness between those representing employees’ interests (in this case union representatives) and the employers or their legal representatives. There is plethora of gains to be made when efforts are effectively championed to improve cooperation in the area of employment relations, more so for the good of economic prosperity in a nation. In this regard, economies are sure to benefit through high level of productivity when employee and employer relations are well coordinated in situations of dispute of issues dealing

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

with employees’ dissatisfaction. The most important and highly publicized issues that seem to be promoted in the media about employee-employer bargaining agreements are to do with pay/wage condition. This is quite important, given the fact that the main reason for people taking up work is to address livelihood concerns, and the way such transaction can be demonstrated is through monetary exchange, which require transfer of money (physically or through electronic means as seen in modern time). In the world of uncertainty, which is highly dictated by shocks that come in the form of unexpected events within an economy or in the global community as seen in the case with oil price changes, it is obvious that weak economies are left in a vulnerable state to sail through impacts of shocking events. Such impacts would normally be seen through supply-side shock, revealing itself through exchange rate dynamics. For weak economies (more so those in the SSA region) that are highly dependent on the importation of essential items to sustain lives, the pass-through effect will be clearly seen through high prices for basic commodities and services consumed. Given the experience of aftermath supply shocks in the 1970s, researchers have developed keen interests in the weaknesses of collective bargaining agreements, without much consideration given to macroeconomic adjustments, which can impact on livelihood sustainability (Flagan 1999; Christofides and Oswald 1992). In situations where employees are inclined to request for adjustment in pay/wage conditions on account of a drop in standard of living, it is vital that employers display maturity and understanding to the reality of things happening, while also coming clean about the reality of resource limitation at their disposal. Equally, employers will also be faced with serious level of constraints, particularly in the public sector, where expenditures for service delivery would have been determined, without much consideration given to unexpected shock outcome. In the event of such a situation occurring, it is very important that collaborative efforts (between employers and employees) are devoted to ensuring that each side of the negotiating table manifests understanding about the reality on

69

ground; in this case, ensuring there is calmness in working practices, despite the impact on livelihoods, seem to manifest itself through high price adjustments of goods and services. Employers would need to demonstrate skillfulness in their approach to dealing with such trivial matters, while also expressing their understanding of the reality, with regard to the adjusted high cost of living. In a bid to moving forward, the worse situation of bargaining impasse should be avoided during collective bargaining agreements. No matter how difficult a situation is, both employees and employers should at all time seek to demonstrate high level of restrain in minimizing problems that will result in economic strike actions being voted upon by employees. There is plethora of ramifications to be faced when a strike action is used as the ultimate means of addressing problems and to name a few, “loss of earnings to businesses, particularly in the case of profit making institutions, loss of livelihoods to individuals or households, economic loss to productivity for both the state and businesses, and where such action is to recourse to violence, this may result in economic loss to a state, etc.” In conclusion, and as a way of moving forward with collective bargaining agreements, it is necessary that the following points are considered seriously: • Promoting continuous dialogue or discourse on work welfare between employers and employees. This will help both parties to address issues that are pertinent to the going forward state of employees’ satisfaction and also areas that an employer would need to factor in building cohesiveness in the workplace environment. • The establishment of employee union or organization should always be fostered and, where necessary, made an integral part of employeremployee relationship in ensuring issues are dealt with, particularly in situations where changes proposed by an employer may result in devastating impact on employees’ conditions of service. In this vein, and as stressed out in the UN Peace, Justice and Strong

C

70

Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

Institutions agenda item (SDG16), government legislative policies must ensure that actions taken by employers on employees’ state of employment must be dealt with through legal means, and most importantly, in consultation with union representation. Where it is absolutely necessary that changes suggested by an employer would lead to the sustainability of an organization’s existence, it will be necessary for collective bargaining arrangement to be organized with presentations made to explain concerns to union members. – Collective bargaining agreements must always seek to explore wider means of operational support that builds on employees’ capacity to grow and also empower the self (Jabbie et al. 2020), as opposed to just the normal focus on adjustment in wages and salaries, which seem to have revealed itself in the wake of COVID-19. During the down period of COVID-19 intensity, the world economy witnessed a situation where employers had to become very much flexible with employees with regard to adopting flexible hours of work, and in some cases, opening up negotiation for employees to consider reduce their hours of work in order to ease the adverse impact of redundancy. Such a situation as witnessed recently has made it more relevant for Newland’s (1968) definition (which emphasize the relationship between management and the representative of organised employees) to become very relevant in terms of the role of management in supporting employees’ plea about conditions of services. • The situation must foster equality of opportunity (irrespective of gender or sexuality), with the ulterior motive of encouraging innovation that builds on an organization’s capacity to grow as emphasized in the UN SDG5, 8 and 9 charters. On a final note, progress in developing sustained collective bargaining agreements will require collaboration and the ability to be inclusive in decision making. In this case, both

employees and employers must ensure systems are continuously reviewed, with the scope of ensuring both parties are at the benefit of contributing to society’s long-term scope for development and growth through cooperation.

Cross-References ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs) ▶ Ethical and Sustainable Sourcing: Toward Strategic and Holistic Sustainable Supply Chain Management ▶ International Labour Organization: A Short History

References Atleson JB (1983) Values and assumptions in American labor law. University fo Massachusetts Press, Amherst Bangura M, Caluker E, Pessima S (2012) Exchange rate pass-through to inflation in Sierra Leone: a structural vector autoregressive approach. J Monetary Econ Integrat 12(1):93–123 Charlton KE (2016) Food security, food systems and dfood sovereignty in the 21st century: a new paradign reequired to meet Sustainable Developmnt Goals. Nutr Dietics 73(1):3–12 Christofides LN, Oswald AJ (1992) Real wage determination and rent-sharing in collective bargaining agreements. Q J Econ 107(3):985–1002 Cobbinah PB, Erdiaw-Kwasie MO, Amoateng P (2015) Africa’s urbanisation: Impliations for sustainable development. J Cities 47(2015):62–72. https://doi.org/ 10.1016/j.cities.2015.03.013 Feldman J-P (1999) Hayek’s critique of the Universal Declaraiton of Human Rights. J Economistes et des Etudes Humaines 9(4):1–13 Flagan RJ (1999) Macroeconomic performance and collective bargaining: international perespective. J Econ Lit XXXVII:1150–1175 International Labour Organisation (ILO) 2015a) Collective bargaining: a policy guide. https://apirnet.ilo.org/ resources/collective-bargaining-a-policy-guide/at_ download/file1. Accessed 9 Dec 2019 International Labour Organisation (ILO) (2015b) Promoting constructive approaches to labour relations in the public services: examples from collective agreements. ILO Office, Sectoral Activities Department, Geneva. https://www.ilo.org/wcmsp5/groups/public/% 2D%2D-ed_dialogue/%2D%2D-sector/documents/ instructionalmaterial/wcms_433916.pdf. Accessed 9 Dec 2019

Community-Based Development Jabbie M, Barrie ASI, Tamuke E (2020) Inclusive employment: A global concern. In: Leal Filho W et al (eds) Decent work and economic growth: encyclopedia of the UN sustainable development goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71058-7 Jackson EA (2015) Impact of MOODLE platform on the pedagogy of students and staff: cross-curricular comparison. J Inf Commun Technol 22(1):177–193. https:// doi.org/10.1007/s10639-015-9438-9 Jackson EA (2018a) MOODLE platform: “A case of flexible corporate learning in the financial sector in Sierra Leone”. In: Sinecen M (eds) Trends in E-learning. INTECH, USA. https://doi.org/10.5772/ intechopen.75617. Jackson EA (2018b) Comparison between static and dynamic forecast in autoregressive integrated moving average for seasonally adjusted headline consumer Price index. SSRN Electronic Journal 70(1):53–65 Jackson EA (2019) Hermeneutics of ceteris paribus in the african context. J Econ Insights – Trends and Challenges 9(71):9–16 Jackson EA (2020) Informal employment. In: Leal FW, Azsul A, Brandli L, Özuyar P, Wall T (eds) Decent work and economic growth. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71058-7_15-1 Jackson EA, Jabbie M (2020a) Twin deficits hypothesis as an indication of government failure in Sierra Leone: An empirical investigation (2007 to 2018). J Econ Policy Res 7(1):43–68. https://doi.org/10.26650/JEPR658440 Jackson EA, Jabbie M (2020b). Exploring intersectionality through artful critical qualitative methodologies. Gender Equality: Encyclopedia of Sustainable Development Goal, Springer Nature Publisher Jackson EA, Jackson J (2020) Global perspectives on gender sensitivity and economic benefits. In: Leal Filho W et al (eds) Gender equality. Encyclopedia of the UN sustainable development goals. Springer, Cham. https://doi.org/10.1007/978-3-319-70060-1 Jackson EA, Tamuke E (2018) Probability forecast using fan chart analysis: a case of the Sierra Leone economy. J Adv Stud Finance 9(1(17)):34–44 Jackson EA, Sillah A, Tamuke E (2018) Modelling monthly headline consumer price index (HCPI) through seasonal box-Jenkins methodology. Int J Sci 7(1):51–56. https://doi.org/10.18483/ijSci.1507 Jackson EA, Tamuke E, Jabbie M (2019) Disaggregated short-term inflation forecast (STIF) for monetary policy decision in Sierra Leone. J Theor Pract Res Econ Fields Finan Markets Institutions Risks 3(4):36–52. https:// doi.org/10.21272/fmir.3(4).36-52.2019 Jackson EA, Jackson H, Jackson E (2020) Nurturing career development for human resource sustainability. In: Filho WL et al (eds) Decent work and economic growth: encyclopedia of sustainable development goal. Springer Nature Publisher. https://doi.org/ 10.1007/978-3-319-71058-7_2-1 Kumi E, Arhin AA, Yeboah T (2014) Can post-2015 sustainable development goals survive neoliberalism? A

71 critical examination of the sustainable developmentneoliberalism nexus in developing countries. Environ Dev Sustain 16(3):539–554 Le Blanc D (2015) Towards integration at last? The sustainable development goals as a network of targets. Sustain Dev 23(3):176–187. https://doi.org/10.1002/ sd.1582 Newland CA (1968) Collective bargaining concepts: applications in governments. Public Adm Rev 28(2):117– 126 Nurser J (2005) For all peoples and all nations. Christian churches and Humamn rights. World Council of Churches Publications, Geneva Pope JG (2006) Worker lawmaking, sit-down strkies, and the shaping of Amereican industrial relations, 1935–1958. Law and Hist Rev 24(1):45–113. https:// doi.org/10.1017/S0738248000002273 Saylordotorg (Online) Collective bargaining. https:// saylordotorg.github.io/text_human-resource-manage ment/s16-02-collective-bargaining.html. Accessed 7 Dec 2019 Tamuke E, Jackson EA, Sillah A (2018) Forecasting inflation in Sierra Leone using ARIMIA and ARIMAX: a comparative evaluation. Theor Pract Res Econ Fields 9 (1(17)):63–74 Wilkinson A, Dundon T, Donaghey JJ, Freeman R (2015) Employee voice: Charting new terrain. In: Wilkinson A et al (eds) The handbook of research on employee voice Cheltenham, UK: Edward Elgar Publishing

Collective Employment Agreements ▶ Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living

Community Service ▶ Importance of the Public Service in Achieving the UN SDGS

Community-Based Development ▶ Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

C

72

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs Shahana Afrose Chowdhury1, Mahreen Mustafa2, Meherun Ahmed2 and Nushrat Jahan3 1 Kazi Shahid Foundation, Dhaka, Bangladesh 2 Asian University for Women, Chattogram, Bangladesh 3 Sher-e-Bangla Agricultural University, Dhaka, Bangladesh

Synonyms Community-based development; Decent work; Skill development; Socioeconomic development

Definition Community-based socioeconomic development programs initiate a process that enables Non-Government Organizations (NGOs) to develop a sustainable and long-term program involving community participation for alleviating poverty that acts as a catalyst to growth and development and meeting Sustainable Development Goals of the United Nations. Generally the broad objective of these programs is to improve the livelihoods and living conditions of poor rural communities with emphasis on women and other vulnerable groups.

Introduction The notion of “Community-Based Rural Socioeconomic Development Programs” is ubiquitous in the current development public policy discourse amongst Non-Governmental Organizations (NGOs). This paper presents a critical review of the literature pertaining to implementation of community-based actions. It is shown that community-based action can be implemented by NGOs in two ways; NGOs can either link with preexisting communitybased organizations (CBOs) or can create new

community-based organizations. The goal of this paper is to suggest ways in which NGOs can begin to develop a more relevant concept of community and coordinate their operations accordingly. Much of the literature which focuses on the role of Non-Governmental Organizations (NGOs) in development has been characterized by interest in policy issues for NGO relations with states, donors, and communities (Lewis 1998: 3). In comparison, the literature analyzing the theme “NGO Management” is small, though growing and gaining interest among stake holders. The tendency to overemphasize the issues of policy over the issues of management in the NGO development discourse is striking in the light of the practical and organizational nature of the work of the NGOs. According to the author De Graaf (1987), there are two reasons why there should be greater attention given to issues of NGO Management. First, NGOs concerned with development face the management of a complex and diverse range of issues. NGOs encounter internal management issues, for instance, concerns of strategic planning, staffing, budgeting, and the governing structure of the organization, as well as growth and change within the organization. Likewise, NGOs face the management of external relationships as well; for example, relations with the government, the private sector, other NGOs, and with their target communities. Each of these comes to bear on the feasibility of NGOs managing development. The efficacy of NGOs as actors in change and development depends not only on the successful engagement within both internal and external management concerns but also on the successful articulation between issues of internal and external management. Second, the consideration of NGO Management issues is important because turning policy into effective action requires effective management. A critical realization that the implementation of policy directives is a practical rather than ideological process is often missing in NGO literature. The underlying theme of this paper is that NGOs who work in development can reap benefits by considering the practical and managerial implications for the implementation of policy ideas.

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

“Community-based action” is a policy idea that pervades the contemporary NGO development discourse. It is part of a strategic shift that NGOs have made in their relationship with the people that they work with and for, their beneficiaries. Fowler (1997: 221) has described this strategic shift as one in which NGOs move from roles of welfare and delivery to roles of strengthening people’s organizations and movements. The shift has occurred in tandem with an overall recognition of the importance of alternative, grassroots approaches to development processes (Craig and Mayo 1995: 1). This policy idea of “community-based action” is an engine to inclusive and sustainable economic growth that can in turn drive progress and generate the means to implement the Sustainable Development Goals. Before we observe how that occurs, let’s first explore the progress of Goal 8 in 2019. Next we discuss some mention worthy community development programs across the globe that is setting the tone of development process of the respective countries. We delineate their major accomplishments in a tabular form for easier comparisons. We conclude by discussing the possible key issues of community development programs.

Progress of SDG Goal 8 in 2019 The policies and institutions discussed in the policy spiral of “Time to Act for SDG 8: Integrating Decent Work, Sustained Growth and Environmental Integrity” (ILO 2019) relate predominantly to targets under SDG 8. The policy spiral therefore includes pro-employment macroeconomic and sectoral policies, together with measures to promote wages, skills, technology, and innovation, that enable countries to move toward full and productive employment and decent work and to raise productivity (SDG Targets 8.2 and 8.9), employment (8.5 and 8.6), labor income (10.4), and economic growth (8.1) while reducing informality (8.3). Combined with institutional mechanisms that, in accordance with international labor standards, ensure health and safety at work, uphold labor rights (8.7 and 8.8), provide social protection for all (1.3), and promote gender

73

equality (8.5.1), the policy spiral is fully aligned with the ILO’s Decent Work Agenda. As far as social dialogue is concerned, independent and strong employers’ and workers’ organizations reinforce democratic ownership, inclusiveness, and accountability, all of which are relevant to the implementation of the 2030 Agenda. An upward policy spiral implementing the Decent Work Agenda goals offers a tested approach to promote SDG 8. The integrated approach embraces three distinct elements: (a) national employment policies, (b) labor standards and labor market institutions, and (c) social dialogue, partnerships, enhanced capacities at the national level, and robust monitoring mechanisms. Albeit the presence of isolated pockets of achievement, progress toward SDG 8 is slowing down in many areas of the world. An urgent acceleration of action and efforts is required to bring about transformative change in support of SDG 8 in its three dimensions of sustained, inclusive, and sustainable growth. The performance of countries in terms of achieving sustained economic growth is highly uneven. Since 2000, growth in both gross domestic product (GDP) and labor productivity has been higher in lower- and upper-middle-income countries than in low- and high-income countries. Moreover, least developed countries are falling short of the specific SDG 8 target of sustaining annual GDP growth of at least 7%. Progress in reducing informality is poor, and informal employment continues to be the reality for around 61% of workers worldwide. While informality rates vary greatly with income levels, there are particularly large differences among countries in the lowerand upper-middle-income groups. Access to financial services is also highly uneven among countries, but again there is a positive correlation with their income level. Inclusive growth and decent work for all women and men constitute the social dimension of SDG 8. Progress in that dimension is measured in terms of equality, fairness, and justice within societies. The evidence suggests that most countries still have a long way to go. Unemployment is too high in many countries, and there are persistent gender

C

74

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

wage gaps and decent work deficits across the world. In addition to women, young people and persons with disabilities are also at a great disadvantage. Even in countries with a low risk of unemployment, these population groups face severe challenges when it comes to finding employment and enjoying equal access to decent work and equal pay for work of equal value. Both low- and middle-income countries, the share of young people not in employment, education, or training (NEET) is similar. Workers’ rights are human rights, and respect for workers’ rights and compliance with labor standards are the foundation of decent work and social justice. The available data for measuring progress in this dimension of SDG 8 show that the prevalence of child labor has declined at the global level, but that without radical action, it will not be eradicated by 2025, the year fixed by the relevant target under SDG 8. Lastly, SDG 8 takes into account the environmental dimension by emphasizing the importance of a transition toward responsible consumption behavior. Despite the adoption of the 2030 Agenda by all countries in 2015, the available data suggest a continued and alarming upward trend in global material consumption per capita, fueled in particular by Asia and Latin America. Africa has, overall, the lowest material consumption per capita, mainly as a result of its relatively low levels of production, income, and demand (United Nations 2019). Hence, as we can observe, more progress is needed to increase employment opportunities, particularly for young people, reduce informal employment and the gender pay gap, and promote safe and secure working environments to create decent work for all. To do so, the current Community-Based Rural Socioeconomic Development Programs are working on lowering these gaps.

Some Rising Community-Based Socioeconomic Development Programs Preexisting Community-Based Socioeconomic Development Programs Poverty alleviation programs have been aggressively pursued by governments in developing

world, with a lot of focus on government-led approaches and initiatives – which in most cases have left much to be desired. A study in Nigeria “Community-Driven Development (CDD) and Rural Poverty Alleviation in Nigeria: A Bottomup Development Approach” analyzed a number of selected rural development (community-driven) projects (Anietem and Abiodun 2015). Using literature collected from secondary source to analyze selected projects, the study displays that community-driven projects are indeed effective in improving the lives of the poor in rural areas by increasing their income level, productive assets, and general welfare. Consequently, the research recommends that for it to achieve desired results, communitydriven development approaches to rural poverty alleviation should be carefully planned and monitored (Anietem and Abiodun 2015). Moreover, a project on the “Assessment of socioeconomic empowerment of the Strengthening Dairy Value Chain (SDVC) Producers” (CARE Bangladesh 2018) also focused on the SDG Goal 8. The project has been implemented on 30,000 female dairy farmers from 7 districts of Northern Bangladesh (Bogra, Joypurhat, Sirajganj, Pabna, Natore, Rangpur, Kurigram). The project’s main goals are based on (i) gender division of labor: to improve in sharing in cow management, increasing joint labor fodder collection, or cutting and get women involved in groups, (ii) access and control profile: access to information and services of women in dairy cow management, and (iii) analysis of influencing factors: factors that affect the socioeconomic empowerment. Diversify incomes has given more choices about how to make money, as households diversified their income through milk sales income and savings operation. During SDVC, women’s access to extension advisory services ensured through communication, leadership training, campaign, and linkage with the service providers. SDVC worked with paraprofessional extension agents but also connected to government livestock services. SDVC helped to connect women to service markets so that they could sell milk at a fair price at digital fat testing (DFT) points. Women’s access to markets increased due to three-way credit system (DFT point owner-input shop

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

owner and producer). Both women and men told that couples dialogue was one of their trustworthy relationships and one that had a profound impact on the way they interact. Furthermore, looking into the case of Mali, the country’s challenges are compounded by its population growth rate. Its population is expected to double from 18 million persons in 2016 to 35 million by 2035. Population growth and migration patterns will pose future challenges for the decentralization process in Mali, which will have a notable effect on service access in rural areas. In Mali, the persistent dependency on farming – and the concomitant search for farm and grazing land – is leading to growth in the most distant and remote areas, increasingly distant from commune centers where services are located. In these remote areas, commercial activity is also least viable because of high transport costs and lack of market access, among other factors. The objective of improving the living conditions of rural communities was, and remains, substantially relevant. Relevance could be enhanced by pivoting the objective toward improving local governance and public resource management while anchored in meaningful citizen engagement for increased legitimacy. Project design is rated modest, however, because several design features – such as the need for better complementarity (between public and private investments), nontransparent participation criteria, inadequate inclusion criteria, and the forced establishment of cooperatives – were only modestly relevant to achieving the project aims. A notable design tension was the desire of the state to achieve political legitimacy by extending investment to remote areas of Mali that, while underserved, are also inhospitable to commercial activities. The use of country systems – namely, the newly established National Agency for Communal and Territorial Investments (ANICT) – also undermined efforts to achieve clear financial targeting. Commune selection criteria are not evident, for example. In contrast to project indications that funds were needed to smooth service delivery to more remote areas, no such patterns emerge from the data analyzed. The use of country systems fell prey to existing “rules of the game” characterized by a

75

degree of collusion between ANICT and select commune heads, and between ANICT and entrepreneurs, which at times resulted in inefficient choices or poor-quality infrastructure (e.g., in the purchase of building materials). This assessment finds that the project only modestly contributed to improved living conditions by (1) providing access to basic socioeconomic services, with more achievements noted for education than for health and by (2) expanding private investment opportunities, with a greater a greater rate of success associated with investment in agricultural activities than in transformation, commercialization, or livestock rearing. Location mattered for service access (especially for health) because more investment per capita was made in the Chef Lieu (commune center) than in other villages within the commune. Social capital also mattered; the success of the private investment opportunities required access to land, water, finance, bargaining power, and markets, among other factors (World Bank 2017). Bangladesh Rural Advancement Committee (BRAC) has launched a 5-year strategic plan (2016–2020) focusing on eight programmatic areas for the community people of 11 countries across Asia and Africa: Afghanistan, Bangladesh, Liberia, Myanmar, Nepal, Pakistan, the Philippines, Sierra Leone, South Sudan, Tanzania, and Uganda (BRAC Annual Report 2017). The mission of the plan is to have a world free from all forms of exploitation and discrimination where everyone has the opportunity to realize their potential and empower people and communities in situations of poverty, illiteracy disease, and social injustice. Their interventions aim to achieve large-scale, positive changes through economic and social programs that enable women and men to realize their potential. Among their eight programmatic areas “Employable Skills for Decent Work at home and Abroad” is directly related to SDG 8. They offer high-quality training to people from all backgrounds and link graduates with decent work opportunities. BRAC works in both the formal and informal economy, identifying occupations in demand and skills in short supply, in partnership with market actors and employers. They offer technical and vocational training,

C

76

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

enterprise and institution-based apprenticeships, and entrepreneurship and enterprise development, especially for startups in the informal economy. Their projects aim to improve working conditions and strengthen market value chains. BRAC promote and facilitate safe, regular, and responsible migration for potential migrants at every step of their journey so that they can pursue safe migration routes and financing. They arrange trade-specific training, pre-decision and predeparture orientation, and life skills training for migrant workers. Their reintegration service centers in 64 districts provide services to returnees to promote social and economic reintegration, including psychosocial counseling to those who have experienced trauma and emergency support for returnees. A number of the plan’s major accomplishments are: The accomplishments of the abovementioned community-based programs are shown as follows:

Preexisting communitybased organizations (CBOs) SDVC Producers

Mali Rural Community Development Project

Accomplishments Among the community, 164% incomes more than doubled Overall 75% productivity increased In term of community development, 3.8% resilience increased In term of socioeconomic status, 116% cow ownership increased for women Among the community women, increased their decision-making capacity Increased the engagement of men to shift role Social attitude has been changed toward the women by increasing their socioeconomic status by a decent work Farm investments (inputs, including new seed, or support for crop diversification) were more successful than (continued)

Preexisting communitybased organizations (CBOs)

Accomplishments transformation and commercialization activities and livestock rearing. These latter investments were made in the absence of market or value chain analysis Because of the project’s requirements that groups form cooperatives, existing economic groups reshaped themselves to access project finance. The cooperative model was characterized by collective action challenges, including free riding and predatory behavior on the part of elite group members. These dynamics contributed to the poor performance of some of the subprojects, especially in the livestock sector Land was a constraining factor. While conditions varied, land was often gifted by a village chief, which proved to be unsustainable in the long run (land was asked to be returned once it was cultivated). Available land was often too far away from homesteads, and this affected the success of the productive investments (too far away to regularly oversee) The project also lacked social accountability tools to empower cooperatives’ members vis-à-vis suppliers. The low quality, or durability, of the productive equipment was a frequent cause of project failure, as expressed in the cooperative interviews. Female cooperatives reported that they felt uncomfortable reporting poor equipment or that they lacked the right to reject it from the field (continued)

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

Preexisting communitybased organizations (CBOs)

BRAC’s “Employable Skills For Decent Work at Home and Abroad” Project

Accomplishments agent, who was in nearly all instances a man. Gender, overall, was not addressed well in project design, regarding the way that women would participate in local priority setting and investment decision-making along cultural lines Bangladesh sent over a million workers abroad in 2017 33,980 people across 46 districts supported with skills training, jobs, and decent work interventions 6,343 owners of microand small enterprises benefited from improved working conditions BRAC Institute of Skills Development established, offering governmentaffiliated training and certification, and City and Guilds Certification Currently BRAC offering 10 courses. 1,425 people trained under the skills for employment investment program and empowering ready-made garments worker projects 438 learners placed in jobs in coordination with 350 industries 62,884 potential labor migrants and their family members equipped with information on safe migration, remittance, and financial management 2,320 potential migrants reached with language training, predeparture, health and life skills training, and other support services BDT 6,935,000 recovered through social arbitration on behalf of deceased and deceived migrant workers

77

Newly Rising Community-Based Socioeconomic Development Programs The International Labour Organization’s Decent Work initiative aims to “create opportunities for women and men to obtain productive work in conditions of freedom, equity, security and human dignity” (2017–2020). Decent Work Country Programmes (DWCPs) have been established as the main vehicle of ILO support to countries. DWCPs have two main objectives. They promote Decent Work as a key component of national development strategies. At the same time, they organize ILO knowledge, instruments, advocacy, and cooperation at the service of government, employers, and workers. This DWCP for Bangladesh to be implemented from 2017 to 2020 is results oriented, focused, and wellcoordinated with national policy documents and global development initiatives such as the Sustainable Development Goals (SDGs). The DWCP priorities have been chosen on the basis of participatory assessment of current challenges through stakeholder consultations involving a wide range of constituents and other interested parties as well as a review by specialists of the Decent Work situation at the end of the previous DWCP. These challenges include the high unemployment rate among youth and especially among those with higher levels of education, high and stagnating income inequality, low productivity in some sectors, slow improvement in the occupational safety and health situation and working conditions, as well as inadequate opportunity for social dialogue. Australia’s macroeconomic policy framework, combined with a substantial natural resource endowment, a flexible labor market and a skilled workforce, has laid the foundation for sustained economic growth and high levels of employment (Department of Foreign Affairs and Trade Australia 2018). The main pillars of the framework are a flexible exchange rate, an open capital account, an inflation-targeting independent central bank, and fiscal policy focused on transparency and sustainability. The framework is supported by a robust financial system, overseen by independent prudential regulators and flexible labor and

C

78

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

product markets. They have created 415,000 job in 2017, the majority of which were full time. And their employment rate was 73.5% in 2017. Australia’s open economy is supported by a network of modern free trade agreements (FTAs), which decrease barriers to trade and investment, increase Australia’s competitiveness, and generate more and higher-paying jobs. In the workplace, Australia has a robust system of protections for the rights, entitlements, and safety of workers, underpinned by a national minimum wage, a sound bargaining process between employers and employees and a baseline set of pay and conditions. The Fair Work Commission reviews Australia’s national minimum wage each year with the participation of key stakeholders. In 2016–2017, the Fair Work Ombudsman, a federal agency, recovered more than $30.6 million in unpaid wages for more than 17,000 employees. Australia supports the work of the Global Compact and the Global Reporting Initiative to develop and promote corporate sustainability reporting standards. The Australian Stock Exchange Corporate Governance Council recommendations on corporate governance practices are being adopted by Australian Securities Exchange (ASX)-listed entities, ensuring transparency on exposure to “economic, environmental, and social sustainability risks.” In 2015, the Australian Government supported Good Shepherd Microfinance to develop a Financial Inclusion Action Plan, in collaboration with EY and the Centre for Social Impact and with the advice of government, the private sector, and civil society. Initiatives range from improved access to appropriate and affordable financial products and services, development of early warning indicators to identify vulnerability, and support to those experiencing family violence to avoid financial hardship. In Africa include men, women, and youth, as well as children, who move primarily within the continent, except for migrants from Northern Africa, for work and to seek economic opportunities (United Nations 2018). Contemporary migrants are predominantly men, yet women migrants have increasingly become important participants in economic migration on the continent.

With regard to skill levels, contemporary migrants comprise low-skilled, semiskilled, and highly skilled labor, and most of their movements are intraregional and interregional, in response to labor demand in various economic sectors. Regional policy frameworks address underlying issues that hinder the mobility of highly skilled migrants in regional markets, such as the recognition of skills and academic qualifications, yet the lack of comparable measures and of visas and work permits aimed at low-skilled and semiskilled migrants constrains their mobility in regional labor markets. Well-managed migration can foster social inclusion by ensuring that women, most of whom are concentrated in low-skilled occupations, can earn incomes that improve their livelihoods and lift them out of poverty. Economic growth in Africa is crucial in order to generate demand for labor for migrants. Growth in laborintensive sectors such as agriculture and services, which have strong absorptive capacities for lowskilled migrants with limited levels of education, can create significant employment paths out of poverty. With rapid urbanization in Africa fueling demand in housing and other infrastructure, prospects for growth in the construction sector appear promising. Growing demand in this sector could generate employment for semiskilled and highly skilled migrants, while demand in services sub-sectors such as agri-processing and light manufacturing could also create employment for semiskilled persons. With the relatively high barriers to entry with regard to the technical skills demanded in these sectors, secondary-level education and/or vocational training at postsecondary levels is critical for semiskilled occupations. Demand in finance, engineering, and information technology, in addition to generating employment for highly skilled migrants, including youth, if met, can promote innovation and yield positive spillovers in other productive sectors in local economies. Given the high barriers to entry in skill-intensive sectors, tertiary-level education and/or other professional qualifications are a prerequisite for occupations requiring high skill levels. Investment in human capital development in vocational training and in tertiary education in origin countries is critical in ensuring adequate

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

skills development that can meet the needs of regional labor markets. According to “China’s Progress Report on Implementation of the 2030 Agenda for Sustainable Development” (2017), China has redoubled its efforts in the following areas since 2017. China will deepen international cooperation and provide help for trade and economic development of other developing countries, least developed countries (LDCs) in particular. The system of work permits for foreigners will be further improved and service and administrative capabilities enhanced so as to contribute to the implementation of the Global Employment Compact and promotion of decent work worldwide. Focusing on supply-side structural reform, China has worked to expand aggregate demand as appropriate and maintained a medium-high rate of growth, with accelerated paces in economic transformation and upgrading and improved quality and returns of economic development. At the same time, production safety has been promoted, and the safety red line upheld. Workplace safety has been steadily improved, and the safety of people’s lives and property effectively guaranteed. China has stepped up macroeconomic regulation, and economic performance has enjoyed a stable and healthy momentum of growth. In 2016, China’s GDP reached 74.4 trillion renminbi (RMB) yuan, upby 6.7% and contributing more than 30% of global growth. Support has been given to the development of the “Maker in China” Platform. Over 4000 innovation and entrepreneurial bases have been set up for micro- and small enterprises. Small- and medium-sized enterprises have been playing a more prominent role in the industrial and innovation chains, creating over 60% of GDP, over 70% of inventions and patents, and over 80% of urban jobs. China has formulated the Medium and Long-Term Youth Development Program (2016–2025), expanding areas of employment for young people and fully leveraging fiscal, financial, tax, subsidy, and other policy tools to support them in finding various forms of employment through multiple channels or starting their own businesses. Employment procedures have been more standardized. In 2016, cases related to wage payments dropped by 14.8% year on year,

79

and the number of laborers involved by 22.7%. Ecommerce has been encouraged and branding enhanced in promoting rural tourism. China implemented the Inclusive Finance Development Plan (2016–2020) to provide small and microenterprises, farmers, low-income groups, people living under the poverty line, people with disabilities, the elderly, and other key groups with access to affordable, convenient, and safe financial services. The Government of Bangladesh in partnership with Non-Government Organizations has achieved some of the Sustainable Development Goals, but there is still a long way to go. The Kazi Shahid Foundation (KSF) was founded in August 2005 with the commitment of “Establishment of a Society based on Organic Ideology.” The primary mission and vision of Kazi Shahid Foundation is to develop the socioeconomic advancement of the rural women by sustainable and responsible livelihoods. The vision is to eradicate poverty through development of entrepreneurship for the underprivileged part of the community. KSF Dairy Model is implemented entirely through rural women of Panchagarh. Additionally, it encourages organic tea plantation, natural vegetable cultivating and supply, bio-manure creation, and instruction programs. KSF accepts that by starting and encouraging smallholder dairy creation in the Panchagarh especially among the rural women could be utilized as a capable device for diminishing destitution, raising sustenance levels, and enhancing the livelihoods of poor across the country. KSF’s Specialized Dairy Farming Program had turned out to be an intense apparatus for poverty alleviation. KSF through its different interventions such as contractual dairy farming, promoting organic farming, learning center for the children and adults, etc. is improving the livelihood of local people. This program directly and indirectly helps in achieving the different social, economic, and environmental well-being particularly the Sustainable Development Goals (SDGs). KSF is strongly committed through its core intervention and dairy farming and other integrated programs for livelihoods development contribute directly to the following goals and, indirectly, most of the 17 global goals. KSF’s innovative

C

80

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

programs specifically, the contractual dairy farming model, are accordingly designed to provide both opportunities and capacity building in engaging the underprivileged rural people in the profitable asset generating economic activity. It has been observed that the capacity building and acceptance (by the society and at family level) are the two critical elements in making the program not only truly meaningful but also sustainable. Community people especially women find it hard to identify themselves as leaders due to persistent neglect and lack of knowledge, skills, and exposure. Members of KSF are all women, who are turning their lives toward progressive way of living. Though it is slow progress, but changes are coming, which is encouraging.

Key Issues to Discuss for Creating Future Community-Based Programs Asia and the Pacific need to accelerate progress toward all Sustainable Development Goals of the United Nations 2030 Agenda for Sustainable Development. On its current trajectory, Asia and the Pacific will not achieve any of the 17 Sustainable Development Goals (SDGs) by 2030. To live up to the ambition of the 2030 Agenda, accelerated progress is required on all fronts. All Asia-Pacific subregions need to reverse existing trends for at least three Goals. North and Central Asia is regressing on gender equality (Goal 5), decent work and economic growth (Goal 8), and sustainable cities and communities (Goal 11). For more than half the SDGs, progress is stagnant or heading in the wrong direction in Asia and the Pacific. Little progress has been toward ensuring decent work and economic growth (Goal 8). South and Southwest Asia is ahead in its effort to achieve good decent work and economic growth (Goal 8) by different progress. Decent work and economic growth (Goal 8), four subregions in Asia-Pacific have regressed or made little progress (North and Central Asia, Southeast Asia, South-Southwest Asia, and the Pacific). South and Southwest Asia needs to ramp up progress to achieve Goal 8. Surveys are

key source of country-level data for the SDG indicators, but data availability from surveys is much lower than administrative sources. Surveys often only provide data intermittently, and analysis finds data availability is the highest when it can be sourced from administrative data (United Nations 2019). By increasing use of these data sources could help overcome the difficulty of obtaining data from survey responses, as this data can be produced at a lower cost, more rapidly, and at a higher frequency. There is also scope for the region to make greater use of alternative data sources to complement traditional sources and build a more accurate picture of progress toward the SDGs. Lack of progress toward SDG 17 could undermine progress toward all other SDGs. Goal 17 seeks to strengthen global partnerships and means of implementation to achieve the ambitious targets of the 2030 Agenda. Its underlying targets focus on measuring tax revenues, debt sustainability, statistical capacity, technology transfer, international cooperation, trade conditions, and policy coherence on sustainable development. Progress in all these areas is necessary to ensure they have the means to finance, target, and implement policy solutions to achieve sustainable development. In 2018, all SDG Targets under Goal 17 need to be accelerated in Asia and the Pacific. Failing to do so could jeopardize the achievement of all other SDGs. The key issues for discussion that needs to be kept in mind for future community-based organization endeavors are as follows (UNDP 2017): (A) Territorial cohesion as a meaningful concept and framework for: (i) Promoting SDG implementation (specifically at the local level) (ii) Reduce inequalities between states and territories: (a) Relevance (b) Applicability at a global/larger scale (c) Indicators/metrics for capturing territorial cohesion and their interactions with indicators on SDG implementation within states and territories

Community-Based Socioeconomic Development Programs: A Catalyst for SDGs

(B) Enabling policy and institutional frameworks for socioeconomic and territorial cohesion: (i) Relevant linkages and complementarities between institutional frameworks for SDG implementation (territorial and multilevel governance systems, cross sectorial/integrated planning, etc.) and territorial cohesion (ii) Specific implications in translating these frameworks and systems into enabling policies and measures for LED – inclusive growth, decent work promotion, etc. (C) Matching sustainable competitiveness and territorial cohesion through LED: (i) The role and potential of territorial cooperation networks and interregional/ supranational coordination (ii) Addressing and managing trade-offs for inclusive growth (concentration and convergence of economic activity, economic efficiency and social well-being, and competition and cooperation)

Conclusion A critical analysis of the community-based rural socioeconomics development programs and its drivers are extremely important for attaining not only SDG 8 but other SDGs as well. Learning from the success and failures of the major players in the development sectors and replicating the relatively efficient and effective mechanisms and management structure in other parts of the globe will reap greater benefits for the world’s poor. In this paper we highlight the policy idea of “community-based action” as an engine to inclusive and sustainable economic growth that can in turn drive progress and generate the means to implement the Sustainable Development Goals. By exploring the progress of SDG 8 in 2019, we identify the sustainable development measures which are essential to meet the targets of 2030 agenda. Delineating and comparing the accomplishments of some mention worthy community development programs across the globe that are setting the tone of development process helps us understand efficiency and efficacy of the

81

concept. It also sheds light on the possible replication in struggling parts of the world to meet the SDGs by 2030 (UN 2013).

Cross-References ▶ Creative Strategies for Sustainable Development in Small Cities ▶ Decreasing Youth Unemployment as a Way to Achieve Sustainable Development ▶ Poverty Reduction: Concept, Approaches, and Case Studies

References Anietem OV, Abiodun AL (2015) Community driven development (CDD) and rural poverty alleviation in Nigeria: a bottom-up development approach. In: International conference on trends in economics, humanities and management (ICTEHM'15) March, pp 27–28. http:// www.hrpub.org/journals/article_info.php?aid¼3776 BRAC (2017) Annual report. Available from http://www. brac.net/sites/default/files/annual-report/2017/BRACAR-2017e.pdf CARE Bangladesh (2018) Unleashing the Knot: An Assessment on Socio-Economic Empowerment of the SDVC II Producers. Available from: www.care.org/sites/ default/files/documents/4._socio_economic_empower ment.pdf. Craig G, Mayo G (1995) Community empowerment: a reader in participation and development. Zed Books, London De Graaf M (1987) Context, constraint or control? Zimbabwean NGOs and their environment. Dev Policy Rev 5:277 Department of Foreign Affairs and Trade Australia (2018) Report on the implementation of Sustainable Development Goals. Available from https://dfat.gov.au/aid/ topics/development-issues/2030-agenda/Documents/sdgvoluntary-national-review.pdf Fowler A (1997) Striking a balance. Earthscan, London International Labor Organization (2019) Time to act for SDG 8: integrating decent work, sustained growth and environmental integrity. Available from https://www. ilo.org/wcmsp5/groups/public/%2D%2D-dgreports/% 2D%2D-inst/documents/publication/wcms_712685.pdf Lewis D (1998) Bridging the gap?: the parallel universes of the non-profit and nongovernmental organization research traditions and the changing context of voluntary action. CVO international working paper no. 1, London Ministry of Foreign Affairs of People’s Republic of China (2017) China’s progress report on implementation

C

82 of the 2030 Agenda for Sustainable Development. Available from http://www.chinadaily.com.cn/spe cials/China%27sProgressReport2(CN).pdf United Nations (2013) A new global partnership: eradicate poverty and transform economics through sustainable development. United Nations Publication, New York. https://sustainabledevelopment.un.org/content/docu ments/8932013-05%20%20HLP%20Report%20%20A %20New%20Global%20Partnership.pdf; https://sustai nabledevelopment.un.org/sdg8 United Nations (2018) Economic development in Africa Report 2018, migration for structural transformation. Available from https://unctad.org/en/Publication sLibrary/aldcafrica2018_en.pdf United Nations (2019) Asian and the Pacific SDG progress report 2019. Available from https://www.unescap.org/ sites/default/files/publications/ESCAP_Asia_and_the_ Pacific_SDG_Progress_Report_2019.pdf UNDP (2017) Local Economic Development as a Means to Achieve Equality, Equity and Cohesion within the Sustainable Development Goals Localization Framework. Available from: https://www.local2030.org/events/ 131/Concept%20notes_4th%20world%20forum.pdf World Bank (2017) Mali Rural Community Development Project. Independent Evaluation Group, Project Performance Assessment Report 117145. Washington, DC: World Bank. Available from: https://ieg.world bankgroup.org/sites/default/files/Data/reports/PPAR20119-Maliruraldevelopment.pdf

Companies ▶ Contribution of Enterprises in Achieving the Sustainable Development Goals

Competencies for Sustainable Entrepreneurship Lisa Ploum Education and Learning Sciences, Wageningen University and Research, Wageningen, The Netherlands

Definitions Competence is described as the generic, integrated, and internalized capability to deliver durable effective performance in a certain professional

Companies

domain, job, role, organizational context, and task situation. Competency or the plural competencies are the constituents of competence, which refers to coherent clusters of knowledge, skills, and attitudes which can be utilized in real performance contexts. The overarching aim of Sustainable Entrepreneurship is ultimately to balance the competing demands for environmental protection and economic development, emphasizing economic, ecological, and social goals in equal degrees. Sustainable entrepreneurs are described as those individuals who holistically integrate the goals of economic, social, and environmental entrepreneurship into an organization that is sustainable in its goal and sustainable in its form of wealth generation.

Setting the Stage Sustainable development is perhaps the most prominent challenge for businesses of our time. Climate change and the destruction of biodiversity demonstrate the negative and potentially deadly consequences these processes have for living species (United Nations 2004). Entrepreneurial action is increasingly seen as a promising way to preserve ecosystems, counteract climate change, reduce environmental degradation, improve agricultural practices, and maintain biodiversity (Dean and McMullen 2007; Patzelt and Shepherd 2011). In addition, acting entrepreneurial is of increasing importance because of the rapidly growing complex world we live in, caused by developments such as globalization and technological change (Lackéus 2015). Everyday life is characterized by dynamics and discontinuities, or as Gibb (2002) states: “Individuals as consumers, workers and as members of families [. . .] face greater levels of uncertainty and complexity in their lives” (p. 136). In a world in which global climate disruption, ever-increasing population, and massive extinctions of biodiversity and critical species are at the forefront, there is a need for individuals who are able to deal with these challenges in their work contexts. These challenges are intertwined with the sustainable development

Competencies for Sustainable Entrepreneurship

goal: “decent work and economic growth.” Here, economic growth refers to creating conditions that allow people to have quality jobs that stimulate the economy while not harming the environment. Developing specific competencies can help these (future) workers in dealing with complexity and uncertainty in their work context, but also with tackling some of the grand challenges of our time. One of those fields in which uncertainty and complexity are truly at the forefront is the domain of sustainable entrepreneurship. Therefore, competencies for sustainable entrepreneurship can support future change agents in their jobs and offer pathways for balancing the triple bottom line through their entrepreneurial behavior. Sustainable Entrepreneurship Global climate change and the accelerating depletion of natural resources are just two of several phenomena indicating that the world is not well aligned with the concept of sustainable development (Brundtland 1987). The severity of global sustainability challenges has led to an increasing awareness that incremental solutions will not be enough to maintain critical levels of natural and social capital (Russo 2003) and hence there is an increased interest in sustainable entrepreneurship as a phenomenon and a research topic (Cohen and Winn 2007; Dean and McMullen 2007). The relationship between entrepreneurship and sustainable development has been addressed by various streams of thought and literature such as ecopreneurship, social entrepreneurship, institutional entrepreneurship, and sustainable entrepreneurship, of which some are covered in this Encyclopedia of the UN Sustainable Development Goals: Decent Work and Economic Growth as well. Early conceptions of this link between entrepreneurship and sustainable development stem from theories based on an economics or market failure perspective. Traditional theories from environmental and welfare economics largely concluded that market failures within the economic system not only prevent entrepreneurial action from resolving environmental problems but actually motivate environmentally degrading entrepreneurial behaviors (Cropper and Oates 1992). More specifically, this stream of literature

83

states that, because of the unique characteristics of many environmental resources, certain obstructions to their efficient allocation in the market system exist, and, as a result, entrepreneurial action will not protect and preserve valuable environmental resources (Dorfman 1983). From a practical perspective, this argument has led to policy and research that focuses on regulatory intervention as the primary solution to environmentally relevant market failures and has created a general lack of knowledge about the means by which entrepreneurs can help solve environmental challenges (Dorfman 1983). This has however not held back recent developments in the field that focus less on the market system, but more on the individual processes and characteristics of these sustainable entrepreneurs. As a result, entrepreneurship is increasingly identified as a catalyst for solutions to sustainability problems (York and Venkataraman 2010; Dean and McMullen 2007). Whereas conventional entrepreneurship is more associated with counteracting sustainable development, as almost everything is subordinate to the bottom line, sustainable entrepreneurial action is seen as a promising way to preserve ecosystems, counteract climate change, reduce environmental degradation, improve agricultural practices, and maintain biodiversity (Cohen and Winn 2007; Dean and McMullen 2007; Patzelt and Shepherd 2011). The central idea behind the development of sustainable ventures is that the activities performed by entrepreneurs in the pursuit of gains must not undermine the ecological and social environments in which they operate and, when necessary, they must restore or nurture such environments toward recovering the balance between the environment, society, and economic activity which is referred to as the triple bottom line (Patzelt and Shepherd 2011; Schaltegger and Wagner 2011). This and other definitions of sustainable entrepreneurship resonate with mainstream sustainability ideas. Ultimately, its overarching aim is to balance the competing demands for environmental protection and economic development, emphasizing economic, ecological, and social goals in equal degrees (Patzelt and Shepherd 2011).

C

84

Sustainable Entrepreneurs In the work of Young and Tilley (2006), sustainable entrepreneurship is embodied by someone “who holistically integrates the goals of economic, social and environmental entrepreneurship into an organization that is sustainable in its goal and sustainable in its form of wealth generation” (p. 88). Sustainable entrepreneurs balance the triple bottom line, by balancing economic health, social equity, and environmental resilience through their entrepreneurial behavior (Kuckertz and Wagner 2010). Sustainable entrepreneurs are often referred to as change agents for sustainability. According to Svanström et al. (2008), a successful change agent for sustainability must have knowledge of environmental, of economic, and of social issues related to sustainability. Furthermore, the change agent must have a value system to support their actions. This value system is a necessary condition that separates conventional entrepreneurs from sustainable entrepreneurs. Addressing sustainability problems and recognizing sustainable business opportunities requires to go beyond descriptive questions of how complex social-ecological systems have evolved, how they are currently functioning, and how they might further develop (Swart et al. 2004; Rockström et al. 2009; Wiek et al. 2011). It deals with how social-ecological systems ought to be developed in order to achieve a balance between economic, social, and environmental aspects in business practices. Therefore, the concept of sustainability can be characterized by its value-oriented and also normative character. Individuals who are involved in sustainable development do not only feel responsible; they also take responsibility and act upon their values and norms. In addition, the sustainable entrepreneur must have the ability to perform sustainability tasks. Therefore, the difference between conventional entrepreneurs and sustainable entrepreneurs is not just about the difference in the nature of the opportunity to be exploited but also has to do with the value-oriented character of the decisions made which entails making the trade-off between economic, social, and environmental values without, a priori, choosing one over another – even if this entails tensions and conflicts (Hahn et al. 2014).

Competencies for Sustainable Entrepreneurship

Therefore, it is not just the sustainable entrepreneurial object (i.e., product, service, method of production, etc.) that serves a different goal than that of conventional entrepreneurs. Also, the entrepreneurial process as such seems to imply that sustainable entrepreneurs require different skills, knowledge, and values which enable them to achieve sustainability goals through their entrepreneurial actions. Research on different types of skills and knowledge to deal with sustainability issues or challenges meanders across various contexts vary from organization-level studies to individual-level studies. For instance, in the domains of environmental issue management and corporate social responsibility, the level of analysis is commonly the company. Here, knowledge and skills to deal with sustainable development are usually described by organizational-level competencies or dynamic capabilities (Heugens 2006; Nijhof 2005). Even though the level of analysis in these studies is the company, it is acknowledged that these organizational-level competencies or dynamic capabilities are a product of individuallevel competencies that are enacted by individual employees (Heugens 2006). As a result, studies on individual-level competencies are rising in most fields that deal with sustainable development in a business context. Especially in the field of entrepreneurship, where the individual has a much bigger impact on the performance of the venture (because of the small size of start-up companies), a focus on individual-level skills, knowledge, and attitudes is dominant. But also in the field of individual competencies, different approaches exist. The next section addresses the concept of individual competence and introduces a competence framework for sustainable entrepreneurship.

Competencies for Sustainable Entrepreneurship Already more than two decades ago, Barbara Bird (1995, p. 51) stated that “Entrepreneurial Competence may be an oxymoron to a disgruntled investor, but it provides policy makers, program directors, educators, and organizational

Competencies for Sustainable Entrepreneurship

researchers with an important predictor of venture outcomes.” Also in the EU, there is continuous attention for entrepreneurial competencies. The EU defined “sense of initiative and entrepreneurship” as one of the key competencies for lifelong learning (European Parliament and the Council of the European Union 2006). Since then, entrepreneurial competence has received much attention in policy documents (e.g., Morselli and Ajello 2016). Recently, Bacigalupo et al. (2016) proposed the “EntreComp,” a European Entrepreneurship Competence Framework, including 3 competence areas and 15 underlying competencies translated to 442 learning outcomes related to entrepreneurship. Next to receiving attention from a (European) political point of view, the competence concept also remains to receive attention from scholars all over the world, in which sustainable development becomes a more important element. Approaches to Individual Competence In general, three approaches to competence are described in the literature. In the behavioral-functionalistic or work-oriented approach, individual competencies are derived from detailed job descriptions that are central for accomplishing specific work tasks and then translating those activities into personal attributes (Sandberg 2000). A job analysis refers to an investigation of an occupation, in which the analysis is centered around a number of jobs. The jobs are further broken down into a series of activities, which in turn are broken down into duties, tasks, and subtasks. One basic criticism of the behavioral-functionalistic approach is that a list of work activities does not sufficiently capture the underlying knowledge, skills, and attitudes required to accomplish those activities efficiently (Eraut 1994). As a reaction to these critiques, the generic- or worker-oriented approach to the concept of competence emerged (Eraut 1994; Sandberg 2000). The generic approach views competence as a set of attributes possessed by workers, typically represented as knowledge, skills, attitudes, and personal traits required for effective work performance. Researchers in this approach focus on

85

observing successful and effective job performers to determine how these individuals differ from less successful performers. One of the strengths of this approach to competence is that much effort has been put into testing it on a large scale with a wide variety of practitioners, using a wide range of psychometric techniques to measure the reliability and validity of the constructs. However, the competence profiles resulting from this approach are often too general, thereby losing the context specificity of the competencies, and are therefore difficult to use in professional practice (Eraut 1994; Osagie et al. 2015). Both the work-oriented and worker-oriented approaches fall short in addressing the situated nature of professional practice (e.g., Brown et al. 1989); this is problematic since people and their world(s) are inextricably related: workers and their work blend together in the execution of activities, with workers experiencing them and making sense of them (Sandberg 2000). Over the last two decades, there has been a continuous search for more comprehensive conceptualizations of competence in order to contrast them clearly with the disintegrative and reductionist models of competence described above. Comprehensive in this sense refers to the integrated and internalized capability conditional for accomplishing task performance, problemsolving, and functioning within a specific position and context. From this comprehensive perspective, competence is defined as “the generic, integrated and internalized capability to deliver durable effective performance in a certain professional domain, job, role, organizational context, and task situation” (Mulder 2014, p. 111). Competency or the plural competencies are the constituents of competence, which refers to coherent clusters of knowledge, skills, and attitudes which can be utilized in real performance contexts. An important characteristic of competence is that it is a latent construct, meaning that not all competence is continuously present in performance. For instance, the mere fact that a person is able to act entrepreneurial with regard to sustainable development does not mean this person is actually acting entrepreneurial all the time. Therefore, competence and its constituent competencies

C

86

are latent constructs, meaning that assessing them always involves inference. Furthermore, competencies in the comprehensive approach are always context dependent, referring to them being constituted in relation to contextual factors (e.g., peers, networks, industry). Competencies for Change Agents in Specific Work Contexts According to Svanström et al. (2008), a successful change agent for sustainable development must have knowledge of environmental, of economic, and of social issues related to sustainability (i.e., knowledge element of competence). Furthermore, the change agent must have a value system to support their actions (i.e., attitude element of competence). In addition, the change agent must have the ability to perform sustainability tasks (i.e., skills element of competence). Considerable, though mostly conceptual, efforts in translating these abilities for change agents into competencies have been made over the last decade (Svanström et al. 2008; De Haan 2006; Wiek et al. 2011; Rieckmann 2012). Education for sustainable development aims at enabling people to “not only acquire and generate knowledge, but also to reflect on further effects and the complexity of behavior and decisions in a futureoriented and global perspective of responsibility” (Rieckmann 2012, p. 128). It is likely that these skills, attitudes, and knowledge stem from individual competencies for sustainable development. Over the past few years, individual competencies for sustainable development have received much attention in the education for sustainability literature (De Haan 2006; Barth et al. 2007; Wiek et al. 2011; Rieckmann 2012). Competencies such as foresighted or anticipatory thinking, systems thinking, interdisciplinary work, and participation are considered as key competencies that warrant (additional) attention in higher education. Critical questions can be raised regarding the conceptual nature of these studies as they lead to rather abstract academic descriptions of competencies (Delamare Le Deist and Winterton 2005), which are more in line with the worker-oriented view on competence, focusing on generic descriptions and little attention for specific

Competencies for Sustainable Entrepreneurship

contexts. As a result, competence descriptions from the education for sustainability literature are usually decontextualized because competence lists are meant to be study program overarching, crossing various educational contexts and curricula. The reality, however, is that sustainability challenges and tasks often become meaningful in one’s specific work environment. Therefore, the work context is also an important factor to take into account in the field of sustainable development. As a reaction to these critical remarks, several scholars have identified and studied competencies for sustainable development which are enacted in a specific work context and embrace a comprehensive approach to competence (Hesselbarth and Schaltegger 2014; Osagie et al. 2015; Wesselink et al. 2015; Lans et al. 2014; Ploum et al. 2017). In today’s society, different types of work contexts for change agents in the field of sustainable development can be distinguished. For instance, CSR managers, sustainable intrapreneurs, and sustainable entrepreneurs all play a key role in bringing about change to companies and society as a whole. Competencies identified in relation to specific change agent’s context are usually combinations of the key competencies for sustainable development mentioned above and key competencies identified in management and entrepreneurship literature (Hesselbarth and Schaltegger 2014; Lans et al. 2014). Most of these studies applied the comprehensive or multimethod-oriented approach to competence in applying these competencies in the business context. For example, the work of Hesselbarth and Schaltegger (2014) focuses on contextualizing competencies for SD in a work context. Based on experiences of MBA alumni, they propose five key competencies for change agents for sustainability. Osagie et al. (2015) combined results from a systematic literature review with results from 28 interviews with CSR managers to compile a set of 8 CSR-related competencies. In the field of CSR, Wesselink et al. (2015) performed an empirical study to analyze individual competencies for managers engaged in corporate sustainable management practices and identified five competencies

Competencies for Sustainable Entrepreneurship

87

which highly correspond with core tasks performed by CSR managers. In addition, Lans et al. (2014) identified a framework of seven competencies for sustainable entrepreneurship based on focus groups with teachers involved in entrepreneurship education and by performing an exploratory factor analysis on the survey in which the seven competencies were queried. Finally, Ploum et al. (2017, 2018) further tested and developed the framework as proposed by Lans et al. (2014) in subsequent studies with entrepreneurship students and professionals, resulting in a framework of six competencies for sustainable entrepreneurship. Table 1 provides an overview of the five studies and competencies mentioned in these studies.

Competencies for Sustainable Entrepreneurship Despite the use of some of the same initial competencies, the inclusion of key competencies differs among the different studies. Three competencies are included in all five studies, namely, strategic (management) competence, systems thinking competence, and interpersonal competence. Where Hesselbarth and Schaltegger (2014), Lans et al. (2014), Osagie et al. (2015), and Ploum et al. (2017) underpin the importance of normative competence, the empirical study performed by Wesselink et al. (2015) did not point in this direction. They argue that this could be a result of either normative competence already being internalized in the behavior of CSR

Competencies for Sustainable Entrepreneurship, Table 1 Overview of competencies for sustainable development contextualized in the work context, identified by key researchers Authors Hesselbarth and Schaltegger 2014

Domain Entrepreneurship Education

Lans et al. 2014

Entrepreneurship Education

Osagie et al. 2015

Corporate social responsibility

Wesselink et al. 2015

Corporate social responsibility

Ploum et al. 2017, 2018

Entrepreneurship education and sustainable entrepreneurship

Key competencies included in research 1. Strategic competence 2. Systems thinking competence 3. Anticipatory competence 4. Normative competence 5. Interpersonal competence 1. Systems thinking competence 2. Embracing diversity and interdisciplinarity competence 3. Foresighted thinking competence 4. Normative competence 5. Action competence 6. Interpersonal competence 7. Strategic management competence 1. Anticipating CSR challenges 2. Understanding CSR-relevant systems and subsystems 3. Understanding CSR-relevant standards 4. CSR management competencies 5. Realizing CSR-supportive interpersonal processes 6. Employing CSR-supportive personal characteristics and attitudes 7. Personal value-driven competencies 8. Reflecting on personal CSR views and experiences 1. Systems thinking competence 2. Embracing diversity and interdisciplinarity competence 3. Interpersonal competence 4. Action competence 5. Strategic management competence 1. Systems thinking competence 2. Embracing diversity and interdisciplinarity competence 3. Foresighted thinking competence 4. Interpersonal competence 5. Normative competence 6. Strategic action competence

C

88

managers or the structural lack of normative behavior in this specific work/business context (Wesselink et al. 2015). Another competency which has been subject to debate is anticipatory/foresighted thinking competence (both words are used for more or less the same construct). Rieckmann (2012) identifies this as one of the most important competencies, and it is also empirically found in the work of Hesselbarth and Schaltegger (2014), Osagie et al. (2015), Lans et al. (2014), and Ploum et al. (2017). However, Wesselink et al. (2015) did not include this competency as a key competency. The reason for not including this competency seems to be directly related to the specific CSR context in which they have researched the enactment of the competencies (Wesselink et al. 2015). They argue that in the more mature phases of the CSR implementation process, foresighted thinking is less important than in the starting phases. Their sample consisted of companies in the more mature phases, which could explain the absence of foresighted thinking competence. Also, embracing diversity and interdisciplinarity competence is not supported by all five studies. Lans et al. (2014), Wesselink et al. (2015), and Ploum et al. (2017) acknowledge the importance of this competence, but it is not included in the studies by Hesselbarth and Schaltegger (2014) and Osagie et al. (2015). The fourth and last competence up for debate is action competence. In the literature, this competence is widely considered as one of the most important competencies for sustainable development (De Haan 2006; Ellis and Weekes 2008; Blok et al. 2016), but in practice, this does not always show. Even though Lans et al. (2014) tend to keep action competence included, the results of their exploratory analysis show significant overlap with strategic management competence. This overlap was confirmed in the study by Ploum et al. (2017) who merged action competence with strategic management competence into strategic action competence. Also, Hesselbarth and Schaltegger (2014) and Osagie et al. (2015) encounter difficulties with the concept of action competence. The latter encourage a more practical interpretation of the concept and see it merely as “actively engaging

Competencies for Sustainable Entrepreneurship

oneself in the process of CSR implementation” (Osagie et al. 2015, p. 17). Whereas the other studies mainly focus on students or on CSR professionals, the latest study by Ploum et al. (forthcoming) is one of the only studies that includes experienced sustainable entrepreneurs. The competence framework developed in the educational context was tested in the business context of sustainable entrepreneurs. As this entry revolves around the specific context of sustainable entrepreneurship, a detailed description of the competencies used by Lans et al. (2014) and Ploum et al. (2017, 2018) in subsequent studies is presented below: 1. Embracing diversity and interdisciplinarity competence: the ability to structure relations, spot issues, and recognize the legitimacy of other viewpoints (i.e., stakeholders) in business decision-making processes, be it about environmental, social, and/or economic issues 2. Foresighted thinking competence: the ability to collectively analyze, evaluate, and craft “pictures” of the future in which the impact of local and/or short-term decisions on environmental, social, and economic issues is viewed on a global/cosmopolitan scale and in the long term 3. Systems thinking competence: the ability to identify and analyze all relevant (sub)systems across different domains (people, profit, planet) and disciplines, including their boundaries 4. Interpersonal competence: the ability to motivate, enable, and facilitate collaborative and participatory sustainability activities and research 5. Normative competence: the ability to map, apply, and reconcile sustainability values, principles, and targets with internal and external stakeholders, without embracing any given norm, but based on the good character of the one who is involved in sustainability issues 6. Strategic action competence: the ability to collectively design projects; implement interventions, transitions, and strategies; and translate these strategies to responsible actions for the improvement of the sustainability of socialecological systems

Competencies for Sustainable Entrepreneurship

This synthesis of the most recent studies on competencies for sustainable entrepreneurship calls for a more in-depth and empirical analysis of the competencies at stake when dealing with sustainability challenges.

Future Directions Research Agenda Sustainable entrepreneurs try to manage the triple bottom line, by balancing economic health, social equity, and environmental resilience through their entrepreneurial behavior (Kuckertz and Wagner 2010). Sustainable entrepreneurship is thus associated with the promise of more traditional concepts of entrepreneurship such as gaining economic values but also brings additional potential both for society and the environment. Even though it is often stated that the triple bottom line is managed by individuals, open-ended problems like sustainability issues require difficult and complex decision-making processes that are not easy to manage. In line with this, Gibbs (2009) refers to the concept of sustainable entrepreneurship as a “black box,” meaning that economic, social, and environmental values and goals are combined in entrepreneurial processes regarding sustainability issues, but does not get at how (and even if) this is achieved. Focusing on competencies that can enable individuals to achieve this balance between people, profit, and planet helps in understanding this process. As a result, several research issues can be pointed out. First, studies on what competencies could be considered as key competencies to achieve a balance between people, profit, and planet are numerous. Interesting to see is that although many scholars warn for the production of endless laundry lists of competencies, the reality is that scholars continue to do so and that real consensus on which competencies constitute sustainable entrepreneurial competence is lacking. In addition, due to the conceptual nature of most of these studies, the lists of competencies are usually rather abstract academic descriptions of competencies (Delamare Le Deist and Winterton 2005). There is a need for research that empirically

89

addresses the validity of such lists of competencies. In addition, moving from the “what” question to the “how” question remains problematic (Lans et al. 2018). There is a need for future research that empirically addresses the actual enactment of these competencies by professionals in the field and relating the competencies with performance measures like opportunity recognition for sustainable development and with decision-making processes. Impact Agenda Not just entrepreneurial individuals have an important role to play in transforming our society into a more sustainable one in which there is decent work for all and economic growth and environmental resilience for the future generations to come. In this ever-changing, complex world, education institutions have an important role in preparing future workers for dealing with open-ended sustainability challenges in a work context. Nevertheless, higher education institutions and business schools mainly prescribe a profit-driven and materialistic worldview to students. This can compromise their ethical values and weaken their perceptions of social responsibility (Ghoshal 2005). Critics such as Giacalone and Thompson (2006) argue that students are often encouraged to treat everything as subordinate to profit. Slater and Dixon-Fowler (2010) call this the “profit-first” mentality, which has no regard for moral considerations or social responsibilities. Education institutes have a big role in the transition from this profit-first mentality as a logic toward a new logic in which sustainability is not seen as a loss, but seen as a positive outcome. As such, entrepreneurship education should incorporate sustainable development as a basic requirement and focus on the development of the competencies for sustainable entrepreneurship. This can be done by implementing new pedagogies that focus on value creation that moves beyond profit maximization. In this process, it is important to keep track of the competencies for sustainable entrepreneurship and to foster them within the teaching cases. Lackéus (2015) proposed several entrepreneurship-oriented tools to capture value creation

C

90

processes within education. Even though these tools are specified within the entrepreneurship domain, they could also be useful for teaching sustainable entrepreneurship. For instance, the concept of effectuation represents a quite practical and hands-on approach to teaching “through” entrepreneurship. It has been developed by Sarasvathy and colleagues (see, e.g., Sarasvathy 2001; Sarasvathy and Venkataraman 2011). Effectuation is described as an iterative process of decision-making and active commitment seeking that results in creation of new value, where each iteration is started with questions such as “Who am I?”, “What do I know?”, and “Whom do I know?”. Sarasvathy and Venkataraman (2011) propose that entrepreneurship could be regarded as a generic method for creating potentially valuable change by unleashing human potential and has contrasted this to the scientific method designed to harness Mother Nature. Viewing entrepreneurship as a generic method holds much promise for the field of entrepreneurial education but requires emphasis on taking responsibility, value creation, and using creativity tools (Neck and Green 2011). In addition, incubators play an important role in the (sustainable) entrepreneurial landscape. Their role is to provide a support environment for start-up companies, thereby promoting local job creation, economic development, and technology transfer (Peters et al. 2004). A lot of sustainable entrepreneurs are involved in such business incubation programs, lean start-up boot camps, acceleration programs, and so on. They could use these learning platforms to develop their sustainable entrepreneurial competencies and become more aware of the enactment of the right competencies during the stages of the entrepreneurial process. At the same time, these learning platforms should include a focus on the development of these competencies throughout their services and include sustainable development as an integrated aspect of doing business. Concluding Remarks Despite the growing interest in sustainable development in all layers of society, it remains difficult to fully reach the potential sustainable

Competencies for Sustainable Entrepreneurship

entrepreneurs can have in the transformation toward a more sustainable society. Nevertheless, focusing on developing specific competencies for sustainable entrepreneurship might mitigate and overcome challenges that are inherent to this transition toward a more sustainable society in which there is inclusive and sustainable economic growth, employment, and decent work for all.

Cross-References ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs) ▶ Entrepreneurship: Opportunity Identification and Entrepreneurial Behavior ▶ Social Entrepreneurship ▶ Sustainable Business Models ▶ Sustainable Business Strategies ▶ Understanding Market Failure in the Developing Country Context

References Bacigalupo M, Kampylis P, Punie Y, van den Brande G (2016) EntreComp: the entrepreneurship competence framework. Publication Office of the European Union, Luxembourg Barth M, Godemann J, Rieckman M, Stoltenberg U (2007) Developing key competences for sustainable development in higher education. Int J Sustain High Educ 8:416–430 Bird B (1995) Towards a theory of entrepreneurial competency. In: Katz JA, Brockhaus RH (eds) Advances in entrepreneurship firm emergence and growth. JAI Press, Greenwich, pp 52–72 Blok V, Gremmen B, Wesselink R (2016) Dealing with the wicked problem of sustainable development: the necessity virtuous competence. Bus Prof Ethics J 34(3):297– 327 Brown JS, Collins A, Duguid P (1989) Situated cognition and the culture of learning. Edu Res 18(1):32–42 Brundtland GH (1987) Our common future – call for action. Environ Conserv 14(4):291–294 Cohen B, Winn MI (2007) Market imperfections, opportunity and sustainable entrepreneurship. J Bus Ventur 22 (1):29–49 Cropper ML, Oates WE (1992) Environmental economics: a survey. J Econ Lit 30(2):675–740 De Haan G (2006) The BLK ‘21’ programme in Germany: a ‘Gestaltungskompetenz’ based model for education for sustainable development. Environ Educ Res 12:19–32

Competencies for Sustainable Entrepreneurship Dean TJ, McMullen JS (2007) Toward a theory of sustainable entrepreneurship: reducing environmental degradation through entrepreneurial action. J Bus Ventur 22:50–76 Delamare Le Deist F, Winterton J (2005) What is competence? Hum Resour Dev Int 8:27–46 Dorfman NS (1983) Route 128: the development of a regional high technology economy. Res Policy 12(6): 299–316 Ellis G, Weekes T (2008) Making sustainability ‘real’: using group-enquiry to promote education for sustainable development. Environ Edu Res 14:482–500 Eraut M (1994) Developing professional knowledge and competence. Falmer Press, London European Parliament and the Council of the European Union (2006) Recommendation of the European Parliament and of the Council on key competences for lifelong learning, OJ L394/10. Accessible via: http:// eur-lex.europa.eu/legal-content/EN/TXT/?uri¼celex% 3A32006H0962 Ghoshal S (2005) Bad management theories are destroying good management practices. Acad Manag Learn Educ 4(1):75–91 Giacalone RA, Thompson KR (2006) Business ethics and social responsibility education: shifting the worldview. Acad Manag Learn Educ 5(3):266–277 Gibb A (2002) In pursuit of a new ‘enterprise’ and ‘entrepreneurship’ paradigm for learning: creative destruction, new values, new ways of doing things and new combinations of knowledge. Int J Manag Rev 4(3): 233–269 Gibbs SR (2009) Exploring the influence of task-specific self-efficacy on opportunity recognition perceptions and behaviors. Front Entrep Res 29(6):1 Hahn F, Jensen S, Tanev S (2014) Disruptive innovation vs disruptive technology: the disruptive potential of the value propositions of 3D printing technology startups. Technol Innov Manage Rev 4(12):27 Hesselbarth C, Schaltegger S (2014) Education future change agents for sustainability – learnings from the first sustainability management master of business administration. J Clean Prod 62:24–36 Heugens PP (2006) Environmental issue management: towards a multi-level theory of environmental management competence. Bus Strateg Environ 15(6):363–376 Kuckertz A, Wagner M (2010) The influence of sustainability orientation on entrepreneurial intentions – investigating the role of business experience. J Bus Ventur 25(5):524–539 Lackéus M (2015) Entrepreneurship in education: what why, when how. Entrepreneurship 360 background paper. Available via: http://www.oecd.org/cfe/leed/ BGP_Entrepreneurship-in-Education.pdf Lans T, Blok V, Wesselink R (2014) Learning apart together: towards an integrated framework for sustainable entrepreneurship competence in higher education. J Clean Prod 62:37–47 Lans T, Baggen Y, Ploum L (2018) Towards more synergy in entrepreneurial competence research in

91 entrepreneurship education. In: Fayolle A (ed) A research agenda for entrepreneurship education. Elgar, Cheltenham, p 224 Morselli D, Ajello A (2016) Assessing the sense of initiative and entrepreneurship in vocational students using the European qualification framework. Educ + Train 58:797–814 Mulder M (2014) Conceptions of professional competence. In: Billett S, Harteis C, Gruber H (eds) International handbook on research into professional and practice-based learning. Springer, Dordrecht, pp 107–137 Neck HM, Green P (2011) Entrepreneurship education: known worlds and new frontiers. J Small Bus Manag 49(1):55–70 Nijhof WJ (2005) Lifelong learning as a European skill formation policy. Hum Resour Dev Rev 4(4): 401–417 Osagie ER, Wesselink R, Blok V, Lans T, Mulder M (2015) Individual competencies for corporate social responsibility: a literature and practice perspective. J Bus Ethics 135:233. https://doi.org/10.1007/s10551-014-2469-0 Patzelt H, Shepherd DA (2011) Recognizing opportunities for sustainable development. Entrep Theory Pract 35(4):631–652 Peters L, Rice M, Sundararajan M (2004) The role of incubators in the entrepreneurial process. J Technol Transf 29(1):83–91 Ploum L, Blok V, Lans T, Omta SWF (2017) Toward a validated competence framework for sustainable entrepreneurship. Organ Environ 31:113. https://doi.org/ 10.1177/1086026617697039 Ploum L, Blok V, Lans T, Omta SWF (2018) Exploring the relation between individual moral antecedents and entrepreneurial opportunity recognition for sustainable development. J Clean Prod 172:1582–1591 Rieckmann M (2012) Future-oriented higher education: Which key competencies should be fostered through university teaching and learning? Futures 44:127–135 Rockström J, Steffen W, Noone K, Persson Å, Chapin FS, Lambin EF, . . . Nykvist B (2009) A safe operating space for humanity. Nature 461(7263):472–475 Russo MV (2003) The emergence of sustainable industries: building on natural capital. Strateg Manag J 24 (4):317–331 Sandberg J (2000) Understanding human competence at work: an interpretative approach. Acad Manage J 43:9– 25 Sarasvathy SD (2001) Causation and effectuation: toward a theoretical shift from economic inevitability to entrepreneurial contingency. Acad Manag Rev 26:243–263 Sarasvathy SD, Venkataraman S (2011) Entrepreneurship as method: open questions for an entrepreneurial future. Entrep Theory Pract 35(1):113–135 Schaltegger S, Wagner M (2011) Sustainable entrepreneurship and sustainability innovation: categories and interactions. Bus Strat Environ 20:222–237 Slater DJ, Dixon-Fowler HR (2010) The future of the planer in the hands of MBAs: an examination of CEO

C

92

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

MBA education and corporate environmental performance. Acad Manage Learn Educ 9(3):429–441 Svanström M, Lozano-García FJ, Rowe D (2008) Learning outcomes for sustainable development in higher education. Int J Sustain High Educ 9(3):339–351 Swart RJ, Raskin P, Robinson J (2004) The problem of the future: sustainability, science and scenario analysis. Glob Environ Chang 14(2):137–146 United Nations (2004) UNEP 2004 annual report. United Nations Environment Program, Nairobi. United Nations General Assembly (2000). United Nations millennium declaration Wesselink R, Blok V, van Leur S, Lans T, Dentoni D (2015) Individual competencies for managers engaged in corporate sustainable management practices. J Clean Prod 106:497–506 Wiek A, Withycombe L, Redman CL (2011) Key competencies in sustainability: a reference framework for academic program development. Sustain Sci 6:203– 218 York JG, Venkataraman S (2010) The entrepreneur–environment nexus: uncertainty, innovation, and allocation. J Bus Ventur 25(5):449–463 Young W, Tilley F (2006) Can businesses move beyond efficiency? The shift toward effectiveness and equity in the corporate sustainability debate. Bus Strateg Environ 15(6):402–415

Conceptualizing Green Economies: Origins, Evolution, and Imperatives Hali Healy Department of Anthropology and Development Studies, University of Johannesburg, Johannesburg, South Africa

Synonyms Circular economy; Dematerialized economy; Green growth

Definition Increasing greenhouse gas emissions combined with the destruction and degradation of ecosystems have dramatically increased the likelihood of human exposure to major climatic shifts while simultaneously reducing our resilience and

fuelling conflicts over dwindling natural resources. The concept of Green Economy (GE) has emerged in this context, a response to the evolving ecological, social, and economic crises that we are confronted with today. The Green Economy promises to stimulate economic recovery through more environmentally friendly production processes, thereby achieving economic growth, promoting positive social outcomes, and reducing environmental impacts simultaneously. Under mainstream GE thinking, past perceptions of environmental protection as in conflict with economic activity have given way to the idea that the environment can be a positive economic force, offering great social, economic, and environmental gains. There is no singular, widely accepted definition of a GE, though there is broad agreement that for an economy to be green, it must operate within the ecological limits of the earth’s biosphere. As articulated by politicians the world over, the GE is in essence about the decoupling of economic growth from environmental impact. This approach has a broad appeal to politicians, business people, environmentalists, and the general public as it presents the GE as a “triple-win” solution – using technological advances and ecoinnovation to enable continued economic growth while reducing environmental damage. It also appeals to certain developing countries who have traditionally viewed environmentalism as a threat to broader objectives of economic growth and development. The term Green Economy is often used interchangeably with “Green Growth” (Jacobs 2012; Cavanagh and Benjaminsen 2017), a term that has come to the fore within multilateral development institutions such as the World Bank, UNEP, and OECD. Defined by the OECD as the “fostering [of] economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies” (OECD 2011), the idea of Green Growth (GG) has been deployed as a means of addressing climate change, promoting the efficient management of natural resources, enhancing energy security, and driving further economic growth (OECD 2009). More recently,

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

the World Bank (WB) has defined GG as “growth that is efficient in its use of natural resources, clean in that it minimizes pollution and environmental impacts, and resilient in that it accounts for natural hazards and the role of environmental management and natural capital in preventing physical disasters” (World Bank 2012: 2). Even with an apparent degree of consensus around the need for economic greening, however, scholars such as Brockington and Ponte (2015: 2198) warn that the notion of Green Economy is underpinned by “a bundle of paradoxes and contradictions,” serving simultaneously as “a rallying call for radical change to the organisation of economic activity and social life, and an instrument by which meaningful alterations of either is resisted.” Comprised of sometimes wildly different epistemic communities, the notion remains hotly contested as an area of scholarship and activism, as the following sections of this entry illustrate.

Green Economy: Origins and Evolution The origins of Green Economy thinking can be traced to a report published for the UK government in the late 1980s (Faccer et al. 2014; Cavanagh and Benjaminsen 2017), entitled Blueprint for a Green Economy (Pearce et al. 1989). This report argued that to address ongoing resource exploitation, depletion, and pollution, a Green Economy must be able to fully account for environmental externalities. Perhaps more powerful catalysts for the rapid ascent of the Green Economy however were the interconnected financial and economic crises of 2008, along with growing awareness of an impending global climate crisis (Faccer et al. 2014; Tienhaara 2014; Cavanagh and Benjaminsen 2017). In this context, UNEP launched its Green Economy Initiative (GEI) in 2008, designed to support governments to develop policy, investment, and budgetary strategies to promote the adoption of clean technologies, renewable energies, and green transportation systems. From this point on, interest in the relationship between economy and the environment increased substantially

93

in policy and academic circles, giving rise to a number of proposals. Notable among these was the “Green New Deal,” which called for the structural transformation of national and international financial regulations, major changes to taxation systems, and targeted investments in public and private sector energy conservation programs (NEF 2008). Proposals for Green Stimulus meanwhile advised increased government spending in order to combat climate change and simultaneously create more sustainable employment opportunities. Investment in renewable energy, for example, due to its labor intensiveness relative to fossil fuel industries, would deliver green jobs (Pollin et al. 2008; Robins et al. 2010; Jones and Green 2009). Investment in retrofitting and renewable energy sources moreover promised significant economic savings to individuals and businesses through lower fuel bills and reduced health costs (Engel and Kammen 2009; Houser et al. 2009). The transition to a low-carbon economy via Green Stimulus programming it was believed would also circumvent future economic downturns stemming from fossil fuel price increases (Edenhofer et al. 2009). The majority of these perspectives are captured in the OECD’s Declaration on Green Growth, adopted by government ministers on June 25, 2009. In the Declaration, signatories committed themselves to careful policy analysis, identification of best practices, and supporting countries in their efforts to establish long-term sustainable economies. By 2012, the Green Economy had become a major theme of the United Nation’s Rio + 20 Conference on Sustainable Development (Fig. 1). However, in the run up to conference, the very notion of Green Economy came under intense scrutiny by a wide range of actors. As Faccer et al. (2014: 643) report, “Conservative critics bemoaned the emphasis on ‘green’ at the expense of ‘growth’, while progressive voices were concerned that the concept represented business as usual rather than a fundamental shift in the prevailing macroeconomic paradigm.” Developing countries meanwhile had their own set of concerns. These pertained to the implications of a Green Economy imperative in terms of countries’ sovereign rights to follow “a growth path

C

94

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

Economy abound and in some cases coexist, permeating policies and strategies for economic development at all levels. However, as Cavanagh and Benjaminsen (2017: 206) assert, the specific unfolding of Green Economy initiatives and strategies in particular contexts is ultimately determined by the nature of interactions between modes of governance and accumulation, ongoing state and non-state territorializations, and numerous cultural formations. It is to a closer examination of some of these different contexts that the next section now turns. Conceptualizing Green Economies: Origins, Evolution, and Imperatives, Fig. 1 Green economy. (Source: UNEP 2011)

aligned to their resource endowments”; the potential for “hijack” of the notion by developed countries intent on promoting a new form of “green protectionism” (Resnick et al. 2012); and worries that developed country commitments to assisting developing countries to pursue Green Economy objectives would eventually become diluted (Faccer et al. 2014: 643). These concerns in particular prompted major multilateral organizations like the UN (2011), the OECD ( 2012), and the World Bank (2012) to begin promoting “Inclusive Green Economies” and “Inclusive Green Growth,” emphasizing that Green Economy policymaking should be designed to benefit the most vulnerable in society. The UNRISD (United Nations Research Institute for Social Development) for its part articulated the view that in the interests of fairness and equity, any transition to a GE “must not only address the consequences of environmental and economic change. It must also seek to transform the social structures, institutions and power relations that underpin vulnerability, inequality and poverty” (UNRISD 2012: 3). As the concept of the Green Economy continues to evolve, it remains hotly debated, subject to interpretation by different “discourse coalitions” (Hajer 1995), and shaped by the different industrial, political, geographical, historical, and socioeconomic circumstances and interests of a range of actors (see Text Box 1). What is clear is that a diversity of interpretations of Green

Text Box 1: Green Economy – A Discursive Approach

A great deal of scholarly attention has been paid to the unfolding of Green Economy discourses and how these have evolved as a product of particular coalitions of interests (Hajer 2005). Tienhaara (2014), for example, describes the notions of “Green New Deal,” “Green Stimulus,” and “Green Economy” as part of an overarching discourse of “Green Capitalism.” Faccer et al. (2014: 644) in contrast offer a “stylised interpretation” of a broader variety of extant GE discourses. “Incrementalist” thinking, popular among policy makers and multilateral organizations, downplays the negative environmental impacts of economic growth, calling for increased reliance on market-based mechanisms to internalize environmental externalities (Ibid: 645). Reformist approaches, increasingly popular in industry and policy circles, highlight opportunities presented by GEs to promote economic growth while adding social and environmental value (Ibid: 648). Meanwhile, transformative approaches tend to emanate from civil society and grassroots organizations critical of broad social, environmental, and economic objectives, calling for a fundamental paradigm shift toward greater emphasis on human rights (Ibid: 50). Carl Death (2015) makes similar (continued)

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

Text Box 1: Green Economy – A Discursive Approach (continued)

distinctions, highlighting four often coexisting global notions of GE. Green Transformation (like Faccer et al.’s “incrementalism”) closely resembles the notion of sustainable development first articulated in the Brundtland report (WCED 1987), privileging the role of existing actors and structures and of economic growth as the engine of progress. Viewing the environment as a resource for human development, it charges “green developmental states” with ensuring and regulating the greening of economies, through, for example, the use of investment and fiscal stimulus strategies to develop safe and efficient public transport systems. Dominant among GE discourses however is that of Green Growth (similar to Faccer et al.’s “reformism”). Prevalent in the global North, this discourse emphasizes the “win-win” economic opportunities presented by environmental changes, advocating carbon markets, bioprospecting, and the valuation of ecosystem services. Increasingly popular in the Global South, Green Growth is promoted as a key means of “leapfrogging” the negative environmental effects of industrialization, to deliver both prosperity (via increased employment) and environmental protection. “Green Resilience,” also prevalent in many national development strategies across the Global South, has emerged in response to perceived threats from climate change, peak oil, food and water insecurity, and biodiversity loss. The path to a “resilient” Green Economy thus lies in cooperation between states and development institutions to implement technological interventions and their ability to engage empowered, resourceful communities. Finally, more radical “Green Revolution” (much like Faccer et al.’s “transformative”) discourses tend to be based on critiques of mainstream GG discourses. Often deployed

95

by deep ecologists, eco-socialists, eco-feminists, indigenous peoples, and environmental justice activists (see the Local/ Grassroots Initiatives section), Green Revolution calls for “a radical realignment of economic (and hence social and political) relationships to bring them in line with natural limits and ecological virtues” (Death 2015: 2217).

Key Initiatives Multilateral At the multilateral level, the United Nations (UN) has continued to spearhead efforts to transition to Green Economies. Since its Green Economy Initiative in 2008, for example, the UN has developed and implemented a plethora of platforms, partnerships, programs, resources, funds, facilities, and mechanisms through its various agencies. Platforms for information exchange and knowledge management, for example, include the Green Industry Platform (UNIDO, UNEP), the Climate Information Platform (UNDP with several partners), and the Green Growth Knowledge Platform. The UN has also played a central role in establishing Green Economy partnerships, among them the Global Green Growth Institute (GGGI), comprised of national governments, research institutes, intergovernmental organizations, and private sector actors; the Partnership for Action on Green Economy (PAGE – https://www.un-page.org/); and the Green Economy Coalition, a global network of UN agencies, NGOs, research institutes, and business and trade unions, engaged in information exchange, awareness raising, and research activities (Fig. 2). In addition, the UN and its agencies have led the way with the implementation of a wide range of Green Economy programs, often in cooperation with European (primarily Norway, Denmark, Germany, Spain, and Sweden) and other international donors. The aim of these programs in general is to provide Green Economy capacity

C

96

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

Conceptualizing Green Economies: Origins, Evolution, and Imperatives, Fig. 2 Green economy coalition strategy. (With permission from GEC)

building and information services and some financing. Examples include the Green Economy Joint Programme (UNDP, UNEP, and UNDESA), the Green Industry Initiative (UNIDO), the Green, Low-Emission Capacity Building Program (UNDP), and the Green Jobs Programme (ILO, UNEP, the International Trade Union Confederation (ITUC), and the International Organisation of Employers (IOE)). Also notable at the multilateral level is the work of the World Bank and the OECD. Although frequent partners in UN-led initiatives, these organizations tend to place less emphasis on equity, fairness, and well-being, favoring instead predominantly “reformist” (Faccer et al. 2014) or “Green Growth” (Death 2015) agendas that advocate market- and financial-based incentives as the best means of making a green transition. Both organizations, for instance, highlight the potential for international trade policy to generate economic growth and, at the same time, contribute to environmental protection, by mandating the more efficient use of resources (OECD 2012)

and facilitating the transfer of green technologies through the export and import of green products (World Bank 2012). Clearly then, multilateral approaches to GE are not homogenous. However, there are substantial areas of shared emphasis at the multilateral level, a few of which are outlined below. Inclusivity

As briefly mentioned above, the run up to Rio + 20 saw a shift in dominant GE discourses to include the notion of “inclusivity,” rooted in concerns about the uneven distribution of costs and benefits associated with the shift to Green Economies. For the OECD (2012), Inclusive Green Growth became oriented toward ensuring that developing countries and emerging-market economies were not excluded from the economic opportunities provided by a Green Growth agenda. The World Bank (2012) approach to Inclusive Green Growth (Fig. 3) was somewhat broader, calling for policies “carefully designed to maximize benefits for, and minimize costs to, the

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

97

found both in traditional sectors, such as manufacturing and construction, and in emerging green sectors such as renewable energy and energy efficiency.

Conceptualizing Green Economies: Origins, Evolution, and Imperatives, Fig. 3 Inclusive green growth. (Source: World Bank)

poor and most vulnerable, [avoiding] . . .policies and actions with irreversible negative impacts.” Arguably however, UNEP (2015: 6) produced the most comprehensive articulation, calling for GEs to be: . . .low carbon, efficient and clean in production, but also inclusive in consumption and outcomes, based on sharing, circularity, collaboration, solidarity, resilience, opportunity, and interdependence. [GE] is focused on expanding options and choices for national economies, using targeted and appropriate fiscal and social protection policies, and backed up by strong institutions that are specifically geared to safeguarding social and ecological floors. And it recognizes that there are many and diverse pathways to environmental sustainability. Green Jobs

Another common area of interest at the multilateral level pertains to promotion of Green Jobs, defined by the GGKP (ND) as: decent jobs that contribute to environmental sustainability, either through employment in the production of green goods or services or through employment that utilises environmentally friendly production practices. As such, green jobs can be

For UNEP, the ILO, and trade unionists (UNEP 2008), a major concern has been the potential for massive workforce disruption and job losses in the transition to Green Economies, as certain environmentally damaging sectors of employment (notably agriculture, forestry, fishing, energy, manufacturing, recycling, buildings, and transport) “green” themselves. The promotion of Green Jobs is seen as vital by UNEP, not only to supporting climate change mitigation and adaptation but equally to poverty eradication, especially in developing countries. Key to the successful promotion of green jobs in the developing world however is a commitment to providing opportunities for economic development that also protect a country’s natural asset. The OECD and World Bank have also recognized the employment risks associated with the greening of certain sectors. However, the stance of these organizations is more optimistic, based on assumptions that innovation can lead to “new ideas, new entrepreneurs and business models, contributing to the establishment of new markets and eventually to the creation of new jobs” (OECD 2012: 18). A well-managed transition they argue will ensure that the opportunities of the Green Economy transition will outweigh the costs. To this end, the OECD recommends labor policies that, for example, support worker reallocation to new firms, reducing the adjustment costs borne by displaced workers themselves; enable “top-up training” for mid-career workers who need to adapt to greener ways of working; support eco-innovation and green technology dissemination; and reform worker benefit and taxation systems to protect jobs from cost pressures generated by environmental policies. Genderrelated issues have also been recognized as a policy priority by the OECD, in order to address the chronic underrepresentation of women in politics, as well as to improve the access of women to sectors such as science, technology, engineering, and mathematics that are central to innovation (OECD 2012).

C

98

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

Natural Capital

Also prevalent at the multilateral level is concern with the protection of natural capital, valued for the essential functions it fulfils, as well as its complexity. These functions include the provision of basic life support functions and “amenity services,” such as the beauty of wilderness and other natural areas, as well as providing the raw materials and waste sinks upon which production processes depend. In a Green Economy asserts the UN (2011: 41), natural capital is a key determinant of “economic production, innovation, value creation, stability and long-term prosperity.” According to the World Bank, planetary stocks of natural capital have come under threat as a result of different “market, policy, and institutional failures” that have encouraged the inefficient and wasteful use of resources, ignored the social costs of resource depletion, and failed to ensure adequate investment in other forms of productive capital (World Bank 2012: ix). Thus a key initiative to emerge at this level was the Millennium Ecosystem Assessment (MA – https://www. millenniumassessment.org/). Notably, a key recommendation outlined in one of the MA reports, entitled Ecosystems and Human Well-being: Opportunities and Challenges for Business and Industry, pointed to payments for ecosystem services (PES) as an important marketbased instrument for delivering more efficient production processes and reducing harmful trade-offs. This approach was enthusiastically adopted at the multilateral level, with proponents making calls for increased attention to the value derived from natural capital (OECD 2012) and the scaling up of PES programs worldwide (World Bank 2012). Such were the motivations behind TEEB (The Economics of Ecosystems and Biodiversity), a subsequent major global initiative launched in 2010 with the participation of UNEP, the European Commission, and a wealth of international (but mainly Northern) NGOs and leading research centers. The TEEB synthesis report (http://www.teebweb.org/ our-publications/teeb-study-reports/), a product of the joint efforts of international experts from the fields of science, economics, and policy, advanced arguments for the “systematic appraisal of the

economic contribution of biodiversity and ecosystem services to human well-being; and for routine steps to be taken by decision makers and economic actors to prevent that contribution being lost or diminished through neglect or mismanagement” (Sukhdev et al. 2010: 4).

Indicators

The measurement of progress in moving toward Green Economies is also a key preoccupation at multilateral level. The Green Growth Knowledge Platform (GGKP) has been a major contributor in this regard, launching the Global Green Economy Index (GGEI) in 2010 to measure Green Economic performance in four dimensions: leadership and climate change, efficiency sectors, markets and investment, and environment and natural capital. Using qualitative and quantitative data, the index also accounts for “perception values,” assessing how leaders and experts rate their own green performance. Such a measure is considered important because despite the increased level of political focus on the importance of Green Growth in tackling climate change, commitments and targets communicated by leaders are sometimes not commensurate with actual outcomes. By gathering data on leaders’ own perceptions of problems and solutions, it is hoped that the GGEI can generate insights into how communications and information exchange can be better leveraged for progress toward Green Economic growth. Offering broader coverage and enhanced data and processing with every edition, the 2016 GGEI highlighted trends that were both reassuring and worrying. Findings indicated, for example, that Germany and the Nordic states were top performers but that many rapidly growing economies performed poorly. Furthermore, the report found that the perceptions of some developed countries (notably, Japan and the USA) of their Green Economic performance dramatically outstripped their actual performance. Conversely, the scores of some European nations actually exceeded perception scores, highlighting room for improvement in strategic communications and information exchange.

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

The findings of the 2018 report 2 years on (Text Box 2) also found Nordic countries to be among the top performers. Investment in renewables by China and the USA was also found to be strong, but this strength was offset by slow rates of decarbonization in China and poor forest management in the USA. Meanwhile efforts to green businesses through the mainstreaming of CSR were found to be disappointing outside of the USA, Western Europe, Australia, and Japan. In African nations meanwhile, investments in renewable sources of energy translated poorly into improvements in building efficiency, transportation, or the environment.

Text Box 2: GGEI 2018: Summary of Findings. (Adapted from GGEI 2018)

• Sweden is the top GGEI performer for the 3rd straight edition, joined by other Nordics, Switzerland, Germany, and France in the top 10. Taiwan and Singapore are the top performers in Asia, Colombia and Costa Rica in Latin America, and Kenya in Africa. • Renewable energy investment (China) and green innovation (USA) are still strong, but both countries continue to have mediocre overall GGEI results due to their slow pace of sector decarbonization, poor air quality (China), and poor forest management (USA). • Corporate sustainability initiatives are surging in the USA and Western Europe, but the GGEI detected limited evidence that they are mainstreamed in the rest of the world, with the exception of Japan and Australia. • The GGEI results across the European Union continue to be uneven, with the top GGEI performers counterbalanced by poor results in the Baltic states, Bulgaria, and Poland.

99

• Rapidly growing Asian markets like Cambodia, Laos, Myanmar, and the Philippines do not perform well on the GGEI, a well-established trend that highlights the limits of GDP as a growth metric. • Many African countries are relatively low-carbon-intensity economies with higher than average contributions of renewable energy, but these factors rarely translate to good performance on other areas of the GGEI like building efficiency, transportation, or the environment.

Regional/National Approaches Indeed, multilateral efforts to stimulate a transition toward greener economies share a great deal of common ground. However, GE approaches and initiatives (and the discourses that represent them) also vary depending on different regional and national priorities. For instance, in developed and emerging economies, a great deal of emphasis has been placed on how green strategies and policies can not only address environmental costs but also tackle non-environmental market failures that inhibit economic growth. In contrast, in developing countries, the focus is often on the conservation of natural capital and ensuring ecosystem resilience in the face of the climate changerelated risk.

Europe

The value of this observation becomes evident upon inspection of how the GE agenda has evolved in Europe. Certainly, European decision-makers have integrated a range of GE elements into their policies, focusing, for example, on the role of natural capital and on possibilities for decoupling economic growth from resource use. However, policy discourse under the Europe 2020 agenda has focused on achieving “smart, sustainable, inclusive growth,” rather than Green Growth per se, as the best means of achieving high levels of employment, productivity, and

C

100

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

Conceptualizing Green Economies: Origins, Evolution, and Imperatives, Fig. 4 The circular economy. (Adapted from the European Commission)

social cohesion in the Member States while reducing the impact on the natural environment. Central to meeting ambitious targets for 2020 moreover are strategies for building a circular economy (Fig. 4), defined as one that “aims to maintain the value of products, materials and resources for as long as possible by returning them into the product cycle at the end of their use, while minimising the generation of waste” (Eurostat n.d.). With objectives of achieving Zero Waste in the region, the first European Circular Economy Action Plan was introduced in 2015 (EC 2015), designed to close production loops through greater recycling and reuse. Then in January 2018, a new set of measures was adopted to support European nations in their greening efforts (http://ec.europa.eu/environ ment/circular-economy/index_en.htm). The success of these and other measures will be assessed via the EU monitoring framework for the circular economy which includes ten indicators covering the four areas of circular economy: production and consumption, waste management, secondary raw materials, and competitiveness and innovation. Asia Pacific

There is a long history of engagement with GE in the Asia Pacific region. In March 2005,

52 governments and other stakeholders from Asia and the Pacific convened in Seoul at the Fifth Ministerial Conference on Environment and Development (MCED), agreeing to move beyond sustainable development rhetoric to pursue a path of “Green Growth,” defined as “a strategy of sustaining economic growth and job creation necessary to reduce poverty in the face of worsening resource constraints and climate crisis” (UNESCAP n.d.). Following on from this event, UN’s Economic and Social Commission for Asia and the Pacific (UNESCAP) adopted a ministerial declaration (the Seoul Initiative) and developed a Regional Implementation Plan (2006–2010) to help member states (notably Korea) to promote Green Growth in their respective nations. More recently, GE discourse has turned its attention to the risks posed to the region by not only natural hazards but also commodity shocks and pollution shocks, highlighting the need for increased efforts from citizens, civil society, government, and the private sector alike to build resilience capacities by turning risks into opportunities (UNESCAP 2018). Africa

On the African continent, work on achieving transition toward Green Economies has been well received, with national representatives at the 2012 African Ministerial Conference on Environment (UNECA 2011) recognizing that “the transition to a Green Economy could offer new opportunities for advancing the achievement of Africa’s sustainable development objectives through economic growth, employment creation, and the reduction of poverty and inequalities” (UNECA 2011: 1). Here regional leaders expressed a commitment to explore Green Economic opportunities, resolving to establish better mechanisms for delivering GE coordination and support to member states; to develop partnerships and national strategies; and to promote regulation, global cooperation, and the transfer of green technology and know-how. Given the predominance of concern in the region with poverty and climate change vulnerability, it is not surprising that the majority of GE discourse in Africa centers on Green Growth and

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

its potential to deliver both economic prosperity and resilience. Accordingly, the African Development Bank states that Green Growth offers: “the promise and maximisation of opportunities for economic growth through building resilience, managing natural assets efficiently and sustainably” (AfDB 2016). Green Growth in Africa asserts the AfDB is about “addressing existing and emerging development challenges without locking into pathways that deplete Africa’s natural capital and leave economies and livelihoods more vulnerable to climate change and other environmental social and economic risks” ( 2016: 4). With this aim in mind, the AfDB has carried out extensive work in the region, framing GG issues in the African context, conducting awareness raising and capacity building programs, developing tools and strategies for GG implementation in member states, establishing funding instruments, and financing pilot programs to mainstream GG into national development plans.

Latin America

Across Latin America and the Caribbean (LAC), efforts to move toward a Green Economy have made considerable strides. Given the prevalence of poverty and inequality in the Latin America and Caribbean region, discourses around Inclusive Green Growth have grown in popularity, with decision-makers increasingly keen to implement policies that support economic growth, encourage the development of clean technologies and efficient production processes, and secure climate-resilient investments (World Bank 2012). It is in this region that the uptake of market-based mechanisms designed to curb deforestation and protect forms of natural capital including water, fertile land, and biodiversity is arguably the most advanced. Green Growth Initiatives have been so successful in fact that the World Bank’s Department of the Latin America and Caribbean Region (LCSSD) has declared the region “the world’s laboratory” for innovation in inclusive Green Growth (World Bank 2012: 3). This title is in part due to the success of marketbased initiatives.

101

Local/Grassroots Local or grassroots level initiatives are a vital source of greening efforts, whereby community members and activists apply bottom-up approaches to experiment with green innovations and technologies in response to local concerns, values, and interests. Shaped by wider social, ethical, and cultural considerations rather than narrow objectives of economic growth, local/ grassroots initiatives can contrast considerably with mainstream (multilateral/national) greening approaches. The significance of local/grassroots initiatives is moreover considerable. “Green niches” created by local/grassroots initiatives provide an important impetus for transition toward greener societies by “provid[ing] space for new ideas, artefacts, and practices to develop without full exposure to the range of processes channelling regime development” that if successful spread into the mainstream as they are disseminated and adapted to suit other local contexts (Seyfang and Smith 2007: 588). Grassroots and local GE initiatives take a variety of organizational forms, comprised of cooperatives, voluntary associations, informal community groups, and social enterprises. Similarly, they can be funded by a wide range of sources, from private or public grants to commercial activity, voluntary input, and mutual exchanges, and sometimes run alongside other highly professionalized organizations. Founded on distinct priorities and values, some are geared toward more “intrinsic” social and environmental ends or benefits (such as reducing car usage, increasing levels of recycling, or increasing access to goods and services), while others may be more “strategic,” aimed at more radical transformations of institutions and values and/or regime change (Seyfang and Smith 2007). In the North, many intrinsically oriented grassroots or community initiatives coexist – aimed, for example, at reducing the consumption of energy and materials, or the production of emissions, alongside more strategic projects such as building “sharing” economies (to the extent that they seek to decentralize and disrupt established sociotechnical and economic structures/regimes) and the use of LETS (local exchange trading systems).

C

102

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

Conceptualizing Green Economies: Origins, Evolution, and Imperatives, Fig. 5 Mujeres Kichwas de Canelos for sumak kawsay. (With permission from AmazonWatch)

In the Global South in contrast, Green Economy practices tend to take a different form, shaped by objectives of reducing poverty and unemployment and addressing threats faced by vulnerable communities from climate change. As such, local initiatives (often supported by multilateral/ regional funding institutions) to promote ecotourism and carbon offsets, to produce energy from renewable sources, and in support of communitybased natural resource management/food production abound. Also notable among GE approaches evolving at the local/grassroots level from the global South however is a set of more strategic, radical interpretations of the Green Economy. As a result of the proliferation of approaches such as payments for ecosystem services and REDD, grassroots actors on the receiving end of their negative impacts are mobilizing against efforts to accelerate the commodification or “neoliberalization” of nature (Heynen et al. 2007; McCarthy and Prudham 2004). These actors are furthermore designing and experimenting with alternative conceptions and models of GE. In Latin America, for example, activists belonging to networks of indigenous peoples are advocating for the development of post-extractive economies and the

advancement of buen vivir (good living in Spanish) and sumak kawsay (in Quechua), looking beyond and even forsaking opportunities for Green Growth, in favor of other means of achieving well-being that are in harmony with nature (See Fig. 5).

Relevance to SDGs The pursuit of Green Economies stands to contribute directly and substantially to the aims of SDG 8, to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all” (ref). However, the objectives and potential benefits of greening economies are manifold and consequently crosscut a large proportion of the SDGs. Even so, the transition toward more socially, ecologically, and economically sustainable world may depend on greater efforts among SDG advocates to discursively separate the notion of Green Growth from the Green Economy, placing greater emphasis on the latter, and the wide adoption of alternative measures and indicators of progress (Ferguson 2015).

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

Critiques/Debates Despite its growing popularity, the notion of the Green Economy has been and continues to be the subject of wide-ranging criticism/debate. Some of these critiques are directed at empirical claims about GE, with scholars pointing, for example, to the highly contingent nature of relations between green innovation and economic growth (Huberty and Zachmann 2011; Dutz and Sharma 2012; Victor and Jackson 2012). Similarly, research has shown that measures such as state renewable energy portfolio standards (RPS – policies that legislate the adoption of renewable energy technologies in state electricity markets) have had a negligible impact on the creation of green jobs, pointing instead to the importance of vibrant markets, a well-educated workforce, and adequate public infrastructure (Bowen et al. 2013). Scholars are also documenting how large-scale greening initiatives in the Global South have proven to be a major source of “ecological distribution” (Martinez-Alier 2018; O’Connor and Martinez-Alier 1998) or environmental justice conflicts, particularly on frontiers of commodity extraction and waste disposal. There, the rapid proliferation of GE initiatives while creating new opportunities for commercialization and market integration is also leading to increased incidences of land and water grabbing, displacement and dispossession, destruction of locally defined rules of access to natural resources, and greenwashing. As a result, critics argue that discourses and policies supporting GE are proving to be a force for negative change, ultimately “reallocating resources, reinforcing inequalities and redistributing the fortune and misfortune of its participants and of those excluded from it” (Brockington and Ponte 2015: 2197). Carl Death (2015: 2219) goes even further, suggesting that Southern states that deploy GE discourses to legitimate their development politics “have more in common with colonial, racist or authoritarian states than some of the more optimistic narratives of ecological modernisation assume.” From a more critical perspective then, positive claims about the benefits of pursuing GE policies,

103

especially in the South, must be weighed against the realities of the political struggles that follow such a trajectory engenders. These struggles, which oppose the neoliberalization of nature, can be seen as representative of an emergent “counterhegemonic ‘double movement’ ‘that aims to challenge capitalist hegemony and the commodification of society–nature relations” (Wanner 2015: 21). In this sense there is an important role for Northern advocates of degrowth/steady-state economics to play in alliance with environmental justice activists working for a transition to not only a greener but socially just, sustainable world.

Challenges and Opportunities There are major opportunities presented by the global transition to a GE, but for it to be successful, it must deliver ecologically sound poverty alleviation and social protection. Without these in-built objectives, there is a risk that the Green Economy will not address fundamental obstacles to the achievement of sustainable development – namely, the growing inequality between rich and poor and the unequal distribution of natural resources both within and between nation-states. Efforts to deliver ecologically sound poverty alleviation and social protection moreover require bottom-up approaches, informed by local capacities, needs, and vulnerabilities. However, there remains a dearth of research on the conditions under which Green Economy initiatives actually deliver pro-poor results (Faccer et al. 2014). As Death (2015: 2208) points out, “The relative absence of in-depth analysis of Green Economy strategies in the Global South means that our current understanding of the range of political interventions under the Green Economy banner is somewhat restricted.” A related implication moreover is that the pursuit of certain Green Economy policies may actually be having a net negative effect in the global South. Faccer et al. add of GE, “the notion may not be as widely applicable among developing nations as it is among emerging and developed countries, and that the risks and trade-offs in these countries need to be carefully assessed” (2014: 654).

C

104

Conceptualizing Green Economies: Origins, Evolution, and Imperatives

In this sense, there is a great deal to be learned from community-level action, recognized as an important source of Green Economy innovation. While much has been written to describe the emergence, drivers, and proliferation of grassroots greening initiatives, little research has focused on the conditions under which such efforts are able to influence shifts in mainstream socio-technical regimes (Seyfang and Smith 2007). To this end, scholars have called for closer attention to be paid to the contexts, actors, and processes under which lessons from local greening efforts translate into mainstream situations. The study of SMMEs has also been highlighted as vital to ensuring that efforts to Green Economies deliver equitable outcomes rather than serving as an instrument of “green greed.” Recognized as a substantial source of employment, especially in developing countries, the study of SMMEs has tended to focus on exploring how mainstream medium-sized enterprises can benefit from emerging opportunities in green industries (Creech et al. 2014). However, comparatively little attention has been paid to understanding how SMMEs can drive social and environmental transformation and ultimately inform the development of international frameworks and national strategies for economic greening. Mainstream approaches to GE implementation ought to be challenged from both a practical and an ideological point of view, given that the future sustainability of societies worldwide seems to be riding on them. Bowen and Hepburn (2014), for example, argue that states need to move beyond focusing on market-driven “Green Growth” transition, to stimulating larger-scale, system-wide, and structural transitions. In practice this means establishing strong institutions capable of promoting innovation but also addressing the distributional consequences of stronger environmental policies, especially in developing countries. On an ideological level, however, there is also an evident need for the “rearticulation” of GE based on the reconstruction of notions of prosperity, progress, and security and a need to avoid direct and disempowering discursive conflict with currently hegemonic pro-growth discourses

(Ferguson 2015). This means paying greater attention to the wide variety of alternative conceptions of GE coming from the grassroots level, alternatives that “are being experimented with (out of inspiration or desperation) on a daily basis among the poorest of the poor, [those who] have no choice but to seek alternatives to what they are experiencing” (Radcliffe 2015: 871).

Cross-References ▶ Decoupling of Economic Growth from Environmental Degradation ▶ Degrowth and the Sustainable Development Goals ▶ Environmental Injustice and Economic Growth for Proof Processing

References African Development Bank (2016) Green growth in Africa: transitioning the African Continent Toward Green Growth – an introductory guide to understanding AfDB’s Green Growth Framework. Available via https://www.afdb.org/fileadmin/uploads/afdb/Documents/ Generic-Documents/Introductory_guide_to_understand ing_AfDB_Green_Growth_Framework.pdf. Accessed 18 Aug 2018 Bowen A, Hepburn C (2014) Green growth: an assessment. Oxf Rev Econ Policy 30(3):407–422 Bowen WM, Park S, Elvery JA (2013) Empirical estimates of the influence of renewable energy portfolio standards on the green economies of states. Econ Dev Q 27(4):338–351 Brockington D, Ponte S (2015) The green economy in the global south: experiences, redistributions and resistance. Third World Q 36(12):2197–2206 Cavanagh CJ, Benjaminsen TA (2017) Political ecology, variegated green economies, and the foreclosure of alternative sustainabilities. Special Section of the J Polit Ecol 24:200–341 Creech H, Paas L, Gabriel GH, Voora V, Hybsier C, Marquard H (2014) Small-scale social-environmental enterprises in the green economy: supporting grassroots innovation. Dev Pract 24(3):366–378 Death C (2015) Four discourses of the green economy in the global south. Third World Q 36(12):2207–2224 Dutz MA, Sharma S (2012) Green growth, technology and innovation. The World Bank, Washington, DC Edenhofer O, Stern N, Bauer N (2009) Towards a global green recovery. Recommendations for immediate G20 action. Report submitted to the G20 London Summit

Conceptualizing Green Economies: Origins, Evolution, and Imperatives Engel D, Kammen DM (2009) Green jobs and the clean energy economy. Copenhagen Climate Council, Copenhagen European Commission (2015) Communication from the Commission to the European Parliament, the Council. Closing the loop – An EU action plan for the Circular Economy. European Economic and Social Committee and Committee of the Regions Eurostat (n.d.) Circular economy: overview. Available via http://ec.europa.eu/eurostat/web/circular-economy/over view. Accessed 22 Aug 2018 Faccer K, Nahman A, Audouin M (2014) Interpreting the green economy: emerging discourses and their considerations for the global south. Dev South Afr 31(5):642–657 Ferguson P (2015) The green economy agenda: business as usual or transformational discourse? Environ Polit 24(1):17–37 Global Green Economy Index (2018) Available via https:// dualcitizeninc.com/global-green-economy-index/. Accessed 15 Oct 2018 Hajer MA (1995) The politics of environmental discourse: ecological modernization and the policy process. Oxford University Press, Oxford Hajer M (2005) Coalitions, practices, and meaning in environmental politics: from acid rain to BSE. In: Howarth D and Torfing J (eds.) Discourse theory in European politics: identity, policy and governance, Palgrave Macmillan: Basingstoke 297–315 Heynen N, McCarthy J, Prudham S, Robbins P (eds) (2007) Neoliberal environments: false promises and unnatural consequences. Routledge, New York Houser T, Mohan S, Heilmayr R (2009) A green global recovery?: assessing US economic stimulus and the prospects for international coordination. Peterson Institute for International Economics, Washington, DC Huberty M, Zachmann G (2011) Green exports and the global product space: prospects for EU industrial policy (No. 2011/07) Brussels, Bruegel working paper Jacobs M (2012) Green growth: economic theory and political discourse. Working Paper 108. Centre for Climate Change Economics and Policy Jones PS, Green AE (2009) The quantity and quality of jobs: changes in UK regions, 1997–2007. Environ Plan 41(10):2474–2495 Martinez-Alier J (2018) Ecological distribution conflicts and the vocabulary of environmental justice. In: Dayal V, Duraiappah A, Nawn N (eds) Ecology, economy and society. Springer, Singapore McCarthy J, Prudham S (2004) Neoliberal nature and the nature of neoliberalism. Geoforum 35(3):275–283 New Economics Foundation (2008) A new green deal. Available via https://neweconomics.org/uploads/files/8f737ea19 5fe56db2f_xbm6ihwb1.pdf. Accessed 18 Aug 2018 O’Connor M Martinez-Alier J (1998) Ecological distribution and distributed sustainability. In Sustainable development: Concepts, rationalities and strategies (pp. 33– 56). Springer, Dordrecht Organization for Economic Cooperation and Development (2009) Declaration on green growth adopted at the meeting of the council at ministerial level on 25 June

105

2009 [C/MIN(2009)5/ADD1/FINAL]. Available via https://www.oecd.org/env/44077822.pdf. Accessed 18 Aug 2018 Organization for Economic Cooperation and Development (2011) Towards green growth. OECD Green Growth Studies, OECD Publishing, Paris. https://doi.org/ 10.1787/9789264111318-en Organization for Economic Cooperation and Development (2012) Inclusive green growth: for the future we want. Available via http://www.oecd.org/greengrowth/ futurewewant.htm. Accessed 22 Aug 2018 Pearce D, Markandya A, Barbier E (1989) Blueprint for a green economy. Earthscan, London Pollin R, Garrett-Peltier H, Heintz J, Scharber H (2008). Green recovery: a program to create good jobs & start building a low-carbon economy. Political Economy Research Institute, University of Massachusetts at Amherst Radcliffe SA (2015) Development alternatives. Development and Change 46(4):855–874 Resnick D, Tarp F, Thurlow J, (2012) The political economy of green growth: illustrations from Southern Africa. United Nations University World Institute for Development Economics Research (UNU-WIDER) Working Paper No. 2012/11. Available via https://www. econstor.eu/handle/10419/80955. Accessed 18 Aug 2018 Robins N, Clover R, Saravanan D (2010) Delivering the green stimulus. HSBC Global Research, London Seyfang G, Smith A (2007) Grassroots innovations for sustainable development: towards a new research and policy agenda. Environ Polit 16(4):584–603 Sukhdev P, Wittmer H, Schröter-Schlaack C, Nesshöver C, Bishop J, Brink PT, Gundimeda H, Kumar P, Simmons B (2010) The economics of ecosystems and biodiversity: mainstreaming the economics of nature: a synthesis of the approach, conclusions and recommendations of TEEB (no. 333.95 E19). UNEP, Geneva Tienhaara K (2014) Varieties of green capitalism: economy and environment in the wake of the global financial crisis. Environ Polit 23(2):187–204 UNESCAP (n.d.) Green growth and green economy. Available via https://www.unescap.org/our-work/environmentdevelopment/green-growth-green-economy/about. Accessed 18 Aug 2018 United Nations Economic and Social Commission for Asia and the Pacific (2018) Transformation towards sustainable and resilient societies in Asia and the Pacific. Available via https://www.adb.org/sites/default/files/publicati on/410761/sdgs-resilience-transformation.pdf. Accessed 18 Aug 2018 United Nations Economic Commission for Africa (2011) A green economy in the context of sustainable development and poverty eradication: what are the implications for Africa? In: Rio+20 UN conference on sustainable development. Available via http://www1. uneca.org/Portals/rio20/documents/cfssd7/1AfricaGEBackgroundReportEN.pdf. Accessed 18 Aug 2018 United Nations Environment Programme (2008) Green jobs: towards decent work in a sustainable, low-carbon world. Available via http://adapt.it/adapt-indice-a-z/wp-

C

106

Contribution of Enterprises in Achieving the Sustainable Development Goals

content/uploads/2013/08/unep_2008.pdf. Accessed 22 Aug 2018 United Nations Environment Programme (2011) Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication. https://sustainablede velopment.un.org/index.php?page=view&type=400& nr=126&menu=35. Accessed 11 June 2019 United Nations Environment Programme (2015) Building inclusive green economies in Africa – experience and lessons learned 2010–2015. Available via http://www. greengrowthknowledge.org/sites/default/files/down loads/resource/Building_Inclusive_Green_Economies_ In_Africa_UNEP.pdf #. Accessed 18 Aug 2018 United Nations Environmental Management Group (2011) Working Towards a Balanced and Inclusive Green Economy. https://sustainabledevelopment.un.org/ index.php?page=view&type=400&nr=652&menu=1515. Accessed 11 June United Nations Research Institute for Social Development (2012) Social dimensions of green economy. Research and policy brief 12. Available via https://www.files.ethz. ch/isn/143941/RPB%2012e.pdf. Accessed 18 Aug 2018 Victor PA, Jackson T (2012) A commentary on UNEP’s green economy scenarios. Ecol Econ 77:11–15 Wanner T (2015) The new ‘passive revolution’ of the green economy and growth discourse: maintaining the ‘sustainable development’ of neoliberal capitalism. New Polit Econ 20(1):21–41. https://doi.org/10.1080/1356 3467.2013.866081 World Bank (2012) Inclusive green growth in Latin America and the Caribbean. http://documents.worldbank. org/curated/en/585171468242100860/Inclusive-greengrowth-in-Latin-Americaand-the-Caribbean. Accessed 11 June 2019 World Commission on Environment and Development (1987) Our common future. Report of the World Commission on Environment and Development

Contribution of Enterprises in Achieving the Sustainable Development Goals Edurne A. Inigo Communication, Philosophy and Technology, Social Sciences Group, Wageningen University and Research, Wageningen, The Netherlands Deusto Business School, University of Deusto, San Sebastian, Spain

Synonyms Businesses; Companies; Corporations; Firms

Definitions Enterprises, often called businesses of companies, are the organizations that tie together several individuals for the pursue of a commercial purpose. They are usually founded by an entrepreneur (or group of entrepreneurs) or by other enterprises. They normally present a hierarchical structure whereby several layers of management direct the strategic and operational activities of the enterprise. Large enterprises and small and medium enterprises (SMEs) are the most commonly referred categories to distinguish enterprises. They are classified by number of employees, turnover, and balance sheet total; however, the criteria vary internationally: as an example, the SME label is given to enterprises with between 11 and 250 employees in the European Union, while in the US enterprises with less than 500 employees are considered SMEs (OECD 2000). They have different characteristics and management needs and contribute to sustainable development in different ways (Baumann-Pauly et al. 2013). Multinational enterprises (MNEs) are enterprises that operate internationally (see United Nations 1973). Such operations may refer to assets, sales, production, employment, or profits of foreign branches and affiliates. Often, companies that have a primary national orientation are denominated “transnational” or “international” enterprises (for the purpose of this entry, we will refer to MNEs in general). Due to the amount of resources that are needed to operate internationally, MNEs are usually large, measured by both turnover and number of employees.

Introduction The ability of enterprises to contribute to sustainable development is apparent. They are the main instruments to create economic growth and jobs, since they operationalize the value-creating activities in economic systems. Because of that, they are one of the major actors in SDG 8, Decent Jobs and Economic Growth. However, the role of business in society has been often criticized,

Contribution of Enterprises in Achieving the Sustainable Development Goals

with particular emphasis on MNEs, which have often been criticized by environmental or social groups of environmental degradation and labor exploitation based on forum shopping and the promotion of a race-to-the-bottom in global environmental and social legislation (Newell 2001). Even if enterprises are a well-established mechanism to sustain economic growth, the remaining question is, which kind of growth? Economic growth is positively correlated to several indicators of social prosperity, such as access to education, life expectancy, or lower levels of political oppression (DFID 2008). This is the main reason why developing countries often pursue economic growth before other social concerns: without sufficient tax revenue, the budget disallows for addressing other pressing issues such as building infrastructure. The Nobel Laureate Amartya Sen argued that economic development should be considered as a freedom, since economic growth is an end and a means to sustain welfare. This freedom has been denied to a large share of the global population (Sen 2000). However, increases in wealth are also coupled to environmental degradation (UNEP 2014), and disgraces such as the collapse of Rana Plaza (Reinecke and Donaghey 2015) show that the economic wealth brought by enterprises has not always been attached to decent jobs or local development. However, enterprises do learn from these mistakes. For example, the oil sector was one of the pioneers in the implementation of corporate social responsibility policies in the wake of the scandalous oil spills in the 1970s (Frynas 2012). Policy support, citizen demands, NGO lobbying, and enterprises’ new awareness of their potential to contribute environmentally, socially, and economically to sustainable growth are steadily changing the role of business in society. The next section explores this evolution, followed by a section exploring enterprise involvement with the SDGs. Next, the mechanisms of evaluation and reporting of such involvement are outlined. After that, the main differences between SMEs and large enterprises and the consequences of such differences in their involvement with sustainable development are explored, followed by a recollection of the new enterprise models that aim to address social

107

and economic goals. Finally, the entry closes with some notes on the future directions that enterprises research and practice might adopt in their relationship with sustainable development.

Evolution of the Role of Enterprises in Sustainable Development The role of enterprises as actors of sustainable development has gone through a profound evolution from the 1970s to date, exploring different levels of responsibility toward society. The following subsections explore this evolution, providing a historical overview that explains the engrailment of enterprises in the pursue of sustainable development. Traditional View: Compliance and Maximization of Shareholder Value As illustrated by the famous article by Milton Friedman, the traditional understanding of to what extent enterprises should be involved in noneconomic causes is summarized as follows: “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Friedman 1970). Compliance with regulation and maximization of shareholder value were considered the only obligations and purposes of the firm. Therefore, under this view, any issues like the creation of quality jobs (vs. any kind of jobs), responding to the needs or demands of stakeholders different to shareholders or environmental stewardship, are not a concern of enterprises: if the firm is to attend to these issues, it is only because there is a regulation with which they need to comply (e.g., minimum wage, pollution thresholds, etc.). Consequently, under this view, enterprises are merely instruments of the free market, and therefore they are free to maximize profits regardless of moral concerns as long as they keep playing within the rules of the game. This view is very much influenced by liberal economic thinking, which also built on a strict interpretation of US

C

108

Contribution of Enterprises in Achieving the Sustainable Development Goals

corporate law and the obligation it sets on managers and enterprises to “maximize shareholder value.” Although this interpretation evolved over the years, admitting that shareholders’ only interest shall not be short-term profits only (Stout 2012), it has led to the emergence of new enterprise forms under US law (B-corps) with the aim of capturing the twofold (economic and social) purposes of enterprises. Although this stringent understanding of corporate responsibility was more nuanced in social economies (such as most of the European economies), this was the prevalent view until the emergence of corporate social responsibility and corporate citizenship in the 1970s. Corporate Citizenship: Responding Beyond Compliance A new understanding that enterprises had a moral responsibility in addition to their legal and economic responsibilities gave rise to the research and practice of so-called corporate social responsibility (see entry on “▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)”). These new responsibilities are the following: ethical, obligation of the enterprise to act beyond compliance in response to societal demands. and discretional, strictly voluntary contributions to society to respond to social issues while not directly related to their main commercial purpose (e.g., philanthropic contributions) (Carroll 1979). Therefore, enterprises have an ethical responsibility of responsiveness to societal demands, often operationalized as stakeholder management (Freeman 1984). Stakeholder management transforms the purpose of enterprises from “maximizing shareholder value” to “maximizing stakeholder value,” that is, creating value for all the groups and institutions that are somehow affected by enterprises’ activity. This aligns the core activities of the enterprise – economic value creation – and social responsiveness through the integration of social groups in its strategic management. The question about how enterprises – legally or customarily constructed abstract organizations – could have a moral responsibility was raised. This question led to the development of the idea of

corporate citizenship (Moon et al. 2005). It is defined as “the role of the corporation in administering citizenship rights for individuals. Such a definition reframes corporate citizenship away from the notion that the corporation is a citizen in itself (as individuals are) and toward the acknowledgement that the corporation administers certain aspects of citizenship for other constituencies” (Matten and Crane 2005, p. 173). The main argument of corporate citizenship is that enterprises have an important role in society that exceeds their role as economic actors, since they are providers of social rights (e.g., by providing decent working conditions), enablers of civils rights (e.g., promoting nondiscrimination), and a channel of political rights for other stakeholders (e.g., MNEs often provide an institutional background more reliable than public mechanisms of governance in certain countries and support public unrecognized civil rights). Corporate citizenship set the basis for more involvement of enterprises in societal issues, transitioning from responsiveness to society to adopting a proactive role. Proactive Role: Business in Society The turn of the millennium brought new perspectives on the role of enterprises in society. The consolidation of the concept of sustainable development (World Commission on Environment and Development 1987) as a model of economic growth, the ideas distilled from corporate citizenship (Matten and Crane 2005; Moon et al. 2005) and stakeholder management (Freeman 1984) and the issuance of supporting policies such as the SDGs (United Nations 2014) showed an increasing potential of enterprises to actively contribute to sustainability beyond responsiveness to societal demands. The concept of sustainable business management (see entry on “▶ Sustainable Business Strategies”) emerged strongly, aiming to incorporate social and environmental concerns in the core activities of enterprises, rather than understanding it as an additional burden or a response to societal demands to ensure social legitimation. The new objective of enterprises shall be to align their own interests and objectives with those of sustainable

Contribution of Enterprises in Achieving the Sustainable Development Goals

development, hence creating sustainable value (Hart and Milstein 2003; Porter and Kramer 2011). Beyond the understanding of enterprises as economic actors with a social responsibility, the new role for business in society involves enterprises becoming social actors with social, economic, and environmental targets. Enterprises adopt a proactive role in the achievement of SDGs, beyond those directly concerned with economic growth or creation of employment (SDG 8). Under this new paradigm of enterprises, they are active agents in pursuing systemic changes for sustainability (Loorbach et al. 2010). Enterprises can leverage their value-creating activities, such as innovation or their ability to provide sustainable products and services to the market for sustainability purposes. This implies advancing from impact minimization – in response to stakeholder pressure – to the maximization of their positive impact, for its own purpose (Hoffman and Bansal 2012; Adams et al. 2016). Such alignment of strategies involves trade-offs between social, environmental, and economic value but may be helpful in addressing the ongoing question about whether enterprises capture economic rents from addressing social and environmental issues (Wood 2010). Addressing such issues in an integrated way, rather than as an accessory cost to the firm, should provide a competitive advantage (Porter and Kramer 2011), hence tapping on the role of enterprises as agents of economic growth, while reconciling it with its new role of proactive social system builders (Loorbach et al. 2010; Adams et al. 2016).

Enterprise Engagement with the SDGs The new approach of enterprises to their responsibility toward sustainable development, accompanied by ample policy support, has led many enterprises to actively engage with the SDGs, framing their own objectives along the lines of the UN documents. The next subsections explore how companies have adopted a stewardship role toward the SDGs and two institutionalized

109

enterprise networks to address them: the UN Global Compact and the World Business Council for Sustainable Development.

Enterprise Endorsement of the SDGs Enterprises concerned with sustainability have welcomed the SDGs as an instrument to establish goals and measure performance in sustainable development; in fact, the private sector was highly involved in their development (Scheyvens et al. 2016). While the concept of sustainable development has guided management practices for some time (Gladwin et al. 1995), this was highly context-dependent and lacking of orchestrated action. The SDGs are broken down into actual indicators (United Nations 2017) that can guide enterprises in their support for one or several of such targets. Even if no quantifiable indicators have been developed specifically for business, enterprises can adapt these objectives and integrate them in their own key performance indicators, helping to steer business action toward sustainability in the same direction. The cost of realizing the SDGs cannot be matched without the collaboration of enterprises. Not only are enterprises the main instrument of economic growth – with some MNEs having a turnover larger than many countries GDP – it is also the case that their potential cost is so large that business actors need to be included in their development. For instance, materializing just the health-related targets in the SDGs has an estimated cost of US$274–371 billion a year over current spending (Stenberg et al. 2017). However, the realization of the SDGs also taps into new markets and opportunities from which enterprises can profit: enterprise efforts and investments are needed for the achievement of the SDGs, but there are also economic gains to be attained from participation (BSDC 2017). Moreover, taking into consideration the collaborative trends in the economy and the fact that the SDGs themselves promote partnerships as means to tackle them (SDG 17), businesses have embraced the chance to collaborate with policy-makers and other stakeholders in the pursue of sustainability (Scheyvens et al. 2016).

C

110

Contribution of Enterprises in Achieving the Sustainable Development Goals

The UN Global Compact In this spirit of collaboration for sustainability, the Global Compact is a UN-backed initiative for businesses that share certain values to come together in a network (see Global Compact (2018)). These values are summarized in ten universal principles that pivot around four categories: human rights, labor, the environmental protection, and fighting corruption. The Global Compact supports the mainstreaming of these principles around the world while supporting the SDGs (when it was founded, in year 2000, it supported the Millennium Development Goals). It counts over 9500 signatory enterprises in 160 countries, which commit themselves to adhering and promoting the principles through their activities and local networks. The Global Compact is one of the most successful initiatives in attracting the private sector to sustainability goals at the global level. A survey among signatories of the Global Compact shows that they are mostly motivated by ethical concerns, but the opportunity of accessing knowledge about how to implement sustainability strategies is also very relevant (Cetindamar 2007). In fact, although many large companies are part of the grid, the Global Compact is a good learning opportunity for smaller companies, and many report its value to access better networking opportunities (Cetindamar 2007). The institutionalization of the Global Compact is quite unique, since the UN has not traditionally been a particularly business-friendly organization. However, the establishment of the Global Compact helped to appeal enterprises into sustainability action and policy-making (Kell 2005), which was later beneficial for their wider endorsement of the SDGs. To that extent, it is a prime example of global collaboration between enterprises and policy-makers. The World Business Council for Sustainable Development The World Business Council for Sustainable Development (WBCSD) is an earlier initiative of enterprises working together toward sustainability founded in 1992. The WBCSD is a strictly private sector organization, led by CEOs, and counting over 200 members. Unlike the Global Compact,

access to this network is by invitation. Although they share similar goals – achievement of the SDGs – the WBCSD structures sustainability goals around five programs: Cities and Mobility; Energy and Circular Economy; Food, Land and Water; People; and Redefining Value (WBCSD 2018). Dissimilar to the Global Compact, its impact is not based on networking opportunities, since it limits its number of members strictly. Its impact lies mostly on its very influential reports and programs, which help many enterprises to implement sustainability strategies even if they are not members (see, e.g., their report of business sustainability objectives for 2050 WBCSD (2010)). Beyond the fulfillment of the Global Compact’s principles, the WBCSD is guided by concerns that affect enterprises in a more direct way; therefore, its goals are mostly directed at achieving maximum impact through the integration of sustainability in business strategies, voicing businesses in international fora for sustainability, and developing research-based solutions to challenges faced by sustainability-oriented enterprises.

Evaluation and Reporting of Sustainability Performance The challenge of sustainability performance assessment and reporting is, in fact, one that has occupied many scholars and practitioners (see Herzig and Schaltegger (2006)). In contrast with the economic pillar of sustainability, (most of) local or global regulations do not demand the reporting of social and environmental performance of the firm to the same level of detail (Kolk 2003). In the wake of greenwashing (branding a company, product, or service as sustainable while having little to none social or ecological impact), it became evident that for enterprises to act in a sustainable way, a certain degree of accountability was needed. As corporate citizens, enterprises are not only required to act/perform for sustainability but also be able to report transparently to the rest of society of what their sustainability progress was. In the same way that they

Contribution of Enterprises in Achieving the Sustainable Development Goals

reported publicly to the government and their stakeholders about their economic data, they should inform about social and environmental performance to all their stakeholders. This gave rise to a series of reporting practices, mostly from large companies. The resources required to put forward a sustainability report are often too much for SMEs, especially if the costs of auditing are included. In this regard, although sustainability reporting has been generally wellreceived by most stakeholders, some criticisms stand out (see, among others, Kolk (2008) or O’Dwyer and Owen (2005)). First, the format that these reports have generally adopted misses richness of data and can be misleading, since they often highlight objectives over actual performance. Second, they are frequently developed ex post by a CSR department or external consulting service with data collected from other departments. Consequently, the impact of reporting is diminished, since it is not directly ingrained in the enterprises’ core activities. Third, the same consulting services that draft the reports are often responsible for the auditing of the sustainability reports, creating a problem of transparency and accountability that was meant to be solved by the auditing services. Some NGO-backed initiatives emerged to be able to overcome these issues in sustainability reporting through its standardization. Standardization brings about comparability, and therefore better provision of information for stakeholders. One of the most successful endeavors has been the Global Reporting Initiative (GRI), whose framework has become the main benchmark for sustainability reporting (Dingwerth and Eichinger 2010). This framework is based on five elements: the reporting principles, which determine the required contents and the quality of the reporting; the indicators on which enterprises must report; the indicator protocols, which guide enterprises on how to fulfill each indicators requirements; sector supplements; and the application level, which determines to what extent these guidelines have been followed during the drafting of the report (GRI 2006). The GRI reporting guidelines are revised periodically within the elements of this framework.

111

The latest developments have been toward socalled integrated reporting, which merges traditional economic reporting with sustainability reporting, with the aim of increasing the weight of sustainability aspects in the reports for both external and internal stakeholders. The framework was developed by the International Integrated Reporting Council, a multi-stakeholder initiative, and aims to synthesize how enterprises are creating value in the three pillars of sustainability in the same report (IRRC 2013). This kind of reporting has been praised for setting equal importance for the economic, social, and environmental reporting; however, it has also been criticized for watering down social and environmental concerns. These claims are based on the fact that less social and environmental indicators are included in this framework (as compared to GRI’s), making the sustainability reporting superficial. Yet integrated reporting – even if still nascent – is generally regarded as a good practice (Dumay et al. 2016; McNally and Maroun 2018). On the other side of the Integrated Reporting Framework, other initiatives have adopted a one-issue specialization approach. The Carbon Disclosure Project, a non-for-profit consortium of institutional investors, collects greenhouse gas emissions data from companies and has also been able to attract a large number of enterprises. About one fifth of the global greenhouse gas emissions are reported to the Carbon Disclosure Project as of 2018, with the added value that the project publishes both analyzed and raw data for maximum transparency. This shows the value of convergence mechanisms in sustainability reporting (Matisoff et al. 2013) and the active involvement of stakeholders – in this case, institutional investors – to achieve performance progress based on reporting practices (Kim and Lyon 2011).

Asymmetries Between Large, Small, and Microenterprises in Sustainable Development A major issue when enterprises engage with sustainable development is the fact that the crucial differences between large, SMEs, and

C

112

Contribution of Enterprises in Achieving the Sustainable Development Goals

microenterprises are neglected. The size of these companies makes them structurally diverse, and the ways in which these companies make an impact on sustainable development are essentially different. The majority of frameworks for engagement of enterprises in the SDGs, most conceptual developments, and the frameworks for reporting are designed for large enterprises (Mousiolis et al. 2015). While large enterprises make a large contribution to economic growth, SMEs are the backbone of most economies: as an illustration, in the OECD area, SMEs constitute 99% of all enterprises and provide 70% of all jobs and between 50% and 60% of the value added (OECD 2017). Their share of potential economic growth and contributions to sustainable developed is just too large to be overlooked. However, SMEs are often prevented from participating in the networking opportunities provided by platforms acting on the SDGs such as the WBCSD. Although the Global Compact promotes participation of both large enterprises and SMEs, active contributions by SMEs are scarce, since they rarely can pledge the resources – either time or financial resources – to take advantage of these opportunities. SMEs are underrepresented in multi-stakeholder agreements – as are smaller representatives of other stakeholders, such as NGOs – resulting in a vicious circle where lack of resources leads to underrepresentation, neglect of SME needs in the frameworks, and inability to support such frameworks because of non-identification. The reporting initiatives, which are costly activities, do not consider the specific constraints of SMEs, hence limiting their capability to communicate their sustainability progress to their stakeholders through a standardized approach (Bos-Brouwers 2010; Baumann-Pauly et al. 2013). However, institutional and research developments acknowledge the importance of SMEs involvement for SDG 8 and are aiming to provide them with the necessary tool to successfully become agents of sustainable economic growth and creators of decent jobs (see, for an illustration, OECD (2000, 2017); Bos-Brouwers (2010); or Baumann-Pauly et al. (2013)). It must be noted that, despite their difficulty to access global

frameworks of sustainable developments, SMEs are better equipped than larger enterprises for certain challenges: SMEs show higher levels of commitment, more flexible structures and procedures, and higher degrees of external collaboration (Baumann-Pauly et al. 2013). These features increase their ability for the organizational transformation required for becoming actors of sustainability; however, their characteristic constrain them from communication and reporting. Therefore, larger enterprises are better in the external aspects of sustainability management, while SMEs are better at the implementation aspects.

Alternative Enterprise Models Due to the difficulties that traditional forms of enterprises often encounter when it comes to the integration of sustainable development, different organizational forms are being established in practice. While new strategies and business models are being more accommodative of the active role of enterprises in sustainable development, some enterprises have opted for a different legal form of organization that better reflects their intention to tackle economic and social objectives. In this section, two of these alternative enterprise models are examined: cooperatives and community interest companies (CIC). Cooperatives Cooperatives are “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democraticallycontrolled enterprise [. . .] based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity” (ICA 2018). Although they often present hierarchical structures to facilitate the day-to-day management of the company, major decisions are usually taken in assembly by the members that compose the cooperative, which can range from members of a certain community (for instance, the community of a small village that wants to keep a school service in the village) to users of the service provided by the cooperative (as, for instance, parent-cooperatives for schools)

Contribution of Enterprises in Achieving the Sustainable Development Goals

or, as it is most common, workers of the enterprise (following the example, a teacher-cooperative owned school). As illustrated by their definition, cooperatives ingrain certain values beyond their different ownership structure, and to that extent they are different to other figures of workers’ representation in the enterprise such as trade unions or other figures at the national level such as the workforce-owned limited liability company in Spain (“Sociedad de Responsabilidad Limitada Laboral”) or the codetermination committees in Germany (“Mitbestimmung”). They have embedded social interests, normally related to the development of local communities and the creation of maintenance of decent jobs. Hence, there is a particular interest of cooperatives for SDG 8, since its focus on creating equal opportunities and access to quality jobs make them a fit for purpose tool when it comes to promoting well-distributed, decent growth. Cooperatives are often created by small groups that need to strengthen their position over a larger actor in the supply chain, for instance, smallholder cooperatives, which especially in developing countries present a united front toward the distributor (see Bijman et al. 2012). Often, they are also created with the aim of promoting local development through improved innovation of marketing methods that are not available for smallholders, aiming to make local development possible beyond the local production methods. However, although cooperatives often have a local flair, they can grow to become large, multinational enterprises: as an illustration, the Mondragon corporation, one of the largest cooperatives groups, operates in almost 100 countries and has over 80,000 employees as of 2018 – almost half of them concentrated in the region where it’s headquartered, the Basque Country in Spain, where it is the largest business group (Mondragon Corporation, 2018). Community Interest Companies CICs are enterprises that explicitly state both their economic and social functions in their statutes and that are thereby legally obliged (beyond moral responsibilities) to perform

113

activities and to achieve such social goals. This type of companies has different names and legal obligations in different countries (e.g., CICs in the United Kingdom or B-corps – short for benefit corporations – in the United States), but in general, they are regarded and studied hybrid organizations, due to their double mandate. Additional requirements for these hybrid corporations range from measuring performance against social, environmental, and economic indicators to capping the allowed dividends so that profits are reinvested in the community. In any case, hybridity comes with a number of tensions and tradeoffs, to name a few, less interest of traditional investor because of reduced dividends and higher salaries (as compared with nonsocial enterprises) or disagreements between the interest groups represented in the CIC (see Doherty et al. 2014 for a comprehensive review). While there are increasing applications of enterprises to legally constitute in these hybrid legal forms, there is ongoing controversy regarding how the benefit of these organizations is measured and monitored. For instance, it is argued that enterprises may still adhere to such principles without obtaining an additional certification or label and noticing that achieving different sustainability results trying to follow business logics and the self-serving interest of the corporation will yield none to little results – as acknowledged by Gilbert (2018), one of the founders of the B-Corp movement. However, it is apparent that more and more enterprises are becoming interested in these organizational forms, and research on the area is increasing, and due to the novelty of their development, their impact on sustainable development is yet to be determined.

Future Directions The current trends in the field on enterprises in relation to the SDGs suggest that the primary concern is to further integrate these targets into the core activities of firms, and how this integration changes the structure of the firm. Hart (2012) refers to the third-generation corporation, an enterprise that, unlike the industrial corporation,

C

114

Contribution of Enterprises in Achieving the Sustainable Development Goals

is disruptive, distributed, embedded in its community and building on local knowledge, intrinsic (motivated by meaning and purpose), and stakeholder inclusive. This understanding shows a new understanding of enterprises well beyond responsiveness to society, but rather as an organization that has an economic, environmental, and social purpose, breaking away from the traditional defining factor of enterprises as organizations: their commercial purpose. In this regard, it is notable that several avenues of research are opening on this basis of this new understanding of what an enterprise is. The research on social enterprises – enterprises that see their commercial purpose as a means to achieve their social purpose – is flourishing (see the entries on “▶ Social Business in the Context of Sustainable Development” or “▶ Social Entrepreneurship” in this title). Hybrid organizations, those who have this double or triple sustainability purpose as main goals, are emerging strongly, with the development of a specific legal for in the United States – the B-corps – to allow for the inclusion of goals other than the commercial already in the statutes of the enterprise. Therefore, the future of enterprises may provide with new defining characteristics that make them better suited for their role as agents of sustainable development.

Cross-References ▶ Competencies for Sustainable Entrepreneurship ▶ Conceptualizing Green Economies: Origins, Evolution, and Imperatives ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs) ▶ Decoupling of Economic Growth from Environmental Degradation ▶ Green Business in the Context of the Sustainable Development ▶ Social Business in the Context of Sustainable Development ▶ Social Entrepreneurship ▶ Socio-economic Impact Measurement and the World Business Council for Sustainable Development (WBCSD)

▶ Sustainable Business Models ▶ Sustainable Business Strategies ▶ Typologies of Sustainable Business

References Adams R, Jeanrenaud S, Bessant J et al (2016) Sustainability-oriented innovation: a systematic review. Int J Manag Rev 18:180–205. https://doi.org/10.1111/ ijmr.12068 Baumann-Pauly D, Wickert C, Spence LJ, Scherer AG (2013) Organizing corporate social responsibility in small and large firms: size matters. J Bus Ethics 115: 693–705. https://doi.org/10.1007/s10551-013-1827-7 Bijman J, Iliopoulos C, Poppe KJ, Gijselinckx C, Hagedorn K, Hanisch M, . . . van der Sangen G (2012) Support for farmers’ cooperatives. Wageningen UR, Wageningen Bos-Brouwers HEJ (2010) Corporate sustainability and innovation in SMEs: evidence of themes and activities in practice. Bus Strateg Environ 19:417–435. https:// doi.org/10.1002/bse.652. Wiley BSDC (2017) Better business better world. Business & Sustainable Development Commission, London Carroll AB (1979) A three-dimensional conceptual model of corporate performance. Acad Manag Rev 4: 497–505. https://doi.org/10.5465/AMR.1979.4498 296 Cetindamar D (2007) Corporate social responsibility practices and environmentally responsible behavior: the case of the United Nations global compact. J Bus Ethics 76:163–176. https://doi.org/10.1007/s10551-006-92 65-4 DFID (2008) Growth – building jobs and prosperity in developing countries. Department of International Development of the UK, London Dingwerth K, Eichinger M (2010) Tamed transparency: how information disclosure under the global reporting initiative fails to empower. Glob Environ Polit 10:74– 96. https://doi.org/10.1162/GLEP_a_00015 Doherty B, Haugh H, Lyon F (2014) Social enterprises as hybrid organizations: a review and research agenda. Int J Manag Rev 16:417–436. https://doi.org/10.1111/ ijmr.12028 Dumay J, Bernardi C, Guthrie J, Demartini P (2016) Integrated reporting: a structured literature review. Account Forum 40:166–185. https://doi.org/10.1016/j.accfor. 2016.06.001 Freeman RE (1984) Strategic management: a stakeholder approach. Cambridge University Press, Cambridge Friedman M (1970) The social responsibility of business is to make profit. The New York Times Magazine Frynas J (2012) Corporate social responsibility or government regulation? Evidence on oil spill prevention. Ecol Soc 17. https://doi.org/10.5751/ES-05073-170404 Gilbert JC (2018) Are B corps an elite charade for changing the world? Forbes, 30 August 2018. https://www. forbes.com/sites/jaycoengilbert/2018/08/30/are-b-

Contribution of Enterprises in Achieving the Sustainable Development Goals corps-an-elite-charade-for-changing-the-world-part-1/. Accessed 29 Nov 2018 Gladwin TN, Kennelly JJ, Krause T-S (1995) Shifting paradigms for sustainable development: implications for management theory and research. Acad Manag Rev 20:874–907. https://doi.org/10.2307/258959 Global Compact (2018) What is the UN global compact | UN global compact. https://www.unglobalcompact. org/what-is-gc. Accessed 19 Oct 2018 GRI (2006) Sustainability reporting guidelines. Global Reporting Initiative, Amsterdam Hart S (2012) The third-generation corporation. In: Oxford handbook of business and the environment, 1st edn. Oxford University Press, New York, pp 647–656 Hart SL, Milstein MB (2003) Creating sustainable value. Acad Manag Exec 17:56–67. https://doi.org/10.5465/ AME.2003.10025194 Herzig C, Schaltegger S (2006) Corporate sustainability reporting. An overview. In: Schaltegger S, Bennett M, Burritt R (eds) Sustainability accounting and reporting. Springer Netherlands, Dordrecht, pp 301–324 Hoffman AJ, Bansal P (2012) Retrospective, prospective and perspective: an introduction to the Oxford handbook of business and the natural environment. In: Hoffman AJ, Bansal P (eds) Oxford handbook of business and the environment. Oxford University Press, Oxford ICA (2018) Cooperative identity, values & principles. [ONLINE]. https://www.ica.coop/en/cooperatives/ cooperative-identity#definition-of-a-cooperative. Accessed 29 Nov 2018 IRRC (2013) The international integrated reporting framework. International Integrated Reporting Council Kell G (2005) The global compact selected experiences and reflections. J Bus Ethics 59:69–79. https://doi.org/ 10.1007/s10551-005-3413-0 Kim E-H, Lyon T (2011) When does institutional investor activism increase shareholder value? The carbon disclosure project. BE J Econ Anal Policy 11. https://doi. org/10.2202/1935-1682.2676 Kolk A (2003) Trends in sustainability reporting by the Fortune Global 250. Bus Strateg Environ 12:279–291. https://doi.org/10.1002/bse.370 Kolk A (2008) Sustainability, accountability and corporate governance: exploring multinationals’ reporting practices. Bus Strateg Environ 17:1–15. https://doi.org/ 10.1002/bse.511 Loorbach D, van Bakel JC, Whiteman G, Rotmans J (2010) Business strategies for transitions towards sustainable systems. Bus Strateg Environ 19:133–146. https://doi.org/10.1002/bse.645 Matisoff DC, Noonan DS, O’Brien JJ (2013) Convergence in environmental reporting: assessing the carbon disclosure project. Bus Strateg Environ 22:285–305. https://doi.org/10.1002/bse.1741 Matten D, Crane A (2005) Corporate citizenship: toward an extended theoretical conceptualization. Acad Manag Rev 30:166–179 McNally M-A, Maroun W (2018) It is not always bad news: illustrating the potential of integrated reporting

115

using a case study in the eco-tourism industry. Account Audit Account J 31:1319–1348. https://doi.org/ 10.1108/AAAJ-05-2016-2577 Mondragon Corporation (2018) Highlights. [ONLINE]. https://www.mondragon-corporation.com/en/about-us/ economic-and-financial-indicators/highlights/. Accessed 29 Nov 2018 Moon J, Crane A, Matten D (2005) Can corporations be citizens? Corporate citizenship as a metephor for business participation in society. Bus Ethics Q 15:429–453 Mousiolis DT, Zaridis AD, Karamanis K, Rontogianni A (2015) Corporate social responsibility in SMEs and MNEs. The different strategic decision making. Procedia – Soc Behav Sci 175:579–583. https://doi.org/ 10.1016/j.sbspro.2015.01.1240 Newell P (2001) Managing multinationals: the governance of investment for the environment. J Int Dev 13:907– 919. https://doi.org/10.1002/jid.832 O’Dwyer B, Owen DL (2005) Assurance statement practice in environmental, social and sustainability reporting: a critical evaluation. Br Account Rev 37:205–229. https://doi.org/10.1016/j.bar.2005.01.005 OECD (2000) Small and medium-sized enterprises: local strength, global reach. Organisation for Economic Cooperation and Development, Paris OECD (2017) Enhancing the contributions of SMEs in a global and digitalised economy. OECD, Paris Porter M, Kramer M (2011) Creating shared value. Harv Bus Rev 89:62 Reinecke J, Donaghey J (2015) After Rana plaza: building coalitional power for labour rights between unions and (consumption-based) social movement organisations. Organization 22:720–740 Scheyvens R, Banks G, Hughes E (2016) The private sector and the SDGs: the need to move beyond ‘business as usual’. Sustain Dev 24:371–382. https://doi. org/10.1002/sd.1623 Sen AK (2000) Development as freedom, Edición: Reprint. Anchor, New York Stenberg K, Hanssen O, Edejer TT-T et al (2017) Financing transformative health systems towards achievement of the health sustainable development goals: a model for projected resource needs in 67 low-income and middleincome countries. Lancet Glob Health 5:e875–e887. https://doi.org/10.1016/S2214-109X(17)30263-2 Stout L (2012) The shareholder value myth: how putting shareholders first harms investors, corporations, and the public, 1st edn. Berrett-Koehler Publishers, San Francisco UNEP (2014) Decoupling 2: technologies, opportunities and policy options. A report of the working group on decoupling to the international resource panel. von Weizsäcker EU, de Larderel J, Hargroves K, Hudson C, Smith M, Rodrigues M. UNEP, Paris United Nations (1973) Multinational corporations and world development. Department of Economic and Social Affairs, New York United Nations (2017) Global indicator framework for the sustainable development goals and targets of the 2030 agenda for sustainable development

C

116 United Nations GA (2014) Report of the open working group on sustainable development goals established pursuant to General Assembly resolution 66/288 WBCSD (2018) World Business Council for sustainable development. World Bus Council Sustain Dev. https:// www.wbcsd.org/. Accessed 19 Oct 2018 WBCSD WBC for SD (2010) Vision 2050: the new agenda for business. World Business Council for Sustainable Development, Conches, Geneva Wood DJ (2010) Measuring corporate social performance: a review. Int J Manag Rev 12:50–84. https://doi.org/ 10.1111/j.1468-2370.2009.00274.x World Commission on Environment and Development W (1987) Our common future. Oxford University Press/ United Nations, New York

Corporate Accountability

Corporate Social Performance ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

Corporate Social Responsibility and the Sustainable Development Goals (SDGs) Ingrid Molderez KU Leuven, Brussels, Belgium

Corporate Accountability ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

Corporate Citizenship ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

Corporate Regional Engagement ▶ Corporate Spatial Responsibility and Sustainable Development Goals

Corporate Regional Responsibility ▶ Corporate Spatial Responsibility and Sustainable Development Goals

Corporate Responsibility ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs) ▶ Sustainable Business Strategies

Synonyms Corporate accountability; Corporate citizenship; Corporate responsibility; Corporate social performance; Corporate social responsiveness; Corporate stakeholder responsibility; Corporate sustainability responsibility; Corporate sustainability; Enterprise social responsibility; Global governance; Responsible business conduct; Sustainable business; Triple bottom line

Definitions Corporate Social Responsibility is the voluntary act of companies to integrate social and environmental interests into their business approaches, to contribute to sustainable development and to be accountable for their impact on the environment and society.

About Corporate Social Responsibility and the SDGs The Problematic Nature of Defining Corporate Social Responsibility Although not all the synonyms in the list mean exactly the same thing, they already show the diversity associated with Corporate Social Responsibility (CSR). Defining CSR is not an

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

easy task because most agree that there is no single established definition (Schwartz and Saiia 2012; Sheehy 2015; Bice 2017; Seifi and Crowther 2018). Being a contested, complex, dynamic concept (Matten and Moon 2008), this comes as no surprise. Kakabadse et al. (2005) divided the existing definitions on CSR according to their origin, i.e., academic or originating from business and civil society representatives. But they also admitted that the list was more an overview of the expectations of society concerning the responsibilities of businesses instead of an accepted definition. They listed different related concepts, such as sustainable development, business ethics, business in society, corporate citizenship, corporate governance that added to the confusion of knowing what CSR is about. All these concepts are illustrative of the evolution of CSR. Caroll and Shabana (2010) refer to the nonprofit organization CSR International that even made a distinction between “old CSR” or CSR 1.0, i.e., Corporate Social Responsibility, and “new CSR” or CSR 2.0, i.e., Corporate Sustainability and Responsibility. Responsible Business Conduct (RBC), a concept used by the OECD (2011) in its Policy Framework for Investment, can be an example of the latter. RBC is described as follows: “complying with laws, such as those on respecting human rights, environmental protection, labor relations, and financial accountability, even where these are poorly enforced. It also involves responding to societal expectations communicated by channels other than the law, e.g., inter-governmental organizations, within the workplace, by local communities and trade unions, or via the press. Private voluntary initiatives addressing this latter aspect of RBC are often referred to as corporate social responsibility (CSR).” Within a European context, the European Commission’s (EC) (2011: 6) definition of CSR is often used: “the responsibility of enterprises for their impacts on society.” The EC makes the distinction between large organizations that “should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of maximizing the

117

creation of shared value for their owners/shareholders and for their other stakeholders and society at large and of identifying, preventing and mitigating their possible adverse impacts.” For small organizations, this process can be informal and intuitive. Since Wood’s (1991: 695) article on corporate social performance, the basic idea of CSR has not changed: “. . . business and society are interwoven rather than distinct entities; therefore, society has certain expectations for appropriate business behaviour and outcome.” The problem with defining CSR, despite the ubiquity of the concept, comes as no surprise according to Sheehy (2015). He argues that defining CSR is complex and complicated. He wonders whose views will prevail when harm is caused, whether all types and degrees of harm should be addressed, and which party should be responsible. However, a definition is very important because without one “no measure of efficacy is meaningful . . .” and one “. . . cannot accuse or defend claims against accusations of greenwash” (Sheehy 2015: 632). He opposes a consensus definition or common usage because of “various political agendas and disciplinary siloes” (Sheehy 2015: 636). Based on a philosophical approach, an “intensional definition” for CSR is suggested: “. . . a socio-political movement which generates private self-regulatory initiatives, incorporating public and private international law norms seeking to ameliorate and mitigate the social harms of, and to promote public goods by, industrial organisations,” shortened by: “international private selfregulation” (Sheehy 2015: 639). Social should be interpreted in a broad way as societal, i.e., inclusive of environmental aspects. The four-part definition of CSR by Archie Carroll, firstly published in 1979 and later selected in his article on the Business Case for Corporate Social Responsibility (Caroll and Shabana 2010: 89), i.e., “The social responsibility of businesses encompasses the economic, legal, ethical and discretionary (later referred to as philanthropic) expectations that society has of organisations at a given point in time,” could be seen more as “behavior” than as a phenomenon following Sheehy’s (2015) arguments. The abundance of definitions might be related to the diversity of theories and related approaches that exist. Crane et al. (2008) suggest

C

118

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

understanding CSR as a field of scholarship instead of as a concept, construct, or theory. This explains the diversity in interpretations, ideological positions, and approaches. Likewise, CSR cannot be attributed to just one discipline. It is fueled by a wide range of disciplines directly related to the microlevel of businesses, such as management, strategy, marketing, accounting, operations management, organizational behavior, law, economics, or to a rather macro level, such as political science, development studies, geography, sociology, history. Nevertheless, some theoretical perspectives have been rarely discussed in CSR literature according to Grosser (2016), such as feminist theories (Grosser and Moon 2019). And despite the importance of stakeholder management theory in relation to CSR, CSR practices fail to “incorporate the voices and concerns of poorer and traditionally marginalized groups and stakeholders” (Grosser 2016: 66). This relates to Banerjee’s (2008) stipulation that the discourse of social responsibility is defined by narrow business interest and not by societal interests. This narrow view challenges the urgent call of the United Nations for action to achieve the Sustainable Development Goals. Notwithstanding progress, many areas need urgent collective attention (UN 2019). Garriga and Melé (2004) took the initiative in classifying CSR theories into four groups. The instrumental theories focus on wealth creation and see CSR as an instrument to create profits. Political theories emphasize the social power of a corporation that makes social activities part of a business. This is also known as “the iron law of responsibility” (Davis 1967, quoted by Garriga and Melé 2004: 56) and the implicit social contract between business and society. Integrative theories focus on social demands and how businesses integrate them. Finally, within ethical theories, CSR is seen as an obligation. These four groups fit into Lee’s (2008) evolutionary path of theories on CSR, i.e., from explicitly normative and ethics oriented to implicitly normative and performance-oriented. It is not always easy to put every CSR-approach into one specific category and aspects of profits, political performance, social demands, and ethical values might be

present in an explicit or implicit way. Garriga and Melé (2004) therefore suggest that the development of a new theory integrates the four dimensions. Since the publication of ISO 26000 in 2010, the international guideline on social responsibility, one could argue that there is a consensus definition. This guideline came into existence after extensive consultation processes in a large working group of about 500 experts. Representatives from governments, NGOs, industry, consumer groups, and labor organizations around the world developed the guideline. After 5 years of extensive debate, the guideline was published and included a definition of social responsibility (ISO 2010: 6): “The essential characteristic of social responsibility is the willingness of an organisation to incorporate social and environmental considerations into its decision-making and be accountable for the impacts of its decisions and activities on society and the environment. This implies both transparent and ethical behaviour that contributes to sustainable development, takes into account the interests of stakeholders, is in compliance with applicable law and consistent with international norms of behaviour, and is integrated throughout the organisation and practiced in its relationships.” Being acknowledged by this huge number of specialists gives the definition credibility. “Corporate” has been omitted deliberately to stress that every type of organization, from profit to nonprofit, has a contribution to make. The length of the definition of CSR in ISO 26000 invites a critical examination. The definition of CSR is “out of the ordinary” for two reasons (Moratis 2016). First, by emphasizing ethics and norms it returns to morality. Second, it has a few shortcomings. It differs from mainstream triple bottom line thinking because there is neither explicit reference to profit nor to prosperity. And there is no explicit mention of going beyond law, which is seen as the main characteristic of CSR, i.e., doing more than just obeying the law. However, according to Sheehy (2015) beyond compliance is problematic because depending on the severity of the law, one day an organization can be beyond compliance and the

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

next day, when the law is changed, below compliance. Since the announcement of the Sustainable Development Goals (SDGs) in 2015 (UN 2015), organizations have a clearer view of what their contribution to sustainable development can be. SDGs help to operationalize CSR (Nurunnabi et al. 2019). Although private companies are embracing SDGs, there are still comments to make on the role the private sector can play as an active development agent mainly because businesses remain focused on their core business objectives which is making profits (Scheyvens et al. 2016). They will contribute to the SDGs when it corresponds with their economic bottom line and this is not always in line with what can be expected from an agent concerned about development. Sustainability as a Guidance for CSR Despite all the differences, there is a consensus about the basic idea that “business corporations have an obligation for social betterment” (Geva’s 2008: 1). According to Seifi and Crowther (2018: 2), all the definitions of CSR have a common ground: “. . . a concern with more than profitability and return to shareholders.” They argue that within corporations one is not led by a definition, but by real issues that matter most at a particular time, such as sustainability, corporate governance, relationships with the supply chain and with stakeholder communities. Therefore, their focus is on how corporations are practicing social responsibility. In relation to sustainability, two contrasting views and one in-between these two exist (Sidiropoulos 2014). In a “weak” view of sustainability, a functionalist approach prevails, i.e., the organization optimizes its processes to “achieve relatively easy gains.” It is also known as “doing things better,” but there is no reflection about the thing in itself. A car remains a car, although it might have a soot filter. A strong view of sustainability gives primacy to the biosphere and asks for a paradigmatic change and to “see things differently.” In between those views, there is room for reflection and recognition that the dominant paradigm of the supremacy of the economic system

119

has reached its limits. Reflection can lead to a change, but not necessarily. The emphasis is on “doing better things,” but social and ecological systems are still subject to capitalist market systems (Kumi et al. 2014). Kumi et al. (2014) therefore ask for a new approach, i.e., going beyond the recognition of the interdependency among social, ecological, and economic goals and putting equity and unfavorable power relations in the foreground. A paradigmatic change often refers to a holistic and systemic view of challenges related to sustainable development. The need for a critical examination of the dominant economic framework is often absent. Kumi et al. (2014: 540) argue for the relevance of this because “neoliberal-oriented policies such as minimalist state interventions and privatization have invariably had adverse impacts on the environment and social development.” The many studies they are referring to, such as firewood certification being beneficial for the environment, but unequally sharing the benefits of it with the poor, emphasize the need to give voice to poor people. The current concern for sustainability is related to the general acceptance that global warming is taken place and that its effects cannot be avoided (Seifi and Crowther 2018). These issues have a negative impact on the existence of an organization if the organization does not change. Its transition is externally triggered. This is a very functional perspective giving priority to the economic system. One can also value the ecosystem because of the ecosystem itself. This would be another way of reconsidering CSR. CSR is often interpreted from a neoliberal point of view, i.e., profit-maximization, which comes into conflict with real efforts at taking care. Rabello et al.’s (2018) suggestion of rethinking CSR offers a way out of the dichotomy between profit and care. Different economic approaches that now fall outside neoliberal thinking should be included, although a market-demand paradigm still dominates how we think about economic systems. Think of the commodification of people and planet. Putting a monetary value on a forest is a typical example, but it is not a universal thought. Other approaches are found in neo-communitarianism (Rabello et al. 2018, referring to Tam

C

120

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

1998), indigenous economies (Kuokkanen 2011), and Buddhist economics (Welford 2007). Systems thinking is already present in these other economies. Companies are not separated systems but are part of the community. They do not interact with the stakeholders they select but are stakeholders themselves. With a systems perspective (Werhane 2008) or a societal triangulation approach (Van Tulder and Pfisterer 2013), the issue is put at the center and all the others, including SMEs and MNCs, are stakeholders trying to come up with a collaborative vision on the issue at stake. This might shed another light on CSRresearch that focuses too much on MNCs and sees SMEs mainly as a supplier instead of as an equal actor. The boundaries between an organization and its environment are then no longer a splitting force, but a binding one, perceiving contacts as a possibility of taking care of the other (Molderez 2003; Molderez and Ceulemans 2018; Spence 2016). Despite the fact that more and more organizations are writing about their societal responsibilities, the concept of CSR is losing popularity in business cycles. CSR in itself is already valueladen because “responsibilities” do not easily fit with the free market. But free does not mean without any limits. Heidegger (in Being and Time, referred to by Steiner 1992: 100–101) makes the distinction between free from, i.e., without any constraints and free for, i.e., the capability of taking care. Responsibility relates to what should be done and not to what you would like to do. The principles of social responsibility according to ISO 26000, i.e., accountability, transparency, ethical behavior, respect for stakeholder interests, respect for the rule of law, and respect for international norms of behavior, are also still part of a framework of what ought to be done. It therefore comes as no surprise that companies feel better with the concept “creating shared value” (Porter and Kramer 2011) because it refers to positive aspects, being capable of making a change, having a positive impact on society. The Sustainable Development Goals (SDGs) have given an extra boost for organizations to make a change. The SDGs are more visible and with their straightforward symbolic icons offer an easy path

to follow. According to research by Sustainalize and Tilburg University (Van Tilburg and Zeeuw 2018), analyzing how big Dutch companies are integrating SDGs into their business strategy, the 17 SDGs have provided a common language for communicating about sustainable challenges. Nevertheless, there are still too few organizations that perceive the SDGs as holistic and as an inspiration for new policy. The following sections elaborate on the link between SDGs and the different concepts related to CSR aiming to reflect on the boundaries of an organization and emphasizing that an organization can neither be managed as an economic system in isolation from its environment nor as one that subordinates all other systems on which it depends like the ecological and social system. Standards for CSR Bijlmakers and Calster (2015) stress an important aspect of CSR. Because of the lack of international human rights regulations, CSR acts as an instrument of global human rights governance. Human rights are an integral part of CSR, as is shown by the existence of different standards for CSR. As a consequence, the responsibility to respect human rights exists, “regardless of states’ legal human rights frameworks and jurisdiction” (Bijlmakers and Calster 2015: 125). Governance then comes instead of governments only. Several nonbinding codes of conduct and frameworks exist, such as the OECD Guidelines on Multinational Enterprises, the United Nations Global Compact, the United Nations guiding principles on business and human rights, the International Labour Organisation Tripartite Declaration of Principles Concerning Multinational Enterprises, and the UN 2030 Agenda for Sustainable Development. Because of the lack of coercion, a lot of frameworks include the importance of transparency and openness. By being transparent, organizations are able to show their commitment towards the community they are operating in and in the end nonvoluntary schemes imply coercion. The existence of external rating schemes is also effective. Not being on the list or no longer being on the list has an impact on how investors are perceiving these organizations. However, these

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

so-called soft laws and voluntary initiatives are often not sufficient because not every organization is vulnerable to investor pressure and rankings. As a consequence, governments have to take responsibility and enforce regulation such as the California Transparency in Supply Chain Act (2010), the UK Modern Slavery Act (2015), the French Corporate Duty of Vigilance law adopted in 2017, and the Non-Financial Reporting Directive of the EU from 2018 onwards. ISO 26000 is the first global effort of public and private organizations to agree on how social responsibility could be defined and which core subjects should be addressed (Hemphill 2013). These cover the most likely economic, environmental, and social impact an organization can have, i.e., organizational governance, human rights, labor practice, the environment, fair operation practices, consumer issues, and community involvement and development. It was meant as practical guidance to any organization, profit or nonprofit. The list of recommendations aligned well with international norms such as the United Nations Universal Declaration of Human Rights and the conventions of the International Labour Organisation. ISO 26000 offers guidance through recommendations. The International Organization for Standardization (ISO) makes a distinction between “should” for the guidance and “shall” in order to be a certified international standard (Söderberg n.d.). ISO 26000 was not developed as an ISO management system standard, which explains why it is not possible to get a certification. It cannot be internationally certified because it is not connected to an international accreditation scheme. However, it is possible that national or regional certification schemes verify compliance against local standards inspired by ISO 26000, like in the Netherlands. The CSR Performance Ladder has been applied there since 2010 and has been internationally recognized since 2015. It is inspired by international standards, such as ISO 26000, ISO 9001:2015, AA1000, and the Global Reporting Initiative (GRI). Several classification systems for CSR standards exist. The one developed by the International Organisation of Francophonie (OIF) in 2007 uses six categories:

121

legislation (e.g., social clauses in procurements), methodology tools (e.g., life-cycle assessment), reference documents (e.g., ISO 26000), codes of conduct (e.g., UN Global Compact), labels, and sustainable stock indices (Delchet-Cochet and Vo 2013: 138). A CSR standard is “the wide set of national and international standards aimed at advancing the social, ethical, and environmental performance of organizations” (De Colle et al. 2014: 177). From the nine CSR standards de Colle et al. (2014) included in their research, only ISO 14001, ISO 9000, and SA 8000 dispose of a certification system. Ethical Trading Initiative, UN Global Compact, Responsible Care, GRI guidelines, AA 1000, and ISO 26000 lack certification. The researchers gave a comprehensive overview of the good aspects of CSR standards, such as promoting continuous improvement, facilitating stakeholder engagement, enhancing corporate reputation, and the bad aspects, among other things introducing extra costs, lack of enforcement, and failure to drive systemic change. Being a comprehensive standard for every organization worldwide involves shortcomings, or challenges to say the least. Hemphill (2013) lists three for ISO 26000. First, the absence of a certification system limits the standard to an internal guidance document for organizations. Second, it cannot be thoroughly evaluated because the standard is not meant for certification purposes. Third, it does not take into account specific contexts, such as small and medium sized enterprises. Lacking an internationally recognized certification process entails that it is difficult to assess its popularity by quantifying the number of organizations that apply ISO 26000. In contrast to GRI or Global Compact, two other non-ISO standards, there is no list available and one has to set up research to find out about how ISO 26000 is acting as a guide to examine the social responsibilities of organizations. This can explain the low number of academic articles, the one by Avila et al. (2013) about their analysis of social responsibility initiatives using ISO 26000 in Brazil being one of the exceptions, in addition to the study of the relevance of ISO 26000 to the Hong Kong construction industry (Barnes and Croker 2013) and to the

C

122

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

forest industry (Toppinen et al. 2015). Frontrunners in the forest industry do not attach a lot of value to the standard because they see their processes already in line with sustainability and they lack specific issues that are relevant for this sector (Toppinen et al. 2015). Conforming to Bice’s (2017) argument of the four key social mechanisms that institutionalize CSR, ISO 26000 lacks “coercion.” It is also not yet the dominant “discourse” which prevents “mimesis” although there is already a lot of “normative learning,” like training programs on how to apply the norm. ISO 26000 was developed before the SDGs were established in 2015, but the seven core subjects and 37 issues of social responsibility contribute to the SDGs (ISO 2016). This does not come as a surprise because the aim of the ISO 26000 is to contribute to sustainable development and the 17 SDGs are a way of putting that into practice. ISO 26000 is a complementary tool to contribute to the SDGs. Nevertheless, there is no framework yet linking the SDGs to the main principles and core subjects of ISO 26000. ISO (2016) only gives a few examples, such as the link between labor practices and SDG 1, No poverty, or between human rights and SDG 3, Good health and well-being. There is still a need to make all the links more explicit. Link between the First Interpretations of CSR and the SDGs One did not need to wait for ISO 26000 to come up with corporate social responsibilities. Most of the scholars (Carroll 1999, 2008, 2016; Caroll and Shabana 2010; Matten and Moon 2008; Kakabadse et al. 2005; Lee and Carroll 2011) date modern CSR back to the 1950’s, notwithstanding the existence of literature in the 1930s and 1940s. Examples can be found in Carroll (1999), i.e., “The Functions of the Executive” by Chester Barnard (1938) or “Measurement of Social Performance of Business” by Theodore Kreps (1940). However, the conviction that businesses have responsibilities to society beyond profit has been around for centuries. The historical link with CSR can be found in social entrepreneurship that dates back to the period of Industrial

Revolution. Social enterprises are self-sufficient, market oriented, and based on fulfilling social goals (Nicholls 2006). CSR as an Anglo-Saxon concept originated in philanthropy and this can explain the differences in interpretations between the United States and Europe. Although often linked, CSR is neither the same as philanthropy or charity (Kakabadse et al. 2005) nor the same as Porter and Kramer’s (2002) concept of strategic philanthropy. Philanthropy is about giving something back to the community, but that does not imply that a broader integrated strategy has been implemented to assess and/or to improve the performance towards society (Kakabadse et al. 2005). The confusion can be explained by the first concerns of business men for the welfare of their workers (Rabello et al. 2018; Molderez and Lefebvre 2009). Not only were houses built, but also facilities for recreation, shops, hospitals, and schools. One could argue that these entrepreneurs only did this out of selfinterest or paternalistic concern. But these entrepreneurs were significantly different from other entrepreneurs of that time. They felt committed to activities on the boundary of work. Although a school, theater, or playground was not part of a typical job, it made the job more pleasant. What is interesting about these entrepreneurs is that they expanded the boundary of their organization to include a commitment towards the community. Today this includes the ecological system. Kakabadse et al. (2005: 280), among others, refer to Bowen (1953) and his Social responsibilities of the businessman as one of the first authors who extended the responsibilities of businessmen to society, i.e., “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.” Bowen’s (1953) definition of social responsibilities hints at the diversity of definitions because not one society is the same. Contextualization, being one of the core concepts of CSR (Kakabadse et al. 2005; Matten and Moon 2008), explains the difference of social responsibilities among countries. Nevertheless, there is no such thing as one capitalist system and Matten and Moon (2008) rightly distinguish between the

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

liberal market and coordinated market economies and their effect on different CSR systems. Institutional factors, such as political, financial, education, labor, and cultural systems, are so specific that they define the nature of the firm, the organization of market processes and the coordination and control system and thus why and how CSR varies among different countries. Matten and Moon (2008) give many examples among which workers’ rights is a well-known one. While membership in a health insurance plan is mandatory for every citizen in many European countries, this does not exist in the United States. Hence, the initiative of many US companies to voluntarily provide health insurance systems for their employees. In his pyramid of responsibilities, Archie Carroll (1991) distinguishes four different responsibilities. According to this conceptualization, it is “required” for an organization to be profitable and to obey the law, “expected” to be ethical and “desired” to be a good corporate citizen. The economic responsibilities form the basis, followed by the legal, ethical, and philanthropic responsibilities. The last layer was in the beginning also labeled “discretionary responsibilities.” Although Carroll emphasized that the four responsibilities coexist, he did not stress the links between the four in his 1991 article. An alternative approach, i.e., a Venn diagram, was suggested by Schwartz and Carroll (2003) because of some critical comments and limitations. Only three responsibilities were withheld: economic, legal, and ethical. Given the different motivations for philanthropy, either for ethical reasons or for economic motives, such as in the case of strategic giving, this category was attached to either the ethical or the economic domain. In their Venn diagram, a hierarchy of domains is avoided and overlaps are included, despite the fact that options are still open for pure domains. Carroll (1991, 2016) discusses the nature of the responsibilities, but avoids the question of how these are integrated into the organization. As it becomes clear in ISO 26000, integration into the entire organization is necessary. Making a lot of money and then being a “good corporate citizen” by contributing “resources to the community” is a

123

bit contradictory and even close to greenwashing. Nevertheless, these responsibilities go much further than Friedman’s (1962: 133) narrow view of responsibilities: “. . . there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits as long as it stays within the rules of the game, which is to say, engages in an open and free competition without deception or fraud.” But Friedman did not question the source of the profits and whether the full cost involved in doing business was taken into account. Schwartz and Saiia (2012) classify Friedman’s view as the ultimate example of a narrow version of CSR although there have always been critical writers, like Theodore Levitt who wrote in 1958 about “The dangers of social responsibility” (Carroll 2016). But relying on Alter’s (2003) hybrid spectrum, there is no combination of social and business interests and companies following Friedman are just examples of “traditional for profit” and not of “corporations practicing social responsibility” or “socially responsible businesses.” However, this is still a dominant view of the rationale behind running a business. The SDGs illustrate this perspective. In a survey setup in 10 economic sectors asking to rank the five SDGs where their business will have the greatest impact, all, except the chemical industry, included SDG 8, Decent Work and Economic Growth (PwC 2015). This effort is not so big since SDG 8 fits within the economic bottom line of a company. John Elkington (1999) coined the term triple bottom line (TBL) in 1994. The triple bottom line is a kind of “sustainability framework that examines a company’s social, environmental, and economic impact” (Elkington 2018). Elkington (2018) did not design TBL just for accounting purposes, although it is often used like that. He wanted to create a systemic change and deep reflection about capitalism, but by the very fact of using “bottom lines” he created an accountant’s mentality. It is often forgotten how Elkington (1999) perceived these bottom lines, i.e., as continental plates, moving independently, but often also touching and clashing. According to him, the ultimate bottom line was the health of the global ecosystem. And this is also how the SDGs are

C

124

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

conceptualized by Röckstrom and Sukhdev (2016) from the Stockholm Resilience Centre: not as a list of 17 goals, but as an allocation of the SDGs to economy, society, and biosphere where economy is part of society and society ultimately bounded by the biosphere. All new frameworks should be valued against a “radical intent”, i.e., stopping overshooting the planetary boundaries (Elkington 2018). He earlier launched the term “zeronauts” to describe innovative leaders that take responsibility for achieving economic growth that results in zero negative social and environmental impact. This term illustrates that Elkington did not mean the triple bottom line to be “a balancing act, adopting a trade-off mentality” (Elkington 2018). This would also be a naïve interpretation of the TBL, pretending that one is able to compare the different bottom-lines. Despite Elkington’s emphasis on the shear zones, i.e., where there is overlap between the bottomlines, the SDGs run the risk of being perceived as disconnected goals. Within companies the interconnections are not seen. SDG 10, for example, Reduced Inequalities, is not mentioned as a goal with high impact and high opportunity in the study by PWC (2015). Leblanc (2015) however finds 12 goals that are connected with SDG 10. The Triple Bottom Line is often replaced by Triple P, or People, Planet and Prosperity. Nevertheless, within companies profit instead of prosperity is commonly used. With this conceptualization, an organization remains focused on its own goals, whereas it should have a wider concern: “. . . all human beings can enjoy prosperous and fulfilling lives . . .” (UN 2015). Since the publication of the SDGs (UN 2015) two P’s have been added: peace and partnership, also specified in two goals, i.e., SDG 16 and SDG 17. Partnership emphasizes that an organization or an individual cannot make big steps towards sustainability, but acting in togetherness will lead to more progress. Sustainability and peace have a mutual relationship. Living in a peaceful world is a prerequisite for being concerned about environmental and societal challenges and being capable of doing something about it (Clammer 2019). However, working on sustainable challenges can also build peace (Shrivastava and Suazo 2017; Hagerty 2013).

In Geva’s (2008) analysis of three basic CSR-models, i.e., Carroll’s CSR as a pyramid, Schwarz and Carroll’s intersecting circles in the Venn diagram and the concentric circles model, originally developed by the Committee for Economic Development, the last model is especially interesting. The scope of economic responsibility is opened up. Instead of the narrow view of a corporation as solely a profit-making enterprise, it includes doing something good for society: “it is not simply about wealth creation: it is about generating wealth that improves the nation’s standard of living, supplying the needs and wants of people for goods and services, and selling them at fair prices, providing jobs and decent wages to the work force, expanding career opportunities in all parts of society, and eliminating poverty” (Geva 2008: 24). Using concentric circles emphasizes a system of inclusion and interrelationships where the inner circle is also a member of the wider one. In this case, the core economic responsibilities are embraced by the noneconomic ones which clarify the broader scope. This fits the prosperity pillar of sustainable development. It is about serving society and not about the profitability of an organization. Geva (2008: 25) even goes further by adding that within the concentric circle model a corporation has “direct responsibility to promote the quality of life, even at the expense of profitability.” Post Triple Bottom Line Views on CSR After the triple bottom line, different views on CSR appeared. Responsibilities are making way for opportunities and this is a vocabulary that is better understood within businesses. Porter and Kramer’s (2011) concept of Creating Shared Value is a good example of this approach. Within this framework, it is possible to enhance the competitiveness of a company and at the same time advance economic and social conditions in the community in which it operates. According to them this approach does not redistribute wealth, but expands the total pool of economic and social value. Value is created for the economic and societal spectrums, so organizations work at both at the same time. Porter and Kramer (2011: 84) believe that this model will work because “businesses can act as businesses, not as charitable

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

donors.” They see CSR as philanthropy and this explains their criticism of CSR. Within their framework businesses can use their power to address the societal challenges and then create shared value. This approach expands possibilities and stimulates innovations (Porter and Kramer 2011). The three possible strategies they propose can easily be linked with the SDGs. In the first strategy, reconceiving products so that they meet social needs, the social needs can be changed by numerous SDGs, such as no poverty (SDG 1), zero hunger (SDG 2), good health and wellbeing (SDG 3), clean water and sanitation (SDG 6), affordable and clean energy (SDG 7), sustainable industries and infrastructure (SDG 9), sustainable cities and communities (SDG 11), climate action (SDG 13), life below water (SDG 14), and life on land (SDG 15). The second strategy, redefining productivity in the value chain, fits with SDG 12, responsible production and consumption, among many other SDGs and the third and last strategy, local cluster development, can refer to SDG17, partnerships for the goals. Considering social needs creates opportunities and the SDGs give ample examples of this. Emphasizing opportunities might run the risk for cherry-picking. An organization will only focus on those challenges where there is a shared value to create. One might wonder who will fill the gaps when there is no possibility of creating a shared value, at least for profit-making companies. In the study by PwC (2015) on the opportunities the SDGs have for businesses, the combination of having a big impact and a big opportunity is low for clean water and sanitation (SDG 6), life on land (SDG 15), zero hunger (SDG 1), sustainable cities and communities (SDG 11), zero hunger (SDG 2), no poverty (SDG 1), life below water (SDG 14). Businesses believe they have the biggest impact on decent work and economic growth (SDG 8), climate action (SDG 13), good health and well-being (SDG 3), industry, innovation and infrastructure (SDG 9), responsible production and consumption (SDG 12), and affordable and clean energy (SDG 7). Business opportunities in terms of the biggest societal challenges are not seen (Buhmann et al. 2018).

125

Another framework that fits the mindset of opportunities is the circular economy (Schulte 2013; Ghisellini et al. 2016). A circular economy centralizes a systemic change in how the economy works. Being inspired by nature where there is no waste, everything is an input to another process. Apart from the three Rs principles, i.e., reduction, reuse, and recycle, three principles are added, i.e., appropriate design, reclassification of materials into technical and nutrients and renewability. Building closed loop circles into the design of products generates positive effects and contributes to seeing problems as opportunities. Integrating a circular economy approach is beneficial for obtaining many SDGs, such as SDG 6, 7, 9, 11, 12, 13, 14, and 15. Despite all the stimulations that the SDGs offer for CSR, one might wonder whether an inspiration from Buddhist philosophy (Welford 2007) will be more beneficial for the earth, i.e., a philosophy of the middle way and moderation, of true happiness through freeing oneself from continuous consumption and of nonharm and nonviolence. This could be another interpretation for sustainable consumption and production (SDG 12). As Elkington and Hartigan (2008) argue, there is a need for “unreasonable people,” those who want to change the system. They are described as being insanely ambitious, propelled by emotion and thinking that they know the future because they are creating it. Elkington and Hartigan (2008) mainly refer to social entrepreneurs who are driven by the mission to change. According to Raworth (2017), there is a need to redesign economics, i.e., bringing humans to a safe and just space. Her model of Doughnut Economics focuses on the planetary boundaries that form the ecological ceiling and social foundations that are the basics of life and necessary for humans to be able to have a decent life. She warns about the blind belief in growth and argues for an economy that is distributive by design, i.e., not only of income, but also of wealth, time and power (Raworth 2017: 174). Apart from social entrepreneurs, other alternative models like the peer to peer for benefit sharing economy initiatives already fit into this redesign. Alternative models are precisely what is needed for wicked problems such as many of the

C

126

Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

sustainability challenges. A way out is to define a wicked problem as a wicked opportunity without thinking whether there is something to gain. The Partnerships Resource Centre (2016) defines eight principles to be taken into account: adopt systemic and collaborative approaches (1); get the whole system into the room (2); make hands, hearts, and heads work together (3); move away from interestand position-based negotiations towards collective-vision-based negotiations (4); start thinking in paradoxes, share dilemmas, and enable out-ofthe-box approaches (5); bring a willingness to contribute into the room (6); open up to biases and failure (7); and aim for coalitions of the needed instead of coalitions of the willing (8). Especially the fifth principle needs emphasis: it counts as a shifting paradigm in itself. Instead of the idea that a choice has to be made when thinking in terms of dilemmas, or the right balance has to be found in the case of a trade-off, a paradox is tolerant of many innovative reconciliations. The corresponding strategy is to make the best of many worlds. Conclusion SDGs have given a new boost to corporate social responsibilities. They are adopted as an appropriate discourse for CSR. Al lot of sustainability reports by big organizations refer to the different goals which invite mimesis. Normative learning about how to integrate the SDGs into the daily operations is available. And these three mechanisms are activating coercion without the necessity of a government to force companies to satisfy diverse goals. It is almost unacceptable not to know or mention how an organization is complying with SDGs. They fit within the win-win vocabulary that companies appreciate. One has to avoid, however, being too optimistic. The SDGs also have to be a trigger for a fundamental change in the dominant economic model and that is still not the case. Companies will go ahead with it when there is something to win, but what will they do when there is nothing to win? Despite the diverse CSR instruments and rankings that exist, there is still not one accepted methodology to compare the social performance of corporations. CSR is still very much a concept of large, western-oriented companies. Much more

attention should be given to how business-society relations are formed in different economic systems than the dominant neo-liberal ones. Lee (2008) urged future research on these topics and his demand is still valid.

Cross-References ▶ Competencies for Sustainable Entrepreneurship ▶ Ethical and Sustainable Sourcing: Toward Strategic and Holistic Sustainable Supply Chain Management ▶ Responsible Management for Innovative and Sustainable Firms in the Age of Complexity ▶ Social Entrepreneurship

References Alter KS (2003) Social enterprise: a typology of the field contextualized in Latin America, Working paper. Washington, DC Avila LV, Hoffman C, Corrêa AG, Madruga L, Junior V, Junior A, Zanini R (2013) Social responsibility initiatives using ISO 26000: an analysis from Brazil. Environ Qual Manag 23:15–30 Banerjee SB (2008) Corporate social responsibility: the good, the bad and the ugly. Crit Sociol 34(1):51–79 Barnes LR, Croker N (2013) The relevance of the ISO26000 social responsibility issues to Hong Kong construction industry. Australas J Constr Econ Build 13 (3):37–50 Bice S (2017) Corporate social responsibility as institution: a social mechanisms framework. J Bus Ethics 143:17– 34 Bijlmakers S, Van Calster G (2015) Global business and human rights governance: the case of corporate social responsibility. In: Wouters J, Braekman A, Lievens M, Bécault E (eds) Global governance and democracy: a multidisciplinary analysis. Edward Elgar Publishing, Cheltenham, pp 117–155 Bowen HR (1953) Social responsibilities of the businessman. Harper and Row, New York Buhmann K, Jonsson J, Fisker M (2018) Do no harm and do more good too: connecting the SDGs with business and human rights and political CSR theory. Corp Gov 19(3):389–403 Caroll A, Shabana K (2010) The business case for corporate social responsibility: a review of concepts, research and practice. Int J Manag Rev 12(1):86–105 Carroll A (1991) The pyramid of corporate social responsibility: toward the moral management of organisational stakeholders. Bus Horiz 34:39–48

Corporate Social Responsibility and the Sustainable Development Goals (SDGs) Carroll A (1999) Corporate social responsibility. Evolution of a definitional construct. Bus Soc 38(3):268–295 Carroll A (2008) A history of corporate social responsibility: concepts and practices. In: Crane A, Matten D, McWilliams A, Moon J, Siegel DS (eds) The Oxford handbook of corporate social responsibility. Oxford University Press, Oxford, pp 19–46 Carroll A (2016) Carroll’s pyramid of CSR: taking another look. Int J Corp Soc Responsib 1(3):1–8 Clammer J (2019) The right to peace? Cultural values, peace and conflict resolution. In: Clammer J (ed) Cultural rights and justice. Palgrave Macmillan, Singapore, pp 109–126 Crane A, McWilliams A, Matten D, Moon J, Siegel DS (2008) The corporate social responsibility agenda. In: Crane A, Matten D, McWilliams A, Moon J, Siegel DS (eds) The Oxford handbook of corporate social responsibility. Oxford University Press, Oxford, pp 3–15 De Colle S, Henriques A, Sarasvathy S (2014) The paradox of corporate social responsibility standards. J Bus Ethics 125:177–191 Delchet-Cochet K, Vo L-C (2013) Classification of CSR standards in the light of ISO 26000. Soc Bus Rev 8 (2):134–144 Elkington J (1999) Cannibals with forks. Capstone Publishing Limited, Oxford Elkington J (2018) 25 years ago I coined the phrase “triple bottom line”. Here’s why it is time to rethink it. Harv Bus Rev. https://hbr.org/2018/06/25-years-ago-i-coined-thephrase-triple-bottom-line-heres-why-im-giving-up-on-it Elkington J, Hartigan P (2008) The power of unreasonable people. How social entrepreneurs create markets that change the world. Harvard Business Press, Boston European Commission (EC) (2011) A renewed EU strategy 2011–14 for corporate social responsibility. https://eurlex.europa.eu/legal-content/EN/TXT/?uri¼CELEX:520 11DC0681 Friedman M (1962) Capitalism and freedom. University of Chicago Press, Chicago Garriga E, Melé D (2004) Corporate social responsibility theories: mapping the territory. J Bus Ethics 53:51–71 Geva A (2008) Three models of corporate social responsibility: interrelationships between theory, research and practice. Bus Soc Rev 113(1):1–41 Ghisellini P, Cialani C, Ulgiati S (2016) A review on circular economy: the expected transition to a balanced interplay of environmental and economic systems. J Clean Prod 114:11–32 Grosser K (2016) Corporate social responsibility and multi-stakeholder governance: pluralism, feminist perspectives and women’s NGOs. J Bus Ethics 137:65–81 Grosser K, Moon J (2019) CSR and feminist organisation studies: towards an integrated theorization for the analysis of gender issues. J Bus Ethics 155:321–342 Hagerty T (2013) The butcher, the baker, the brewer and the peacebuilder. Opportunities, strategies and metrics for the role of business in building peace. Bus Peace Sustain Dev 1:69–78

127

Hemphill T (2013) The ISO 26000 guidance on social responsibility international standard: what are the business governance implications? Corp Gov 13(3):305–317 ISO (2010) ISO 26000. Guidance on social responsibility. ISO, Geneva ISO (2016) ISO 26000 and SDGs. ISO, Geneva Kakabadse NK, Rozuel C, Lee-Davies L (2005) Corporate social responsibility and stakeholder approach: a conceptual review. Int Bus Gov Ethics 1(4):277–302 Kumi E, Arhin AA, Yeboah T (2014) Can post-2015 sustainable development goals survive neoliberalism? A critical examination of the sustainable development-neoliberalism nexus in developing countries. Environ Dev Sustain 16(3):539–554 Kuokkanen (2011) From indigenous economies to marketbased Self-governance: a feminist political economy analysis. Can J Polit Sci 44(2):275–297 Leblanc D (2015) Towards integration at last? The sustainable development goals as a network of targets. DESA working paper no. 141. http://www.un.org/esa/desa/ papers/2015/wp141_2015.pdf Lee M-DP (2008) A review of the theories of corporate social responsibility: its evolutionary path and the road ahead. Int J Manag Rev 10(1):53–73 Lee SY, Carroll CE (2011) The emergence, variation, and evolution of corporate social responsibility in the public sphere, 1980–2004: the exposure of firms to public debate. J Bus Ethics 104(1):115–131 Matten D, Moon J (2008) “Implicit” and “explicit” CSR: a conceptual framework for a comparative understanding of corporate social responsibility. Acad Manag Rev 33 (2):404–424 Molderez I (2003) Organisation as body-in-contact. In: Höpfl H, Kostera M (eds) The maternal organisation. Perspectives on the representation of the mother in organisation. Routledge, London, pp 47–61 Molderez I, Ceulemans K (2018) The power of art to foster systems thinking, one of the key competencies of education for sustainable development. J Clean Prod 186:758–777 Molderez I, Lefebvre E (2009) Maatschappelijk Verantwoord Ondernemen: Modus operandi of mode. In: De Prins M, Devooght K, Jansen G, Molderez I (eds) Maatschappelijk Verantwoord Ondernemen. Van Strategisch Inzicht tot Operationele Aanpak. Uitgeverij De Boeck, Antwerpen, pp 43–64 Moratis L (2016) Out of the ordinary? Appraising ISO 26000’s CSR definition. Int J Law Manag 58(1):26–47 Nicholls A (ed) (2006) Social entrepreneurship. New models of sustainable social change. Oxford University Press, Oxford Nurunnabi M, Esquer J, Munguia N, Zepeda D, Perez R, Velazquez L (2019) Reaching the sustainable development goals 2030: energy efficiency as an approach to corporate social responsibility. GeoJournal. published online. https://doi.org/10.1007/s10708-018-09965-x OECD (2011) Policy framework for investment. http:// www.oecd.org/investment/toolkit/policyareas/responsi blebusinessconduct/42267935.pdf

C

128

Corporate Social Responsibility Manager: Job Roles, Challenges

Porter M, Kramer M (2002) The competitive advantage of corporate philanthropy. Har Bus Rev 80(12):4–16 Porter M, Kramer M (2011) Shared value. How to reinvent capitalism – and unleash a wave of innovation and growth. Harv Bus Rev 89:62–77 PwC (2015) Make it your business: engaging with the sustainable development goals. http://www.pwc.com/gx/en/ sustainability/SDG/SDG%20Research_FINAL.pdf Rabello RCC, Nairn K, Anderson V (2018) Rethinking corporate social responsibility in capitalist neoliberal times. In: Crowther D, Seifi S (eds) Redefining corporate social responsibility. Developments in corporate governance and responsibility, vol 13. Emerald Publishing, Bingley, pp 27–41 Raworth K (2017) Doughnut economics. Seven ways to think like a 21st-century economist. Random House Business Books, London Röckstrom J, Sukhdev P (2016). How food connects all the SDGs. Keynote Speech. https://www.stockholm resilience.org/research/research-news/2016-06-14-how food-connects-all-the-sdgs.html Scheyvens R, Banks G, Hughes E (2016) The private sector and the SDGs: the need to move beyond ‘business as usual’. Sustain Dev 24:371–382 Schulte UG (2013) New business models for a radical change in resource efficiency. Environ Innov Soc Trans 9:43–47 Schwartz MS, Carroll AB (2003) Corporate social responsibility: a three-domain approach. Bus Ethics Q 13 (4):503–530 Schwartz MS, Saiia D (2012) Should firms go “beyond profits”? Milton Friedman versus broad CSR. Bus Soc Rev 117(1):1–31 Seifi S, Crowther D (2018) The need to reconsider CSR. In: Crowther D, Seifi S (eds) Redefining corporate social responsibility. Developments in corporate governance and responsibility, vol 13. Emerald Publishing, Bingley, pp 1–11 Sheehy B (2015) Defining CSR: problems and solutions. J Bus Ethics 131(3):625–648 Shrivastava P, Suazo AE (2017) Peace building. Bus Peace Sustain Dev 10:28–34 Sidiropoulos E (2014) Education for sustainability in business education programs: a question of value. J Clean Prod 85:472–487 Söderberg S (n.d.) https://ISO26000.info Spence LJ (2016) Small business social responsibility: expanding core CSR theory. Bus Soc 55(1):23–55 Steiner G (1992) Heidegger. Fontana Press, London The Partnerships Resource Centre (2016) Wicked problems plaza. Principles and practices for effective multi-stakeholder dialogue. Rotterdam School of Management, Erasmus University, Rotterdam Toppinen A, Virtanen A, Mayer A, Tuppura A (2015) Standardizing social responsibility via ISO26000: empirical insights from the forest industry. Sustain Dev 23:153–166 UN (2015) Transforming our world: the 2030 Agenda for Sustainable Development. Resolution adapted by the General Assembly. United Nations Publications, New York

UN (2019) The sustainable development goals report 2019. United Nations Publications, New York Van Tilburg R, Zeeuw C (2018) Sustainable Development Goals bereiken bedrijven via de achterdeur. Sustainalize.com, Utrecht Van Tulder R, Pfisterer S (2013) Creating partnering space: exploring the right fit for sustainable development partnerships. In: Seitanidi MM, Crane A (eds) Social partnerships and responsible business. A research handbook. Routledge, London. Online: https://www.researchgate. net/publication/285652014_Creating_partnering_space_ exploring_the_right_fit_for_sustainable_development_ partnerships Welford R (2007) Examining, discussing and suggesting the possible contribution and role of Buddhist economics for corporate social responsibility. Int J Green Econ 1(3/4):341–350 Werhane PH (2008) Corporate social responsibility, corporate moral responsibility, and systems thinking: is there a difference and the difference it makes. In: Flynn G (ed) Leadership and business ethics. Issues in business ethics. vol 25, Springer, Dordrecht, pp 269–289 Wood D (1991) Corporate social performance revisited. Acad Manag Rev 16(4):691–718

Corporate Social Responsibility Manager: Job Roles, Challenges, and Individual Competencies E. R. Osagie1 and R. Wesselink2 1 Research group HRM, HAN University of Applied Sciences, Nijmegen, The Netherlands 2 Education and Learning Sciences, Wageningen University and Research, Wageningen, The Netherlands

Definition Sustainable development (SD)

Corporate social responsibility (CSR)

Within a business context, SD refers to business practices that are economically viable, which the environment can bear and which are socially justifiable A company’s continuing commitment to integrate ecological, social, and economic interests in company’s operations and in its interactions with stakeholders

Corporate Social Responsibility Manager: Job Roles, Challenges

Introduction It is well documented that today’s Western way of living presents us with grand sustainable development (SD) challenges like global warming, malnutrition, resource scarcity (water and food), and social injustice. As such, the call for a change in lifestyle and for the way we conduct business is increasing, as it could prevent more damage and preserve a sustainable way of living for future generations (e.g., Brito and Strafford-Smith 2012; Steffen et al. 2011). The United Nations (2018) has set 17 Sustainable Development Goals (SDG) to stimulate actions in this regard. These SDGs center on tackling global challenges such as poverty, good health, global warming, and inequality (see Gago-Cortés and Alló 2019, for an outline of these 17 SGDs). The scale and complexity of these challenges, however, make it essential for individuals, organizations, communities, and societies to act and if needed to collaborate in order to realize sustainability. As one of the greatest users of natural and human recourses, companies have an important role to play in fulfilling the SDGs (see Inigo 2019 for an elaboration of companies’ role in achieving the SDGs) and SD at large. Within a business context, SD refers to business practices that are economically viable, which the environment can bear and which are socially justifiable (Van Meter et al. 2012). Companies’ role is particularly apparent with respect to SDG 8, which focusses on “decent work and economic growth”; companies are the main tool through which jobs are created and economic growth is realized. Sustainable entrepreneurship (see Ploum 2019), new sustainable business models that involve a triple bottom-line (people, profit, planet) approach (see Bocken 2019), and practices that aim to reduce precarious work and stimulate workers’ well-being (Gago-Cortés and Alló 2019) are just a few of the many ways companies can help realize SDG 8. In fact, companies increasingly attempt to address SD concerns. They often do so through their corporate social responsibility (CSR) programs. CSR refers to as a company’s continuing commitment to integrate ecological, social, and economic interests in

129

company’s operations and in its interactions with stakeholders (Dahlsrud 2008). It is essential that CSR is thoroughly implemented and reflected in company’s core business processes and practices to effectively deal with SD challenges, however (cf. Jamali 2008). Yet, in practice, many companies, and particular well-established companies, seem to struggle with internalizing CSR principles (Carroll and Shabana 2010; Aguinis and Glavas 2012). As such, in recent years many large companies have employed CSR managers to assist them and manage the CSR adaptation process (Hutjens et al. 2015). These CSR managers are the ones who actually strategize, make decisions, manage, and sometimes execute CSR practices (Osagie et al. 2016). This entry aims to provide the reader with insights on the CSR manager’s role in companies by summarizing the main insights of research on this topic. The following paragraphs will explore CSR managers’ profession and their role in companies more in depth. It will describe the essential job roles in CSR managers’ position including the challenges they face in their jobs. Moreover, it will provide insights on the individual competencies these managers employ to successfully tackle these challenges.

The CSR Profession The CSR profession is a relatively new profession, and research on CSR managers’ position and role is still in its infancy. Research show that they often have an internal role, operating inside companies’ borders, and an external role, operating outside corporate borders often as consultants (Osagie et al. 2017). Their role within companies is in some respect similar to that mainstream functional managers. They work autonomously across the entire company and, therefore, are often in direct contact with both top management and coworkers (Heiskanen et al. 2016; Hutjens et al. 2015). Like other functional managers, they often lack the formal authority needed to instruct others to integrate CSR into their daily practice (Heiskanen et al. 2016; Osagie et al. 2016). However, their position and role within

C

130

Corporate Social Responsibility Manager: Job Roles, Challenges

companies also differ in some respect from that of mainstream (functional) managers. They can be seen as the few specialized responsible managers who are specifically employed to implement CSR (Laasch 2018; Osagie et al. 2016), whereas mainstream managers are many and have general managerial tasks. Furthermore, unlike many other functional managers, CSR managers must deal with numerous uncertainties (Osagie et al. 2017) and must work extensively with external stakeholders due to the wicked nature of SD challenges (Dentoni et al. 2012). Moreover, recent studies show that CSR managers’ working environment may also differ from that of mainstream managers (e.g., Heiskanen et al. 2016; Osagie et al. 2017; Wijdoogen 2016). That is, they tend to work in environments where they experience little support for CSR (Heiskanen et al. 2016;). Many CSR managers experience work-related and personal conflicts related to the challenge of balancing the company’s profit orientation and their personal CSR-driven orientation (Osagie et al. 2017; Wijdoogen 2016). In fact, they are often employed specifically to negotiate and tackle these conflicting orientations (Wright et al. 2012). Yet these conflicts can be detrimental to CSR manager’s health and well-being, because they can cause internal dissonance which can eventually lead to a diminished work ability and even a burnout. Therefore, the CSR manager position can be challenging one (Hahn et al. 2014). Nevertheless, the number and influence of CSR managers are growing, as executive positions in CSR are increasing (Carollo and Guerci 2018; Knight and Paterson 2018).

CSR Managers’ Job Roles CSR as an Adaptation Process The management of the CSR adaptation process can be viewed as a form of change management (Maon et al. 2009; Osagie 2016) – the process of continuously modifying or transforming company’s strategy, structure, and capabilities in order to improve or maintain company’s effectiveness in dealing with the needs of internal and external stakeholders (Hayes 2007). In general,

organizational changes differ in type and can be categorized by their: 1. Rate of occurrence: discontinuous change (rapid changes) versus incremental change (limited successive changes) versus continuous change (organizational-wide change in status quo) 2. By how they came about: planned (changes are planned and are top-down driven) versus emergent (nonlinear change-driven bottom up) versus contingency (in which situational variables drive the change) versus choice (changing situational variables to change situation) 3. By the scale of the change: fine-tuning (ongoing small changes to benefit alignment) versus incremental adjustment (non-radical modifications) versus modular transformation (major modifications) versus corporate transformation (radical organizational-wide changes; see Todem 2005 for a detailed description of change features) It is generally acknowledged that a thorough change process is needed when aiming to establish CSR practices that are effective in the long run (Jamali 2008; for a description of the CSR change process, see Maon et al. 2009). This change process often involves a (large-scale) continuous transformational process of adaptation as CSR principles are continuously evolving (Jamali 2008; Osagie 2016). Scholars have identified managerial roles for different change contexts. For example, BarrattPugh et al. (2013) conducted a case study and signified the importance of the role of “change agents” in driving incremental planned changes (e.g., merger between departments). Change agents act as catalysts for change by leading the change, by stimulating others to change, and by managing change efforts. An example in which both discontinuous and incremental change processes were studied is the study of Higgs and Rowland (2011). They interviewed change leaders from 33 organizations and found that certain leadership behaviors support effective change management. The behaviors concur with four of the eight key managerial roles described in

Corporate Social Responsibility Manager: Job Roles, Challenges

Cameron et al. (2006) “competing values framework” (Cameron et al. 2006; Quinn 1988), which is a normative framework of effective leadership behaviors that boost organizational effectiveness. The four managerial roles identified by Higgs and Rowland (2011) are: 1. Strategizing role: in this role the manager is focused on determining and setting the strategy, goals, and objectives. 2. The coordinating role: in which the manager is focused on implementing the set strategy. Key tasks here are scheduling, coordinating, and problem-solving. 3. The stimulating role: in which the manager is focused on internal group relations; the professional facilitates and stimulates collaboration and teamwork among employees, encourages others, and stimulates the development of group moral. 4. The mentoring role: in which the manager is focused on individual employees. He or she listens to individual needs and stimulates and attempts to facilitate workers’ development. These two studies are examples of change contexts that mostly involved discontinuous or incremental organizational changes, which are rapid or successive but limited changes, unlike the CSR adaptation process. Thus, though the CSR adaptation process resembles general change processes to some extent, it also has some distinctive features; it is a process that is heavily normative and ethically oriented which to a great extent affects the activities and choices made during process. Furthermore, it involves wicked problems, which require companies to operate as open systems (e.g., Jamali 2008; Senge et al. 2001) and form partnerships with a broad range of stakeholders (Osagie 2016). The thoroughness and depth of the CSR adaptation process depend to a large extent on the company’s CSR ambition level which can easily be translated into six maturity levels of CSR (Van Marrewijk and Werre 2003; see also Baumgartner and Ebner 2010; Lozano 2008; Schoemaker et al. 2006; Visser 2014 for other categorizations of CSR maturity levels):

131

1. Pre-CSR: At this level there are basically no ambitions in CSR. When forced by stakeholders, some projects or activities might be initiated to prevent damage to the organization’s image or to prevent negative publicity. CSR activities here are aimed at “damage control.” 2. Compliance-driven CSR: Duty, the idea of correct behavior, or scene of obligation drive CSR initiatives. CSR at this level consists of acting according to the rules, laws, and regulations of rightful authorities. Extra investment and effort can be put into CSR initiatives to boost organization’s reputation and image. 3. Profit-driven CSR: At this level the business case drives CSR initiatives. CSR as such consists of the integration of social, ethical, and ecological aspects into business operations and decision-making, provided it contributes to the financial bottom line or is otherwise profitable (e.g., improved reputation). 4. Caring CSR: Similar to the previous level CSR at this level consists of balancing economic, social, and ecological concerns. However, here all three domains are considered important in themselves. The motivation for CSR is that human potential, social responsibility, and care for the planet are as important as the business case. Therefore, CSR initiatives and projects go beyond legal compliance and profit considerations. 5. Synergistic CSR: At this level the motivation for CSR is that CSR is important in itself, especially because it is recognized as being the inevitable direction progress takes and, therefore, CSR consists of a search for wellbalanced, functional solutions creating value in the economic, social, and ecological realms of corporate performance. This is done in a synergistic and win-together (cf. win-win) approach with all relevant stakeholders. 6. Holistic CSR: The starting point for this level is that each person or organization has a universal responsibility toward all other beings. Therefore, CSR is fully integrated and embedded in every aspect of the organization, aimed at contributing to the quality and continuation of life of every being and entity, now and in the

C

132

Corporate Social Responsibility Manager: Job Roles, Challenges

future. The generic starting point is that SD is the only alternative since all beings and phenomena are mutually interdependent. It follows with this ranking that the higher the maturity level, the more a company internalizes CSR principles and acts according to these principles (Van Marrewijk and Werre 2003). For both organizations and CSR managers, it is good to be aware of the company’s current maturity level and its ambitions in CSR, because it also affects how the CSR position is interpreted and the leeway CSR managers may experience or have to pursue CSR objectives, as will become clear in the next section. CSR Manager’s Job Roles and Challenges in the CSR Adaptation Process The abovementioned distinctive features between general change processes and the CSR adaptation process have led researchers to assess the CSR profession and identify job roles for (and specific to) CSR managers. One of the first studies on the

job roles of CSR managers within a business context is that of Osagie et al. (2017). Using the management roles of the competing values framework (Cameron et al. 2006; Quinn 1988), these researchers found six roles – coordinating, stimulating, networking, strategic, monitoring, and the mentoring role – to be important. They describe them in terms of CSR tasks and actions (Table 1). Independently and around the same time, Carollo and Guerci (2017), Knight and Paterson (2018), Van Poeck et al. (2017), and Wright and Nyberg (2012) also studied the CSR manager’s position. Their work on effective leadership behavior and roles of CSR managers complements the work of Osagie et al. (2017) by operationalizing and labelling the roles even more in accordance with the CSR discourse. All these studies, however, show great congruence in the roles and tasks involved in the CSR profession. For example, Knight and Paterson’s (2018) “visionary thinker role,” Wright and Nyberg’s (2012) “rational CSR manager role,” and Carollo and Guerci’s (2017) “bookkeeper role” all

Corporate Social Responsibility Manager: Job Roles, Challenges, and Individual Competencies, Table 1 CSR manager job roles according to Osagie et al. (2017) Job role 1. Networking role

2. Strategic role

3. Coordinating and initiating role

4. Stimulating role

5. Mentoring role

6. Monitoring role

Description This role focusses on initiating, maintaining, and investing in relationships with internal and external stakeholders in order to communicate about company’s CSR program and involve, commit, and develop ownership of CSR in specific stakeholders In this role, the CSR manager is particularly focused on developing a CSR strategy, and he/ she is responsible – at least in part – for integrating this strategy into the company’s general strategy. The manager establishes and refines CSR-related business models and establishes CSR initiatives, and he/she is perceived and approached as a business partner by other business units The CSR manager in his/her role as coordinator supports the various business units during the CSR adaptation process. Actual responsibility for integrating CSR into the organization’s daily activities lies with the various business units and employees. Nevertheless, the CSR manager provides support and monitors the progress The CSR manager acts as an ambassador of CSR. His/her personal ideals and way of living are based upon CSR principles, through which he/she motivates, stimulates, inspires, and activates others to integrate CSR objectives into their assigned tasks In this role, the manager advises, informs, and trains employees, so they can achieve CSR objectives in their respective jobs. Because employees often know best how to integrate CSR into their assigned tasks. The CSR manager’s task is to support, counsel, and coach others In this role, the CSR manager monitors and evaluates specific applications of the CSR strategy and policies (e.g., by performing internal audits). He/she is also responsible for – or contributes to – the content of the annual CSR report. Therefore, he/she collects and analyzes relevant data (e.g., data regarding the company’s CSR performance and carbon footprint)

Corporate Social Responsibility Manager: Job Roles, Challenges

emphasize addressing CSR as a source of competitive advantage, making the business case for CSR the dominant driver for engaging in CSR practices (i.e., the strategic role described in Osagie et al. 2017). As such, Wesselink and Osagie (2020) combined these insights and compiled a final list of four job roles for CSR managers: • Change agent role: the CSR manager is the change agent, both within and outside his/her organization. The CSR manager is responsible for making the change happen. He or she does so by leading and coordinating the change process (i.e., coordinating role in Osagie et al. 2017). • Business-oriented role: the CSR manager addresses CSR as a source of competitive advantage, making the business case for CSR the dominant driver for engaging in CSR practices (i.e., the strategic role described in Osagie et al. 2017). • Monitoring role: In this role, the manager advises, informs, and trains employees, so they can achieve CSR objectives in their respective tasks. Because employees often know best how to integrate CSR into their assigned tasks, the CSR manager’s task is to support, counsel, and coach others. • Idealistic role: the CSR manager has CSR ideals as a starting point for his/her work behavior (and personal livelihood), no matter the resistance experienced. He or she is a heroic idealist who actively fights to promote a social value-oriented vision inside and outside his/her company (i.e., stimulating role, mentoring, and networking role in Osagie et al. 2017). Thus, on the one hand, the CSR manager role is business oriented in which he/she should be focused on the business case. On the other hand, CSR managers also have an idealistic role; no matter the resistance the CSR manager should actively fight to promote social values. The dominance of one of these orientations will depend to a large extent on the company’s CSR maturity level, with the higher levels more fitting to the

133

idealistic role. However, one can imagine how these conflicting roles can lead to conflicts, in particular in companies with low CSR maturity/ ambition levels; accommodating both the business case and realizing social values in decisionmaking are in many cases not possible in established companies and can cause conflicts. Wesselink and Osagie (2020) provide a first overview on the current knowledge on CSR manager’s experiences with such conflicts. Knowing that scientific insights on this subject are still scarce, as the topic of conflicts in the CSR profession has just recently gained increased attention in the CSR literature, this overview is used in this entry to provide a first glance into the complexity of the CSR profession. Wesselink and Osagie (2020) listed a set of six possible conflicts, using Carollo and Guerci’s (2018) work on CSR manager’s experiences with conflict as a starting point. The first conflict is caused by the dilemma between business orientation and value orientation (Carollo and Guerci 2018). On the one hand, there is a dominant view that managerial work should be focused on profit maximization and financial performance. On the other hand, CSR managers’ work is interpreted as a mission to create value for the society and the environment. The second conflict involves CSR manager’s role as an organizational insider versus outsider (Carollo and Guerci 2018). Within the role of the “organizational insider,” CSR mangers construct their (work) identities based on their idea of being a full organizational member who is positioned close to or as part of the top management. Within the role of the “organizational outsider,” CSR managers take in an external view on their company’s CSR issues and practices and internalize the insights gained. These conflicting roles may distort CSR managers’ work identity. Wright et al. (2012) illustrate this “outsider perspective” as “green” change agents who advice their and other organizations how to improve their CSR practices. Other organizational members may view them as “hippies” or “tolerated eccentrics” because of their distinctive views on things. The third conflict involves CSR managers’ short-term versus long-term view on addressing

C

134

Corporate Social Responsibility Manager: Job Roles, Challenges

CSR challenges (Carollo and Guerci 2018). CSR managers often have a dominant preference or dominant modus operandi. If they are short-term focused, they may seek rapid actions to pursue immediate CSR results, whereas long-term focused CSR managers have long-term horizon typical to CSR and, therefore, are more satisfied with successive CSR actions that lead to ambitious results. These CSR managers are patient believers as they are able to delay incorporating the pressures exerted by stakeholders. CSR managers should be able to face the contingencies and these external pressures while simultaneously keeping an eye on long-term trends and planning for future changes. The modus operandi of the CSR manager depends to a large extent on the pressures and challenges experienced in their working environment which are often related to a company’s CSR maturity level (Wesselink and Osagie 2020). The fourth conflict is especially applicable in multi-national companies (MNC) and regards a possible conflict between local CSR policies and global CSR policies (Acquier et al. 2018). Because CSR managers in MNC operate on both local and a global level, it can be challenging to develop policies and CSR intervention that are relevant and applicable at both levels given the different CSR issues, regulations, laws, and politics involved at both levels. The fifth conflict deals with the way CSR is implemented within the company. According to Matten and Moon (2008), CSR practices can be divided into two competing approaches that depend on the level of institution influences: implicit versus explicit CSR. Within the implicit CSR approach, CSR practices are driven by “values, norms, and rules, that results in (mandatory and customary) requirements for corporations to address stakeholder issues” (Matten and Moon 2008, p. 409; see also the inside-out approach by Nijhof et al. 2008). These companies view CSR as an implicit part of their institutional framework, and do not communicate and label their CSR practices separately from their business practices (i.e., synergetic CSR and the holistic CSR maturity level of Van Marrewijk and Werre 2003). Whereas with an explicit CSR approach,

companies choose to explicitly showcase their CSR practices, often separately from their other business practices (Matten and Moon 2008; see also the compliance and profit CSR maturity level of Van Marrewijk and Werre 2003 and the outside–in approach by Nijhof et al. 2008). Having these two approaches simultaneously may lead to conflicts as it can be seen as greenwashing and lead to conflicting CSR practices. The sixth and final conflict concerns emotional conflicts and the regulation thereof (Wright et al. 2012). CSR managers within a business context may experience a difference between their personal pro-CSR orientation and behavior and the company’s profit orientation and (in)formal behavior regulations. This mismatch can cause emotional dissonance as in these cases CSR managers’ behavior and public displays of emotion can differ strongly from how they actually feel. In short, these different conflicts all somehow reflect a situation where there is a conflict between a profit and a social value orientation, a bipolarity that is reflected in the four job roles of CSR manager: change agent role, business-oriented role, monitoring role, and the idealistic role (Wesselink and Osagie 2020). The next paragraph will provide insights on the individual competencies CSR managers employ to tackle these conflicting situations.

CSR Managers’ Individual CSR Competencies To effectively perform the aforementioned roles, CSR managers need individual competencies. The concept of individual competence can be conceptualized in different ways, which one can categorize in three dominant conceptualizations (Delamare Le Deist and Winterton 2005). Using a behavioral approach (Neumann 1979), one describes atomized behaviors and knowledge elements that are needed for specific tasks. With a generic approach (Eraut 1994), one describes personal characteristics (e.g., knowledge, skills, attitudes, and/or personal attributes) that one can use in different contexts and by which one can separate successful performers from less

Corporate Social Responsibility Manager: Job Roles, Challenges

successful performers. Nowadays, however, the comprehensive approach is used most often in research to identify competencies and develop a competence framework (Delamare Le Deist and Winterton 2005; Mulder 2017). In this comprehensive approach, one focusses on the total of the situations, describing behaviors, personal characteristics, etc. that a person needs to succeed, therefore taking the complexity of the practice into account without resulting in fragmented behavior requirements. Thus, in the comprehensive approach, one focuses on the work, on the professional, and on the context, thereby contextualizing the competencies needed (Mulder 2014). There are limited studies available on the individual competencies CSR managers need in their job within a business context. Most often studies on individual competencies for CSR are conceptual (e.g., Dentoni et al. 2012; Van Kleef and Roome 2007) in nature or focused on the competencies for SD educational purposes (see, e.g., De Haan 2006; Rieckmann 2012; Wiek et al. 2011a, b). Yet, the competencies that can be taught in a scholastic setting are often not sufficient for new CSR professionals to be successful in practice (Stenström 2006); the CSR practice is far more complex as was described earlier in this entry. This complexity is difficult to simulate in a school setting (Gulikers 2006, unpublished doctoral dissertation). As such, more insight was needed on the individual competencies of CSR professionals. To account for the gap in literature, Osagie et al. (2016) conducted a comprehensive literature review and interviewed 28 CSR managers to identify important individual competencies for CSR managers working in a business context. Using the comprehensive approach to the concept of competence, their study resulted in the following eight distinct CSR-related competencies: 1. Anticipating CSR challenges 2. Understanding CSR-relevant systems and subsystems 3. Understanding CSR-relevant standards 4. CSR management competencies, including (4a) leading CSR programs, (4b) managing

5. 6. 7.

8.

135

CSR programs, and (4c) identifying and realizing CSR-related business opportunities Realizing CSR-supportive interpersonal processes Employing CSR-supportive personal characteristics and attitudes Personal value-driven competencies, including (7a) ethical normative competencies, (7b) balancing personal ethical values and business objectives, and (7c) realizing self-regulated CSR-related behaviors and active involvement Reflecting on personal CSR views and experiences (see Table 2 for a description of the competencies)

This list of individual CSR competencies was later amended to 11 competencies by Wesselink and Osagie (2020; see Table 3), by including new insights provided by new research on this topic. However, earlier in this entry, it was stated that the organizational contexts in which CSR managers operate (i.e., the company’s CSR maturity and ambition level) affect their position and behavior. Therefore, it is important to contextualize these identified individual competencies. This contextualization has been largely ignored in scientific research. Osagie et al. (2017) provided an initial contextualization of individual CSR competencies. They combined the identified job roles of CSR managers with the eight distinct competencies in Table 2 and assessed which competencies are needed within each job role. Their results showed that the general management-related competencies (e.g., realizing CSR-supportive interpersonal processes, being able to anticipate CSR challenges, and being able to translate these challenges into business opportunities) are considered important in multiple roles (Osagie et al. 2017). They conclude their article by stating that “the business case arguments for engaging in CSR are dominant and remain directive for employees’ CSR work behavior to date” (Osagie et al. 2017, p. 392; see also Gao and Bansal 2013; Hahn and Aragón-Correa’s 2015). Wesselink and Osagie (2020) also contextualized their proposed competencies by using the four job roles identified in their review study. They provided a final list of job

C

136

Corporate Social Responsibility Manager: Job Roles, Challenges

Corporate Social Responsibility Manager: Job Roles, Challenges, and Individual Competencies, Table 2 Individual CSR-related competencies. (Cited from Osagie et al. 2016) Competence label Cognition-oriented competence domain (1) Anticipating CSR-related challenges

(2) Understanding CSR-relevant systems and subsystems

(3) Understanding CSR drivers, CSR standards, and CSR regulations.

Functional-oriented competence domain (4a) CSR leadership competencies

(4b) Identifying and realizing CSR-related business opportunities

(4c) Managing CSR implementation

Competence description The CSR professional must be able to mentally construct scenarios to describe how CSR-related challenges will develop in the future and how these challenges might affect the company. This definition includes the ability to think critically and anticipate potential consequences for future local and global CSR-related challenges of decisions made by the company today Systems thinking is the ability to identify and understand relevant socio-ecological systems from different domains and disciplines and reflect on their interdependency. This competence has both an internal component and an external component. Here, “external component” refers to the ability to have a system-wide perspective on CSR challenges. The “internal component” reflects the notion that the company is perceived as a system comprised of several interdependent subsystems (i.e., business units and disciplines). In this internal perspective, “systems thinking” refers to the ability of a CSR professional to analyze CSR-related challenges in an interdisciplinary manner When faced with CSR challenges, a CSR professional must understand how the company should cope with and apply important industrial regulations (e.g., collective industrial standards and integrity pacts), national and international regulations, political processes, and corporate governance (such as codes of conduct). Moreover, the CSR professional should be able to contribute to the development of these standards, for example, by participating in roundtable meetings The CSR professional must be able to develop a CSR vision and give the company’s CSR program direction. This includes being prepared to take risks and seeks new ways to pursue CSR (i.e., being a pioneer) and thinking about future CSR developments, as well as how those developments might affect the company’s current CSR program A CSR professional should also have entrepreneurial competencies. Thus, the CSR professional should be alert to trends in CSR and should be able to translate and realize these developments into business opportunities for the company. In order to do so, the CSR professional must have at least some business, organizational, and sector-specific knowledge, and the CSR professional must be able to make a business case for CSR. At the same time, the professional must not lose sight of the bigger picture (i.e., tackling local and global CSR challenges) and should therefore avoid the trap of thinking in terms of short-term financial gains. Moreover, to realize CSR-related business opportunities, the professional must be able to deal with the company’s formal and informal decision-making processes and its organizational politics and culture These change management-related and program management-related competencies include the ability to lead the transition toward CSR, to develop crucial alliances with important individuals both within and outside the company, and to deal with “resistance to change” by inspiring and motivating others. The CSR professional must be able to translate a strategy into individual milestones, targets, and concrete actions. The CSR professional must also be able to organize, facilitate, and manage this process and the people involved, all within the specified timeframe and budget. To do so, the professional must have (continued)

Corporate Social Responsibility Manager: Job Roles, Challenges

137

Corporate Social Responsibility Manager: Job Roles, Challenges, and Individual Competencies, Table 2 (continued) Competence label

Competence description good problem-solving skills, and he/she must be able to prepare reports and present results in a clear and convincing manner

Social-oriented competence domain (5) Realizing CSR-supportive interpersonal processes

Meta-oriented competence domain (6) Employing CSR-supportive personal characteristics and attitudes

(7a) Ethical normative competencies

(7b) Balancing personal ethical values and business objectives

(7c) Realizing self-regulated CSR-related behaviors and active involvement

(8) Reflecting on personal CSR views and experiences

The CSR professional must have good social, communication, and networking skills, as he/she must be able to raise awareness of CSR, as well as challenge and stimulate ownership of CSR in others. Moreover, the CSR professional should be able to coach and help others integrate CSR into their daily work. Finally, the CSR professional must be able to work well in multidisciplinary and multicultural collaborations, and he/she must be able to represent the company’s interests while mapping and showing respect to distinctive ideas and inputs of stakeholders In implementing CSR in his/her company, the CSR professional must deal with various stakeholders, each of whom can have their own unique interests. Moreover, CSR implementation is a process of change that involves changing people’s mindset. Thus, CSR professionals often encounter resistance to change and will need to possess certain personal characteristics and attitudes in order to address these challenges. The most commonly mentioned features include patience, resilience, flexibility, a realistic attitude, pragmatism, innovativeness, empathy, and a positive attitude The CSR professional is convinced of the urgency of CSR challenges and is intrinsically driven (i.e., intrinsic motivated) to address these challenges. This competence involves the ability to apply one’s personal ethical standards and values while assessing CSR-related issues This competence is functionally oriented and includes the ability to strike a balance between idealism and pragmatism. Thus, the CSR professional must have the adaptive capacity to pursue both financial objectives and CSR objectives without losing sight of (or overstepping) his/her personal ethical boundaries and values This competence involves the ability to apply one’s personal ethical standards and values to CSR implementation. The CSR professional feels personally responsible for behaving ethically and assumes this responsibility. The CSR professional is actively involved in the implementation of CSR by being action-oriented and decisive; the CSR professional also serves as a role model for others by performing CSR-related activities. This competence is functionally oriented and is interpreted in practice as the congruence between what you stand for, what you say, and what you do This competence includes the ability to recognize and challenge one’s own prior ideas, habits, and assumptions, as well as the ability to derive meaning from this self-evaluation. Thus, CSR professionals use selfevaluation and self-learning approaches when working on CSR challenges

roles and the competencies needed to perform these roles, which are presented in Table 3. Wesselink and Osagie (2020) conclude that it is difficult to isolate specific competencies and that being successful means that CSR managers

need integrated performance-oriented abilities (Mulder 2014) – which involves multiple competencies simultaneously. Moreover, they conclude that depending on the maturity and ambition level of the company, different job roles and as such

C

138

Corporate Social Responsibility Manager: Job Roles, Challenges

Corporate Social Responsibility Manager: Job Roles, Challenges, and Individual Competencies, Table 3 The relative importancea of specific individual Individual competencies (C) C1. Anticipating CSR-related challenges C2. Understanding CSR-relevant systems C3. Understanding CSR-relevant standards C4. CSR leadership competencies C5. Identifying and realizing CSR-related business opportunities C6. Managing CSR implementation C7. Realizing CSR-supportive interpersonal processes C8. Ethical normative competence C9. Balancing personal ethical values and business objectives C10. Realizing self-regulated CSR-related behaviors and active involvement C11. Reflecting on personal CSR views and experiences

CSR-related competencies for CSR managers’ four job roles. (Derived from Wesselink and Osagie 2020) Change agent role X0 X X 0 0

Businessoriented role X0 X0

Monitoring role X0 X0

X0 X0

X#

X0 X0 0 X0

X X0

Idealistic role X# #

X X

X0# X0# X0

X0

#

X0

0#

X ¼ evidence derived from Osagie et al. (2016, 2017). 0 ¼ derived from Knight and Paterson (2018). # ¼ evidence derived from Brown (2012) a The relative importance is determined by the number of studies that provide evidence for the competence contextualization. The more studies, the higher the relative importance to that specific role

different set of individual competencies are needed to succeed as a CSR manager.

To Conclude The brief summarization of the scientific research on the CSR profession presented in this entry shows that scientists have just recently started to explore this topic. New insights and issues are constantly introduced by new research. For example, the issue of competence development has been raised recently in Baumgartner and Winter (2014) – who introduced a simulation game for educational purposes to develop CSR competencies – and in Osagie et al. (2018). These latter scholars showed through a large-scale survey study among CSR managers how informal learning activities – that center on learning with and from others outside the company (e.g., engaging in think tanks and by visiting and asking advice from pioneering companies and CSR professionals) – are particularly favored by them to develop the abovementioned job roles and

competencies. Moreover, they showed how contextual features such as a supportive learning climate stimulate CSR managers’ engagement in continuous learning, which is needed to cope with the complexities associated with implementing CSR principles (Osagie et al. 2018). Nevertheless, there are still many unknowns on this topic. For example, it is important to explore to what extent other employees and particularly other managers can benefit from specific CSR competencies, because in an ideal situation CSR is integrated in everybody’s routine, in that a separate CSR position may become redundant. Furthermore, it remains unclear whether CSR managers need all proposed competencies or whether, with the notion of shared leadership often being more effective, it can be “distributed” among multiple employees. Moreover, the competencies described in the literature to date are limited to the competencies that CSR managers needed to bring them to the point they were at the point of the studies. Yet, researchers have cautioned that todays established companies (those not founded on CSR principles) at best are at the

Corporate Social Responsibility Manager: Job Roles, Challenges

profit-driven and caring CSR maturity level; higher maturity levels are needed to tackle bigger SD challenges (e.g., Osagie 2016; Visser 2014). However, the noticeable increase of available studies on the CSR profession and its role within companies promises more important insights on this topic in the near future.

Cross-References ▶ Competencies for Sustainable Entrepreneurship ▶ Contribution of Enterprises in Achieving the Sustainable Development Goals ▶ Precarious Work and Sustainable Development ▶ Sustainable Business Models

References Acquier A, Carbone V, Moatti V (2018) Teaching the Sushi Chef: hybridization work and CSR integration in a Japanese Multinational Company. J Bus Ethics 148 (3):625–645. https://doi.org/10.1007/s10551-0153007-4 Aguinis H, Glavas A (2012) What we know and don’t know about corporate social responsibility: a review and research agenda. J Manag 38(4):932–968 Barratt-Pugh L, Bahn S, Gakere E (2013) Managers as change agents: implication for human resource managers engaging with culture changes. J Organ Chang Manag 26(4):748–764 Baumgartner RJ, Ebner D (2010) Corporate sustainability strategies: sustainability profiles and maturity levels. Sustain Dev 18:76–89 Baumgartner RJ, Winter T (2014) The sustainability manager: a tool for education and training on sustainability management. Corp Soc Responsib Environ Manag 21:167–174 Bocken N (2019) Sustainable business models. In: Leal FW, Azul A, Brandli L, Özuyar P, Wall T (eds) Decent work and economic growth. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham Brito L, Stafford-Smith M (2012) State of the Planet Declaration. Planet Under Pressure: New Knowledge Towards Solutions conference. London, pp 26–29. Available via: http://www.igbp.net/download/18. 6b007aff13cb59eff6411bbc/1376383161076/SotP_ declaration-A5-for_web.pdf. Accessed 9 Sept 2017 Brown BC (2012) Leading complex change with postconventional consciousness. J Organ Chang Manag 25(4):560–575. https://doi.org/10.1108/09534811211 239227

139

Cameron KS, Quinn RE, DeGraff J (2006) Competing values leadership: creating value in organizations. Edward Elgar, Cheltenham Carollo L, Guerci M (2017) Between continuity and change: CSR managers’ occupational rhetorics. J Organ Chang Manag 30(4):632–646. https://doi.org/ 10.1108/JOCM-05-2016-0073 Carollo L, Guerci M (2018) ‘Activists in a suit’: paradoxes and metaphors in sustainability managers’ identity work. J Bus Ethics 148(2):249–268. https://doi.org/ 10.1007/s10551-017-3582-7 Carroll AB, Shabana KM (2010) The business case for corporate social responsibility. A review of concepts, research and practices. Int J Manag Rev 12(1):85–105 Dahlsrud A (2008) How corporate social responsibility is defined: an analysis of 37 definitions. Corp Soc Responsib Environ Manag 15:1–13 De Haan G (2006) The BLK ‘21’ programme in Germany: a ‘Gestaltungskompetenz’ based model for education for sustainable development. Environ Educ Res 12 (1):19–32 Delamare Le Deist F, Winterton J (2005) What is competence? Hum Resour Dev Int 8(1):27–46 Dentoni D, Hospes O, Ross RB (2012) Managing wicked problems in agribusiness: the role of multi-stakeholder engagements in value creation: editor’s introduction. Int Food Agribus Manag Rev 15(B):1–12 Eraut M (1994) Developing professional knowledge and competence. The Falmer Press, London Gago-Cortés C, Alló M (2019) Precarious work and sustainable development. In: Leal FW, Azul A, Brandli L, Özuyar P, Wall T (eds) Decent work and economic growth. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham Gao J, Bansal P (2013) Instrumental and integrative logics in business sustainability. J Bus Ethics 112:241–255 Gulikers JTM (2006) Authenticity is in the eye of the beholder: Beliefs and perceptions of authentic assessment and the impact on student learning (Unpublished doctoral dissertation). Open University, Maastricht The Netherlands Hahn T, Aragón-Correa JA (2015) Towards cognitive plurality on corporate sustainability in organization: the role of organizational factors. Organ Environ 28(3): 255–263 Hahn T, Preuss L, Pinkse J, Figge F (2014) Cognitive frames in corporate sustainability: managerial sensemaking with paradoxical and business case frames. Acad Manag Rev 39(4):463–487. https://doi. org/10.5465/amr.2012.0341 Hayes J (2007) The theory and practice of change management, 2nd edn. Palgrave Macmillan, New York Heiskanen E, Thidell Å, Rodhe H (2016) Educating sustainability change agents: the importance of practical skills and experience. J Clean Prod 123:218–226 Higgs M, Rowland D (2011) What does it take to implement change successfully? A study of the behaviors of successful change leaders. J Appl Behav Sci 47:309– 335

C

140

Corporate Social Responsibility Manager: Job Roles, Challenges

Hutjens A, Dentchev NA, Haezendonck E (2015) CSR implementation in Belgium: institutional context, the role of CSR managers and stakeholder involvement. In: Idowu SO, Schmidpeter R, Fifka MS (eds) Corporate social responsibility in Europe. United in sustainable diversity. Springer, Geneva, pp 57–80 Inigo EA (2019) Contribution of enterprises in achieving the Sustainable Development Goals. In: Leal FW, Azul A, Brandli L, Özuyar P, Wall T (eds) Decent work and economic growth. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham Jamali D (2008) A stakeholder approach to corporate social responsibility: a fresh perspective into theory and practice. J Bus Ethics 82(1):213–231 Knight B, Paterson F (2018) Behavioural competencies of sustainability leaders: an empirical investigation. J Organ Chang Manag 31(3):557–580. https://doi.org/ 10.1108/JOCM-02-2017-0035 Laasch O (2018) Just old wine in new bottles? Conceptual shifts in the emerging field of responsible management. CRME working papers, vol 4, p 1 Lozano R (2008) Envisioning sustainability three-dimensionally. J Clean Prod 16(17):1838–1846. https://doi. org/10.1016/j.jclepro.2008.02.008 Maon F, Lindgreen A, Swaen V (2009) Designing and implementing corporate social responsibility: an integrative framework grounded in theory and practice. J Bus Ethics 87:71–89 Matten D, Moon J (2008) “Implicit” and “explicit” CSR: a conceptual framework for a comparative understanding of corporate social responsibility. Acad Manag Rev 33:404–424 Mulder M (2014) Conceptions of professional competence. In: Billett S, Harteis C, Gruber H (eds) International handbook on research into professional and practice-based learning. Springer, Dordrecht, pp 107–137 Mulder M (2017) Competence-based Vocational and Professional Education Bridging the World of Work and Education. Springer, Cham Neumann W (1979) Educational responses to the concern for proficiency. In: Grant G, Elbow P, Ewens T, Gamson E, Kohli W, Neumann W, Olesen V, Riesman D (eds) On competence, a critical analysis of competence-based reform in higher education. JosseyBass, San Francisco, pp 66–94 Nijhof A, De Bruijn T, Honders H (2008) Partnerships for corporate social responsibility: a review of concepts and strategic options. Manag Decis 46(1):152–167. https://doi.org/10.1108/00251740810846798 Osagie ER (2016) Learning and corporate social responsibility. A study on the role of the learning organization, individual competencies, goal orientation and learning climate in the CSR adaptation process. Dissertation, Wageningen University Osagie ER, Wesselink R, Blok V, Lans T, Mulder M (2016) Individual competencies for corporate social responsibility: a literature and practice perspective. J Bus Ethics 135:233–252

Osagie ER, Wesselink R, Blok V, Mulder M (2017) Contextualizing individual competencies for managing the corporate social responsibility adaptation process: the apparent influence of the business case logic. Bus Soc 58(2):369–403. https://doi.org/10.1177/0007650316 676270 Osagie ER, Wesselink R, Runhaar P, Mulder M (2018) Unraveling the competence development of corporate social responsibility leaders. The importance of peer learning, learning goal orientation, and learning climate. J Bus Ethics 151(4):891–906 Ploum L (2019) Competencies for sustainable entrepreneurship. In: Leal FW, Azul A, Brandli L, Özuyar P, Wall T (eds) Decent work and economic growth. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham Quinn RE (1988) Beyond rational management: mastering the paradoxes and competing demands of high performance. Jossey-Bass, San Francisco Rieckmann M (2012) Future-oriented higher education: Which key competencies should be fostered through university teaching and learning? Futures 44(2):127–135 Schoemaker M, Nijhof A, Jonker J (2006) Human value management. The influence of the contemporary developments of corporate social responsibility and social capital on HRM. Manag Rev 17(4):448–465 Senge P, Carstedt G, Porter PL (2001) Innovating our way to the next industrial revolution. MIT Sloan Manag Rev 42(2):24–38 Steffen W et al (2011) The Anthropocene: from global change to planetary stewardship. Ambio 40:739–761 Stenström ML (2006) Polytechnic graduates working life skills and expertise. In: Tynjälä P, Välimaa J, BoultonLewis G (eds) Higher education and working life: collaborations, confrontations and challenges. Elsevier, Amsterdam, pp 89–102 Todem R (2005) Organisational change management: a critical review. J Chang Manag 5(4):369–380 United Nations (UN) (2018) Sustainable Development Goals. https://www.un.org/sustainabledevelopment/ sustainable-development-goals/ Van Kleef JAG, Roome NJ (2007) Developing capabilities and competence for sustainable business management as innovation: a research agenda. J Clean Prod 15 (1):38–51 Van Marrewijk M, Werre M (2003) Multiple levels of corporate sustainability. J Bus Ethics 44(2):107–119. https://doi.org/10.1023/a:1023383229086 Van Meter K, Marshall L, Just C (2012) The skeptic’s guide to sustainability. The skeptical humanitarian. The skeptical capitalist. The skeptical environmentalist. http://www.sustainablecitizen.org/. Accessed 27 Dec 2015 Van Poeck K, Læssøe J, Block T (2017) An exploration of sustainability change agents as facilitators of nonformal learning: mapping a moving and intertwined landscape. Ecol Sol 22(2). https://doi.org/10.5751/es-09308 220233

Corporate Spatial Responsibility and Sustainable Development Goals Visser W (2014) Transforming corporate sustainability and responsibility. CSR 2.0. Springer, London Wesselink R, Osagie E (2020) Differentiating CSR managers’ roles and competencies: taking conflicts as a starting point. In: Laasch O, Suddaby R, Freeman RE, Jamali D (eds) The research handbook of responsible management. Edward Elgar, Cheltenham Wiek A, Withycombe L, Redman C, Mills SB (2011a) Moving forward on competence in sustainability research and problem solving. Environment 53(2):3–12 Wiek A, Withycombe L, Redman CL (2011b) Key competencies in sustainability: a reference framework for academic program development. Sustain Sci 6:203–218 Wijdoogen C (2016) MVO doe je zo: Het vak van duurzaamheidsmanager vanuit mijn ervaring bij NS (CSR, here is how to do it: The profession of sustainability manager from my experience at the NS [Dutch Railways].). Maurits Groen Milieu & Communicatie, The Hague, The Netherlands Wright C, Nyberg D (2012) Working with passion: emotionology, corporate environmentalism and climate change. Hum Relat 65(12):1561–1587. https://doi.org/ 10.1177/0018726712457698 Wright C, Nyberg D, Grant D (2012) “Hippies on the third floor”: climate change, narrative identity and the micropolitics of corporate environmentalism. Organ Stud 33 (11):1451–1475. https://doi.org/10.1177/01708406 12463316

Corporate Social Responsiveness ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

Corporate Spatial Responsibility and Sustainable Development Goals Lech Suwala1,2 and Hans-Hermann Albers1 1 Technical University Berlin, Berlin, Germany 2 Jagiellonian University, Cracow, Poland

Synonyms Corporate regional engagement; Corporate regional responsibility; Corporate spatial volunteering; Corporate urban responsibility

141

Definitions Corporate spatial responsibility (CSpR) focuses on corporate engagement at various spatial scales (e.g., local, regional, global) and within different spatial entities (e.g., urban and rural settings). It can be understood as a spatial extension of the well-known concept of corporate social responsibility (CSR) (Albers and Suwala 2018, 2020a). CSR is the sum of all voluntarily and non-voluntarily social, ecological, and economic efforts both within and outside the company beyond core economic competencies and compliance with legal requirements (Meffert and Münstermann 2005; Albers 2011). CSpR encompasses, in particular, spatial corporate measures of the above mentioned sum with varying motives, types, and intensities that increase the economic competitiveness, social compatibility, and ecological sustainability of spatial entities by enhancing locational factors, improving material, institutional and personnel infrastructure, by attracting or retaining mobile highly qualified workers, contributing to social cohesions, facilitating ecological goals, or enlightening the profile and image of region, among many other activities (Albers and Hartenstein 2017; Kiese 2017; Schiek 2017). In other words, CSpR are partnerships for development between corporations (e.g., private, publicowned, etc.) and regions (e.g., pertinent administrative bodies, regional civic initiatives, etc.) based on voluntary and collaborative relationships for mutual objectives by sharing risks, resources, benefits, and responsibilities.

Introduction The SDG framework can be contemplated as a joint effort of governments, knowledge institutions, corporations, and the civil society in developing an institutional agenda for realizing sustainable development. SDGs signal a noticeable break with earlier leading paradigms of sustainable development such as the Millennium Development Goals and “Washington Consensus” which dealt with securing basic needs (Fukuda-Parr 2016). From a corporate

C

142

Corporate Spatial Responsibility and Sustainable Development Goals

perspective, SDGs can be considered as an extension of the UN Global Compact – a global joint commitment founded in 1999, owned largely by the private sector, and supported by various UN organizations which calls for the establishment of social, spatial, and ecological principles concerning the new global economy – in other words providing an important platform for dialogue on corporate social or spatial responsibility. A statement of the former Secretary-General of the United Nations Kofi Annan catches the main essence quite well: “We do not request companies to do things different from their normal business, but to conduct normal business in different ways.” (Annan 1999). This chapter focuses on the engagement, volunteering and spatial responsibility by corporations beyond their core economic competencies and compliance with legal requirements and highlights the manifold initiatives of CSpR with regard to SDG goal No.8 “Decent work and economic growth.” Since SDGs are legally not binding, the main objective of the chapter is to showcase various examples and initiatives of CSpR in order to contribute to a “good practice” catalogue whereby countries and regions can learn from each other and incorporate general ideas or tangible approaches into their national development agenda. Although studies linking corporate engagement towards SDGs are rather scarce (as SDGs are a rather novel phenomenon) (van der Waal and Thijssens 2020), findings have already shown that especially corporations can generate a significant impact on SDGs in general, and on SDG No.8 in particular. Interviewing 81 of the Fortune 500 multinational enterprises (MNE), companies indicated particularly high contributions to SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), SDG 12 (Responsible Consumption and Production), SDG 13 (Climate Action), SDG 16 (Peace, Justice, and Strong Institutions), and SDG 17 (Partnerships for the Goals) with SDG 8 having the second highest mean score for relevance just behind SDG 16, mainly since it aligned with core strategies of the corporations anyway, but also through partnerships, public advocacy, sharing data, and philanthropy (Van Zanten and Van Tulder 2018, 221). Against this

background, the chapter wants to shed some light with tangible examples what “partnerships, public advocacy, sharing data, and philanthropy” might mean in particular contexts from a spatial perspective. This chapter is structured into five sections. Section “Trajectories of Corporate Spatial Responsibility” describes the origins and transformation of the concept of CSpR over the centuries. Section “Contemporary Field of Corporate Engagement and the Place of CSpR” introduces related concepts and attempts to distinguish the idiosyncrasies of CSpR (inter-definition of the concept against similar concepts). Section “Motives, Types, and Intensities of CSpR” presents basic motives, types, and intensities of CSpR (intra-definition of the concept). This background sets the scene for the analysis of selected examples of CSpR and their contribution to SDG No.8. Hereby, the overall “decent work and economic growth” goal will be partitioned into CSpR and macroeconomic targets (8.1, 8.2, 8.10), CSpR and policy targets (8.3, 8.6, 8.9), CSpR and social targets (8.5, 8.7, 8.6, 8.8), and CSpR and environmental targets (8.4, 8.7, 8.9). Finally, the last section makes some summarizing and closing observations.

Trajectories of Corporate (Spatial) Responsibility Corporate engagement and responsibility are centuries old phenomena. Ideally, three basic phases of corporate engagement can be identified, which are closely related to the predominant economic formation: a preindustrial phase, an industrial phase, and a postindustrial phase (Albers 2011, 267ff, see Fig. 1). The preindustrial phase was characterized predominantly by the instrument of the foundation, which was later used in the CSR/CSpR context. Like the etymology of the word “donate” from “build, found” suggests, the first foundations relate to the establishment of settlements. Its traditions originated in the Middle Ages and where utilized for both frontier colonization, foundations of cities, and Christian missionary work (founding of monasteries, etc.) in particular in the European context (Kluger 2006). The founders were thus

Corporate Spatial Responsibility and Sustainable Development Goals

143

C

Corporate Spatial Responsibility and Sustainable Development Goals, Fig. 1 History and evolution of corporate engagement and responsibility

not only the respective aristocratic rulers but also donors, lenders, financiers, and town founders. They expected both gains for their salvation and memoriam, but also anticipated the expansion of their secular power and financial resources – for example, as feudal lords. All these motives have a spatial character and testify to beginnings of a levelled corporate spatial engagement. For example, they are also represented in built form (e.g., founder figures with miniatures of the edifices indicate, ostentatious architecture (e.g., Medici), social facilities (e.g., Fugger)). Ecclesiastical and secular expansion of power – in other words church and state – are connected in feudalism and thus are fundamental motivations for early forms of philanthropy (Albers 2011). The industrial phase brought novel motivations and instruments for corporate (spatial) engagement to the fore. Enlightenment combined with increasing interest in sciences and the promotion of research and education led to both

technical progress and the industrial revolution. Two general issues were in need to be solved by corporations: maintaining/expanding productivity and the social question in erraticratic industrial settlements. The latter happened not only as an end in itself. With the accelerated urban growth and emergence of the new working class, most of the existing urban administrations and infrastructure was overburdened, a circumstance also noticed by the industrialist (Castel 2000). The triggers for this corporate commitment towards home cities or regions, however, were not based on pure altruism alone, but were undertaken in order to benefit from substantial market or agglomeration opportunities, to secure workforce and as image-building campaigns – especially in locally bounded markets. The phase was thus characterized by a differentiation and extension of internal and external instruments towards the corporation. Besides internal social institutions (e.g., Fabrikwohlfahrtspflege, BASF) and

144

Corporate Spatial Responsibility and Sustainable Development Goals

external corporate engagement (e.g., Rockefeller Foundation) securing certain social security/ health standards or facilities for leisure for their employees and beyond, donation was also attached to patronage for arts and culture. Taking the spatial dimension of corporate engagement into account, the rise of corporate housing constructions (e.g., Margarethenhöhe, Germany (owned by German industrialist Alfred Krupp, Essen, Germany), Ford Homes in Detroit or Deadborn, USA) and the establishment of socalled company town (e.g., Siemensstadt in Northwest Berlin, Germany, American Railway Union, Pullman, IL, USA, Volkswagen in Wolfsburg, Germany, or Lego in Billund, Denmark) provide evidence here (Garner 1992; Albers and Suwala 2020c). The postindustrial phase of corporate engagement is not so much associated with secular and heroic images of corporate donors, but with rather pragmatic and everyday necessities of knowledge-driven societies. Global challenges such as climate change, intercontinental migration, poverty, and hunger have to be paradoxically mastered under the auspices of digitalization and cultural cognitive capitalism. This juxtaposition does not simplify matters and results in novel moralities and attitudes probably mostly clearly pronounced in SDG (Albers 2011; Suwala 2014; UN 2016). The society and consumers are both central figures and catalysts for this development at the same time. Corporate engagement has to adjust to these transformed ethical and postmodern values and consumption patterns which rest on ecological, responsible, but also aesthetic rationales in order to be credible. Corporation have reacted to this with an almost hard to keep track of variety of internal and external instruments of professional corporate engagement (e.g., causerelated marketing, commitment to SDG in company reports, sponsoring, public-private partnerships, etc.). By and large, most of these instruments have been subsumed under the headings of corporate citzenship (CC) or corporate social responsibility (CSR) in the second half of the twentieth century (e.g., Garriga and Melé 2004; Hüther et al. 2012). Referring to the spatial dimension, corporations engage in manifold ways

to revive (e.g., corporate re-urbanization), upgrade (e.g., business improvement districts), or even lead (e.g., business-led community development) urban and rural spaces (Albers and Hartenstein 2017; Albers and Suwala 2020a, b, c).

The Contemporary Field of Corporate Engagement and the Place of CSpR Since the seminal book Social Responsibilities of the Businessman (Bowen 1953), a long, ambiguous, and partly conflicting debate has been taking place on corporate social responsibility (CSR) where “some theories combine different approaches and use the same terminology with different meanings” (Garriga and Melé 2004, 51). This terminological and methodological fuzziness has been already expressed almost some 50 years ago: “corporate social responsibility means something, but not always the same thing to everybody. To some it conveys the idea of legal responsibility or liability; to others, it means socially responsible behavior in the ethical sense; to still others, the meaning transmitted is that of ‘responsible for’ in a causal mode; many simply equate it with a charitable contribution; some take it to mean socially conscious; many of those who embrace it most fervently see it as a mere synonym for legitimacy in the context of belonging or being proper or valid; a few see a sort of fiduciary duty imposing higher standards of behavior on businessmen than on citizens at large” (Votaw 1972, 25) and is still more valid than ever. This conceptual fuzziness can also be observed when a spatial component (corporate spatial responsibility, CSpR) is added to the CSR concept. Hereby, “the social” – remaining part of the concept – is complemented or overshadowed by “the spatial.” The “spatial” expresses an explicit commitment to locations, places, or landscapes at various scales, be it local or regional, and urban or rural (Knieling et al. 2012). Therefore, CSpR can be understood as a collective term for the related concepts of “corporate regional responsibility” (CRR) (Schiek 2017), “corporate urban responsibility” (CUR) (Albers 2011; Albers and Hartenstein 2017), and “corporate

Corporate Spatial Responsibility and Sustainable Development Goals

regional engagement” (CRE) (Bürcher and Mayer 2018). In general, CSpR follows principles also evidenced in CSR practices, including corporate ethics, social enterprise, corporate civic leadership, intra- or intercorporate and voluntary self-commitment and sometimes even corporate citizenship. Existing initiatives subsumed within these conceptual frameworks may however significantly differ not only with regard to motives, types, and intensities (see next section), in their scale and regional focus (Werna et al. 2009), but also in their scope of action; existing literature documents activities that range from the revitalization of the built environment (Albers 2011), towards socio-spatial context framing and embeddedness (Selcuk and Suwala 2020) or the pursuing of sustainable technologybased or socially responsible urban or regional development (Schiek 2017; Brandt et al. 2019). Just like CSR, CSpR initiatives were professionalized over the last 20 years, corresponding to new values, alternating social demands and ethical ideals, but also the renaissance of local and regional commitment in the wake of globalization. This local and regional commitment is also a result of both a pervasive urbanization and new meaning of the rural against the background of challenges such as environmental protection, scarcity of resources, demographic change, migration patterns, and general consequences of globalization (Knieling et al. 2012). Therefore, a connection to SDGs is obvious, not only to SDG 8 – the focus of this contribution – but also to SDG 9, 12 or in particular 11 that explicitly aims for sustainable cities and communities also part of this UN Encyclopedia. Even in a globalized world with a prevalence of “absentee-owned” companies (some of which are previously locally owned), there are often still manifold incentives for family-run and regionally committed companies to invest in local structures, place-based civic engagement like CSpR and place leadership (Klettner et al. 2014; Basco et al. 2020; Basco and Suwala 2020). The latter applies also to mushrooming corporations in novel or high-tech sectors within inner-city locations, especially those in the digital economy, that are gradually being prompted and called upon to commit themselves to local and urban development beyond

145

company borders, and to play an active role in their regional settings (Albers and Hartenstein 2017).

Motives, Types, and Intensities of CSpR As economic systems and the organization of economic activities have evolved, so have the motives, types, and intensities for the corporate spatial commitments around CSpR. Despite the aforementioned differentiation of target groups, and instruments, etc., there is some common knowledge. In what follows, motives, types, and intensities of CS(p)R will be described. Theoretically, there are two paths of agency/ motivation for corporations with regard to (social and/or) spatial responsibility: assumption or rejection. In reality, however, the rejection path is not really an option if the following argument is taken serious that “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game” (Friedman 1970, 232). Hereby, social or spatial responsibility originates by default from the very nature of (successful) business activities, since the real needs of society can be satisfied including manifold positive effects for locations where those corporations are situated. Apart from that, general motives on CS(p)R can be arranged according to Carrolls CSR pyramid (be profitable, obey the law, be ethnical, be a good corporate citizen) and are either based on economic reasoning (e.g., companies assume responsibility, because they are able to do so in the long term to achieve higher profits and secure (local) market positions) or on ethical arguments (e.g., companies assume responsibility, because profits oblige to support an equitable, social, ecologically sound or spatial distribution of resources) (Carroll 1991, Albers 2011). Pertinent spatial motives can be versatile and range from entrepreneurial or family business attachment to the region (Graffenberger and Görmar 2020), to competitiveness or image/ identity building of the region (Kiese 2017). Of course, these motives are often combined or communicated miscellaneously to the respective

C

146

Corporate Spatial Responsibility and Sustainable Development Goals

audiences of interests – e.g., ethnical to the general public, but pointing out the added economic value to shareholders or financiers (Brandt et al. 2019). There are manifold typologies of the CS(p)R (Knieling et al. 2012; Albers and Hartenstein 2017). The focus here will be on spatial typologies. Some typologies are based on spatial adaptivity and differentiate into responsive CSpR (e.g., companies are reacting upon demands of their (local) stake or shareholders or trying to meet the needs of the various groups in society/regions) and acting CSpR (e.g., companies actively putting effort into locales for strengthening corporate culture, staff loyalty, or image of the region) (Hüther et al. 2012). Others differentiate between object/ structure-based corporate engagement and planning/process-based corporate engagement. Whereas object/structure-based CSpR measures concentrate on (a) the financing or promotion of buildings for social, educational or recreational purposes or (b) corporate re-urbanization, district renewal, and privately owned public spaces, planning/process-based CSpR measures bring (a) BID and TCM activities or even (b) private sector masterplan initiatives or entire private-sector driven and business-community-led models to the fore (Albers and Suwala 2020a, b, c). Moreover, types of CSpR may vary with the size of the company or regard to spatial contexts. In the Global South, for example, CSpR measures will be mostly introduced to meet minimum social, environmental, or spatial planning law standards: “CSpR towards (global) compliance” (Bustamante 2011; Falk 2017). If corporations act multilocal, different CSpR measures are applied in internal company processes, along the value chain, the company headquarter or subsidiaries and the wider environment of a company (GTZ 2011). Approaches towards the intensity of CSpR measures also gained momentum (Albers and Suwala 2018). By way of preliminary observation, the majority of corporations considers CS(p) R activities – whether or not with a spatial focus – as philanthropy and benevolence and neither follows an integrated strategic or spatial approach. The Bertelsmann Stiftung differentiates between

three modes of intensity: basic engagement, strategic engagement, and networked and bundled engagement. Basic engagement is characterized by tangible resources (e.g., capital, physical structures), one-time or short-term commitment and a cooperation with the civic society. Strategic engagement adds up intangible resources (e.g., human capital, know-how, know-who), cyclical commitment, and further exchange also with municipalities, where networked and bundled engagement aims for structural spatial changes by connecting policy, industry, and academia and setting up long-term self-sustaining cross-sectoral partnerships in responsible corporate-driven ecosystems (Bertelsmann Stiftung 2010; König et al. 2020). Based on the CSR maturity model (Schneider 2012), Albers and Suwala (2018) developed a pyramid with four different levels of CSpR intensities (see Fig. 2). The first two levels, CSpR 0.0 and CSpR 1.0, embrace low threshold/ conventional engagement activities that exert compliance with existing laws (CSpR 0.0) or philanthropic commitment that exhibits rather immediate spatial impacts (CSpR 1.0). Levels three and four are characterized by genuine and proactive spatial interventions in which either purposeful regional economic and societal synergies between the city/region and the company are created (CSpR 2.0), or in which companies even are partly taking over (formerly) public responsibilities or matters of governance exerting spatial leadership (CSpR 3.0). (Suwala and Micek 2018; Albers and Suwala 2018, 2020a).

CSpR and SDG 8 Targets The most important CS(p)R initiative at a worldwide scale is the United Nations Global Compact. Based on ten universal principles and in the meanwhile also Sustainable Development Goals, it pursues the vision of an inclusive and sustainable global economy for the benefit of all people, communities, and markets, now and in the future. More than 13,000 companies and organizations from civil society, politics, and science in 161 countries are already demonstrating that they want to realize this vision (UN 2015). The

Corporate Spatial Responsibility and Sustainable Development Goals

147

Corporate Spatial Responsibility and Sustainable Development Goals, Fig. 2 Intensities of corporate spatial responsibility. (Adapted from Albers and Suwala (2018), 55 based on Schneider 2012)

geography of diffusion of these CS(p)R related principles is uneven and highly context dependent (Perkins and Neumayer 2010). Apart from that, traditional CS(p)R philanthropic activities, such as donations, sponsorships, patronage, and charities are still widespread. However, more complex modes, such as public-private partnerships, corporate cooperation with public sectors or civil society, and long-term interinstitutional projects are increasingly becoming the norm. These complex instruments have often an explicit spatial dimension, as well as local or regional imprints or impacts (Albers and Hartenstein 2017; Albers and Suwala 2018). The aforementioned economic, social, and ecological global challenges call for joint and overarching initiatives such as SDGs. Therefore, civic initiatives, governments, and academia are also invited for setting at least “compliance standards” to be incorporated by appropriate movements, policies, and ideas. Studies have identified regional-specific CS(p)R instruments in countries, at universities or within civic movements (Palazzo and Scherer 2008; Nejati et al. 2011; Steurer et al. 2012). This chapter however, centers on corporate-induced measures. CSpR have large potential to significantly contribute here in the future. Not only to SDG 8 – the focus of this contribution – but also to SDG 9,

C

12, or 11 that calls for spatial responsibilities within sustainable cities and communities. To begin with, it should be emphasized that this chapter outlines the possible contribution of CSpR measures towards SDGs in the future. Since the SDG framework was agreed upon only few years ago in September 2015, corporations are just slowly starting to develop internal and external measures towards more sophisticated SDG involvement and reporting. Apart from that, many companies are already incorporating UN Global Compact principles in their practices today that are overlapping with SDG goals. Van der Waal and Thijssens found out – by juxtaposing reported SDG involvement and corporation attributes within a sample of the 2000 largest stock listed corporations – that corporate involvement in SDGs is currently still limited (van der Waal and Thijssens 2020). Therefore, avenues and ideas for potential contribution will be portrayed for SDG 8. Hereby, the overall “decent work and economic growth” goal will be partitioned into CSpR and macroeconomic targets (8.1, 8.2, 8.10), CSpR and policy targets (8.3, 8.6, 8.9), CSpR and social targets (8.5, 8.7, 8.6, 8.8), and CSpR and environmental targets (8.4, 8.7, 8.9) for the sake of clarity. It must be mentioned at this point that more complex CSpR initiatives (e.g., UN Global Compact), examples, and

148

Corporate Spatial Responsibility and Sustainable Development Goals

measures may traverse these classification borders, thus allocable to multi-targets. CSpR and Macroeconomic Targets (8.1, 8.2, 8.10) CS(p)R measures are drivers for marcoeconomic targets such as economic growth, economic productivity, and financial stability but are also driven by finance or prosperous conditions (Scholtens 2006; Škare and Golja 2014). Skare and Golja conclude – by using panel data across 25 countries that CS(p)R companies have a positive and statistically significant effect on a country’s economic growth. According to this study, a higher share of CS(p)R firms in the economy means higher economic growth. Moreover, “Business performance of CSR firms positively affects economic growth and their associated share in growth is 6% for 25 economies” (Škare and Golja 2014, 562). Other studies envision good reasons for firms to engage in “profit-maximizing” CSR that are not only based on expected benefits or financial stability from these actions, but when aggregated under certain assumptions also as measures to enhance total factor productivity and financial performance through social or spatial performance (Paul and Siegel 2006; Hasan et al. 2018). A simple example on a firm-based level illustrates this link. As most MNEs encounter pressures from various stakeholders (e.g., shareholders, employees, consumers, suppliers, civic groups, (non)governmental organizations) to engage in CS(p)R, some try to incorporate social, ecological, or spatial characteristics into products and manufacturing processes (e.g., making greater use of environmentally friendly technologies, sourcing from local suppliers or promoting goals of supranational organizations, providing corporate guarantees or mobile system for employees and enabling them to leave the unbanked segment of the population or to qualify them for microcredits, fighting corruption through appropriate wages) to foster productivity and financial stability in the long run (Prior and Argandoña 2009). By and large, “CSR engagement and its economic and financial outcomes are context dependent” (Hasan et al. 2018,672).

CSpR and Policy Targets (8.3, 8.6, 8.9) CS(p)R measures can be both random and intended to assist or even guide culture-oriented, education-oriented or development-oriented policies. There are manifold examples how corporations stimulate or even lead entire towns, cities, or regions at various scales and with various intensities of commitment (e.g. Suwala et al. 2012; Suwala and Micek 2018). In smaller German cities, cultural buildings are often sponsored by local firms to enrich cultural life. Instances of this are numerous and often involve donations by family firms attached to the region for decades or even centuries. These buildings are named after those enterprises – emphasizing traditional motives of establishing memorials – and include the Kunsthalle Weishaupt in Ulm (http://kunsthalleweishaupt.de), the Museum Barberini in Potsdam (https://www.museum-barberini.com/en/), and the Knauff Museum in Iphofen (https://www. knauf-museum.de). Each of these projects are based on strong commitment to the site/location and support to the city/regional branding or marketing activities (Albers and Suwala 2020b; Graffenberger and Görmar 2020). Corporate education initiatives are also widespread and encompass engagement in building kindergarten or schools and even entire universities (e.g., WürthHochschule in Künzelsau, https://www.hs-heil bronn.de/campus-kuenzelsau). Corporate driven development-oriented measures also vary a lot with regard to scale, scope, type, and intensity and encompass miscellaneous measures or in order to revitalize (e.g., corporate re-urbanization), stimulate (e.g., town center management), upgrade (e.g., business improvement districts) or even lead certain spatial entities (e.g., master plan initiatives at a quarter or even city level) (Albers and Suwala 2020a). By and large, CSpR measures/policies call for context dependent approaches (e.g., depending on function of the company unit, position in the value chain, or location: Global South/North, etc.) (GTZ 2011). CSpR and Social Targets (8.5, 8.7, 8.6, 8.8) CS(p)R measures that are aiming for social targets with the SDG No.8 frame are directed towards labor market issues. This includes human rights,

Corporate Spatial Responsibility and Sustainable Development Goals

decent work for everyone in general, and youth/ gender equality on labor markets in particular. What is common practice in most countries of the Global North is nowadays still often neglected in the Global South. Hereby, there is either no CS (p)R beyond the very nature of business or insufficient rights (e.g., discrimination, no decent breaks, child labor). As a substitute, policy initiatives from business leaders (e.g., Business Leaders Initiative on Human Rights, etc.) and guidelines from other semiprivate organization (e.g., Official Development Aid) based on commitments within UN Global Compact call for “company-led approaches to protecting human rights” (GTZ 2011, 11). A practical first step in this realm is to familiarize with the “International Bill of Human Rights” made of three agreements (The Universal Declaration of Human Rights, The International Covenant on Civil and Political Rights, The International Covenant on Economic, Social and Cultural Rights). Then it is important to incorporate human rights into procedures and processes. The latter can be based on considering the full scope of business activities and functions at stake – especially when the value chain is globalized (e.g., working conditions with suppliers, etc.) or by establishing control systems for managing human rights within the business (OHCHR 2006). Hands-on instances for all three subjects (e.g., human rights, decent work for everyone, youth/gender equality on labor markets) include local and global labor union recognition, safe home journeys for female employees, proximate corporate housing construction to secure workplaces for all income groups, or dual vocational training for the youth with extensive tangible (e g., own flats) and intangible resources (e.g., takeover agreements) among many other initiatives (Albers 2011; Suwala et al. 2012, 2018). CSpR and Environmental Targets (8.4, 8.7, 8.9) The general relationship between CS(p)R measures and sustainability management or corporate sustainability is multilayered, equivocal, and overlapping (van Marrewijk 2003). CSpR measures and environmental targets can be broken down into sustainable production and

149

consumption, workplaces, and tourism according to SGD No.8. Apart from that, UNDP has a scheme called Growing Sustainable Business, initiated by the United Nations Global Compact itself (UN 2015). These ideas are far from being novel and have been underlined by many organization such as the European Commission or the OECD which stresses that promoting sustainable consumption and production are vital aspects of sustainable development that is both consistent with environmental and social needs and equally important to limit negative environmental and social, and spatial externalities (OECD 2008). The European Commission points out that consumer attention to CSR-related issues has grown in recent years, but significant barriers remain, such as insufficient awareness, the need to pay a price premium, and lack of education or accessibility to information necessary for making informed choices. Here, corporations need to adopt a stronger role in helping consumers to make more sustainable choices (European Commission 2011). Sustainable workplaces form not only an important part as CSpR but also direct instruments of the latter. Hereby, it is not only about the long-term nature and content of work (e.g., activities around renewable resources), flexible time schedules, space for sabbaticals or family compatibility but also about the design, green practices, and spatial arrangement of workplaces themselves that promote a vital communication, health aspects, and climate or look and feel for employees (Brinkhoff et al. 2015). Examples comprise corporate or employees gardens (Severson 2010) or corporate campuses that promote sustainable lifestyles (e.g., Alnatura 2018) or in general corporate-driven initiatives that create do-it-yourself spaces and networks, co-working, open workshops, repair initiatives, and open source projects (Merkel 2015). Finally, despite obvious links CSpR and sustainable tourism initiatives are not an easy couple. A report to the Foreign Investment Advisory Service (FIAS) (a joint program by the World Bank and International Finance Corporation) recognizes that CS (p)R within the tourism industry is behind other industries in all aspects (Dodds and Joppe 2005). At the same time, tourism is a cross-sectional

C

150

Corporate Spatial Responsibility and Sustainable Development Goals

industry with a substantial impact on the triple bottom line (environmental, social, and economic – e.g., poverty alleviation, local economic development and conservation) by pushing for greater adoption of CSpR. Examples show that demand for sustainable tourism is rising globally, albeit still mass tourism with few variables like price, quality of accommodation, and security decide where people spend their vacations. Hereby, corporations

need to transparently raise awareness about the history, local people and regions where they provide services and report about these practices. Although most types of engagement are rather single initiatives than policies, they can have a systemic or holistic character (see also Table 1). Moreover, CSpR also encompass indirect measures that are pursued either through commercial associations, own corporate foundations or the

Corporate Spatial Responsibility and Sustainable Development Goals, Table 1 Supporting the Sustainable Development Goals through selected CSpR measures (own compilation) SDG 8 targets CSpR and macroeconomic targets (8.1, 8.2, 8.10)

CSpR and policy targets (8.3, 8.6, 8.9)

CSpR and social targets (8.5/8.6, 8.7, 8.8)

CSpR and environmental targets (8.4, 8.7, 8.9)

Systemic CSpR embracing manifold targets

Examples Economic growth: CS(p)R firms positively affects economic growth and their associated share in growth is 6% for 25 economies (Škare and Golja 2014) Economic productivity: CS(p)R firms engage into “CS(p)R profit maximizing” by trying to incorporate social, ecological, or spatial characteristics into products and manufacturing processes (Paul and Siegel 2006) Financial stability: Expanding outreach increasing access to financial services to the unbanked segments of the population by corporate guarantees for employees to obtain microcredits or by providing corporate mobile systems, fighting corruption through appropriate wages (Prior and Argandoña 2009) Culture-oriented initiatives/policies: Object-oriented CSpR measures (e.g., museums, art hall, iconic buildings for the promotion/image of localities (Albers and Suwala 2018) Education-oriented initiatives/policies: Corporate-driven kindergarten, school or even universities, dual vocational programs (Albers and Suwala 2020c) Development-oriented initiatives/policies: BID measures or in order to revitalize (corporate re-urbanization) or stimulate (TCM), upgrade (BID) or lead (master plans) certain spatial entities (Knieling et al. 2012, Albers and Suwala 2020b), context-dependent CSpR measures for the Global South (GTZ 2011) Human rights on labor markets: Consideration of/control systems for entire local or global value chains concerning aspects like no child labor, recognition of labor unions, etc. (GTZ 2011; Suwala et al. 2018) Decent work for everyone: Corporate housing construction to secure workplaces for all income groups (Albers 2011) Youth/gender equality on labor markets: Dual vocational training for the youth with extensive tangible (e.g., own flats) and intangible resources (e.g., takeover agreements, study funds) (Suwala et al. 2012) Sustainable production and consumption: Sustainable consumption and production as vital aspects to limit negative environmental and social, and spatial externalities (OECD 2008). Sustainable workplaces: Design, green practices (e.g., corporate gardens) and spatial arrangement of workplaces promote a vital communication, awareness, health aspects, and climate or look and feel for employees (Severson 2010; Brinkhoff et al. 2015; Merkel 2015) Sustainable tourism: CSpR measures in tourism (as cross-sectional industry) promise substantial impact on the triple bottom line (especially though information, awareness and reporting about local and regional circumstances) (Dodds and Joppe 2005) UN Global Compact (Annan 1999), private sector-driven community development (e.g., master plan initiatives, context-/location-dependent CSpR standards, place leadership), control systems for entire local or global value chains concerning human rights or working conditions (GTZ 2011; Albers and Hartenstein 2017)

Corporate Spatial Responsibility and Sustainable Development Goals

support of social institutions, ecological projects or spatial administrative entities no matter at which scale (e.g., district partnerships, socio-spatial volunteering, infrastructure construction).

Concluding Summary CSpR and many of the aforementioned targets inherit context dependency, uneven geographies and are attached to site or location-specific idiosyncrasies. All these observations suggest that the spatial dimension or perspective of CSR gains an increasingly role in the globalized world and its challenges. The featured Table 1 summarizes selected examples from the main text body and should be considered as a first collection of “good CSpR practices” that might help to find starting points when approaching SDG targets. Apart from the illustrated enthusiasm, it has to be acknowledged that there is multifaceted criticism with regard to corporate spatial responsibility. First of all, many corporations criticize such measures themselves and abstain from CSpR measures due to their far-flung activities and additional costs involved. In particular, SMEs just either do not have the capacities to take part in such measures or are simply overwhelmed by the scale or scope of action. Second, despite development towards more sophisticated SDG involvement and reporting, there is a risk that these measures remain rather rhetoric than meaningful (van der Waal and Thijssens 2020). Moreover, since multilateral initiatives like the UN Global compact are purely voluntary and neither police, enforce nor measure what companies do, it brought critique to the fore that it allows corporations to “bluewash” their shortcomings with the UN’s name – also a threat to SDGs (Standing 2007). Third, there are many arguments that argue against CSpR. Do corporations really deal with societal benefits or do they rather attempt to achieve corporate goals? In other words, corporate spatial responsibility or corporate spatial strategy (Knieling et al. 2012). Next to this opportunism, there are lobbyism, dependence or framing problems that accompany such initiatives. Many measures follow pertinent political interests

151

or are often neither transparent nor implemented in a participatory manner (e.g., corporate master plan initiative in Cologne (Germany) (Albers and Hartenstein 2017). Fourth, activities of administration bodies or planning sovereignties might be undermined or deterred from implementing effective regulations by regionally hegemonic or paternalistic corporations. Therefore, if certain types of spatial corporate engagement with substantial interventions are desired (e.g., masterplan initiatives) is a challenging question – in small towns, rural areas, or jurisdictions with a lack of strong government bodies or low effectiveness of administrative authorities (e.g., failed states), CSpR measures might be without alternatives and can provide the necessary baseline for the realizing Sustainable Development Goals (Horlings and Padt 2013; Suwala et al. 2018).

Cross-References ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs) ▶ Corporate Social Responsibility Manager: Job Roles, Challenges, and Individual Competencies ▶ Responsible Management for Innovative and Sustainable Firms in the Age of Complexity

References Albers HH (2011) Corporate urban responsibility. Campus, Frankfurt Albers HH, Hartenstein F (eds) (2017) CSR und Stadtentwicklung: Unternehmen als Partner für eine nachhaltige Stadtentwicklung. Springer, Berlin Albers HH, Suwala L (2018) Unternehmensengagement als Standortfaktor. Mit der Wirtschaft attraktive (Klein-) Städte schaffen. Informationen zur Raumentwicklung 6:50–57 Albers HH, Suwala L (2020a) Family firms and corporate spatial responsibilities in Germany – implication on urban and regional planning and management. In: Basco R, Stough R, Suwala L (eds) Family business and regional development. Routledge, London Albers HH, Suwala L (2020b) Place leadership and corporate spatial responsibilities. In: Sotarauta M, Beer A (eds) Handbook on city and regional leadership. Edward Elgar Publishing, Cheltenham Albers HH, Suwala L (2020c) Räumliches Unternehmensengagement (Corporate Spatial

C

152

Corporate Spatial Responsibility and Sustainable Development Goals

Responsibility) und Ortsführung (Place Leadership) in Kleinstädten. Perspektiven für eine neue Ortsführung? Eine Zusammenführung von zwei Diskursen. In: Döhringer S, Eder J (eds) Schlüsselakteure der Regionalentwicklung. Welche Perspektiven bietet Entrepreneurship für ländliche Räume? ISR Forschungsbericht, vol 51, ÖAW, Wien, pp 63–84 Alnatura (2018) Der Alnatura Campus. Retrieved from https://www.alnatura.de/de-de/ueber-uns/alnatura-cam pus. Last Accessed 10 Apr 2020 Annan K (1999) UN global compact. In World Economic Forum in Davos, Switzerland. UN Press Release SG/ SM/6881 Basco R, Suwala L (2020) Spatial familiness – a bridge between family business and economic geography. In: Calabrò A (ed) A research agenda for family business. A way ahead for the field. Edward Elgar, Cheltenham Basco R, Stough R, Suwala L (eds) (2020) Family business and regional development. Routledge, London Bertelsmann Stiftung (eds) (2010) Verantwortungspartner. Unternehmen. Gestalten. Region. Ein Leitfaden zur Förderung und Vernetzung des gesellschaftlichen Engagements von Unternehmen in der Region. Bertelsmann Stiftung, Gütersloh Bowen HR (1953) Social responsibilities of the businessman. Harper and Row, New York Brandt M, Dahlbeck E, Flögel F, Gärtner S, Schlieter D, Schilcher C (2019) Raum und Unternehmen: Zur Funktionsweise von Unternehmensengagement in Regionen mit Entwicklungsbedarf. Nomos, BadenBaden Brinkhoff S, Suwala L, Kulke E (2015) Managing innovation in ‘localities of learning’ in Berlin and Seville. In: Micek G (ed) Understanding innovation in emerging economic spaces. Ashgate, Farnham, pp 11–31 Bürcher S, Mayer H (2018) Are there differences in social capital related to corporate regional engagement in dynamic and less dynamic non-core regions? Eur Plan Stud 26(2):342–364 Bustamante S (2011) Localization vs. standardization: global approaches to CSR management in multinational companies, working paper, no. 60. HWR Berlin, Berlin Carroll AB (1991) The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Bus Horiz 34(4):39–48 Castel R (2000) Metamorphosen der Sozialen Frage. Universitätsverlag, Konstanz Dodds R, Joppe M (2005) CSR in the tourism industry? The status of and potential for certification, codes of conduct and guidelines. World Bank Group, Washington European Commission (2011) A renewed EU strategy 2011–14 for Corporate Social Responsibility, COM (2011) 681 final, Brussels Falk K (2017) Corporate Urban Responsibility– Hintergründe, Motive und Rahmenbedingungen für nachhaltiges Engagement von multinationalen Unternehmen in der Stadtentwicklung. In: Albers HH, Hartenstein F (eds) CSR und Stadtentwicklung. Springer Gabler, Berlin/Heidelberg, pp 181–200

Friedman M (1970) The social responsibility of business (is to increase its profits). The New York Times Magazine, 13 September 1970, 232–236 Fukuda-Parr S (2016) From the millennium development goals to the sustainable development goals: shifts in purpose, concept, and politics of global goal setting for development. Gend Dev 24(1):43–52 Garner J (ed) (1992) The company town: architecture and society in the early industrial age. Oxford University Press, Oxford Garriga E, Melé D (2004) Corporate social responsibility theories: mapping the territory. J Bus Ethics 53(1–2): 51–71 Graffenberger M, Görmar F (2020) Family firms and corporate responsibility in peripheral regions. In: Basco R, Stough R, Suwala L (eds) Family business and regional development. Routledge, London GTZ (2011) Corporate social responsibility and development corporation. GTZ’s contribution. Eschborn Hasan I, Kobeissi N, Liu L, Wang H (2018) Corporate social responsibility and firm financial performance: the mediating role of productivity. J Bus Ethics 149 (3):671–688 Horlings I, Padt F (2013) Leadership for sustainable regional development in rural areas: bridging personal and institutional aspects. Sustain Dev 21(6):413–424 Hüther M, Braun S, Enste D, Neumann M, Schwalb L (2012) Für eine Kultur der Mitverantwortung. Erster Engagementbericht. Stellungnahme der Bundesregierung. Bericht der Sachverständigenkommission Kiese M (2017) Unternehmerisches Engagement in der Clusterentwicklung–Konzeptionelle Überlegungen und Fallbeispiele aus Wolfsburg und Mitteldeutschland. In Albers, HH, Hartenstein F (eds) CSR und Stadtentwicklung. Springer, Berlin/Heidelberg, pp 119–142 Klettner A, Clarke T, Boersma M (2014) The governance of corporate sustainability: empirical insights into the development, leadership and implementation of responsible business strategy. J Bus Ethics 122 (1):145–165 Kluger M (2006) Die Fugger. Die deutschen Medici in Augsburg und im bayerischen Schwaben. Regio Augsburg Tourismus, Augsburg Knieling J, Othengrafen F, Preising T (2012) Privatisierung von Stadtund Regionalentwicklung: Gesellschaftlicher Nutzen oder Verwirklichung von Unternehmenszielen? Corporate spatial responsibility ‘oder’ corporate spatial strategy? Raumforsch Raumordn 70(5):451–464 König J, Suwala L, Delargy, C (2020) Triple, quadruple, quintuple: Helix models of innovation and sustainable development goals. In: Filho WL, Salvia AL, Azul AM, Brandli L, Wall T (eds) Encyclopedia of the UN sustainable development goals. Decent work and economic growth. Springer, Cham Meffert H, Münstermann M (2005) Corporate social responsibility in Wissenschaft und praxis – eine Bestandsaufnahme. In: Meffert H, Backhaus K, Becker J (eds) Corporate social responsibility – gesellschaftliche Verantwortung von Unternehmen.

Corporate Sustainability Wissenschaftliche Gesellschaft für Marketing und Unterneh-mensführung, Münster Merkel J (2015) Coworking in the city. Ephemera 15(2):121–139 Nejati M, Shafaei A, Salamzadeh Y, Daraei M (2011) Corporate social responsibility and universities: a study of top 10 world universities’ websites. Afr J Bus Manag 5(2):440–447 OECD (2008) Promoting sustainable consumption. Good practices in OECD countries. OECD, Paris OHCHR (Office of the United Nations High Commissioner for Human Rights) (2006) A guide for integrating human rights into business management, business leaders initiative on human rights, United Nations Global Impact. London Palazzo G, Scherer AG (2008) Corporate social responsibility, democracy, and the politicization of the corporation. Acad Manag Rev 33(3):773–775 Paul CJ, Siegel DS (2006) Corporate social responsibility and economic performance. J Prod Anal 26(3):207–211 Perkins R, Neumayer E (2010) Geographic variations in the early diffusion of corporate voluntary standards: comparing ISO 14001 and the global compact. Environ Plan A 42(2):347–365 Prior F, Argandoña A (2009) Best practices in credit accessibility and corporate social responsibility in financial institutions. J Bus Ethics 87(1):251–265 Schiek M (2017) Corporate regional responsibility (CRR). Lemgo, Rohn Schneider A (2012) Reifegradmodell CSR – eine Begriffserklärung und Abgrenzung. In: Schneider A, Schmidpeter R (eds) Corporate Social Responsibility, Verantwortungsvolle Unternehmensführung in Theorie und Praxis. Springer Gabler, Berlin, pp 17–38 Scholtens B (2006) Finance as a driver of corporate social responsibility. J Bus Ethics 68(1):19–33 Selcuk G, Suwala L (2020) Migrant family entrepreneurship – mixed and multiple embeddedness of transgenerational Turkish family entrepreneurs in Berlin. J Fam Bus Manag. https://doi.org/10.1108/JFBM-032019-0011 Severson K (2010) The rise of company gardens. New York Times, 11 May 2010. Retrieved from https://www. nytimes.com/2010/05/12/dining/12gardens.html. Last Accessed 31 Mar 2020 Škare M, Golja T (2014) The impact of government CSR supporting policies on economic growth. J Policy Model 36(3):562–577 Standing G (2007) Decent workplace, self-regulation and CSR: from puff to stuff, DESA working paper no. 62, UN Department of Economic and Social Affairs, New York Steurer R, Martinuzzi A, Margula S (2012) Public policies on CSR in Europe: themes, instruments, and regional differences. Corp Soc Responsib Environ Manag 19(4):206–227 Suwala L (2014) Kreativität, Kultur und Raum: ein wirtschaftsgeographischer Beitrag am Beispiel des kulturellen Kreativitätsprozesses. Springer, Berlin Suwala L, Micek G (2018) Beyond clusters? Field configuration and regional platforming: the Aviation Valley

153 initiative in the Polish Podkarpackie region. Cambridge J Reg Econ Soc 11(2):353–372 Suwala L, Kulke E, Strasser J (2012) Kolumbien – Bericht zur Hauptexkursion 2012. Arbeitsberichte Geographisches Institut Heft 173. Berlin Suwala L, Kulke E, Gade K (2018) Zentralamerika – Bericht zur Hauptexkursion 2017. Arbeitsberichte Geographisches Institut Heft 195. Berlin UN (2015) Impact: transforming business, changing the world. UN Global Compact, Oslo UN (2016) The sustainable development agenda, New York. https://www.un.org/sustainabledevelopment/develop ment-agenda/. Accessed 1 Apr 2020 Van der Waal JW, Thijssens T (2020) Corporate involvement in sustainable development goals: exploring the territory. J Clean Prod 252:119625 Van Marrewijk M (2003) Concepts and definitions of CSR and corporate sustainability: between agency and communion. J Bus Ethics 44(2–3):95–105 Van Zanten JA, Van Tulder R (2018) Multinational enterprises and the sustainable development goals: an institutional approach to corporate engagement. J Int Bus Policy 1(3–4):208–233 Votaw D (1972) Genius became rare: a comment on the doctrine of social responsibility Pt 1. Calif Manag Rev 15(2):25–31 Werna E, Keivani R, Murphy D (2009) Corporate social responsibility and urban development lessons from the south. Palgrave Macmillan, Basingstoke

Corporate Spatial Volunteering ▶ Corporate Spatial Responsibility and Sustainable Development Goals

Corporate Stakeholder Responsibility ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

Corporate Sustainability ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

C

154

Corporate Sustainability Responsibility ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

Corporate Urban Responsibility ▶ Corporate Spatial Responsibility and Sustainable Development Goals

Corporations ▶ Contribution of Enterprises in Achieving the Sustainable Development Goals

Corporate Sustainability Responsibility

Landry (2000) argues that a creative city is based on the idea that “culture as values, insight, a way of life and form of creative expression, represents the soil form within which creativity emerges and grows, and therefore provides momentum for development.” According to the United Nations Conference on Trade and Development (UNCTAD 2018), the creative economy is a concept that is based on creative assets with a development dimension. At the heart of the creative economy are the “creative industries.” Creative industries are defined as industries that are “based on individual creativity, skill and talent” and have “potential for wealth and job creation through the generation and exploitation of intellectual property” (DCMS/CITF 1998, p. 3; DCMS/CITF 2001, p. 5). Finally, the creative class includes creative knowledge workers whose economic function is to create new ideas, new technology, and/or new creative content (Florida 2002).

Introduction

Cradle-to-Cradle ▶ Value Creation in a Circular Economy: An Interdisciplinary Approach

Creative Strategies for Sustainable Development in Small Cities Despina Sdrali Department of Home Economics and Ecology, Harokopio University of Athens, Athens, Greece

Definitions Searching for a new development model, several concepts have emerged such as “creative city” (Landry 2000), “creative economy” (Boccella and Salerno 2016; Howkins 2013), “creative industries” (Caves 2000; Hartley 2005), and “creative class” (Florida 2002).

By looking for a new development model, this model is not solely based on the production of goods but is significantly fueled by ideas and innovation. Central to this model is that creativity, knowledge, and access to information are considered as powerful forces that promote sustainable development (UNCTAD 2018). During the last decades, strategies based on creativity have been considered as key drivers for the development of big cities and metropolitan areas. However, researches (e.g., McGranahan and Wojan 2007a, b; Selada et al. 2012) have stressed the important role of creativity in the case of small cities. Case studies (INTELI 2011) in Europe, the USA, and Canada have outlined creative strategies addressing how small towns and cities could revitalize and diversify their traditional economy seeking for a better quality of life and attractiveness not only for their residents but also for their visitors. Specifically, Petrov (2007, p. 452) states that “there is some evidence that creativity can be even more critical for reviving economies in middle-sized and small towns

Creative Strategies for Sustainable Development in Small Cities

(and perhaps rural areas) than it is in the metropolis.” In this context, the concept of the creative ecosystem has been introduced, which “is an environment of excellence based on creative assets that generates socio-economic growth and development, and comprises three interlinked components; i.e. economy, place and people” (INTELI 2011, p. 16). This chapter aims to provide an overview of the approaches on strategies based on creativity in small cities and to highlight the importance of creativity for sustainable development. A literature research was conducted to report the role that the creative ecosystem and its components can play in furthering the achievement of the Sustainable Development Goals (SDGs). This chapter is structured in four sections, followed by a conclusion. The section “Building a Creative Strategy for Sustainable Development” identifies the context and significance of the interlinked variables that could develop a creative-based strategy for sustainable development. The section “Approaches on the Relationship Between Creativity and Sustainable Development” provides an overview of the approaches of the relationship between creativity and sustainable development. The section “Creative Small Cities Approach” identifies the typology of creative-based approaches in small cities. The section “Key Ingredients for Creative Strategies in Small Cities” discusses the factors affecting creativity toward a strategy. Finally, the chapter makes some closing observations.

Building a Creative Strategy for Sustainable Development Economy (creative industries), place (creative spaces), and people (creative talent) are the interlinked variables that could build a creativebased strategy for sustainable development. Creative Economy The creative economy deals with the interplay between economy, culture, technology, and social aspects. It is a feasible development option for

155

ideas, knowledge, innovation, and new opportunities. In light of the growing concept of the creative economy, studies are linking the creative economy to positive impacts in the area of sustainable development, since it can create jobs and generate income and export earnings while promoting social inclusion, cultural diversity, and the environment. Regarding the relationship between creativity and sustainable development, Levent (2011) proposes that creativity is necessary for sustainable development, and the need for promoting sustainable development pillars may be a trigger to creativity. The United Nations (2010) states that the creative industries that are associated with the creative economy, using resources [inherent in arts and culture], not only enable countries and regions to tell their own stories and project their own unique cultural identities to themselves and to the world, but they also provide these countries with a source of economic growth, employment creation, and increased participation in the global economy. In addition, the creative economy provides opportunities for youth to remain in their own communities. It is argued that work in the creative economy favors youth and women compared with other sectors (European Commission 2019). An important socioeconomic impact of the creative economy is its contribution to employment with the creative industries generally accounting for around 2–8% of the workforce in the economy (United Nations 2010). The creative industries are knowledge- and labor-intensive that require specific skills and high-level qualifications. The creative skills required may drive innovation in the wider economy (Florida 2002). In addition, the creative economy – through arts and cultural activities – can foster social inclusion, provide a sense of belonging, and help promote social cohesion and reduce isolation. Moreover, participation in cultural activities instills self-confidence, pride, and personal wellbeing. Arts and culture promote personal, community, and national identity and provide creative mechanisms for individuals to express their individuality, engage with others, and celebrate diversity. At the global level, the United Nations links

C

156

Creative Strategies for Sustainable Development in Small Cities

the creative economy with the promotion of cultural diversity, an element of significance regarding the fast pace of globalization and concerns around the loss of cultural identity. Finally, from an environmental perspective, the creative economy is relatively low impact. According to reports, cultural activities are most often experience-based rather than material-based and require less infrastructure over other industries. Creative industries offer eco-friendly solutions to sustainable development challenges, giving examples such as eco-friendly fashion, and protect biodiversity by marketing natural health and cosmetic products that work in harmony with nature. Creative Industries Creative industries are those where “the product or service integrates meaningful artistic or creative components” (Greffe 2002, p. 19) and situates them at the crossroads of the arts, culture, business, and technology (UNCTAD 2018). These industries cover a large list of activities, such as advertising, architecture, arts and crafts, design, fashion, cinema production, leisure software, music, the performing arts, publishing, software engineering, and radio and television. However, nowadays the creative industries are generally classified in four areas: heritage, arts, media, and functional creations. Creative industries – being at the heart of the creative economy – could be a source of economic transformation, socioeconomic progress, and job creation while contributing to social inclusion and sustainable development. More specifically, creative industries are generally inclusive, since people from all social classes can participate in the creative economy as producers and consumers alike. However, Florida (2017), in his book The New Urban Crisis: How Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class – and What We Can Do About It, points out the strong correlation between the presence of the creative class in metropolitan areas and income inequality as the creative industry generally employs skilled workers

leading a rise in the relative wages of more educated workers. Creative Space The creative economy is related to the concept of place and has been applied to the creative city (INTELI 2011). Landry (2000) suggests that cities are considered creative if they are characterized by factors, such as personal qualities, leadership, human diversity and access to talent, organizational culture, local identity, urban facilities, and networking. The author points out that creative cities can be considered as generator of new ideas and inventions, since these cities contain the necessary preconditions regarding the hard and the soft infrastructure. More specifically, the hard infrastructure is represented by constructed environment, institutions, and support services that develop the atmosphere and the activities of a city, while the soft infrastructure is represented by skilled and flexible workers, dynamic thinkers, creators, communication linkages, and entrepreneurial culture (INTELI 2011). Furthermore, creative cities are related to creative people since cities are considered as poles of attraction and retention of creative people. More specifically, creative hubs with characteristics related to mixture of cultural and creative people and companies, mixture of cultural and creative functions, mixed-use spaces, social networks, collaboration and interdisciplinarity, and sense of community and identity generate favorable conditions for the development of people’s creative work and the regeneration of the city by finding new uses for old buildings, enhancing creativity and innovation, and stimulating cultural diversity. Creative People The driving force behind the sustainable development of a community is its ability to attract and retain creative people – the so-called creative class – and not exclusively creative or knowledgeintensive companies. Creative people induce creativity and sustainable development in the forms of higher innovation and expansion of technology-based sectors in the places they live and work.

Creative Strategies for Sustainable Development in Small Cities

Approaches on the Relationship Between Creativity and Sustainable Development Literature suggests that there are two different approaches which explore the relationship between creativity and sustainable development: the “creative industries approach” and the “creative class approach.” The Creative Industries Approach Literature on the creative industries approach refers mainly to large cities and metropolises, as they have bigger labor markets, strong agglomeration economies, and larger networks. However, small cities can also play a role in the creative economy through a strategy of product differentiation and focus on niche markets (Van Heur 2010). The creative industries approach emphasizes the role of firms. Specifically, it is based on the theory of clusters (systems of firms) according mainly to the work of Porter (1998). Clusters are regarded as drivers of competition, innovation, and regional development. The main characteristics of clusters – i.e., spatial proximity, strategic collaboration and competition, and interaction between stakeholders – can provide for the implementation of responsible business practices and activities that could contribute to sustainable development. Specifically, clusters give the opportunity to companies to have an easy access to important resources, to reduce transportation costs, to have access to consumers and labor (Porter 2000), and to tap into the abundant information flows and innovative potentials (Scott 2009). The term of creative clusters refers to the beneficial spillovers that occur when sectors work in close proximity to one another. In general, a creative cluster includes enterprises, cultural institutions, arts venues, and individual artists alongside the science park and the media center. Creative clusters are places to live and work, places where cultural products are consumed as well as made. They feed on diversity and change and so thrive in busy, multicultural urban settings

157

that have their own local distinctiveness but are also connected to the world. The groups of creative firms (e.g., music, film, visual arts, fashion, and design) can converge in this way if the conditions for the development of a creative cluster exist. As Michael Porter (1990) claims, the production of creative goods and services under these circumstances can be shown to enhance efficiency and growth and promote sustainable development. The Creative Class Approach The creative class approach proposes that the main source of creativity is creative people, who are able to produce economic value and lead to the sustainable development. Specifically, Florida (2002) suggested an approach focused on the creative class and highly skilled people toward a community development. The creative class approach (or people-based approach) is based on three T’s, i.e., talent, tolerance, and technology. As Charles Landry (2000, p. 51) in his book The Creative City stated: “Human cleverness, desires, motivations, imagination and creativity are replacing location, natural resources and market access as urban resources. The creativity of those who live in and run cities will determine future success.” Thus, the most critical resource of a city is regarded its people (Lazzaretti et al. 2008). The creative class migrates to places with specific qualities and high degrees of openness, diversity, and tolerance. Creative people generate “creative milieu”; they share common values (e.g., creativity, individuality, openness, and diversity); increase “creative capital”; give a competitive advantage to the places they live regarding investment, talent, and trade; and attract new enterprises (INTELI 2011). Hence, the presence of the creative class can generate amenities that are developed in response to the consumption patterns of the creative class (McGranahan and Wojan 2007b). In this way the creative class may contribute to widening the sustainable creative community and attracting mostly talented young families, midlife career changers, active retired persons, investors, entrepreneurs, tourists, etc. (INTELI 2011; Kagan and Hahn 2011).

C

158

Creative Strategies for Sustainable Development in Small Cities

Despite the fact that according to the creative capital model (Florida 2002), the creative class is attracted by large cities due to the cities’ diversity, density, and critical mass and rich cultural life, small cities can also play a role in the attraction of the creative class; small-sized communities are often characterized by quality of life and quality of place – the so-called amenities. High standards of quality of life and unique characteristics in a place can help communities attract creative people, who are looking for alternative lifestyle that is linked to well-being which in turn is associated with sports, healthy food, preservation of the environment and sustainable practices, and the sense of community and local authenticity (Selada et al. 2012). According to Florida (2002), the creative class enjoys a range of activities that highlight the collective interest in being participants and not just spectators. The specific amenities of many small communities are considered as magnets for the creative class, including components such as geographical location, size, climate, traditions, natural resources, and quality of life. McGranahan and Wojan (2007b) showed that the creative class is present in areas with high natural amenities, while it is growing more rapidly in mountainous areas characterized by sunny climate with a mix of forest and open space. Similarly, Lewis and Donald (2009, p. 39) stated that small cities can offer “multiple land uses, amenities and pedestrian connectivity within a compact environment.” Furthermore, the creative class is attracted to places that are characterized by a sustainable lifestyle by ecological and social dimension, lowcarbon lifestyle, community engagement, a culture of collaboration and participation, and social proximity, less density, and a vibrant cultural life, characteristics that may be abundant on the small cities (INTELI 2011; Selada et al. 2012). However, it is argued that amenities have different importance for different segments of the creative class, based on factors such as age, lifestyle, stage of life, and personal attitude and circumstances (Trip and Romein 2014). Since the creative class is a highly heterogeneous class, having integrated, for example, scientists, engineers, artists, and legal and financial

workers, each of these groups may have different preferences in terms of deciding on their residential location, being the amenities and the quality of place less important instead of job opportunities (Scott 2009). On the other hand, amenities may be more important for symbolic knowledge-based occupations, while business-climate parameters are more expressive for synthetic knowledgebased job functions. Finally, the talents that live in rural areas tend to belong to a higher age-scale and be married with children, compared to the urban talents (McGranahan and Wojan 2007a). Finally, regarding age, Denis-Jacob (2012) suggests that retirees and elderly people are able to have a significant role in community life having contributed to cultural consumption and cultural production. Specifically, this group of people has greater propensity to consume cultural activities due to their leisure time and financial resources, while they are sometimes prone to the production of certain cultural products. The creative class is highly related to the economic development of small communities. More specifically, according to McGranahan and Wojan (2007b), small rural communities in the USA with a high proportion of creative class generally had job growth rates that were twice as high as communities with less creative class presence. The creative class is characterized by an entrepreneurial spirit with the capacity to turn ideas into creative products and services, using business skills and creative mind. This induces the development of creative businesses in areas such as arts, music, design, software, etc., which may be characterized by innovation, leading to the local sustainable development.

Creative Small Cities Approach Lewis and Donald (2009) have suggested a new set of variables adapted to the context of small cities, such as ecological footprint, commuting distance, public transit and other sustainable commuting modes, housing conditions and affordability, and education; they may attract creative people and develop creative talents. Similarly, Munoz (2010) identified five areas where small

Creative Strategies for Sustainable Development in Small Cities

cities should focus in order to achieve sustainable creative development, i.e., (a) education and sustainable talent development; (b) network capacity, concentration of interactions, and community engagement and co-development; (c) quality of life; (d) sustainability; and (e) iconic and imaginative territories. Based on the theoretical insights and empirical studies on the development of small creative cities, five dimensions are identified: • Governance: It is a critical factor for the promotion of the creative economy in small communities. Local leaders can act as promoters or facilitators of the development of creative ecosystems. Governance is related not only with leadership and place management but also with the coordination of actors, public participation, and territorial cooperation (Selada et al. 2012). • Natural and built environment: It is considered as a component of great significance to attract creative people. It refers to the natural resources, the climate, the landscape, the public spaces, and other man-made structures. • Social and symbolic capital: It is linked with the community and its social interactions. It is related to memories, local identities, and local image of the place. • Economic activities and cultural facilities: They are referred to the local economic activities, entrepreneurship and cultural activities, and cultural infrastructure and events. • Connectivity: It is regarded as a dimension of great importance for the success of creative context. It fosters cooperation between the creative class, activities, resources, and territories. It encompasses both virtual (digital communication) and physical accessibilities. Based on the results of research studies, a typology of creative-based strategies was established, i.e., physical approach focused on the built environment and mainly based on the creative space; green approach oriented to natural, cultural, and symbolic amenities; thematic approach focused on creative and cultural activities such as music, theater, food, etc.; and integrated approach focused on creative strategies that

159

Creative Strategies for Sustainable Development in Small Cities, Table 1 Approaches of creative-based strategies adopted by small cities Type of approach Physical approach Green approach Thematic approach Integrated approach

Description Strategies focused on the built environment and mainly based on the creative space Strategies focused on natural, cultural, and symbolic amenities Strategies focused on creative and cultural activities Strategies focused on creative industries that encompasses sustainable development dimensions

Source: summarized from INTELI (2011)

link all sustainable development dimensions (Table 1). However, it is worth mentioning that in many cases, small cities adopt creative strategies by combining elements of more than one of the aforementioned approaches.

Key Ingredients for Creative Strategies in Small Cities The gains derived from the creative ecosystem and its interlinked components are not equality distributed across the globe. Asia and the Pacific, Europe, and North America are seeing rapid and unprecedented growth in the creative economy, whereas for Africa, the Middle East, Latin America, and the Caribbean, creative economy represents untapped economic potential. It would be therefore vital to understand the factors that may foster creativity for planning creative strategies for sustainable development in small cities. Local Leadership and Agents of Change An effective local leadership is increasingly recognized as an important key to fulfill the SDGs provided that local leaders are people who deeply care about community issues, implement initiatives, and shape local development. Having direct contact with communities, local leaders push forward ideas, galvanize others, and create immediate social impact, encouraging creative-based strategies.

C

160

Creative Strategies for Sustainable Development in Small Cities

A strong leadership is essential in the definition and implementation of creative-based strategies. Local leadership is a significant factor in promoting change and a new strategy based on creativity. Local leaders can be promoters or facilitators of the development of creative ecosystems provided that they have the appropriate attributes and believe in the strategy and in the community. They have to be proactive and future-oriented, embrace change, and take risk (INTELI 2011). However, local leadership alone is not enough. Collaboration among leaders and the wider public, encouraging and stimulating the locals and the potential talents, is also needed to reach the SDGs. Besides the role of a political authority, sometimes the process of creative transformation of the territories is promoted by a person, a group of people, or a specific organization, the so-called agents of change who are particularly good in imaginative exploration and creation. In small communities, the noneconomic aspects of life are more visible where a strong sense of identity and community spirit prevails. However, the coexistence of different interest groups and practices usually creates discomfort (INTELI 2011). Thus, factors, such as leadership, adequate institutional arrangements, and collective actions, are needed to coordinate the potential collisions between the different interest groups and avoid conflicts. Community Engagement Community engagement through active participatory processes is considered as an effective tool for the success of the implementation of creative-based strategies (INTELI 2011; Selada et al. 2012). Through community engagement, social cohesion is strengthened and active citizenship is promoted (Boudreaux 2008). More specifically, the frequent interaction and communication among residents can help facilitate relationships of mutual trust and understanding (Jones 2005) by enabling self-expression. Through community engagement, people are informed, dialogue is promoted between each other, and self-esteem is being built. In addition, only when locals are involved in the decision-making process, their

traditional lifestyles and values are respected (Mitchell and Reid 2001). Despite the role of local participation, researchers have found that residents’ involvement in the decision-making or management process is weak. It is worth mentioning that the local participation in the decision-making process differs worldwide and depends on institutional arrangements and other constraints, related to a variety of domains, such as land ownership, financial resources, and residents’ experience on sustainable development issues, as well as on the stage of community development and political situation. In order for local people to be able to engage in discourse, knowledge is required. Hence, researchers have proposed that face-toface contacts, social networks, and sharing of knowledge may enhance creativity and allow the success of creative transformation processes (INTELI 2011). In this context, residents can act as “creative brokers” encouraging a creative-based approach and avoiding local conflicts. Creative Brokers Even though fostering creativity is desirable, it is not an easy process. Therefore, scholars have given attention to the role of individual’s traits, networking, and communication for promoting creativity and building creative-based strategies. The role of creative brokers is also important for promoting and enhancing creativity. Creative brokers are regarded as agents who function as connectors between arts, technology, and business. They occupy a position in the social space that provides them with access to nonredundant knowledge (Stea and Pedersen 2017). More specifically, creative brokers have to create interactions between talented people (visitors, residents, investors, etc.) to improve efficiency by introducing “good ideas” from one isolated setting into another, stimulate creative ideas, support the controlled transfer of specialized knowledge, and increase cooperation between different people (Long et al. 2013). Furthermore, creative brokers make residents to engage to the process of building creative-based strategies. People with

Creative Strategies for Sustainable Development in Small Cities

creative ideas, open mind, and a sense of sociability are necessary to be attracted. According to Lombardi et al. (2019), the relationship between creative broker’s knowledge and his/her creativity depends on his/her metaknowledge, i.e., the extent to which he/she knows what others know. In addition, Stea and Pedersen (2017) have shown that a curvilinear specification of the relationship between brokerage and creativity applies when brokers work in research and development. Furthermore, brokers who work in the area of research and development are more sensitive to work environments that protect their cognitive resources; in that case they exhibit greater creativity if the work environment is free from environmental stressors, such as noise and disturbances. However, for Long et al. (2013) brokers who hold the specialized knowledge or resources could become overwhelmed by their role; thus, they need support to function optimally. Networking Networking or building partnerships with other like-minded partners and organizations is essential for the sustainability of small cities. This establishes a wider market base that is supportive to the development of the surrounding regions, promoting connection between urban and rural areas and enhancing polycentrism. Networks could refer to other towns or cities, being able to function as bridges between the “local” and the “global” spheres, having an important role to play despite their size. Especially, local networks provide opportunities for regular, practical support tailored to local needs. Furthermore, with the development of the digital economy and the spread of information and communication technologies, it is possible for a person or a company to be located in a small town and be integrated in partnerships, working for the global market. This fact is also related to the increasing fading of barriers between work, leisure, and living, especially in the case of mobile creative people who work on a project-by-project basis. Networking enhances creativity and sustainability; enterprises support and learn from each

161

other and are able to exploit others’ agendas for new ideas and funding opportunities. Networks support resource management, help in building social capital, and unveil the core of entrepreneurship to suggest an institutional framework that could encourage people – especially the youth – to view their ventures for the benefit of the society (Pai and More 2018). Creative-Friendly Local Education System Researchers (e.g., Compton 2007; Shaheen 2010) have stressed the need for the promotion of creativity in learning based on approaches that promote students’ motivation, self-esteem, and skills. In addition, the Council of the European Union (2009), having developed the role of education in a fully functioning knowledge triangle, encourages education and training institutions to ensure that curricula, teaching, and examination methods should foster creativity, innovation, and entrepreneurship. It is worth mentioning that creative people are more likely to engage in entrepreneurship (Ward 2004), since creative thinking is an essential element in the formulation of business ideas being necessary in each stage of business development. Moreover, the Europe 2020 Strategy sets several initiatives where creativity plays an important role. All these require a fundamental rethinking of educational systems, both formal and informal. A creative-friendly local education system is rather important as an internal source for creative minds and talents. Creativity has been defined as the production of novel ideas (Mumford and Gustafson 1988), which leads to escaping from the existing perceptions to open up new ways of looking at and doing things (Gray 2011). According to Forte (2009), a new classroom atmosphere should be created where thinking, questioning, and imagining will be encouraged. Such an approach may enhance students’ intelligence and build “soft skills,” such as understanding, empathy, collaboration, and communication skills. Creative education involves a balance between teaching knowledge and skills and encouraging innovation. It helps students become creative thinkers and imagine and explore alternatives.

C

162

Creative Strategies for Sustainable Development in Small Cities

However, students’ freedom to learn is closely related to teachers’ freedom to teach (Forte 2009). The aim of a creative-friendly education system is an inward freedom, i.e., freedom of expression and freedom of inquiry (Rogers 1969), being inspired by “active, creative contributors. “Creative teachers are the key figures to implement changes and welcome new experiences; they use approaches to make learning more interesting and effective. Creative teaching is defined in two ways: teaching creatively and teaching for creativity (Morris 2006). Current educational systems need to adopt new methods and strategies being able to ensure the freedom of learning and teaching and give visibility to creative people. Especially, in small communities, talents are not always visible (INTELI 2011). An update of curriculum has a potential to develop student skills and motivation to seek more creative solutions to address social and environmental issues as well as business ones. Promotion of Quality of Life Small-sized communities are often characterized by quality of life and amenities; thus, small-sized communities can play an important role in the creative economy and the attraction of the creative class. The unique endogenous assets of a place – i. e., genius loci – can help it become “special.” Local assets, such as natural landscapes, cultural heritage, and symbolic and built amenities, may confer distinctiveness and authenticity to the places. Studies have shown that the creative class is present in areas with high natural amenities, while it is growing more rapidly in mountainous areas characterized by sunny climate with a mix of forest and open space. In addition to this, people are looking for life satisfaction that is linked to the four dimensions of sustainable development, i.e., environment, social, culture, and economy. Creative people are attracted to places that are characterized by a sustainable lifestyle, such as green spaces, lowcarbon lifestyle, social inclusion, less density, and a rich cultural life, elements that may characterize small cities. Especially, talented young families, midlife career changers, and active

retired people may be induced to small cities by a better work-life balance and an inspiring atmosphere for artistic and creative work.

Concluding Summary While creative strategies are mainly developed in big cities, it has been also stressed the important role of strategies based on creativity in small cities. Small cities that need to be revived should include the interlinked components of creative industries, creative space, and creative class. These aforementioned components can play a key role in the implementation of creative strategies in small cities. However, nowadays, it is argued that creative people are the main source of creativity. Due to the unique endogenous characteristics of small cities that are able to attract people and retain the residents – i.e., natural landscapes, cultural heritage, symbolic amenities, and social capital – creativity is crucial to the sustainable development of small cities. However, the success of creative strategies depends on factors regarding the capability of local leadership. Local leadership is a significant factor in promoting strategies based on creativity. Local leaders can be promoters or facilitators of the development of creative ecosystems if they are proactive and future-oriented and embrace institutional change for development. In addition, community engagement and creative brokers are also crucial to develop strategies based on creativity, building conditions for the success of the creative transformation process. And last but not the least, a creativefriendly local education system has an important role in developing creative minds and talents, taking into account that many times in small cities creative people are invisible. Promoting creative-friendly education at all levels helps individuals be more creative and communities be more sustainable. In line with the 2030 Agenda and the SDGs, cities – even the small ones – need to integrate the opportunities and challenges related to the creative ecosystem into their development plans, strategies, and budgets.

Creative Strategies for Sustainable Development in Small Cities

Cross-References ▶ Creativity, Innovation, and Sustainable Development

References Boccella N, Salerno I (2016) Creative economy, cultural industries and local development. Procedia Soc Behav Sci 223:291–296 Boudreaux K (2008) A new call of the wild: communitybased natural resource management in Namibia. Georgetown Int Environ Law Rev 5(1):313–314 Caves R (2000) Creative industries: contracts between art and commerce. Harvard University Press, Cambridge Compton A (2007) What does creativity mean in English education? Int J Prim Elem Early Years Educ 35 (2):109–116 Council of the European Union (2009) Conclusions of the Council and of the representatives of the governments of the member states, meeting within the council, of 26 November 2009 on developing the role of education in a fully functioning knowledge triangle. Off J Eur Union C 52(302/303):3 DCMS/CITF (1998) Creative industries – mapping document. Londres, Creative Industries Task Force (CITF), Department of Culture, Media and Sports (DCMS) DCMS/CITF (2001) Creative industries – mapping document. Londres, Creative Industries Task Force (CITF), Department of Culture, Media and Sports (DCMS) Denis-Jacob J (2012) Cultural industries in small-sized Canadian cities: dream or reality? Urban Stud 49(1): 97–114 European Commission (2019) Creative Europe – monitoring report 2018. European Union, Luxembourg Florida R (2002) The rise of the creative class: and how it’s transforming work, leisure, community and everyday life. Basic Books, New York Florida R (2017) The new urban crisis: how cities are increasing inequality, deepening segregation, and failing the middle class – and what we can do about it. Basic Books, New York Forte Ν (2009) Freedom to teach, freedom to learn. Can Centre Policies Altern Our Schools-Ourselves 18 (4):24–34 Gray P (2011) Is real educational reform possible? If so, how? Psychology Today. http://www.psychologytoda y.com/blog/freedom-learn/201108/is-real-educationalreform- Accessed 20 Sept 2019 Greffe X (2002) Arts et artistes au miroir de l’économie. Éditions UNESCO, Paris Hartley J (2005) Creative industries. Wiley, Malden Howkins J (2013) The creative economy: how people make money from ideas. Penguin, London INTELI (2011) Creative-based strategies in small and medium-sized cities: Guidelines for local authorities.

163

Final output of the URBACT project “Creative Clusters in urban areas of low density”. INTELI Technical Action Plan Jones S (2005) CBET the significance of social capital. Ann Tour Res 32(2):303–324 Kagan S, Hahn J (2011) Creative cities and (un)sustainability: from creative cities to sustainable creative cities. Cult Local Gov 3(1–2):11–27 Landry C (2000) The creative city a toolkit for urban innovators. Earthscan, London Lazzaretti L, Boix R, Capone F (2008) Do creative industries cluster? Mapping creative local production systems in Italy and Spain. Ind Innov 15(5): 549–567 Levent TB (2011) Sustainable city and creativity: promoting creative urban initiatives. Ashgate, Burlington Lewis N, Donald B (2009) A new rubric for “Creative City” potential in Canada’s smaller communities. Urban Stud 47(1):29–54 Lombardi S, Giustiniano L, Cavaliere VF (2019) When good is not enough: the importance of brokers’ metaknowledge to their creativity. Acad Manag Annu Meet Proc 2019(1):12916 Long J, Cunningham F, Braithwaite J (2013) Bridges, brokers and boundary spanners in collaborative networks: a systematic review. BMC Health Serv Res 13 (1):158 McGranahan D, Wojan T (2007a) Recasting the creative class to examine growth processes in rural and urban counties. Reg Stud 41(2):197–216 McGranahan D, Wojan T (2007b) The creative class: a key to rural growth. Amber Waves 5:17–21 Mitchell R, Reid D (2001) Community integration: island tourism in Peru. Ann Tour Res 28:113–139 Morris W (2006) Creativity its place in education, New Zealand. http://www.jpb.com/creative/Creativity _in_Education.pdf. Accessed 10 Sept 2019 Mumford M, Gustafson S (1988) Creativity syndrome: integration, application, and innovation. Psychol Bull 103:27–43 Munoz P (2010) Beyond talent, diversity and technology: transforming small cities into creative places. Msc Innovation, Creativity and Entrepreneurship. Newcastle University, Newcastle UK. Pai RJ, More B (2018) Sustaining social entrepreneurship through networks in Dubai, United Arab Emirates. J Soc Entrep 9(3):215–233 Petrov A (2007) A look beyond metropolis: exploring creative class in the Canadian periphery. Can J Reg Sci 30(3):451–474 Porter M (1990) New global strategies for competitive advantage. Plan Rev 18(3):4–14 Porter M (1998) Clusters and the new economics of competition. Harvard Business Review, Boston, pp 77–90 Porter M (2000) Location, competition, and economic development: local clusters in global economy. Econ Dev Q 14(1):15–34 Rogers C (1969) Freedom to learn. Charles Merrill Publishing Company, Columbus Ohio

C

164 Scott A (2009) Jobs or amenities? Destination choices of migrant engineers in the USA. Pap Reg Sci 89(1):43–63 Selada C, Cunha I, Tomaz E (2012) Creative-based strategies in small and medium-sized cities: key dimensions of analysis. Quaestiones Geogr 31(4):43–51 Shaheen R (2010) Creativity and education. Creat Educ 1 (3):166–169 Stea D, Pedersen T (2017) Not all brokers are alike: creative implications of brokering networks in different work functions. Hum Relat 70(6):668–693 Trip J, Romein A (2014) Creative city policy and the gap with theory. Eur Plan Stud 22(12):2490–2509 United Nations (2010) Creative economy report 2010: a feasible development option. http://www.unctad.org/ creative-economy. Accessed 10 Aug 2019 United Nations Conference for Trade and Development (2018) Creative economy outlook: trends in international trade in creative industries 2002–2015 – country profiles 2005–2014. UNCTAD, United Nations, Switzerland. Van Heur B (2010) Small cities and the geographical bias of creative industries research and policy. J Policy Res Tour Leis Events 2(2):189–192 Ward T (2004) Cognition, creativity, and entrepreneurship. J Bus Ventur 19:173–188

Creative Work

Definitions Creativity is often understood as something removed from our day-to-day lives, restricted to cultural and artistic endeavors or an attribute of exceptional individuals. In truth, creativity is an important aspect several industries and services, such as software development, architecture, design, media, and advertising. Creativity is the source of inventions and new solutions that, when applied, become innovations. Research indicates that innovation is a social product: innovators draw know-how from their peers, and new knowledge is spread through the community. Therefore, to encourage innovation, it is important to not only support creative individuals but also to develop communities and form an innovation system. Innovation systems can be key in accomplishing the United Nations’ 2030 Sustainable Development Goals. Simultaneously achieving development goals, such as reducing poverty, resource consumption, and waste output, will demand creative and innovative solutions to replace current unsustainable practices.

Creative Work ▶ Creativity, Innovation, and Sustainable Development

Creativity, Innovation, and Sustainable Development Breno Henrique Tomiyoshi Nakao and José Baltazar Osório Salgueirinho de Andrade Guerra Center for Sustainable Development/ Research Centre on Energy Efficiency and Sustainability (Greens), University of Southern Santa Catarina (UNISUL), Florianópolis, SC, Brazil

Synonyms Creative work; Innovation; Knowledge-intensive innovation; Novelty

Introduction This entry discusses the concept of creativity, as it is understood today, and its connection with the concepts of innovation and sustainable development. Creativity has long been a subject of study, in the past, and research was mostly based on biographical and historical information on eminent creators (Woodman et al. 1993). As a result, creativity was often associated with geniuses and artistic individuals, since they produced something tangible that could be recognized as creative (Runco and Jaeger 2012). As Amabile (1983) pointed out, theory and research focused on a personality approach to creativity; creativity referred to the abilities that are characteristic of most creative people. To a lesser degree, other studies equated creativity with idea generation, adopting cognitive functions, like divergent-thinking, trial-and-error learning and analogical or associational abilities, and unconscious processes, like insight, intuition

Creativity, Innovation, and Sustainable Development

and dreams, as subjects of scientific study (Mumford and Gustafson 1988). To Amabile (1983), those definitions were more conceptual than operational, hampering empirical research and providing only partial explanations for creativity. As an alternative, Amabile proposed a framework that included social-environmental variables, ignored in previous formulations of creative theory, and their interaction with personality characteristics and cognitive functions. Amabile’s framework described the way in which an individual assembles and uses information to arrive at a solution, response, or product. By broadly defining creative product as any observable outcome or response, research on creativity became more empirically operational. The research on creativity grew from the study individuals and the most evident expression of their creativity, the creative product, to the study of processes, teams, situations, contexts, and organizations in generating creative products (Woodman et al. 1993; Sternberg 2006). These new perspectives do not remove the relevance of individual factors like knowledge, cognitive function, and motivation to innovate. Both individual factors and environmental factors need to be considered to obtain a comprehensive understanding of the creative process. Economic significance of new technologies made knowledge, creativity, and innovation subjects of constant research interest. This is not a new phenomenon, as Amabile (1988, p. 124) puts it: “[. . .] in the 1980’s, [. . .] it is impossible to read business journals or newspapers, attend business conferences, or read annual reports without constantly hearing about the importance of innovation.” More recently, research has explored how business and innovation theory can be used to link creativity and sustainability. This entry uses the framework of business and innovation theory and pairs it with sustainable development. The same linkage was done in studies by Geels (2010), which stated that frameworks are more suitable than theoretical models for problems pertaining sustainable development and by Boons and Lüdeke-Freund (2013) which used the business plan as a

165

framework to form a more holistic understanding of sustainable innovation. Porter (1991, pp. 97–98) claims that frameworks can capture complex situations by identifying the relevant variables of a specific context and formulating the central questions analysts should ask themselves to better think through the problems they face. Sustainable challenges are context-specific complex problems, a framework serves to help people on the ground construct their own solutions. According to Smith et al. (2010) sustainability theory started with concerns about end-of-pipe pollution control technologies and cleaner production processes. In the early 1990s, the framing of the problem was expanded to how to promote environmentally friendly technology in processes and products, reducing contamination, waste, and material use. Next, the framing broadened beyond the firm level to include organizational innovations across sectors and the development of greener goods and services across the product’s lifecycle. More recently, sustainable innovation research broadened their scope, from a firm to a systems perspective, which studies organizational networks, institutions, and their interactions. Business theory has the techniques to integrate organizational networks with different interested parties (i.e., stakeholders). Those invested in sustainable development, such as institutions, government, the wider socioeconomic system and the natural environment itself, can be integrated in the system as stakeholders (Boons and Lüdeke-Freund 2013). Thus, not only can business theory be useful as a framework for understanding sustainable problems but it can also be used to conduct sustainable innovation systems who aim to solve said problems. Section “Creativity, Knowledge, and Innovation” discusses the definition of creativity. Section “Innovation as a Community Product” describes how the creative and innovative processes are influenced by the environment they are in. Section “Promoting an Innovative Business System” discusses how structures can be built to promote an innovative environment. Section “Sustainability and Innovation” explores the United Nations’ definition of sustainable

C

166

development and how it relates to innovation. Section “Business Theory and Sustainable Development” discusses innovations needed in business theory to meet the challenge of sustainable development. Section “Conclusions” concludes with a brief overview of the topics addressed in the entry.

Creativity, Knowledge, and Innovation Today, creativity is being sought out more and more as organizations rely on state of the art technology, knowledge-intensive sectors, innovations, entrepreneurship, and novelty to compete. One of the earliest definitions of creativity, as understood today, was proposed by Stein (1953), which described it as creative work: (a) Creative work is a novelty – a creative product that did not exist previously in the same form and deviates from the status quo. (b) Creative work is accepted, tenable, satisfying or useful to some group, and therefore, it is shaped by the problems faced by that same group. (c) Creative work has a creative insight that arises from the characteristics of the creative individual and the characteristics of the people they are communicating with; in other words, it is influenced by the social context, such as the knowledge and experience available in the field at the time. The novelty of creative work has been described as creating new value by combining, recombining, recontextualizing, and transforming knowledge in new knowledge and applying this new knowledge in inventions and new solutions (Sternberg 2006; Moran 2010). This contemporary understanding can be traced back to historical studies on creative individuals. Under this methodology, Mumford and Gustafson (1988) cites studies such as Koestler’s (1964) review of the conditions related to innovative achievement, Kuhn’s (1970) study of scientific revolutions, and Rothenberg’s (1976, 1979) study of creativity as the superposition or fusion of images.

Creativity, Innovation, and Sustainable Development

When deviating from the status quo, creativity often encounters opposition. Society might perceive the innovation as annoying or offensive and ignore innovative ideas (Sternberg 2006). The possibility of resistance highlights the importance of intrinsic motivation when innovating. As Amabile (1983) posits, some people are less dependent on social approval and tangible rewards, making them more resistant to that type of opposition. With high intrinsic motivation, the innovation process might continue even when extrinsic motivation is weak, for example, when financial resources are limited. Another form of resistance innovators face is inaction. The uncertainty of a new endeavor might discourage people from investing effort and resources in innovating (Mumford and Gustafson 1988; Miozzo and DiVito 2018), therefore, conserving the status quo. The usefulness of the creative work means the creative work has a purpose, function, and meaning that impacts or direct the wider community (Sternberg 2006; Moran 2010). Being relevant to a specific community means a work does not have to be completely original, but it just needs to be new to that specific group or community (Nelson 2017). It also means that creative potential might stay unrealized if an organization’s work environment is not conducive towards creativity (DiLiello and Houghton 2006). While Amabile (1988) identified the relevance of environmental factors in the creative and innovative processes, the author still considered individual factors as more impactful in generating innovations. Contemporary studies have shifted from a debate between internal and external factors to an understanding that both can either promote or hinder creativity and innovation in different ways. In this definition, the availability of knowledge, technology, supporting actors, and institutions shapes the range of possible creative solutions to a problem (DiLiello and Houghton 2006; Miozzo and DiVito 2018). In other words, while entrepreneurs can be a driving force for change (Schumpeter 2003), they are bounded by the geographical, sectoral, and social contexts in which they operate.

Creativity, Innovation, and Sustainable Development

Knowledge relevant to a sector of industry is needed before advancements can be made in that sector. To Amabile (1983), knowledge is a necessary component of creativity, but it is insufficient to produce creative work. The author claims that some minimum level of intelligence is required for creative performance, because intelligence is directly related to the acquisition of skills and problem-solving methods that lead to novel ideas. The limitation of knowledge by itself to produce innovation was observed in access to vocational education. Vocational education provides students with specific jobrelated skills that allows for easier employment, but those skills might not be adaptable to new technologies and the changes in production technologies (Hanushek 2013, p. 210). Hanushek’s (2013) perception is that granting access to education produces limited results, granting quality education should be the larger concern. One of the characteristics Hanushek uses to describe quality education is the presence of a large set of skills that allows the student to adapt to the constant introduction of new technologies we have today. In the terms of creative theory, in a quality education, students should learn creative-relevant skills (Amabile 1983) that facilitate the combination of knowledge with new knowledge, or in Hanushek’s case, that allows them to combine vocational skills and new technologies. Creativity utilizes knowledge in new ways, new contexts, and give it a new meaning. The application of that new knowledge, which Stein (1953) describes as creative work, is similar to the current understanding of innovation. In social-psychology, ordinary work and creative work (and thus, innovation) are not a dichotomy but a continuum. As stated by Amabile (1983), what differentiates both is the degree in which attributes pertaining to cognitive skills, special talents, or favorable personality traits are applied. At one end is work that relies on standard, and already known, mental pathways. Innovation is usually more frequent at the other end of the continuum, where work is an explorative process that breaks set standards.

167

In summary, knowledge – understood as the combination of skills, expertise, and experience – is creatively combined and transformed into a new knowledge and applied in a specific context to create an innovation that satisfy the needs of a specific group.

Innovation as a Community Product As mentioned in the previous section, the innovative process is supported and restricted by its creative environment. According to Nelson (2017), a large share of innovations is based on, and aims to improve, artifacts and processes that are already in use by a community. In addition, innovators, almost always, draw heavily on knowhow and general knowledge possessed by that community – the innovative part is in reaching beyond what has been done before. The capacity for collective creative learning is unique to human beings, after something is learned it is spread across the community and further built upon by others (Nelson 2017). Collective creative learning develops strong cultural know-how over time and has been responsible for major innovations (Aghion et al. 2009; Nelson 2017). Markman et al. (2008) see these interactions in collective learning as part of a whole ecosystem: “[. . .] organizations are also mobilizing their idle, unexploited, and underutilized discoveries, inventions, and innovations into the open market. Indeed, the commercialization of new knowledge [. . .] is an ecosystem of research and technology commercialization” (p. 1402). The systemic approach to innovation, used by Smith et al. (2010), views this ecosystem as a dynamic system that combines evolution of technical elements (e.g., physical inputs, techniques, technologies, logistics) and social elements (e.g., consumer attitudes, ideas, policy, organized interests). The authors distinguish the system’s actors between the status quo and niches. Within niches, the conformity prevailing in regimes is less evident, facilitating the emergence of alternatives, or of radical change, to the way of realizing societal functions. According to the authors, niches learn, gain institutional support, grow their networks,

C

168

compete with the incumbent regimes, outperform and replace them. Innovation is an iterative process with both the status quo and niches building from each other’s expertise, mistakes, and experiences. Continued progress depends on the essence of what has been achieved in one round of innovative effort becoming part of the collective knowledge base for the next round (Aghion et al. 2009; Nelson 2017). This form of continuous progress can happen when an innovation fails in the commercialization stage. The insights and achievements from the failed experience can then be used to shift an enterprise focus to different customers, adapting the technology to serve a different set of needs (Markman et al. 2008). Another example is when the enterprise ceases to exist and their workers carry their insights and skills to new enterprises, applying them with a new understanding (Winters 2016). It is important to remark that different groups have different goals and fail states, a failure to one group might be a satisfactory innovation to another. Universities and research institutes focus in the development of basic research and raw technology without prioritizing the needs of specific customers. Firms, on the other hand, measure their success as the satisfaction of the needs of a specific customer base. Put differently, a failed innovation in the academic context does not yield the same lessons as a failed innovation in the context of a firm and capitalizing on that failure may demand different resources. A commercial failure usually demands more human capital and commercialization expertise, while a failed research might require people with specialized knowledge and laboratories to further develop the innovation (Markman et al. 2008). Not only does creativity and innovation can be supported by extrinsic factors, the innovation depends on a context or community to provide it meaning. An innovation is only an innovation if it is novel to a group and solves a problem faced by said group. The knowledge to innovate is built iteratively between different groups, through successes and failures, and therefore, creativity and innovation theory cannot be restricted to individual people or objects.

Creativity, Innovation, and Sustainable Development

Promoting an Innovative Business System At the same time, entrepreneurs create opportunities (Schumpeter 2003), and the opportunities they can exploit are narrowed by the context in which they act. Amabile et al. (1996) have verified that characteristics of the work environment can help foster, or hinder, creativity and innovation. In many cases, the absence of creative solutions is not due to the lack of creativity but due to the lack of favorable conditions (Pyka 2017, p. 145). In conditions of extreme resource restriction, like in many less developed nations, the availability of know-how, capital, partners, subsidies, and other resources can determine if an endeavor is economically viable or not. To create favorable conditions, make decent work available and generate economic growth, it might be necessary to build structures that promote innovation from conception to market (DiLiello and Houghton 2006; Winters 2016). Smith et al. (2010) describes these structures as constituted from the accumulation and alignment of knowledge, investments, objects, infrastructures, values, and norms that span the production-consumption divide. The same authors state that, the combination of such structures forms an innovation system – comprised of networks of firm capabilities, knowledge infrastructures, and policy and market institutions. Anthony et al. (2008, p. 226, 227) claims that innovation systems have four strategic objectives: 1. Stimulating innovation by broadening people’s awareness and building skills 2. Defending innovative ideas and removing obstacles that limit their potential to succeed 3. Providing the environment and resources necessary to take ideas from concept to commercialization 4. Strengthening innovation and enabling growth by building alliances, acquiring capabilities, and investing in innovative efforts outside the organization By expanding these strategies from the organizational level to the regional one, they

Creativity, Innovation, and Sustainable Development

can be used as a framework to better comprehend how governments, local universities and communities can promote innovation and economic development. It must be noted that environmental influences do not predict the emergence of innovations, and the structural promotion of innovation does not diminish the individual responsibility in the creative process (Stein 1953). The first strategy organizations use to structurally promote innovation is by stimulating innovation in its initial stages. This support strategy includes setting up training centers, which promotes the mentality, culture, and skills necessary to innovate, and enlisting executives to advise entrepreneurs about innovative business models, management approaches, and technologies (Anthony et al. 2008). Miozzo and DiVito (2018) recommend that training should teach entrepreneurs how to recognize and deal with uncertainty. The authors verified that reducing uncertainty helps potential partners to better asses the firms’ capability to exploit their business opportunities, it increases the problem-solving competence of entrepreneurs and his team, and it allows entrepreneurs to better derive a course of action for the enterprise. At this incipient stage of the life cycle, investors fund the person – his or her character, ability to learn, flexibility, and creativity – not a business idea, which is still uncertain and subject to change. At this stage, entrepreneurs may not be able explain the nature of the opportunities they are going to exploit, they may not even know this nature themselves. Incipient ideas should not be funded at this stage, as external funding creates pressure to exploit short-term gains and might damage the enterprise’s ability to grow. As observed by Amabile (1983), extrinsic motivators can decrease intrinsic motivation and undermine creativity. To avoid that, the author states that extrinsic factors must not be too constrictive, letting people take risks, allow the exploration of new problem-solving strategies, and granting enough time to figure out alternatives paths in problem-solving and task performance. In the case of external funding, it can undermine new ventures by pressuring entrepreneurs to exploit an identified opportunity,

169

to focus on short-term gains, and by not allowing the exploration of different paths even if the current one is not as valuable (Alvarez and Barney 2007). The second strategy to promote innovation is by nurturing and safeguarding innovative initiatives. This is done by examining and prioritizing incipient ideas and leading the most disruptive ones through the innovation processes, including offering subsidies through entrepreneurship funds and providing managerial counseling (Anthony et al. 2008). Amabile et al. (1996) describes several ways organizations can nurture creative and innovative ideas. Organizations can encourage risk taking (instead of being risk averse), offer supportive feedback when evaluating new ideas, reward and recognize creativity, enable collaborative ideas to flow across the organization, and they can have managers and supervisors who enable creativity, delineate clear goals, and are accessible and supportive of a team’s work and ideas. These actions can enhance the intrinsically motivated state that is more conducive to creativity and mitigate the possible negative effects of extrinsic motivators. For example, managers and supervisors can be highly critical of new ideas, undermining creativity. Organizations can make supportive evaluation of new ideas part of its standard procedure and make use of training centers to teach their managers and supervisors the necessary techniques to support them, like participative decision-making and management. At this stage of innovation, the project or enterprise is also concerned with the initial resource acquisition. Resources at the organizational level means funds, materials, systems, people, and the availability of knowledge (Amabile 1988). This initial acquisition includes seed and pre-seed investment, operational resources, renting space, procuring equipment, advice from experts and mentors, scientific and market data, and hiring an initial staff (Siegel and Wright 2015; Miozzo and DiVito 2018). The resources available to entrepreneurs and their enterprises can be increased through accelerators, incubators, and partnerships with universities.

C

170

Accelerators can provide an environment that encourages and support innovation and helps reduce obstacles in the innovation process. Accelerators and incubators can select promising entrepreneurial teams, provide them with pre-seed investment and support, prepare them for the next round of venture capital, create a local entrepreneurial ecosystem, and facilitate networking with potential business partners (Siegel and Wright 2015). Partnerships allow companies to access new knowledge and technology to start the innovation and universities to access the resources needed to take innovation from concept to market. Transforming partnerships in a common activity might demand structural changes in universities, since university employees will need to understand key entrepreneurial concepts, such as opportunity recognition and exploitation, and develop commercialization and entrepreneurial skills (Siegel and Wright 2015, p. 21). The third strategy is focused on taking a rudimentary idea and transforming it into a functioning enterprise with growth potential, the goal is to support business development. One approach is through incubators which can offer know-how in areas not directly related to the innovation itself, such as marketing and business strategy (Anthony et al. 2008). At the beginning, innovative enterprises are more concerned with experimentation and exist in a context of uncertainty. As the business develops, more traditional forms of strategic planning become useful (Alvarez and Barney 2007). The skills necessary to start a new business are different than the ones necessary to grow and run an existing one. The transition from different stages of the enterprise life cycle can be facilitated by support structures, such as science parks and business incubators. Phan et al. (2016) defines science parks are organizations focused on business acceleration through knowledge agglomeration and resource sharing. The difference between them is that incubators provide a specialized space for start-ups, while science parks form a diverse business ecosystem. Incubators focus on assisting start-ups and science research parks admit start-ups, corporate units,

Creativity, Innovation, and Sustainable Development

government labs, medium and small firms in their space. Both incubators ad science parks yield positive externalities and network benefits from the co-location of different firms and actors (Markman et al. 2008). The fourth strategy, according to Anthony et al. (2008), is concerned with securing areas adjacent to the innovative enterprises – such as patents, distribution channels, suppliers, and the licensing of new technology – through partnerships. As authors explain, the goal is to increase the success rate of innovative enterprises by developing relationships that facilitate the acquisition of know-how, secure alliances and strengthen supply and distribution channels. As Woodman et al. (1993, p. 302) states: “the probability of creative outcomes may be highest when leadership is democratic and collaborative, [. . .] and groups are composed of individuals drawn from diverse fields or functional backgrounds.” No organization has sufficient human talent inside its boundaries, and no single institution can cover all the science disciplines that contribute to its product offerings (Markman et al. 2008). Furthermore, the necessary skills to exploit a business opportunity may be unknown before the enterprise is formed (Alvarez and Barney 2007). One way to gain access to skills, which ever they may be, is by creating places that allow individuals to form communities and to organize events that inspire and renovates institutionalized practices (Cohendet et al. 2010). The presence of an entrepreneurial community enables the accumulation of a broad variety of skills, some of which might not be of use today but will be accessible when needed. Through these communities, knowledge can be communicated, shared, and generated. Networks and communication channels can be formed organically or be built and promoted by external actors. The uncertainty of innovative projects can lead to an impasse between entrepreneurs and potential collaborators. Potential partners need to verify the legitimacy of the project before investing their time and resources in a collaboration. According to Miozzo and DiVito (2018), that verification is usually done by demanding proof of concept or baseline data

Creativity, Innovation, and Sustainable Development

from entrepreneurs. The problem is, as the authors indicate, when the venture is still uncertain, the entrepreneur needs the collaboration to happen before they can generate the data, but the potential partner requests said data before deciding to collaborate. The nature of the project, the expertise of the partners, and the moments of the collaborative process can lead partners to pursuit of different forms of legitimacy. Miozzo and DiVito (2018) mentions that entrepreneurs can mitigate this lack of legitimacy by forming alliances, partnerships, or collaborations with people and institutions that are perceived as legitimate, for example, an innovation system that integrates academia, business, and government. Building structures and forming a system conducive to innovation can be an incremental and cumulative process over a long period of time. This creates another challenge to promoting innovation; despite depending on public intervention and public funding, it does not yield political credit to the government actors who enacted that process (Aghion et al. 2009, p. 12). Therefore, engagement from other actors, like business, communities, and learning institutions, is crucial to pressure governments in investing and sustaining innovation systems.

Sustainability and Innovation The United Nations’ 2030 Agenda for Sustainable Development defines sustainable development as the balance and integration of three dimensions: environmental, social, and economic (United Nations 2015). Robinson (2004) traces the origin of this definition to the report “Our common future” from the UN Commission on Environment and Development, also known as the Brundtland Commission. Since then, the goals for each dimension have been expanded but several were already mentioned in 1987. The ecological dimension was concerned with the biosphere’s capacity to absorb human activities, mostly the consumption of natural resources and waste production; the 2030 agenda

171

included sustainable patterns of production as an objective. The social dimension is concerned with citizen participation in decision-making, increasing democracy internationally, policies that support environmental practices and the governance of institutions. The institutional approach includes securing social protections such as universal health care and quality education. The 2030 agenda presents an increased concern with inclusivity, with issues such as gender and disability inequity, political participation, unemployment, hunger, and externalities like urban pollution. It also stresses the need to align the goals and increase cooperation between governments, international organizations, the business sector, non-State actors, local communities, and individual to achieve sustainability. The 1987 report addressed the economic dimension as the use of economic growth to provide basic needs and opportunities to poor regions. Brundtland (1987, p. 29) associated environmental pollution with both poverty (i.e., more resource extraction) and economic growth (i.e., consumption of increasing amounts of raw resource leading to increased pollution). As Robinson (2004) puts it, if the problem is both underdevelopment and overdevelopment, then, sustainable development requires a different form of growth. The 2030 agenda believes that to achieve some of the sustainable goals and targets might require financial resources, the acquisition of knowledge, capacity-building, and the transfer of green technologies (United Nations 2015, p. 10). This requires that creativity and innovation be applied to increase the productivity of the whole system. In Stein’s definition (Stein 1953), this improvement is a creative work in the sense that it brings a technology or management technique that is new to a specific group, a country facing sustainable development; it challenges a status quo (i.e., an unsustainable production system); it presents a change that is useful for a specific community; and, it has insight that arises from a social context, the international community of UN collaborators. There are several sustainable development goals and targets that can be achieved through

C

172

creativity and innovation, and they can be bundled in groups such as: 1. Those aiming to decouple economic growth from environmental degradation by transforming consumption and production patterns, reducing waste, researching and developing clean technologies 2. Those pertaining the formation of systems that promote sustainable development by promoting policies, cooperation, sustainable infrastructure, education, and health 3. Those promoting economic growth by providing access to knowledge, resources, and markets and by forming partnerships between public and private organizations and civil society 4. Those addressing the risks associated with climate change, through planning and management, or its consequences, by combating desertification or restoring degraded lands The UN has been criticized in the past for using value-based definitions for sustainable development. Since the goals can be vague, they can be used to create just the appearance of sustainability, for marketing purposes, instead of the necessary change. But this vagueness can also be used as a political advantage for sustainability. The three pillars of sustainable development (environmental, social, and economic) are often emphasized by parties with conflicting interests. Robinson (2004) points out that the vagueness allows for sustainable development to be adapted to different contexts and activities and to fit any situation. Meanwhile Kates et al. (2005) praises its ability to serve as a grand compromise between conflicting parties, without which, there would not have been the progress in sustainable practices we have today.

Business Theory and Sustainable Development Innovation in business practices might be needed to achieve the goals of establishing sustainable consumption and production of

Creativity, Innovation, and Sustainable Development

resources and addressing waste generation in a sustainable way. To Brand (2012), business-asusual has been a resource-intense industrialized economy, as seen in, for example, the precious metals needed for high-tech products. Since many of these natural resources are found in different countries, especially in the southern hemisphere, industrial market forces have pushed for politics of global open markets and fierce competition. To be able to compete, less developed countries in the global South have been pushed towards extrativism strategies. As Brand describes it, this leads to externalization of ecological costs from the global North to the global South and from the wealthy to the marginalized. Transforming the status quo demands a change in management theory’s conceptual framework about resource scarcity. According to Gladwin et al. (1995, pp. 896–897), the perspective management theories should adopt is that the world is relatively full, rather than empty. Since the world is no longer empty, the authors explain, economic inequality cannot be reduced by expanding the scale of human activity; in fact, its expansion should be constrained. Therefore, as Gladwin et al. states, to be sustainable, management practices should shift from growth to development, incentive systems should shift from quantity to quality. In the authors’ perspective, while companies cannot grow indefinitely, they can develop indefinitely, since they can improve in quality without growing in quantity. Studies on innovation systems expanded the scope of transformations needed in business theory to conciliate sustainability and development. Smith et al. (2010) noted two approaches to innovation systems, the first, a functions approach, focus on identifying properties of technology innovation systems needed to introduce cleaner technologies successfully; in other words, how to make innovation systems greener. This system has a similar goal to Gladwin et al., promote and introduce greener goods and services into markets. The second approach has the goal of inducing the transition to a more sustainable system, going beyond isolated products, processes, or technologies.

Creativity, Innovation, and Sustainable Development

According to Smith et al. (2010, p. 439), the system in the second approach is composed of technical elements and social elements that co-evolve, determining the way the system is structured and how it performs. It analyses the socio-technical elements in the systems that impede new forms of sustainable socio-technical organization from emerging – for example, creating renewable energy systems. While the first approach focuses on goods and one firm, the second approach is concerned with configuring and aligning social and technical elements, such as institutions, knowledge networks, policy, and civil society. This cooperation allows for large-scale sustainable projects to be conducted over long periods of time. To better represent sustainable development, innovation studies need include additional dynamics like civil society and social movements. To Geels (2010), public authorities and civil society are the crucial drivers for sustainability transitions since private actors have no immediate incentive to address sustainability problems. It is social actions that incentivize private actors to reorient their innovation and commercial activities. Robinson (2004) cites the case of sustainability standards and certifications in chemical and forestry industries as examples of civil action that promotes sustainable business practices. While the discussions of creativity and innovation often have a bias towards technological innovations, there are several nontechnological innovations needed in business practices, consumer and production patterns, and societal organization to achieve sustainable development. One example in business innovation is the industry for certification, and standard-setting is organized through partnerships between industry, academia, and NGOs, engaging civil society in monitoring and questioning businesses (Robinson 2004). As in Smith’s et al. (2010) socio-technical approach to system innovation, this industry aligns the firm, different institutions, and society to achieve more sustainable consumption and production practices. These efforts also illustrate the consensus building power of sustainable development, since as Robinson comments,

173

these partnerships are often between organizations that have been fighting for decades. To the author, certifications can also be a source of competitive advantage since the public engagement necessary to create them also built consumer awareness and credibility. Creativity and innovation have the potential to reconfigure the current productive systems. In creating innovation systems that support the development of innovations and creative enterprises in less developed countries, it would be possible to reduce their reliance on goods produced by developed nations. Building selfreliance, an important characteristic of sustainable development (United Nations 2015), in knowledge-intensive goods would also reduce the burden of financial mechanisms in those economies – e.g., trade tariffs, the dollar exchange rate, debt, and interest rates. This additional revenue could be invested in the transition from a resource-intensive to a sustainable economy. It is important to register the existence of different paradigms on what the transition from less developed to a developed nation, or to a sustainable economy, implies. To some paradigms, the development of productive forces through creativity and innovation is insufficient to transition into a developed nation, as this development does not address the existing power asymmetries between collective actors (Braverman 1974; Marini 1977) and, therefore, does not address inequality. The discussion between the Schumpeterian paradigm that informs this entry’s point of view and other paradigms falls outside the scope of this entry (a discussion is provided by Geels 2010), but it is a topic that needs to be debated by countries undergoing this development process.

Conclusions This entry has explored the theories of how creativity work and how it can be structurally encouraged to increase the odds that these creative ideas become reality. Individual characteristics are just as important to creativity as environmental ones. Just as it takes knowledge and motivation

C

174

to take an idea forward, what is possible is limited by the conditions accessible to the creator. Consequently, often there is no lack of creative solutions, ideas, or individuals in less developed nations, but they still fail to achieve their full potential due to the lack of favorable conditions. Business theory on how to build those conditions was used as a framework to identify the components needed to form an innovation system. It was explored how to structurally support individuals, their ideas, how to grant them access to markets, and how to support the formation of an integrated network of public, private, and other non-State actors. This entry explored the United Nation’s definition of sustainable development to discuss how creativity and innovation are crucial to transition from our at-risk situation towards a sustainable future. It was noted that the gap between current practices and the United Nations’ definition of sustainable development, is not only a technological deficiency but also a combination of environmental, social, and economic challenges. Business theory on innovation systems presented itself as both flexible and holistic enough to address the complexity involving sustainable development. The creation of an innovation system that integrates the environment, society, and the economy can be one step in the transition towards sustainable economy. Innovation systems are the only possibility in tapping into the unrealized creative power and in enabling the actualization of human potential throughout the world. There are several alternatives, some might be faster, a relevant factor considering the urgency of climate change, and the path towards sustainability is open to creativity.

Cross-References ▶ Informal Employment ▶ Perceptions and Challenges of Design for Sustainable Behavior

Creativity, Innovation, and Sustainable Development

References Aghion P, David PA, Foray D (2009) Science, technology and innovation for economic growth: linking policy research and practice in ‘STIG systems’. Res Policy 38(4):681–693 Alvarez SA, Barney JB (2007) Discovery and creation: alternative theories of entrepreneurial action. Strateg Entrep J 1(1–2):11–26 Amabile TM (1983) The social psychology of creativity: a componential conceptualization. J Pers Soc Psychol 45(2):357 Amabile TM (1988) A model of creativity and innovation in organizations. Res Organ Behav 10(1):123–167 Amabile TM, Conti R, Coon H, Lazenby J, Herron M (1996) Assessing the work environment for creativity. Acad Manag J 39(5):1154–1184 Anthony SD, Johnson MW, Altman EJ, Sinfield JV (2008) The innovator's guide to growth: putting disruptive innovation to work. Harvard Business Press, Boston Boons F, Lüdeke-Freund F (2013) Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. J Clean Prod 45:9–19 Brand U (2012) Green economy–the next oxymoron? No lessons learned from failures of implementing sustainable development. GAIA-Ecol Perspect Sci Soc 21(1):28–32 Braverman H (1974) Labour and monopoly capital: the degradation of work in the twentieth century. Monthly Review Press, New York Brundtland G (1987) Our common future: report of the 1987 world commission on environment and development. United Nations, Oslo, pp 1–59 Cohendet P, Grandadam D, Simon L (2010) The anatomy of the creative city. Ind Innov 17(1):91–111 DiLiello TC, Houghton JD (2006) Maximizing organizational leadership capacity for the future: toward a model of self-leadership, innovation and creativity. J Manag Psychol 21(4):319–337 Geels FW (2010) Ontologies, socio-technical transitions (to sustainability), and the multi-level perspective. Res Policy 39(4):495–510 Gladwin TN, Kennelly JJ, Krause TS (1995) Shifting paradigms for sustainable development: implications for management theory and research. Acad Manag Rev 20(4):874–907 Hanushek EA (2013) Economic growth in developing countries: The role of human capital. Econ Edu Rev 37:204–212. https://doi.org/10.1016/j.econedurev. 2013.04.005 Kates RW, Parris TM, Leiserowitz AA (2005) What is sustainable development? Environment 47(3):8–21 Koestler A (1964) The act of creation. Macmillan, New York Kuhn TS (1970) The structure of scientific revolutions. University of Chicago Press, Chicago

Credit and Sustainable Development Markman GD, Siegel DS, Wright M (2008) Research and technology commercialization. J Manag Stud 45(8):1401–1423 Marini RM (1977) La acumulación capitalista mundial y el subimperialismo. Ola Financiera 4(10):183–217 Miozzo M, DiVito L (2018) Productive opportunities, uncertainty, and science-based firm emergence. Small Bus Econ 1–22 Moran S (2010) The roles of creativity in society. In: Kaufman JC, Sternberg RJ (eds) Cambridge handbook of creativity. Cambridge University Press, New York, pp 74–90 Mumford MD, Gustafson SB (1988) Creativity syndrome: integration, application, and innovation. Psychol Bull 103(1):27 Nelson RR (2017) Behavior and cognition of economic actors in evolutionary economics. In: Foundations of economic change. Springer, Cham, pp 51–67 Phan P, Siegel DS, Wright M (2016) Science parks and incubators: observations, synthesis and future research. In: Technology entrepreneurship and business incubation: theory practice lessons learned. Journaluk of Bussiness Venturing/Oxford. pp 249–272 Porter ME (1991) Towards a dynamic theory of strategy. Strateg Manag J 12(S2):95–117 Pyka R (2017) Urban creativity in the sociological perspective. Studia Regionalia 51:133–148 Robinson J (2004) Squaring the circle? Some thoughts on the idea of sustainable development. Ecol Econ 48:369–384 Rothenberg A (1976) Homospatial thinking in creativity. Arch Gen Psychiatry 33:17–26 Rothenberg A (1979) The emerging goddess: the creative process in art, science, and other fields. University of Chicago Press, Chicago

175 Runco MA, Jaeger GJ (2012) The standard definition of creativity. Creat Res J 24(1):92–96 Schumpeter JA (2003) Capitalism, socialism and democracy. Taylor & Francis e-Library, London Siegel DS, Wright M (2015) Academic entrepreneurship: time for a rethink? Br J Manag 26(4):582–595 Smith A, Voß JP, Grin J (2010) Innovation studies and sustainability transitions: the allure of the multilevel perspective and its challenges. Res Policy 39(4):435–448 Stein MI (1953) Creativity and culture. J Psychol 36(2):311–322 Sternberg RJ (2006) The nature of creativity. Creat Res J 18(1):87–98 United Nations. General Assembly (2015) Resolution adopted by the General Assembly on 25 September 2015. United Nations, Washington Winters SG (2016) The place of entrepreneurship in “The Economics that Might Have Been”. Journaluk of Bussiness Venturing/Oxford Woodman RW, Sawyer JE, Griffin RW (1993) Toward a theory of organizational creativity. Acad Manag Rev 18(2):293–321

Credit and Sustainable Development ▶ Debt and Sustainable Development

C

D

Debt and Sustainable Development Alberto do Amaral Júnior1 and Maria Paula Bertran2 1 University of São Paulo Law School, São Paulo, Brazil 2 Ribeirão Preto Law School, University of São Paulo, Ribeirão Preto, Brazil

development if part of borrower’s incomes can be used to their daily lives without the need to stop essential activities from paying debts. The lending process must avoid practices of systemic repossession of collaterals in prejudice of both householders and the stability of financial systems worldwide. One finds debt and sustainable development if the lending process doesn’t work as a trigger to increase mental and health problems in society.

Synonyms Credit and sustainable development; Fair access to c r e d i t ; Household debt and sustainable development

Definitions Debt and sustainable development is an expression used to describe the use of credit as a way to improve people’s lives. Sustainable development is reached when borrowed money is applied in ways that create better material conditions of living, entrepreneurship, new job positions, increase of incomes, equality, and development. Debt is according to sustainable development when its offer respects people’s behavioral biases concerning financial arrangements, which means that the amount of credit provided to a person must be connected with the feasible capacity to payoff. Debt is also according to sustainable

Introduction Muhammad Yunus received the 2006 Nobel Peace Prize because of his efforts with the Grameen Bank. Yunus realized the poor were trapped in a vicious cycle of debt to moneylenders. After meeting impoverished village artisans who couldn’t get credit, Yunus lent them money himself. In 1976 Yunus decided to loan $27 to 42 women from a village in India (Yunus 2003). The Grameen Bank solution tried to fix a deep systemic problem: the lack of resources to the poor. New and drastically different from traditional financial institutions, the Grameen Bank challenged the way people think about gender, trust, legal documents, and even social practices (Zahra et al. 2009). The Grameen Bank model has been replicated throughout the world (Schreiner 2003; Taub 1998; Rogaly 1996; Thomas 1995; Hulme 1990).

© Springer Nature Switzerland AG 2021 W. Leal Filho et al. (eds.), Decent Work and Economic Growth, Encyclopedia of the UN Sustainable Development Goals, https://doi.org/10.1007/978-3-319-95867-5

178

It is said that Yunus learned how to be a banker by doing the opposite of what traditional banks did, particularly making small loans to the poor, women, and people with no credit (Zahra et al. 2009). A famous quote says that “a banker lends you his umbrella when it’s sunny and wants it back when it rains.” Indeed, poor people used to be the least attractive lenders for the traditional financial market. Hyman (2011, p. 75) says that “people who wanted to borrow would be exactly the sort of people to whom the bank would not want to lend.” Yunus’ initiative changed this pattern for good. However, the financial system also changed its patterns for other purposes, not always supportive of sustainable goals. The sustainable development now faces the challenges created by the new roles assumed by financial markets, financial actors, and financial institutions (Epstein 2006). Financialization is a complex phenomenon that comprises an array of empirical features and processes that prompts a new accumulation regime in which macroeconomics and economic policies are increasingly dominated by the rationale of financial capital (Lavinas 2017), with deleterious effects on labor, productive investments (Palley 2013), and peoples’ daily life (Martin 2002). The so-called debt-slavery and predatory lending are nontechnical names to describe borrowing practices that can cause both the need to transfer all or substantial part of income to pay debts and the methods of borrowing in harmful conditions. Nowadays, the decrease of interest rates in international markets and safe asset investments around the globe pushes banks to offer credit for ordinary people as never before (Del Negro et al. 2019; Admati and Hellwig 2014). The lack of profits for banks and pension funds in the traditional asset markets creates incentives to deep the search for gains in individual borrowers’ markets. Ordinary people not always benefit from the credit, as it can create a debt overhang that suffocates personal lives. The following text explores the good and the harmful effects of debt in contemporary society, suggesting that sustainable consumption should be guaranteed with the improvement of good initiatives, wiser and more rational access to credit, and better regulation of financial products.

Debt and Sustainable Development

Household Debt The Global Increase in Household Debt Historically, the main goal of banks was to support the development of industry, not the entrepreneurship of craftsmen or consumption of goods for ordinary people. Most people could only count on pawnshops and loan sharks if they needed extra money (Hyman 2011). The economic recession in the 1930s is deemed to be responsible for the increase of lending to consumption of goods in the USA. The recession created a lack of commercial investments and forced commercial banks to look for profits elsewhere: people (Hyman 2011). Households and banks have increasingly displaced nonfinancial businesses and governments as the primary debtors in modern capitalist economies, resulting in more severe economic cycles, increased inequality, and external macroeconomic imbalances. While the process of the aggressive offering of credit for consumption started in the USA, different countries faced the opening of their markets for personal borrowing at some point (Fuller 2015). Household debt is defined as the debt of all people in a family circle. It includes mortgage loans but also other types of consumer debt, like auto loans, student loans, and credit cards. Spending on consumer increased significantly in the twentieth century. The literature points that the increase of household debts relative to their disposable income GDP rose significantly from 1980 to 2007 (Campbell and Hercowitz 2009). During the first years of the twenty-first century, even more countries experienced a remarkable increase in household debt versus GDP. Although the remarkable increase of household debt vs. GDP was registered only from the 1980s, older origins of household debt rise are connected to the rise of durable goods at the beginning of the twentieth century and the end of the Second World War. The literature describes the idea that household debt rose as living standards also rose. Easy credit created a change in patterns from saving to spending. As described by Cohen (2003), the American way of life was based not only on mass consumption but also on

Debt and Sustainable Development

large-scale borrowing. Americans faced the prosperity fueled not only by rising wages but also for easy credit. Hyman (2011, p. 81) says that “Many in the postwar United States achieved material prosperity that, in debt’s absence, they could not have attained. Middle-class consumers with rising incomes shopped on credit for items that their wealthier neighbors could buy with cash. Working-class Americans earned less than the professional class, yet they lived very similar lives. Even middle-class African Americans, though lacking the wealth of their white neighbors and facing racial barriers to some financing, could borrow the same amounts as white debtors and enjoy material abundance. Only the very rich and the very poor borrowed nothing. For the vast middle, borrowing and buying were thoroughly entangled. The social practice of buying had little to do with economist’s abstractions of interest rates, and a lot to do with shopping habits. Consumer debt moved to the center of American life, even as American life began to move to the suburbs. Debt made the good life possible.” While the literature involving debt and the good American way of life describes the history of the USA, its finale is quite global (Hyman 2012). In Denmark, Iceland, Ireland, the Netherlands, and Norway debt peaked at more than 200% of household income during the first years of the 2000s. A surge in household debt to historic highs also occurred in emerging economies such as Estonia, Hungary, Latvia, and Lithuania (International Monetary Fund 2012, p. 89). Describes the aspiration to the powerprestige dimension promoted by debt in South Africa in the post-apartheid era. Lavinas (2017) describes how the hegemonic financedominated capitalism retooled the role of social policies in Brazil, preventing the country from consolidating permanent mechanisms of distribution. Russia faces a similar phenomenon associating the lack of financial literacy and its deleterious consequences (Klapper et al. 2013). Like the literature involving debt, the thesis about financialization research has also focused initially on the US experience, but the concept is increasingly applied to emerging economies.

179

Karwowski and Stockhammer (2017) try to fill this gap, identifying six financialization interpretations for emerging economies. Their arguments stress financial deregulation, foreign financial inflows, asset price volatility, the shift from bank-based to market-based finance, business debt, and household indebtedness. Gregory Fuller (2015) states that while the increase of household debt is nearly universal among developed economies, its intensity varies a great deal from country to country. Fuller highlights the common international causes behind the global expansion of household and financial sector debt; the divergent national approaches to household credit that cause household and financial sector indebtedness to vary from country to country; and the likely causes of these disparate approaches. Fuller mentions national approaches to interest rate restrictions, property transfer taxation, high loan-to-value mortgages, mortgage interest taxation, and secondary markets for consumer debt as factors that can either encourage or mitigate household and financial sector borrowing. According to Fuller: “Whether a country encourages or mitigates such credit is determined by an idiosyncratic mix of institutional, political, and ideational factors. Especially important are the size of domestic pension funds, banks’ preferred business models, the political power of financial firms, and whether policymakers are more sensitive to the gains promised by a creditfueled expansion or to the risks posed by an overleveraged collapse.” Different Types of Debt and Their Social Outcomes The neoclassical consumption theory is based on the hypothesis of a permanent income/life cycle. It was developed in a time of negligible consumer debt. It is established on broad assumptions, such as (a) individuals are rational; (b) they have access to complete markets (perfect information and foresight); and (c) they have stable, well-defined preferences. This view assumes away any responsibility of the markets to attribute to consumer spending (or borrowing) problems (Scott 2007). However, more contemporary research provides evidence that the permanent income/life

D

180

cycle hypothesis has not held up under empirical scrutiny. Scott (2007) mentions Courant et al. (1984), Mokhtari (1990), and Thaler (1990) to assert that “contrary to the classical view, people actually under-consume early and late in life and over-consume during high-income earning years; furthermore, consumers’ utility functions are dynamic, not static as neoclassical assume. More importantly, they found that consumer spending is influenced more heavily by social influences than income optimization.” The types of credit that are prone to create higher profits can create sincere problems in ordinary people’s lives. Similarly to the details provided by the different stages of income/life cycle, it is essential to consider that different types of debt are prone to create different outcomes as well. Ideally, it is worthy to enter a financial agreement that can dramatically improve the way people live, as the initiatives promoted by Mohamed Yunus, or the initiatives to increase people’s professional skills, like good student loans. However, it is unclear if there are any lasting benefits for the mortgages that are cursed to repossession, or credit card revolving credit. The rise of consumption of durable goods was closely connected with financial strategies created by manufacturers and retailers of those goods. The association between retail stores and financing companies benefits from the psychological intimacy consumers feel when they visit their neighborhood stores. Consumers develop mixed feelings of leisure and need at malls or local stores. When consumers are at banks, instead, they are usually in a not so familiar environment. The behavioral economics explains that the lack of awareness most people have in a casual environment makes them accept financial products offered at the cashier of their favorite stores that they would never take at their regular banks. To store cards and consumption, see Erasmus and Lebani (2008). Part of the literature describes that debt is driven by status and that buying certain things and keeping certain habits are socially meaningful as they represent different forms of social inclusion (Roberts and Jones 2001). Veblen (1899) referred to the attempt of consumers to sign their

Debt and Sustainable Development

comparative degree of social power by the expression “conspicuous consumption.” For Roberts and Jones (2001, p. 235), “it is clear that advertisers understand the strong link between the desire for power and prestige and spending. Status appeals are the second most common approach used by advertisers after price appeals.” According to them, college students are being raised in a culture of material possessions as a sign of one’s self-worth. It would partially explain, along with the easy access to credit, compulsive buying among them. Besides status, debt is increasingly recognized as a way for people to finance their ordinary lives, with the purchase of essential goods. Scott (2007) says that the increases in inequality of income and wealth have helped promote credit card borrowing. Many people’s incomes are insufficient to cover basic necessities, so people will many times rely on their credit cards to help them get through a difficult financial period. It is possible since the frontiers of credit for consumption were widespread among revolving credit. As stated by Hyman, its first initiatives came from the department stores that for the first time reshaped the value of instalment purchases, previously focused in auto loans, furniture, or expensive machines and “allowed for even the most mundane purchase of socks to be paid in over time (. . .)” (Hyman 2011, p. 133). The original strategy from department stores cards passed to the credit card industry as a whole and now establishes the contemporary logic that anything can be payed in supplementary time. Besides any convenience of this, the point is that for most credit card debtors, overborrowing is due to a lack of sufficient income (Scott 2007, p. 569). Once credit card debt is established, a combination of high-interest rates, fees, and insufficient income usually keeps people from paying off their debt. Usually, people rely on credit card borrowing for their basic needs considering its use will be limited to a certain period. However, once people take on debt, the credit card companies react by doing at least one of the following, according to Scott (2007): (1) increase interest rates, (2) charge fees/penalties, and/or (3) increase credit limits. All of these actions help to raise the likelihood a

Debt and Sustainable Development

debtor will not pay off their debt quickly. Trying to change people’s attitudes toward overconsumption will not solve this problem because buying necessities is not overconsumption but merely maintaining existence. In Brazil, grocery stores and drugstores are the most common reasons for revolving credit overburden. Lee and Kwon (2002) found that credit availability through bankcards is negatively correlated with consumers’ use of store cards as a financing medium, suggesting the role of store cards as a supplementary credit line. Lavinas (2017) describes how financialization struck the results of distributive policies in Brazil. A similar phenomenon is identified in Russia, where retail lending consumer loans prevail over mortgages. Kuzina and Krupenskiy (2018) affirm that consumer loans are taken for a short time and at a high-interest rate. As a result, the debt service of relatively small loans creates a more significant burden on the family budget for Russians than in Europe and the USA. In this context, “the increase of retail lending can only be sustainable if banks change their business model and transit from short-term consumer credits to long-term loans secured by real estate or other assets” (Kuzina and Krupenskiy 2018). The use of debts that don’t create lasting benefit can be extended for many countries and different routines of deleterious practices.

The Macroeconomics of Household Debt Mian and Sufi (2014) state that economic crises are almost always preceded by a significant increase in household debts. They say that the correlation is so robust that it is as close to an empirical law as it gets in macroeconomics. The links between household debt, spending, and severe recessions are not always clear. The idea comes initially from the fact that a financial system that thrives on the heavy use of debt by household concentrates risks on the debtors, not the financial system. Theoretically, one of the primary purposes of financial markets is to help people in the economy the share of risk. That function appears in many products offered by the

181

financial market that reduce risks, from life insurances to a portfolio of stocks (Mian and Sufi 2014). However, the massive use of debt by households concentrates the risk of debtors. And there are structural differences in society between borrowers and lenders (Mian and Sufi 2014). As Tobin (1980) argues, “the population is not distributed between debtors and creditors randomly.” The accumulation of household debt amplifies slumps in models that differentiate between borrowers and lenders and feature liquidity constraints. A vital feature of these models is the idea that the distribution of debt within an economy matters. Regularly, household debt increases more at the lower ends of the income and wealth distribution. Debtors borrow for good reasons. Most of these reasons indicate a high marginal propensity to spend from wealth or current income or from any other liquid resources debtors can command (IMF 2012). A shock to the borrowing capacity of debtors with a high marginal propensity to consume forces them to reduce their debt. It can lead to a decline in aggregate activity. Mian and Sufi’s basic idea is that recessions are triggered when household spending collapses. Job losses materialize because households stop buying, not because business stop investing. Debtors’ capacity to borrow can be reduced for different reasons. It can happen when they realize their house prices were overvalued (as in the 2008 US crisis), face a tightening in credit standards, live a sharp revision in income expectations, an increase in economic instability, or are forced to precautionary savings. It is intuitive that the economy suffers a slump if the population of a particular society is unable to spend as they used to for any of these reasons. An additional cause to reduce borrowers’ autonomy, not so intuitive at first, is the forced sale of durable goods: Estimates suggest that a single foreclosure lowers the price of a neighboring property by about 1 percent, but that the effects can be much larger when there is a wave of foreclosures, with estimates of price declines reaching almost 30 percent. The associated negative price effects, in turn, reduce economic activity through a number of self-reinforcing contractionary spirals. These

D

182 include negative wealth effects, a reduction in collateral value, a negative impact on bank balance sheets, and a credit crunch. (. . .) Fire sales undermine the ability of financial institutions and firms to lend and borrow by reducing their net worth, and this reduction in credit supply can reduce productivity-enhancing investment. (IMF 2012)

In addition to the reduction of economic activity, debt overhang and foreclosures can give rise to inefficiencies. In firms, it is common sense to recognize that debt can constrain corporation ability to raise funds to finance profitable investment projects. Accordingly, homeowners with debt overhang tend to invest little in their property. Melzer (2010) finds that US homeowners with debt overhang spend 30% less on home improvements and maintenance than homeowners without debt overhang, other things equal. It affects the gentrification of neighborhoods (Immergluck and Smith 2005, 2006). The use of collaterals to guarantee the payment of creditors is based on the leading idea that creditors must be paid for the money they lent. However, the experience involving massive household debt in the US 2008 crisis suggests that the social cost may justify policy intervention aimed at stopping household defaults, foreclosures, and fire sales. The sharp contraction in aggregate consumption caused by the critical consequences of household overhang would provide, in the words of IMF (2012), “(. . .) a rationale for temporarily pursuing expansionary macroeconomic policies, including fiscal stimulus targeted at financially constrained households (Eggertsson and Krugman 2010), and household debt restructuring (Reinhart and Rogoff 2011).”

Small Companies’ Debts Small businesses are considered necessary for economic growth and job creation (Wennekers and Thurik 1999; van Praag and Versloot 2007). Individual entrepreneurship has received much attention from policymakers and researchers. There is substantial evidence that small firms face more considerable growth constraints and have less access to formal sources of

Debt and Sustainable Development

external finance (Beck and Demirguc-Kunt 2006). Mohamed Yunus’ experience with the Grameen Bank is a symbol of both how microcredit programs have the potential for equitable and sustainable development and how small entrepreneurs need better opportunities to grow their business (Zahra et al. 2009). It is unclear if the good intents of microcredit external finance can flourish in an environment that is contaminated by the bad practices that surround household debt. Rahman (1999) shows that bank workers are expected to increase disbursement of loans among their members and press for high recovery rates to earn profit necessary for economic viability of the institution. Her anthropological work with the Grameen Bank states that to ensure timely repayment in the loan bank workers and borrowing peers inflict an intense pressure on women clients. In the study community, she describes that many borrowers maintain their regular repayment schedules through a process of loan recycling, quite similar to the routine problems involving household debt. “This procedures increases the debt-liability on the individual households, increases tension and frustration among household members, produces new forms of dominance over women, and increases violence in society” (Rahman 1999). Excesses of debt and leverage are traditional problems for companies (Bolton and Scharfstein 1996). However, in recent years, a different issue involving borrowing and companies has emerged. Foroohar (2016) states that great companies that did not need credit are overwhelmed with debt, while credit is even more scarce for the companies that need it most. This phenomenon describes a larger movement, a transition from a manufacturing society to a finance society. Low-interest bonds are available only to blue-chip companies. Strategies involving transnational financial and taxes engineering allow big companies to hand back their shareholders more money than if they were focusing in the production and innovation of goods. As stated by Foroohar (2016) “the business isn’t business anymore. It’s finance (pg. 4).” Our society lives a world in which “(. . .) wall street owns main street (pg. 210).”

Debt and Sustainable Development

When discussing household debt, this entry presented the idea that borrowing was a way to replace income. In addition to the already known problems involving household debt, it is important to state that the prominence of financial markets’ other face is also established in business credit. In the words of Hyman, “Dollars invested in debt displaced dollars invested in factories. Debtors began to rely on credit rather than income to maintain a rising standard of living” (Hyman 2012). Small businesses are traditionally assumed to face significant problems in securing long-term external finance, which is regarded as restraining their development and growth. Small business managers are expected to use institutional banking as a means of meeting the need for resources, and as a consequence, the major part of the research on small business finance has focused on constraints in the supply of institutional (market) finance (Winborg and Landstrom 2001). The recent years added additional concerns to the already hard structure for small entrepreneurs lending.

The Health Burden of Debt The association between poor mental health and poverty is well-known, but its mechanism is not fully understood. Jenkins et al. (2008) tested the hypothesis that the association between low income and mental disorder is mediated by debt and its attendant financial hardship. Their study is a cross-sectional nationally representative survey of private households in England, Scotland, and Wales, which assessed 8580 participants aged 16–74 years living in general households. Their results showed that those with low income were more likely to have a mental disorder, but this relationship was attenuated after adjustment for debt and vanished when other sociodemographic variables were also controlled. Of those with a mental disorder, 23% were in debt (compared with 8% of those without disease), and 10% had had a utility disconnected (compared with 3%). The more debts people had, the more likely they were to have some form of mental disorder, even after adjustment for income and other

183

sociodemographic variables. People with six or more separate debts had a sixfold increase in mental disorder after adjustment for income. Jenkins et al. (2008) conclusions are that both low income and debt are associated with mental illness, but the effect of income appears to be primarily mediated by debt. Richardson et al. (2013) review the relationship between personal unsecured debt and health. Panel surveys, nationally representative epidemiological surveys, and psychological autopsy studies have examined the relationship, as have studies on specific populations such as university students, debt management clients, and older adults. Most studies examined relationships with mental health and depression in particular. Studies of physical health have also shown an association with self-rated health and outcomes such as obesity. There is also a strong relationship with suicide completion and relationships with drug and alcohol abuse. Reading and Reynolds (2001) show that policy strategies to enable families to control debt should be an explicit part of more extensive antipoverty measures that are designed to reduce depression and psychological distress among mothers of young children. Nettleton and Burrows (1998) explore the consequences of mortgage arrears for both the health of indebted home owners and their use of primary health-care services. It demonstrates that the experience of mortgage indebtedness has an independent effect on the subjective well-being of men and women and that it increases the likelihood that men will visit their general practitioners. The paper draws upon the sociological notions of “ontological security” and “individualization” to make sense of these empirical findings. It suggests that policies that have encouraged the growth of home ownership are premised on the idea of individual responsibility, a notion which underpins other spheres of contemporary welfare policies. Within this context, the consequences of mortgage indebtedness are likely to have profound psychosocial implications for those who have direct experience of it. The specter of mortgage debt may also contribute to the insecurity which has come to form a feature of our contemporary social and cultural life.

D

184

While the burden and responsibility of mortgages may represent a long-lasting benefit, credit card usage and credit card debt are a growing phenomenon whose benefits remain uncertain. Drentea and Lavrakas (2009) found that both credit card debt and stress regarding debt are associated with health. Brown et al. (2005) found that those household heads who have outstanding (non-mortgage) credit, and who have higher amounts of such debt, are significantly less likely to report complete psychological wellbeing. However, no such significant association is found in the case of mortgage debt. Their results highlight the psychological cost associated with the consumer credit culture.

Possible Paths and the Roles for Different Actors There is a tension between individuals, banks, and the State to establish the roles each actor should assume for better practices to reach sustainable development over debt. It is possible that a robust consumer protection framework could impede the dissemination of predatory practices. It is also possible that public regulation joined with big data could limit the maximum debt individuals could take as a preventive initiative to overindebtedness. However, the literature points heavily to the responsibility of individuals as the main features to create sustainable debt. Individual financial competence has become more essential as the responsibility for saving and investing for the future has shifted from government and employers onto individuals (Lusardi and Tufano 2015). Organization for Economic Cooperation and Development – OECD – recognizes financial education and financial literacy as prominent concerns in the global policy agenda. Financial literacy can be defined as “a combination of awareness, knowledge, skill, attitude and behavior necessary to make sound financial decisions and ultimately achieve individual financial well-being” (OECD 2012). OECD considers financial literacy relevant competencies because they can allow consumers and small businesses to take full advantage of the financial market (OECD 2017).

Debt and Sustainable Development

To Scott (2007), neoclassical models fail to account for the role institutions play in consumer spending/borrowing decisions. Thus, according to Scott, there is a disseminated, but wrong believe that individuals are solely responsible for their debts and that any attempt to reduce indebtedness must come mainly from individuals and nowhere else. Lynch and Wood (2006) state that public policy tools drawn from economics point to three broad classes of interventions to help consumers make better decisions: offering more choices; providing better information to consumers about options they might consider; and providing incentives for consumers or sellers to change their behavior. However, quite numerous papers in psychological theories tend to diminish the outcomes of economics expectations, since they regularly find that “(. . .) offer a counterpoint in which more choice is detrimental, better information is unlikely to be useful, and extrinsic incentives to consumers are unlikely to lead to improved choices” (Lynch and Wood 2006). Fernandes et al. (2014) say that policymakers have embraced financial education as a necessary antidote to the increasing complexity of consumers’ financial decisions over the last generation. However, they find that interventions to improve financial literacy explain very few of the variance in financial behaviors studied, with weaker effects in low-income samples. A detailed explanation about the limits of financial education as a form of information remedy states “An inherent weakness of information remedies is that, for the most part, they aim to influence consumers’ evaluations of options; consumer research shows that far more variance in chosen behavior is controlled by affecting the “consideration set” of actively considered options. Put another way, changing consumers’ evaluations of options does not matter if consumers are not considering those options in the first place.” Science shows limited effectiveness in financial education and the individual’s role in preventing unsustainable debt. Other authors (Thaler and Sunstein 2008) have advocated defaults, “nudges,” and “choice architecture” as strategies to more effective alternatives to financial education. The problem is that these approaches do only bring assistance close to the

Debt and Sustainable Development

time of related decisions. “They blend incentives with information, making it easy to consider and choose more desirable behaviors and slightly more costly to consider and choose alternatives deemed less desirable by a social planner” (Fernandes et al. 2014). However, when debt is part of daily life and aggressively offered, it is hard to know if these quite soft strategies could have effective outcomes. If individuals cannot help themselves as a comprehensive solution, the roles dedicated to the financial market and the States remain to be more explored. United Nations launched the Principles for Responsible Banking in 2019, which has the ambition to align banks’ business strategy with society’s goals, as expressed in the Sustainable Development Goals and the Paris Climate Agreement due to bank’s self-imposed commitments (United Nations Environment Programme – Finance Initiative 2019). Cahan (2009) develops a possible transformation of banks as agents able to reconnect money and its meaning. The ideas of transparency, reduced interest rates, and more significant credit limits for purchases of products that generate positive social responsibility, technology, and data sharing give banks the opportunity to create a new generation for its role. Fintechs and their optimistic-described future may lead debt to more sustainable standards (Gabor and Brooks 2017). Fintechs assume the vital challenge to increase the number of players in financial markets and generate the benefits of more competition. They also assume the mission of developing new artificial intelligence tools to promote wiser, safer, and cheaper credit. Of course, Fintechs can be contaminated by the traditional practices of borrowing market and turn into a misadventure quite easily (European Banking Authority 2019). Finally, the role of States in the private relations of borrowing can be divided into two broad branches: regulation and society structural choices. The first one is regulation and is played by both financial agencies and consumers’ agendas. Monetary authorities’ design worldwide focuses mainly on the financial system stability and enforces measures to protect banks’ soundness, not people (Admati and Hellwig 2014). The

185

2008 economic crises in the USA and Spain are examples of how the financial regulation was used to preserve financial stability, in detriment of other social interests (Mian and Sufi 2014, especially the chapter Save the Banks, Save the Economy?). Consumer agendas have traditionally much less power than financial agencies in most countries. It is quite common that consumer interests don’t even count on autonomous disputeresolution institutions to solve problems and are regulated by courts in general. The outcomes of the imbalanced powers between financial agencies and consumer’s agendas are the rise of solutions that try to diminish the harms caused by predatory lending and overindebtedness (European Commission 2010) ex post, but not in a previous and universal solution. At this point, Ramsay (2019) describes the increase of bankruptcy laws in many countries. While in one hand, bankruptcy becomes a trend, the ideas of fairness, balance, and justice in contracts seem to be out fashioned, as described by Gordley (2006) and Wieacker (1952). The ancient remedies developed by private lawyers for centuries, like usury, just price, or lesion (laesio enormis), came to be seen as weird antiques in modern mass contracts. Finally, States have a vital role in disentangling debt according to the structural choices of the society they represent. Government attitudes against some practices may give rise to discussions about the paternalistic limits of public intervention in private agreements (Kennedy 1982). It is possible that some societies keep on the track of individual’s responsibility of their own debts, even if this society is aware of the macroeconomic impacts of household debt, the health burden of indebtedness over ordinary people, the psychological bias involving vulnerable people purchases, and the aggressive marketing strategies on offering credit, among other issues. However, it is likely that at some point societies choose a different path, which can be represented by social movements (Occupy), scholars’ disruptive works (Sachs 2015; Graeber 2012; Dardot and Laval 2010; Turner 2016; Kay 2015; Streeck 2014), the press (Financial Times 2019), or international organizations (as the initiatives for sustainable development from the United Nations). If

D

186

societies choose to develop a different way of living, it is crucial that governments be prepared to support it, whether it can be called paternalism or not.

Cross-References ▶ Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals ▶ Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living ▶ Competencies for Sustainable Entrepreneurship ▶ Contribution of Enterprises in Achieving the Sustainable Development Goals ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs) ▶ Discussing Approaches to Standard of Living ▶ Global Structures of Inequality and Unequal Distribution of Wealth ▶ Perceptions and Challenges of Design for Sustainable Behavior ▶ Poverty Reduction: Concept, Approaches, and Case Studies ▶ Social Business in the Context of Sustainable Development

References Admati A, Hellwig M (2014) The bankers’ new clothes: what’s wrong with banking and what to do about it. Princeton University Press, Princeton Beck T, Demirguc-Kunt A (2006) Small and medium-size enterprises: access to finance as a growth constraint. J Bank Financ 30(11):2931–2943. https://doi.org/ 10.1016/j.jbankfin.2006.05.009 Bolton P, Scharfstein DS (1996) Optimal debt structure and the number of creditors. J Polit Econ 104(1):1–25. https://doi.org/10.1086/262015 Brown S, Taylor K, Price SW (2005) Debt and distress: evaluating the psychological cost of credit. J Econ Psychol 26(5):642–663. https://doi.org/10.1016/j. joep.2005.01.002 Cahan B (2009) Using high-transparency banks to reconnect money and meaning. Community Dev Invest Rev 5:18. Federal Reserve Bank of San Francisco Campbell JR, Hercowitz Z (2009) Welfare implications of the transition to high household debt. J Monet Econ 56(1):1–16 Cohen L (2003) A consumer’s republic: the politics of mass consumption in postwar America. Vintage, New York

Debt and Sustainable Development Courant P, Gramlich E, Laitner P (1984) A dynamic microeconomic estimate of the life cycle model. In: Aaron HJ, Burtless G (eds) Retirement and economic behavior. Brookings Institution, Washington, DC Dardot P, Laval C (2010) La Nouvelle raison du monde: essai sur la société néolibérale. Editions La Découverte, Paris Del Negro M, Giannone D, Giannoni MP, Tambalotti A (2019) Global trends in interest rates. J Int Econ 118:248–262. https://doi.org/10.1016/j.jinteco.2019. 01.010 Drentea P, Lavrakas PJ (2009) Over the limit: the association among health, race and debt. Soc Sci Med 50(4):517–529. https://doi.org/10.1016/S02779536(99)00298-1 Eggertsson G, Krugman P (2010) Debt, Deleveraging, and the liquidity trap: a Fisher–Minsky–Koo approach https:// www.frbsf.org/economicresearch/files/eggertsson.pdf Epstein G (2006) Financialization and the world economy. Edward Elgar, Cheltenham Erasmus AC, Lebani K (2008) Store cards: is it a matter of convenience or is the facility used to sustain lavish consumption? Int J Consum Stud 32(3):211–221. https://doi.org/10.1111/j.1470-6431.2008.00667.x European Banking Authority (2019) Discussion on approach on financial technology (Fintech). Smart Payment Association (SPA). https://eba.europa.eu/ regulation-and-policy/other-topics/approach-to-financialt e c h n o l o g y - fi n t e c h ; j s e s s i o n i d ¼3 6 B 6 0 E C B 5 A66F59988448058C417CE58?p_p_id¼169&p_p_ l i f e c y c l e ¼0 & p _ p _ s t a t e ¼m a x i m i z e d & p _ p _ mode¼view&_169_recordId¼2013073&_169_struts_ action¼%2Fdynamic_data_list_display%2Fview_ record. Accessed 12 Oct 2019 European Commission (2010) Fondeville N, Őzdemir E and Ward T. Research note 4/2010. Over-indebtedness. New evidence from the EU-SILC special module Fernandes D, Lynch JG, Netemeyer RG (2014) Financial literacy, financial education, and downstream financial behaviors. Manag Sci 60(8):1861–1883. https://doi. org/10.1287/mnsc.2013.1849 Financial Times (2019) Barber L (ed). Introducing the new agenda. Capitalism. Time for a reset. Business must make a profit but should serve a purpose too, 16 September 2019 Foroohar R (2016) Makers and takers: the rise of finance and the fall of American business. Crown Business Fuller G (2015) Who’s borrowing? Credit encouragement vs. credit mitigation in national financial systems. Polit Soc 43(2):241–268. https://doi.org/10.1177/0032329 215571288 Gabor D, Brooks S (2017) The digital revolution in financial inclusion: international development in the fintech era. New Polit Econ 22(4):423–436. https://doi.org/ 10.1080/13563467.2017.1259298 Gordley J (2006) Foundations of private law: property, tort, contract, unjust enrichment. Oxford University Press, New York

Debt and Sustainable Development Graeber D (2012) Debt: the first 5,000 years. Melville House Publishing, Brooklyn Hulme D (1990) Can the Grameen Bank be replicated? Recent experiments in Malaysia, Malawi, and Sri Lanka. Dev Policy Rev 8(3):287–300 Hyman L (2011) Debtor Nation: the History of America in Red Ink. Princeton University Press, New York Hyman L (2012) Borrow: the American way of debt. How personal credit created the American middle class and almost bankrupted the nation. Princeton University Press, Princeton Immergluck D, Smith G (2005) There goes the neighborhood: the effect of single-family mortgage foreclosures on property values. Woodstock Institute, Chicago Immergluck D, Smith G (2006) The impact of single family mortgage foreclosures on neighborhood crime. Hous Stud 21(6):851–866 International Monetary Fund (2012) World Economic Outlook (WEO) Growth resuming, dangers remain, especially the chapter Dealing with Household Debt. https://www.imf.org/external/pubs/ft/weo/2012/01/. Accessed 12 Oct 2019 Jenkins R, Bhugra D, Bebbington P, Brugha T, Farrell M, Coid J, Fryers T, Weich S, Singleton N, Meltzer H (2008) Debt, income and mental disorder in the general population. Psychol Med 38(10):1485–1493. https:// doi.org/10.1017/S0033291707002516 Karwowski E, Stockhammer E (2017) Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies. Econ Polit Stud 5(1):60–86. https://doi.org/10.1080/20954816.2016. 1274520 Kay J (2015) Other people’s money: the real business of finance. Public Affairs Books, Ashland Kennedy D (1982) Distributive and paternalist motives in contract and tort law, with special reference to compulsory terms and unequal bargaining power. Maryland L Rev 41:563 Klapper L, Lusardi A, Panos GA (2013) Financial literacy and its consequences: evidence from Russia during the financial crisis. J Bank Financ 37(10):3904–3923. https://doi.org/10.1016/j.jbankfin.2013.07.014 Kuzina OE, Krupenskiy NA (2018) Over-indebtedness of Russians: myth or reality? Voprosy Ekonomiki 11:85–104. https://doi.org/10.32609/0042-8736-2018-11-85-104 Lavinas L (2017) The takeover of social policy by financialization: the Brazilian paradox. Palgrave Macmillan, New York Lee J, Kwon KN (2002) Consumers’ use of credit cards: store credit card usage as an alternative payment and financing medium. J Consum Aff 36(2):239–262. https://doi.org/10.1111/j.1745-6606.2002.tb00432.x Lusardi A, Tufano P (2015) Debt literacy, financial experiences, and overindebtedness. J Pensiong Econ Financ 14(4):332–368. https://doi.org/10.1017/S1474747215 000232 Lynch J, Wood W (2006) Special issue editors’ statement: Helping consumers help themselves. J Public Policy Mark. https://doi.org/10.1509/jppm.25.1.1

187 Martin R (2002) The financialization of daily life. Temple University Press, Philadelphia Melzer B (2010) Debt overhang: reduced investment by homeowners with negative equity. Kellogg School of Management Working Paper, Chicago Mian A, Sufi A (2014) House of debt: how they (and you) caused the great recession, and how we can prevent it from happening again. Chicago University Press, Chicago Mokhtari M (1990) Are we estimating a life cycle model or an error correction model? In: Proceedings of the annual conference of the American Council on Consumer Interests, March 1990 Nettleton S, Burrows R (1998) Mortgage debt, insecure home ownership and health: an exploratory analysis. Sociol Health Illn 20(5):731–753. https://doi.org/ 10.1111/1467-9566.00127 OECD (2012) High-level principles on National Strategies for Financial Education. https://www.oecd.org/finance/ financial-education/OECD-INFE-Principles-NationalStrategies-Financial-Education.pdf. Accessed 9 Oct 2019 OECD (2017) G20.OECD Infe report on adult financial literacy in G20 countries. https://www.oecd.org/ finance/g20-oecd-infe-report-adult-financial-literacyin-g20-countries.htm. Accessed 8 Oct 2019 Palley T (2013) Financialization: the economics of finance capital domination. Palgrave Macmillan, London Rahman A (1999) Micro-credit initiatives for equitable and sustainable development: who pays? World Dev 27(1):67–82. https://doi.org/10.1016/S0305-750X(98) 00105-3 Ramsay I (2019) Personal insolvency in the 21st century: a comparative analysis of the US and Europe. Hart Publishing, Oxford Reading R, Reynolds S (2001) Debt, social disadvantage and maternal depression. Soc Sci Med 53(4):441–453. https://doi.org/10.1016/S0277-9536(00)00347-6 Reinhart C, Rogoff K (2011) From Financial Crash to Debt Crisis. Am Econ Rev 101:1676–1706 Richardson T, Elliott P, Roberts R (2013) The relationship between personal unsecured debt and mental and physical health: a systematic review and meta-analysis. Clin Psychol Rev 33(8):1148–1162. https://doi.org/ 10.1016/j.cpr.2013.08.009 Roberts JA, Jones E (2001) Money attitudes, credit card use, and compulsive buying among American college students. J Consum Aff 35(2):213–240. https://doi.org/ 10.1111/j.1745-6606.2001.tb00111.x Rogaly B (1996) Micro-finance evangelism, “destitute women”, and the hard selling of a new anti-poverty formula. Dev Pract 6:100–112 Sachs J (2015) The age of sustainable development. Columbia University Press, New York Schreiner M (2003) A cost-effectiveness analysis of the Grameen Bank of Bangladesh. Dev Policy Rev 21:357–382 Scott RH (2007) Credit card use and abuse: a Veblenian analysis. J Econ Issue 41(2):567–574

D

188 Streeck W (2014) Buying time: the delayed crisis of democratic capitalism. Verso, London Taub RP (1998) Making the adaptation across cultures and societies: a report on an attempt to clone the Grameen Bank in Southern Arkansas. J Dev Entrep 3(1):53 Thaler R (1990) Anomalies: savings, fungibility, and mental accounts. J Econ Perspect 4(1):193–205 Thaler RH, Sunstein CR (2008) Nudge: improving decisions about health, wealth, and happiness. Yale University Press. Thomas JJ (1995) Replicating the Grameen Bank: the Latin American experience. Small Enterp Dev 6(2):16–26 Tobin J (1980) Asset accumulation and economic activity: reflections on contemporary macroeconomic theory. Basil Blackwell, Oxford Turner A (2016) Between debt and the devil: money, credit, and fixing global finance. Princeton University Press, Princeton van Praag CM, Versloot PH (2007) What is the value of entrepreneurship? A review of recent research. Small Bus Econ 29(4):351–382. https://doi.org/10.1007/ s11187-007-9074-x Veblen (1899) The theory of the leisure class: an economic study of institutions. Modern Libr., New York Wennekers S, Thurik R (1999) Linking entrepreneurship and economic growth. Small Bus Econ 13(1):27–55. https://doi.org/10.1023/A:1008063200484 Wieacker F (1952) Privatrechtsgeschichte der Neuzeit unter besonderer Berücksichtigung der deutschen Entwicklung. Vandenhoeck u. Ruprecht, Göttingen Winborg J, Landstrom H (2001) Financial bootstrapping in small businesses: examining small business managers’ resource acquisition behaviors. J Bus Ventur 16(3):235–254. https://doi.org/10.1016/S08839026(99)00055-5 Yunus M (2003) Banker to the poor: micro-lending and the battle against poverty, 2nd edn. NY Public Affairs, New York Zahra SA, Gedajlovic E, Neubaum DO, Shulman JM (2009) A typology of social entrepreneurs: motives, search processes and ethical challenges. J Bus Ventur 24(5):519–532. https://doi.org/10.1016/j.jbusvent. 2008.04.007

Decent Work ▶ Community-Based Socioeconomic Development Programs: A Catalyst for SDGs ▶ Decent Work for Women Through Digital Social Network ▶ Economic Growth, Technological Progress, and Employment

Decent Work

Decent Work for Women Through Digital Social Network Hebatallah Ghoneim Faculty of Management Technology, German University in Cairo, Cairo, Egypt

Synonyms Decent work; Job creation; Social network; Women empowerment

Definitions The Decent work and economic growth goal evaluates the ability of the economy to create jobs for both women and men; with attention to fair income, social protection, human dignity and securing significant time for family and leisure. Trading through social networks creates a new era of job opportunities particularly for women. Through these jobs, women can work equivalently with practicing household activities and child-rearing responsibilities. Moreover, the social network is an area for women’s visibility, the psychological gain of being empowered, and sharing experience as well as weakness. Nevertheless, the digital social network might act as a double weapon tool.

Introduction No one denies that the Internet is shaping our lives. It is not only a method of information exchange, but also a method for communicating, gaining knowledge, creating impacts, and constructing business platforms (Dentsel 2013). It even impacts politics. It is known that the Arab Spring revolution was initiated through the Internet and social media, contributing to the collapse of several dictators in the Middle East. With affordable cell phones and growing competition in communication service, social media

Decent Work for Women Through Digital Social Network

and networking are becoming a central part of many people’s daily routine, regardless of income or qualification. It is estimated that 7.8 billion people access social network on a daily basis, and each individual has on average 7.6 social media accounts (Smith 2019), creating a platform for business and new markets. While new jobs are formulated such as youtubers and influencers that require special qualification and talents, other websites have evolved as retailers between suppliers and demanders that just require the ability to reach a consumer. Trading platforms involve large-scale companies such as Amazon and e-bay, as well as smallscale companies selling highly demanded domestic products or selling brand products informally. Moreover, entrepreneur ideas are developed introducing new products and services or producing talented crafting and handmade products. Social media started as a means for people to communicate, and they found it a releasing area for expressing views and getting in contact with a larger number of friends. Social network is an easy method for any individual to expand his community, and for sellers, it is an easy way to reach a larger number of consumers. Sellers seize the opportunity that people are available on social media and market their products (Shih 2010). Social media offers women new methods of interacting with the world, regardless of social standards and income levels. Women, in particular, can find good opportunities through social media. Women for the last decades have been juggling between developing their own career and carrying out their regular housework duties. It is not only difficult to manage time between housework and job, but also stressful. Besides, firms prefer hiring men or single women to avoid the associated expenses for married women such as maternity leaves and parenting leaves. Consequently, several women voluntarily chose to stop working and concentrate on housework. Social media enables several mothers and married women to gain a satisfying income and at the same time have enough leisure time to spend with family. This is one of the cornerstone ideas for decent work.

189

According to Rodgers (2007), ILO has defined the main key of decent work as an integrated agenda for employment creation and its quality. Decent work is a requirement to implement an inclusive economic growth regardless of gender and promote productivity and growth. Decent work requires labor ability to bargain and express work demand as well as creates job opportunities that guarantee significant time for leisure and family. Job opportunities created through social media could be a tool for women empowerment and decent work, especially in developing countries where norms and attitudes in the workplace are still heavily biased against females. This entry highlights how social networks are opportunities of having decent work.

Decent Work According to Women All labor, regardless of women or men, seeks a job that provides fair income, safe working conditions, social protection, personal development, space for expressing opinions, participation in decision making, and career advancement (Fapohunda 2012). In the third millennium, another demand by labor is raised which is work-family balance. The extensive development in technology has made it feasible for an employer to reach employees regardless of working hours. The employee is accessible “24/7,” resulting in less time spent with family. Lately, work-family stress has been one main feature for most of the employees, especially for those having larger family responsibilities such as care of children and elderly parents (Spector et al. 2004). Thus, a worker does not only seek more income and a better career path, but also a job opportunity that allows a work-family balance. Accordingly, decent work implies a job opportunity that adds to family welfare rather than competes with it. According to Spector et al. (2004), work-life balance policies are said to benefit women in particular. The current global competing work situation pressures employees to spend long working hours, resulting in higher pressure on women’s role as a child caregiver (Perrons et al.

D

190

2005; Selmi and Cahn 2006). Based on the gender role theory, men are the breadwinners and have to spend more time at work, whereas women have to spend more time at home (Fapohunda 2012; Floro and Meurs 2009; Lachance-Grzela and Bouchard 2010; Parasuraman and Simmers 2001). Hence, work-balance policies are believed to promote women empowerment and readdress gender inequality, which is also a path for achieving decent work and economic growth. Lately, women empowerment is seen actively worldwide, and women’s participation in labor force has been increasing remarkably. Nevertheless, this did not decrease women’s obligations inside the home (Lachance-Grzela and Bouchard 2010), especially in developing countries that are mainly featured with extended families, familialism, and traditionalism (Spector et al. 2004). Working women are assumed to work professionally and use the gained income to find someone to help her with housework. Nevertheless, even if day care is available, it is usually less shorter than the usual workday (Fapohunda 2012).Women’s one main concern for accepting job opportunities, or completing a job career, is the extent to which work would provide time for the family without feeling pressure at every time taking leave or working from home due to the problem of women’s double burden. Based on a survey conducted for 745 leaders, Clerkin (2017) concludes that women require flexibility in work, seek organizations that help finding their passion, and prefer institutions that provide resources and opportunities for successful leadership. Clerkin added that most women stated their concern about workload and long hours as well as difficulty in dealing with hard people. Clerkin (2017, pp 15 and16) showed that women with kids have given more importance to working from home and flexible working hours as well as maternity leave period in comparison to men and women without kids (Perrons et al. 2005). Women face discrimination in hiring at workplaces, and they have less opportunity to get hired in decent work. Women require more time away from work in comparison to men, due to pregnancy fatigue, maternity leave, and time needed to spend with children. Thus, hiring women is costly

Decent Work for Women Through Digital Social Network

due to the associated cost of pregnancy and caregiving responsibilities (Wentling 1998). Moreover, Selmi and Cahn (2006) demonstrated that the workplace has no tolerance for the challenges of working parents. In addition, pregnant women are seen in a transition stage, hence they are less recommended and are recruited for a lower starting salary (Masser et al. 2007). In short, women’s duty as a mother would disable her opportunity from having a decent work (Fapohunda 2012; Floro and Meurs 2009). Thus, women as the ultimate caregiver have to sacrifice a full job opportunity or professional acceleration for family obligations. Moreover, the current competing workplace provides decent work for highly educated and competitive workers (Floro and Meurs 2009). Together with the public trend of privatization and downsizing of the public sector, it is difficult for middle-educated women to access decent work (Fapohunda 2012). Middle education graduates can only find a place in the informal sector. The informal sector is an invisible sector that is not regulated by the government. It includes a variety of jobs from small-scale enterprises and self-employment for survival to large enterprises with a large number of casual-wage workers (Snyder 2005). In the last couple of decades, a new branch of the informal sector has appeared – the selling groups on social networks. These groups open an opportunity for women for a self-employed job opportunity. Such self-employed jobs are methods for reaching a decent job since women gain satisfying income with less work-family conflict. The question is what are the forms of these job opportunities created through social network and how far they achieve decent work?

Social Network and Decent Work Social network is part of a globalization trend that brought new job opportunities especially for women (Floro and Meurs 2009). Social network generates forms of social relationships and social capital gain (Serafinelli 2018). Social networks, such as Facebook, Whatsapp, and Instagram,

Decent Work for Women Through Digital Social Network

formulate business platforms to reach a large number of people. These networks allow individuals to make links with people invisibly and expand sales opportunities in particular. Facebook Groups, in particular, provide successful modules that allow sellers to reach costumers easily. Moreover, such groups represent an easy method to supply what sellers have daily and sellers can gain trust by allowing customers to write reviews online (Ali et al. 2017). Consumers prefer online shopping since they can check at any time of the day and can browse more than one choice at less time and effort in comparison to regular shopping (Brynjolfsson et al. 2013). Mobile technology as well as affordable smartphones and internet bundles; together with consumers’ preference for online shopping since it cost fewer queues, less time in the street, and sometimes lower prices, created a new business module (Pantano and Priporas 2016). Since this new module is tied neither to location nor to working hours, it attracted women, especially married women that need to work at home. Although it is free of charge stores that need no maintenance, a self-owned enterprise needs a microlevel of funds to start up. For women, it is also a means of keeping social distance and avoiding sexual harassment. Several groups are formulated on different social networks that are managed by one user, and each transaction is done separately with one consumer. The seller can use text, audio, video, and pictures to market the product. Sellers use referral awards to encourage customers to add friends and expand the visibility of their groups. This is done easily without extra charges and would request managing the delivery process. In general, such retail online groups do not have the brightness as center shop stores, respectively the main determinant of customer loyalty to a social network seller is the satisfaction obtained for using the product and word worth. This implies that only good quality of service and products are the guarantee for a seller’s success and customer long-run relationship. Therefore, women working from home, besides their children, would be gaining skills in managing supply chains and be efficient in gaining customer satisfaction.

191

Other types of groups are initiated by women to help each other exchange unused products. It would carry name referring to the target of the group such as “clean your closet” and “sell the unused.” These types of groups are categorized as Consumer to Consumer (C2C) transactions (Chen et al. 2016). Sales include new products or secondhand products. Groups’ admins generate income and gain through allowing advertisement. Many women find themselves very talented in housework such as cooking, arranging stuff, decorating, stitching, and making handcrafted items. Social network groups are a path that they can take to convert this talent into productive sales. Social networks are full of inspired groups that are selling homemade products such as cupcakes and homemade meals, as well as classic looking gifts such as wooden crates, silver accessories, and knitted cloth (Indrupati and Henari 2012). Social networks formulate a platform for sharing ideas and interests (Ali et al. 2017), which women use intensively. Women have formulated groups titled “new mothers,” “mothers talks,” and “mothers in bond” sharing their experience as mothers that need learning by doing. Women through mother groups seek help and advice to help mothers to be a better caregiver as well as to reduce tension. These groups target helping mothers to be more efficient as well as have time for leisure. They also help women to express themselves and break a stressful life, which is highly needed for further empowerment and being productive at work and not only at home. Groups are diversified and do not only concentrate on motherhood experience, but also help women in general in taking decisions. Many groups are initiated to give women a push in their path as strong independent women, such as “she rocks” and “strong independent but little tired.” These groups act as free coaching assistance, in which a more experienced individual guides others to find their strength. Moreover, some of these groups help women to find a job opportunity or start a new business. Some groups are built on the frustration of women in finding decent work that guarantees career development without gender biases or mothers that feel tension due to difficulty of keeping work-home balance.

D

192

Using a survey of 350 women in Bangladesh, Ali et al. (2017) statistically proved that social networks have empowered women through generating more income, converting innovative ideas into a business platform, and gaining social intelligence and social capital. While Ameen and Willis (2016) explained that the mobile phone helps women entrepreneurs in Arab countries to overcome challenges faced due to culture and norms. Literature in how far women benefit from social network is limited and future research is recommended. However, social network opportunities face the same drawbacks as the informal sector. These drawbacks are represented in no clear assessment of women’s performance; it is not possible to decide whether women are underemployed or not and are able to develop or not, and the only means to assess how productive through these jobs is how much income generated. Furthermore, these job opportunities are not socially secured, cannot stand economic crises, and are not protected by labor laws (Fapohunda 2012; Floro and Meurs 2009). This sets women in a vulnerable situation, and they are always not sure about the future, which creates continuous pressure to them. Moreover, the success of e-retail groups depends on the ability of managing delivery, ensuring payment, and facing hacking privacy issues (Ali et al. 2017). In short, discussed job opportunities for women under social network are a kind of nonstandard job, and there is no guarantee of career development or improvement. Concisely, groups constructed through social network serve women staying at home to generate income, become productive, use their talent, develop skills, and keep work-home balance. All these are pillars for decent work.

Conclusion The 8th sustainable development goal is decent work. Achieving decent work implies that economic growth creates work opportunity – for both genders equally – that is productive and generates satisfactory income, in addition to social dialogue,

Decent Work for Women Through Digital Social Network

social security, and balanced time for leisure and family. Women lately have been suffering from the heavy burden of being a caregiver and working to gain income that improves their family lifestyle. Many women stop raising the slogan of strong independent women; nevertheless, others do not have the pleasure to do so or do not want to. Thus, these women, regardless of their education level, can step into the market through a cell phone and start an e-retail business. Others use their talent in coaching or producing handmade products. In the end, women use the social network to gain income, be productive, and act efficiently as a caregiver. Thus, a number of pillars of decent work are achieved. Still, concerns of social security and economic vulnerability of such e-business platforms are raised.

Cross-References ▶ Economic Growth, Technological Progress, and Employment ▶ Gender Roles, Cultural Norms, and Role of Income in Perceived Value: Women and Unpaid Work ▶ Remediation Programs for Decent Work

References Ali MM, Khan AA, Chanra D, Nedelea AM (2017) Testing the theory of social networking on empowerment of people specially women at two villages in Bangladesh: a filed investigation. Ecoforum J 6(2):1–9 Ameen NA, Willis R (2016) The use of mobile phones to support women’s entrepreneurship in the Arab countries. Int J Gender Entrep 8(4):424–445 Brynjolfsson E, Hu YJ, Rahman MS (2013) Competing in the age of omnichannel retailing. MIT, Cambridge, pp 1–7 Chen JV, Su BC, Widjaja AE (2016) Facebook C2C social commerce: a study of online impulse buying. Decis Support Syst 83:57–69 Clerkin C (2017) What women want – and why you want women – in the workplace. Research report: centre for creative leadership. Paper retrieved from: https://www. ccl.org/wp-content/uploads/2017/07/WhatWomenWant. FINAL_.pdf. March 2020 Dentsel Z (2013) How the internet has changed everyday life. Ch@nge: 19 Key essays on how the Internet is

Decent Work in China changing our lives. Paper retrieved from: http://aasa.ut. ee/augsburg/literature/DENTZEL_BBVA-OpenMindbook-Change-19-key-essays-on-how-internet-is-chang ing-our-lives-Technology-Internet-Innovation.pdf Fapohunda TM (2012) Towards improved access to full employment and decent work for women in Nigeria. Int J Humanit Soc Sci 2(8):104–112 Floro MS, Meurs M (2009) Global trends in women’s access to “decent work”. Friedrich-Ebert-Stiftung, Geneva, pp 1–47 Indrupati J, Henari T (2012) Entrepreneurial success, using online social networking: evaluation. Educ Bus Soc: Contemp Middle East Issues 5(1):47–62 Lachance-Grzela M, Bouchard G (2010) Why do women do the lion’s share of housework? A decade of research. Sex Roles 63(11–12):767–780 Masser B, Grass K, Nesic M (2007) ‘We like you, but we don’t want you’ – the impact of pregnancy in the workplace. Sex Roles 57(9–10):703–712 Pantano E, Priporas CV (2016) The effect of mobile retailing on consumers’ purchasing experiences: a dynamic perspective. Comput Hum Behav 61: 548–555 Parasuraman S, Simmers CA (2001) Type of employment, work–family conflict and Well-being: a comparative study. J Organ Behav 22(5):551–568 Perrons D, Fagan C, McDowell L, Ray K, Ward K (2005) Work, life and time in the new economy: an introduction. Time Soc 14(1):51–64 Rodgers G (2007) Decent work, social inclusion, and development. Indian J Human Dev 1(1):21–32 Selmi M, Cahn N (2006) Women in the workplace: which women, which agenda. Duke J Gender Law Policy 13 (7):7–30 Serafinelli E (2018) Chapter 3: visual social relationships. In: Digital life on Instagram: new social communication of photography. Emerald Limited Publishing, Bingley Shih C (2010) The Facebook era: tapping online social networks to market, sell, and innovate. Pearson Education, Boston Smith K (2019) 126 Amazing social media statistics and facts (December 30, 2019). Brand Watch. Paper retrieved from: https://www.brandwatch.com/blog/amaz ing-social-media-statistics-and-facts/. March 2020 Snyder K (2005) Gender segregation in the hidden labor force: looking at the relationship between the formal and informal economies. In: Texler Segal M, Demos V (eds) Gender realities: local and global. Advances in gender research, vol 9. Emerald Group Publishing, Bingley, pp 1–27 Spector PE, Cooper CL, Poelmans S, Allen TD, O’Driscoll M, Sanchez JI, . . . Lu L (2004) A cross-national comparative study of work-family stressors, working hours, and well-being: China and Latin America versus the Anglo world. Pers Psychol 57(1):119–142 Wentling RM (1998) Work and family issues: their impact on women’s career development. New Dir Adult Contin Educ 80:15–24

193

Decent Work in China Xuebing Cao Keele Business School, Keele University, Staffordshire, UK

Definitions Decent work refers to “opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity” (ILO 1999: 3). This official description was provided by the International Labour Organization (ILO) in 1999 during its 87th International Labour Conference. This important concept signals a global effort to promote a fundamental dimension of the quality of life that will significantly contribute to the sustainable development (Anker et al. 2003), as decent work reflects the generation of quality employment with the conditions underpinning workers’ rights and their voice in the community by prioritizing the ILO’s tripartite constituency that includes governments, employers, and trade unions (Burchell et al. 2014). Following the official launch of the Decent Work Agenda, one stream of the United Nations Sustainable Development Goals (SDG8) is particularly advocated to promote the four core labor standards – freedom from forced labor, freedom from child labor, freedom from discrimination at work, and freedom to form and join a union and to bargain collectively (Rai et al. 2019). To achieve decent work and sustained productivity in a highly competitive world, four strategic pillars of the Decent Work Agenda have been set by the ILO (2013) as (1) international labor standards and fundamental principles and rights at work; (2) employment creation; (3) social protection; and (4) social dialogue.

Introduction It has been two decades since the ILO officially launched the decent work campaign to promote

D

194

rights at work and better opportunities for employment (ILO 1999). Whereas in China, the rapid economic development in the past 40 years has dramatically transformed the patterns of work and employment, with the government, employers, and employees paying increasingly more attention to decent work issues such as working conditions, health and safety, equality, and collective representation. Overall the development of the quality of work in China has been impressive, thanks to mass urbanization and marketization, considerable legal enactment activities to expand labor legislation, job creation, and a general improvement of workers’ income. Yet there are still serious challenges that can undermine the achievement of decent work objectives, including the low level of collective representation, unequal opportunities at work, and weak protection of migrant workers. The appeal to decent work is often concerned with non-regular forms of employment (Webster et al. 2016: 203), but its key purpose is to establish a universal social floor for all workers (Kuruvilla 2006: 179). In this respect, different forms of working, such as informal employment and platform working, should also be considered when addressing decent work issues. The Regulatory Framework Two years after the launch of ILO’s Decent Work Agenda, in 2001 China signed a Memorandum of Understanding with ILO for strengthening the mutual, cooperative relationship in promoting decent work, demonstrating the country’s commitment to embed decent work agenda into the country’s labor market regulative framework (ILO 2016). This is accompanied by the country’s efforts to increase law-making activities since the 1990s by the central government and professionalization of the judiciary and legal workforce to regulate employment relations through a series of legislations to promote labor contracts in a market economy (Friedman and Lee 2010). Eleven ILO labor conventions have been ratified by the Chinese government to address some of the key labour standard issues such as the prohibition of using child labor, anti-discrimination at work, and health and safety, which are among key

Decent Work in China

elements of decent work (Cooke et al. 2019). A few influential legislations have been passed to regulate work and address the decent work agenda, and the government has also published numerous regulations and policies dealing with labor market issues such as the minimum wage, job creation, and migrant workers. Since the 1990s China has begun the enactment of legislations regulating labor market and employment relations, starting with the 1994 Labour Law and culminating in the 2008 Labor Contract Law, in an attempt to strengthen worker rights and reduce social and regional inequalities (Taylor 2011). These laws, also including the 1992/2002 Trade Union Law and 2010/18 Social Insurance Law, demonstrate the government’s commitment to using the legal framework to govern the principles of employment relations, responding to the growing social inequality, and achieving decent work objectives (Cooke et al. 2019). The 1994 Labor Law is perhaps the most important legislation to lay the foundations of regulating the contemporary labor relations and labor market operation. The law codifies a number of key decent work indicators including employment choice, fair compensation, working hours, holiday entitlement, workplace safety and working conditions, social insurance, dispute resolution, collective consultation, and labor contracts (Taylor 2011). Subsequently a series of laws and policies have been issued by the government to extend the decent work provision in response to the growing need for protecting workers’ rights. For instance, the 2007 Labor Mediation and Arbitration Law is aimed to streamline the process of arbitration, eliminate arbitration fees, and extend the time limit for grieved workers to file for dispute arbitration (Friedman and Lee 2010: 518). Another important change to labor legislation is the 2008 Labor Contract Law, which offers significant increases on the protection of workers and stabilization of labor relations by strengthening the use of written employment contracts (Taylor 2011). The law expands trade unions’ roles in negotiating collective contracts and defending workers’ rights, but it has not adequately addressed the deep power asymmetry between capital and labor by giving the union a

Decent Work in China

significant increase in determining workplace rules and layoff procedures (Friedman and Lee 2010). Nevertheless, the law has significantly increased the rate of signing written labor contract and prompted the publication of more decent work-related legislations. Many directive regulations and polices strengthening workplace protection have been issued by the government, including the 2011 Social Insurance Law, the 2014 Provisional Regulation on Labour Dispatch, and the 2016 Amendment of the Law on the Prevention and Control of Occupational Disease. In 2012, the State Council issued the first ever national policy document to advocate quality employment and emphasize both expanding the scale and improving quality of employment (Chen 2014). Recently, government policies are gradually changing toward the adaptation of the informalization and deregulation of the labor market due to economic considerations, which will likely weaken the general provision of labor protection (Cooke et al. 2019). The regulatory framework supporting China’s decent work agenda has been gradually improving the country’s labor market environment, although there are also serious challenges such as labor rights violations and the problematic implementation of these legislations (Friedman and Lee 2010). First, labor legislations need to expand the provision of protecting workers, because many laws are not necessarily oriented toward the interests of workers’ civil liberties and labor rights, but to safeguard social stability (Taylor 2011). For firms violating decent work agenda, their liability cost is quite low and therefore the legal consequence needs to be clearer. Second, the implementation of laws and regulations supporting decent work is not always effective, partly due to the ambiguity and inconsistency of these legal documents (Cooke 2011). Too much attention is paid to broad meaning of legal terms, rather than detailed codes of practice that can guide local governments, employers, and employees (Chen 2014). As the judiciary finance and personnel appointment are determined by government, courts are under great pressure to respond to political and economic considerations (Friedman and Lee 2010).

195

Third, the current labor market regulations need to address some of the neglected issues on decent work such as long working hours, workplace safety, and dignity. For instance, the legal responsibility and punishment for discriminatory and unequal behaviors at work are not clearly defined by laws, and victims have found it hard to resolve their claims through legal procedures (Cooke 2011). There have been comprehensive legislations dealing with women’s health and safety at work, but gender equality and discrimination matters are under-addressed by laws. The legal framework about the protection of equal rights for employment is weak, and better clarity is needed to regulate the legal boundary and judgment of employment discrimination and inequality (Shi 2017). Trade Unions and Collective Bargaining Workplace Representation

One of the main dimensions of decent work is the capacity of workers to collectively defend their interests through negotiations, in other words the extent of collective bargaining based on the freedom of association (Anker et al. 2003). Trade unions and social dialogues can provide workers with an opportunity to exercise their right to present their views and engage in negotiations on work-related matters (Ghai 2003). On the one hand, although the extent of union membership is relevant to the level of decent work, it is not a sufficient condition for effective collective bargaining to happen. This is particularly the case in China where the high union density has not led to independent unionism and the labor movement is restricted by a state-oriented model guided by Leninist ideology. On the other hand, despite the prospect that Chinese unions are not likely to soon become independent (Liu 2010), there is still a scope for them to enhance the engagement with dispute resolution and pay determination, through which the level of union legitimacy may be improved. China has a unitary industrial relations system, and all union organizations are affiliated to, and financially depended on, government and employers, with collective bargaining being

D

196

discouraged and strikes contained or suppressed. The law does not prohibit strikes, although in practice unions are not allowed to take industrial action against employers and individual workers are likely to be disciplined or punished if taking part in strike. Due to its structural weakness, the ACFTU (All-China Federation of Trade Unions, the only official union association) and workplace union organizations have little capacity to represent workers to undertake collective bargaining in an independent way (Cao and Meng 2017). Martin (1989: 154) regards China’s trade union movement as a form of “state ancillary” unionism, which emphasizes the promotion of production as unions’ primary task, instead of intermediary organizations between class, market, and society (Hyman 2001). On the other hand, despite the absence of the intention to engage with collective bargaining, a key dimension of decent work, the ACFTU enjoys a certain level of official legitimacy which comes from the law and limited ability to respond to issues such as productivity and employer-employee conflict (Chang and Brown 2013). The unions’ general inability to represent workers’ interests has been highlighted during the country’s transformation toward a market economy when conflicts arise from workers demanding better pay and working conditions, while unions fail to represent and defend their interests. Since the beginning of the twenty-first century, China has witnessed rising cases of labor disputes and non-union strikes, highlighted by the 2010 strike wave when several high-profile disputes such as the Nanhai Honda strike (Lyddon et al. 2015) broke out in south China before spreading to some other regions of the country. Most labor dispute cases are triggered by decent work problems such as wage arrears and unfair social insurance coverage, while unions’ affiliation to the management means they have low trust among workers. According to China Labour Bulletin (2016), there is an upward trend of strikes in manufacturing, construction and mining, with figures doubled in 2015 (2,774 incidents) compared to 2014 (1,379 incidents). Despite the lack of official data on labor disputes

Decent Work in China

to draw a fuller picture, the challenge to Chinese unions is ostensible, as it necessitates the need for reforming union functions and improves workers’ confidence and trust toward unions. Trade Union Reform

The mounting pressure arising from labor unrest and unions’ legitimacy crisis manifests the extent of Chinese workers’ discontent concerning the quality of work and employment. Invariably these challenges have weakened the authority of the ACFTU, which has suffered from unions’ declining relevance to workers (Liu 2010) and low level of trust and authority in the eyes of rank-and-file members (Clarke 2005). In fact, the ACFTU’s representation legitimacy has long been questioned by workers and the public; it is only in recent decades that the escalating labor unrest has started to expose more of the underlying problem, as workers are more conscious about unions’ incapacity to represent their legitimate interests (Chang and Brown 2013). For the ACFTU, more proactive responses toward the pressure will consolidate its monopoly position within the official industrial relations system, though the uncertainty remains for advancing the degree of decent work such as better employee representation, free collective bargaining, and the right to strike. Perplexed by workers’ low level of trust, rising labor discontent, and the problematic status, the ACFTU has been under pressure from the Partystate to extend its workplace coverage (Chan 2010). Since the early 2000s, the union hierarchy has started to exercise greater influence in guiding and supporting enterprise unions in more directly involving with labor relations (Lee et al. 2016). More opportunities are created for grassroots unions to find solutions, because they may be capable of responding to workers’ militancy by developing new practices and structures (Pringle 2011). However, the question is that unions have never been allowed autonomy, which is not in line with the principle of freedom of association, one of the central dimensions of decent work provision. So far Chinese unions have responded to the internal and external challenges by increasing

Decent Work in China

membership, enhancing legislation support, and improving participation in labor disputes resolution. Such moves are encouraged by the government due to the key target for union reform being mainly maintaining industrial peace (Pringle 2015). First, the ACFTU has been expanding membership in recent years, with a lot of local variations and a gradual and bottom-up approach (Liu 2011), although its grassroots mobilization has not had substantial impact on protecting workers’ interests, as unions still lack the strength of representation (Cooke 2016). Second, there have been experiments for grassroots union to hold elections; however, many elections are still manipulated by management and government authorities despite workers’ growing demand for free election of grassroots union leaders (Friedman 2012). Third, attempts have been made to reinstate the conventional union mechanisms such as the existing workplace collective wage consultation and Workers Congress systems to strengthen unions’ intermediary role. Yet, collective wage consultation is not aimed to challenge employers’ prerogative. Rather it is mainly used to remind unions and employers of their legal obligations and the fact that industrial conflict may be defused through institutional channels (Clarke et al. 2004: 251). Most Workers Congresses are merely formalities despite the official pronouncements and their legal standing. Decent Work and Migrant Workers Rural-to-urban migrant workers are China’s largest group of working population who have suffered from the worst decent work concerns for a long period of time (Knight and Yueh 2009; Cooke 2011), mainly because of their precarious status and an under-regulated employment regime. In the wake of the country’s dramatic marketization, industrialization, and urbanization in the past four decades, millions of rural surplus labor have migrated into urban areas to work in factories, services, and construction sites that need large number of workers. From 1978 to 2017, the number of rural migrant workers in China grew from 2 million to 175.85 million (Xu 2019). After the early years when migrant workers endured seriously poor working conditions and

197

exploitation, now their overall employment conditions have improved. In 2018, migrant workers’ average monthly income was 3,721 yuan, a 6.8% increase compared with 2017 (National Bureau of Statistics 2019). In many aspects, migrant workers are the backbone of China’s dramatic economic boom, contributing to the rapid industrialization and modernization, while at the same time their housing, education, and institutionalization (for instance, union participation) are gradually upgraded. However, the overall quality of employment for migrant workers is still low as they are exposed to a number of institutional and structural weaknesses brought in by the marketization, with many still suffering from low pay, job insecurity and instability, inequality, and poor working conditions. Labor Market Challenges

One of the main decent work challenges for Chinese rural migrant workers is the tough, discriminative employment environment, primarily caused by the labor market which is still underregulated as the current labour legislative framework is less comprehensive. Indeed, much of the challenging environment derives from the unfair institutional arrangement, especially the dual labour market which is aimed at segregating people between urban and rural areas and restricting free movement of labor during the planned economy era (Shi 2008). Thanks to the marketization of the economy, now labor mobility has been much greater than before, but the dual labor market still prevails. This means rural-urban migrants have to endure the long-standing household registration system, hukou, required by China’s law as all citizens are assigned to either rural or urban hukou in a given location, while this status will remain unchanged unless a conversion through a strictly controlled system can be made (Song 2016; Cooke et al. 2019). For the majority of rural migrants, working in cities cannot easily help them to convert their rural hukou status, and therefore they cannot have the same access to many jobs, benefits, and opportunities that are exclusively entitled to urban privileges. Although the rigidity of hukou is relaxing in recent years and associated social control is less punitive than

D

198

before, there remains a wide range of employment discrimination against rural residents as they are still excluded from many social welfare and labor market benefits (Sun 2020). Another challenge is that, structurally, most migrant workers will find jobs in lower-skilled manufacturing, construction, and service industries or informal sectors, which are characterized with low wages, long working hours, and high workload. As Shang (2019) reports, nearly half of China’s migrant workers are in production lines and building sites with poor safety protection and low coverage of industrial injury insurance, and they are the main group of workers who are at high risk of occupational hazard. Within the informal sector, for example, more than 90% of the jobs are taken by rural migrants (Liang et al. 2019). Taking informal jobs may help transfer the surplus rural labor force and ease the pressure on employment; however, migrant workers have to endure the wide spread of discrimination on pay, working hours, health and safety, and training opportunities, with generally poor working conditions far from decent work requirement. As migrant workers face significant barriers to equal opportunities in employment and the intersectionality of institutionalized discrimination in an undesirable labor market environment, many have to take non-standard jobs without a formal employment contract (Cooke et al. 2019). Despite the discriminative employment environment due to the rural-urban division of opportunities and their low level of education and skills, migrant workers have little choice but stay in these sectors and occupations to earn a living (Song 2016). Workplace Decent Work Issues

At the workplace Chinese migrant workers face considerable decent work challenges regarding their employment outcomes, one of which is the low level of income. Despite the gradual increase, their wages are still quite low compared with those of employees with urban residency, who can earn nearly twice as much as migrant workers’ (3,721 yuan vs. 6,872 yuan per month) (National Bureau of Statistics 2019). Most migrant workers have to work long hours with short period of break

Decent Work in China

and little holiday entitlement because they usually have temporary rather than permanent employment status and these benefits are easily taken off by employers. For instance, migrant workers in the construction industry and hospitality sector have to work 59.4 and 61.3 h, respectively, both being much higher than the 44 h standard indicated by the law (Ren and Wang 2019). To increase income, migrants have to take excessively long working hours in order to earn overtime pay, and this in turn has negative impact on their work-life balance (He et al. 2012). High intensity and workload have undermined the health and safety of migrant workers, while most are not entitled for social insurances and benefits such as urban health care. Even worse, wage arrears or unreasonable pay deduction is one of the main labor rights violation factors relating to decent work concerns and leading to labor dispute, with a 2017 national survey reporting 70.6% of victims of wage arrears were migrant workers (Shang 2019). Despite the gradual improvement of migrant workers’ education level in recent years, they have not been given adequate jobrelated training opportunities to improve occupational skills, and their career prospect is still weak and narrow (Xie 2014). Social security is a core part of decent work (Cooke et al. 2019); however, Chinese migrant workers do not have easy and fair access to urban social insurances because of their rural hukou, temporary employment status, and many employers’ reluctance to pay for them. Contrary to the legal requirement on having formal, written employment contract, many employers, especially private firms for the purpose of saving cost, are still reluctant to do so with migrant workers (Ren and Wang 2019). By 2016, only 35.1% of migrant workers signed labor contracts, compared with the high percentage (more than 90%) of urban resident employees signing contracts (Shang 2019). Apart from the weak health and safety protection at the workplace, many migrant workers have to confront with strict systemic barriers that prevent them from having equal access to urban public services such as education and social support (Xiao and Bian 2018). By 2017, only 5.3% of migrant workers

Decent Work in China

were covered by health insurance, 15.4% on endowment insurance (i.e., pension), and 26.1% on unemployment insurance (Ren and Wang 2019). Often migrant workers are the victims of labor rights violation while they are treated as non-decent or under-decent work force (Liang et al. 2019). The very low level of social security coverage demonstrates the difficulties of protecting migrant workers, although most of them work in hazardous and dangerous jobs which have high risk of industrial accident and injury. The general level of institutional is low for migrant workers, although the Chinese government has tried to expand trade union coverage for a number of years, aiming to advocate union organizations as useful vehicles for implementing labor laws and providing much needed protection for migrant workers’ rights and interests (Hannan 2008). Between 2012 and 2017, union density among migrant workers increased by 43%, although only 26% of them regularly take part in trade union activities (Shang 2019). However, nearly half of the migrant workers have not joined unions, and this means their rights protection cannot be assisted by official union organizations (Ren and Wang 2019). With trade unions’ residual weakness in representing and protecting members through proper collective bargaining, it is quite hard for migrant workers to get effective, institutional protection. In addition, successful integration into the urban environment is important for addressing decent work deficit (Bescond et al. 2003). New policies should be in place to help migrant workers to successfully integrate into the receiving urban community, so that their identity can be recognized through economic, cultural, and psychological integration (Peng et al. 2018b). Gender Equality at Work China has been widely acknowledged for its achievement of encouraging women to work, a key decent work dimension that is critical for reducing gender-related employment disparities. As ILO (2016) reports, the female labor force participation rate in China (63.9% in 2013) is one of the highest in international comparison, although this rate has been declining in recent years. Meanwhile, Chinese women are often the

199

victims of labor market inequality and discrimination due to the traditional social prejudice against women and a lack of detailed legal framework promoting gender equality. Although Chinese women have a wide range of access to the labor market, they are at a much weaker position compared with men on job opportunities, employment outcome, and career development. First, getting employed in China is more challenging for women than men because there are far less job opportunities for female, and discrimination against women is pretty common during recruitment and selection processes (Cooke 2011). Chinese employers frequently discriminate people at work on gender grounds by using deep-rooted stereotypes and practicing segregated expectations of job roles between genders, as well as hindering women’s career development in the labor market (Woodhams et al. 2009). It is not uncommon to see female job applicants being discriminated by employers who often publicly advertise persona specifications such as “male preference” or “men only,” while women are disadvantaged by the recruitment practice that usually requires applicants to provide marriage and family information. Many employers even ask female employees not to be pregnant during certain period, especially probation; otherwise their jobs or promotion can be in compromised (Dai and Zhang 2010). Second, gender pay disparities are widespread in China, as women face considerable unequal opportunities and discrimination on earnings. Research shows since 1995, the urban gender pay disparity increased consistently, with average female’s earning accounting for between 76% and 89% of male’s, mainly due to the unequal opportunities between genders on pay and recruitment in the labor market (Chen 2014). This disparity, however, differs in different occupations, sectors, and regions and is positively related to the degree of occupational segregation, with private firms and more marketized regions having higher gender earning gaps (He and Wu 2017). Pension age is different between genders, i.e., 60 for men, 55 for female cadres, and 50 for female workers (Zhao and Zhao 2018), effectively widening the gender earning gap by making women to quit employment much earlier than men.

D

200

Third, women’s career development is often influenced by gender discrimination and a lack of equal opportunities, demonstrated by the glass ceiling effect at the workplace where far fewer women can become senior leaders than men. Study has found that discrimination is an important factor preventing women from becoming top managers through climbing the corporate ladder (Gao et al. 2016). Even in higher education where most professionals are women, female academics are disadvantaged for career development, while their male counterparts are nearly dominating most of the higher professional positions and better paid jobs (Li et al. 2015). At universities, because of the vertical gender segregation in education hierarchy and horizontal gender segregation between academic areas, there are widespread discriminations and inequalities that prevent women from being promoted to higher positions as quick as males (Jiang 2011). Decent Work in the Emerging Digital Era The emergence of the platform (also sharing or gig) economy in recent years has attracted more and more people working in this sector, resulting in millions of new jobs based on online platforms and digital technologies. However, platform working has not been clearly regulated by governments around the world (Vallas and Schor 2020). This is also no difference in China where workers in this sector face tremendous challenges regarding their undefined employment status, precarious job, intensive workload, and inadequate protection (Dang and Liu 2019). Being a fastgrowing group who rely on new production models to provide new type of services and products, Chinese platform workers differ significantly from conventional employees in terms of employment methods, labor relations, and occupational characters, especially their employment status that has not been clearly defined (Wang 2019). It is estimated that China’s gig economy, which is the largest in the world, offers more than 75 million jobs through digital platforms, which provide work flexibility and incentive pay relating to customer evaluation (Wu et al. 2019). Most platform workers are male, and many are also rural migrants who mainly work in services,

Decent Work in China

transportation, and hospitality industries, but increasingly more people also take the advantage of the interconnectivity to provide entertainment, education, and even medical services (Wang 2019). A main concern of platform working is the very vague employment status due to the flexible yet complicated form of employment that has not been clearly defined by authorities, leaving large amount of platform workers with no formal employment contract. A 2017 survey found that the only 24% of platform workers in Beijing signed formal labor contracts, showing the low level of employment rights protection among these workers (Wang 2019). Often platform workers are not directly hired by the platform because they are either sub-contracting workers sent by third-party agencies to carry out their jobs or independent, individual contractors who undertake tasks assigned by platform companies and get paid accordingly (Dang and Liu 2019). Working for task-based platforms, many gig workers cannot have guaranteed hours and income, while they have to render their subordination to the capital (Ban 2019). For independent contractors, such as Didi and Uber taxi drivers, they do not have employment contracts with the companies although they take service payment based on jobs and customer evaluations (Wu et al. 2019). As a result, these companies do not pay these workers’ salaries that are subject to labor legislations, nor are platform workers covered by social insurances such as pension and unemployment benefits, with the current legislation failing to clarify the new form of working. In a recent legal case between a few online chefs and a platform restaurant, a Shanghai court ruled in 2017 that there was a kind of formal employment relationship between the two parties although they only signed a commercial service contract (Hu 2018). Nevertheless, this has not prevented more platform working-related disputes from happening. As Wang (2019) states, the current legal framework lags behind the fast development of the platform economy, as existing laws and regulations have not been able to effectively offer legal status for millions of workers in the sector.

Decent Work in China

Another concern is that most platform workers do not have adequate social security benefits. One prominent feature of platform working is that the increased freedom in terms of organizational attribution and economic independence, which actually prevent workers from taking part in social insurance schemes that are based on the traditional employment relationship (Ma and Zhang 2019). A recent research found that one third of China’s platform drivers, food delivers, and couriers had no any types of social insurance (Wang 2019). The nature of high turnover and independent working means platform workers cannot be effectively organized by trade unions, or be able to rely on other institutional support, to defend their interests collectively. This is especially the case when labor disputes occur, not adequate institutional protection can be found for platform works because of the low level of trade union membership among them. Many platform workers in China are deeply concerned about the precarious, unstable, and unsecured working. Their income comes mainly from piecework or project; although some have low level of base pay, their main source of earning is performance-based pay decided by piecework and appraisal system associated with customer assessment (Wang 2019). Despite its flexible nature, most platforms do not create good quality of employment, as workers’ earnings are not high or secure, and many of them have to rely on multiple platform jobs. As business orders are subject to market fluctuations between peak and off-peak periods, and the degree of competition, the changing volume of orders will significantly influence platform workers’ income. To sustain their earnings, platform workers have to work very hard and be very careful about customer feedback which will directly influence on commission fees. Survey shows 51.64% of Shanghai’s platform workers work more than 9 h per day, while in Beijing 86.81% work at least 6 days each week; however, this over-working pattern does not seem to be concerned by labor authorities because it is not clearly covered by the law (Wang 2019). To improve the quality of work for platform workers, the current employment regulations need to be updated so that these workers’

201

terms and conditions can have the same level of protection as the traditional workforce (Ma and Zhang 2019).

Conclusion Overall, much attention has been paid to achieve the decent work targets in China in the past few decades. Despite considerable challenges, positive actions have been taken to strengthen the management of the labor market and employment relations through a more complicated and pragmatic system to provide a more comprehensive legislative framework and social insurance mechanism. A recent regulative attempt is that from May 2020, a new law has been implemented to provide legal support to guarantee wage payment to migrant workers (Xinhua News 2020). There have been to measure decent work development in China, with various tools being proposed to assess the level of decent work achievement (Meng et al. 2015; Peng et al. 2018a; Yan et al. 2019). However, successful measurement of decent work is confronted with three main barriers – the lack of reliable and comparable sources of data, the targets to be measured, and there is no simple set of variables that can easily measure quality work (Burchell et al. 2014). Indeed, the growing number of labor regulations demonstrates the Chinese government’s commitment to improving the level of decent work for working people, although better implementation of these legislations is needed to address the concerns about the current institutional and legal challenges. One of the biggest challenges for continuously improving decent work in China is the residual hukou system, which has restricted the free movement of people within the labor market and caused extensive discrimination and inequality (Hannan 2008). Another hurdle to the promotion of decent work is the current social security mechanism which discriminates and effectively excludes part of the labor force, for instance, those on flexible working and precarious employment. To reduce decent work deficit among China’s migrant workers, informal workforce, female employees,

D

202

and platform workers, polices should be advocated to establish more comprehensive employment legislations to promote the quality of their employment. There are also new challenges due to technological innovation and automation such as artificial intelligence that is increasingly threatening jobs and wages, especially for those low-skilled and older workers (Chen et al. 2020). Further policy intervention is needed to respond the calls to build a sustainable decent work agenda in order to provide continuous support to achieve decent and quality work objectives in China, particularly on equal opportunities and social dialogue through an improved employee voice mechanism (Cooke et al. 2019).

Cross-References ▶ Collective Bargaining Agreements: A Global Discourse on Decent Sustainable Living ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs) ▶ Decent Work: Conceptualization and Policy Impact ▶ Maternity Protection at Work: Decent Work for All During Pregnancy and New Motherhood ▶ Migrant Workers, Decent Work, and Economic Growth ▶ Precarious Work and Sustainable Development ▶ Protection of Labor Rights ▶ SDGs Patterns Across the Globe: From Theory to Practice ▶ Social Dialogue and the Future of Work Acknowledgments The research was supported in part by Leverhulme International Network grant (IN-2015-053) “Collective pay determination and the changing labour relations in globalised China.”

References Anker R, Chernyshev I, Egger P, Mehran F (2003) Measuring decent work with statistical indicators. Int Labour Rev 142(3):147–178 Ban X (2019) Task-based employment in gig economy and labor regulation. Law Rev 215:106–118 Bescond D, Chataignier A, Mehran F (2003) Seven indicators to measure decent work: an international comparison. Int Labour Rev 142(3):179–212

Decent Work in China Burchell B, Sehnbruch K, Piasna A, Agloni N (2014) The quality of employment and decent work: definitions, methodologies, and ongoing debates. Camb J Econ 38 (2):459–477 Cao X, Meng Q (2017) Dockworkers’ resistance and union reform within China’s globalised seaport industry. Globalizations 14(2):272–284 Chan C (2010) The challenge of labour in China: strikes and the changing labour regime in global factories. Routledge, London Chang K, Brown W (2013) The transition from individual to collective labour relations in China. Ind Relat J 44 (2):102–121 Chen C (2014) On the legal policy support system for the realization of decent work. J Sichuan Univ 193(4):155– 160 Chen S, Jiang W, Ma Y (2020) Decent work in a transition economy: an empirical study of employees in China. Technol Forecast Soc Chang 153. https://doi.org/ 10.1016/j.techfore.2020.119947 China Labour Bulletin (2016) Strikes and protests by China’s workers soar to record heights in 2015. http:// www.clb.org.hk/en/content/strikes-and-protests-china %E2%80%99s-workers-soar-record-heights-2015. Accessed March 2020 Clarke S (2005) Post-socialist trade unions: China and Russia. Ind Relat J 36(1):2–18 Clarke S, Lee CH, Li Q (2004) Collective consultation and industrial relations in China. Br J Ind Relat 42(2):255– 281 Cooke FL (2011) Labour market disparities and inequalities. In: Sheldon P, Kim S, Li Y, Warner M (eds) China’s changing workplace: dynamism, diversity and disparity. Routledge, London, pp 259–276 Cooke FL (2016) Employment relations in China. In: Bamber G, Lansbury R, Wailes N, Wright C (eds) International & comparative employment relations, 6th edn. Sage, London, pp 291–315 Cooke FL, Xu J, Bian H (2019) The prospect of decent work, decent industrial relations and decent social relations in China: towards a multi-level and multi-disciplinary approach. Int J Hum Resour Manag 30(1):122–155 Dai L, Zhang L (2010) Female employment and decent work. Econ Res Guid 76(2):59–60 Dang Z, Liu D (2019) Research on the realization of decent work for employees in online service platform in China. J Beijing Fed Trade Unions Cadre College 34 (4):10–15 Friedman E (2012) Getting through the hard times together? Chinese workers and unions respond to the economic crisis. J Ind Relat 54(4):459–485 Friedman E, Lee CK (2010) Remaking the world of Chinese labour: a 30-year retrospective. Br J Ind Relat 48(3):507–533 Gao H, Lin Y, Ma Y (2016) Sex discrimination and female top managers: evidence from China. J Bus Ethics 138 (4):683–702 Ghai D (2003) Decent work: concept and indicators. Int Labour Rev 142(2):113–145 Hannan K (2008) China: migrant workers want ‘decent work’. Copenhagen J Asian Stud 26(2):60–81

Decent Work in China He G, Wu X (2017) Marketization, occupational segregation, and gender earnings inequality in urban China. Soc Sci Res 65:96–111 He T, Liu X, Li H (2012) Decent work problems and countermeasures of the young rural migrant workers. J Shanxi Univ 35(2):55–59 Hu X (2018) Current situation and issues of labour rights protection for platform workers. Soc Sci 252 (4):119–124 Hyman R (2001) Understanding European trade unionism: between market, class and society. Sage, London ILO (1999) Decent work. Report of the Director-General to the 87th Session of the International Labour Conference. Geneva ILO (2013) Decent work indicators: Guidelines for producers and users of statistical and legal framework indicators. ILO Manual, second version. Geneva ILO (2016) China decent work country programme 2016– 2020. International Labour Organization, Geneva Jiang Y (2011) Gender segregation of teacher profession from an international perspective. J China Women’s Univ 4:41–46 Knight J, Yueh L (2009) Segmentation or competition in China’s urban labour market? Camb J Econ 33:79–94 Kuruvilla S (2006) Social dialogue for decent work. In: Ghai D (ed) Decent work, objectives and strategies. International Institute for Labour Studies, Geneva, pp 175–215 Lee CH, Brown W, Wen X (2016) What sort of collective bargaining is emerging in China? Br J Ind Relat 54 (1):214–236 Li J, Wu B, Morgan J (2015) Employment equality in China’s universities: perceptions of ‘decent work ‘among university teachers in Beijing. In: Wu B, Morgan J (eds) Chinese higher education reform and social justice. Routledge, London, pp 52–65 Liang W, Hu S, Xie R (2019) Current situation and influencing factors of occupational safety and health for migrant workers in informal employment. J Northwest A&F Univ Soc Sci Edit 19(2):45–56 Liu M (2010) Union Organizing in China: still a monolithic labor movement? Ind Labor Relat Rev 64 (1):30–52 Liu M (2011) Where there are workers, there should be trade unions: union organizing in the era of growing informal employment. In: Kuruvilla S, Lee CK, Gallagher M (eds) From iron rice bowl to informalization. ILR Press, Ithaca, pp 157–172 Lyddon D, Cao X, Meng Q, Lu J (2015) A strike of ‘unorganised’ workers in a Chinese car factory: the Nanhai Honda events of 2010. Ind Relat J 46(2):134–152 Ma Y, Zhang H (2019) Development of the sharing economy in China: challenges and lessons. In: Innovation, economic development, and intellectual property in India and China. Springer, Singapore, pp 467–484 Martin R (1989) Trade unionism: purposes and forms. Oxford University Press, Oxford Meng H, Wang Z, Yang HJ, Hu W (2015) The measurement of decent work level and its spatial variation in China. Areal Res Dev 34:3): 1–3): 6

203 National Bureau of Statistics (2019) Rural migrant worker survey report 2018, 29 September 2019. http://www. stats.gov.cn/tjsj/zxfb/201904/t20190429_1662268. html. Accessed 20 March 2020 Peng X, Gui J, Fei X (2018a) Study on the measure, factor analysis and difference of decent labor level in China. J Anyang Inst Technol 17(3):44–50 Peng X, Zhang X, Dong Y (2018b) Study on social integration of rural labour migration and its influencing factors: based on the perspective of decent work. J Chongqing Univ Technol (Soc Sci) 6:89–99 Pringle T (2011) Trade unions in China: The challenge of labour unrest. Abingdon: Taylor & Francis Pringle T (2015) Labour under threat: The rise and (possible) fall of “collective bargaining” in Guangdong. International Union Rights 22(4):3–5 Rai SM, Brown BD, Ruwanpura KN (2019) SDG 8: decent work and economic growth–a gendered analysis. World Dev 113:368–380 Ren X, Wang L (2019) Countermeasures for promoting migrant workers to achieve higher quality employment from the perspective of decent work. J Huebei Softw Inst 21(4):60–64 Shang Y (2019) Research on labor rights protection of rural migrant workers of the new generation. Shandong Trade Unions Tribune 25(5):39–45 Shi L (2008) Rural migrant workers in China: scenario, challenges and public policy. ILO, Geneva Shi H (2017) The legislative protection of equal employment right. J Jining Univ 38(1):88–96 Song Y (2016) Hukou-based labour market discrimination and ownership structure in urban China. Urban Stud 53 (8):1657–1673 Sun W (2020) Hukou system, migration pattern and rural migrant identities. In: Latham K (ed) Routledge handbook of Chinese culture and society. Routledge, London Taylor R (2011) China’s labour legislation: implications for competitiveness. Asia Pac Bus Rev 17(4):493–510 Vallas S, Schor JB (2020) What do platforms do? Understanding the gig economy. Annu Rev Sociol 46 https:// doi.org/10.1146/annurev-soc-121919-054857 Wang Y (2019) A study of the labor rights and interests protection of net contract workers of the shared economy platform. J China Univ Labor Relat 33 (6):77–87 Webster E, Joynt K, Sefalafala T (2016) Informalization and decent work: labour’s challenge. Prog Dev Stud 16 (2):203–218 Woodhams C, Lupton B, Xian H (2009) The persistence of gender discrimination in China–evidence from recruitment advertisements. Int J Hum Resour Manag 20(10):2084–2109 Wu Q, Zhang H, Li Z, Liu K (2019) Labor control in the gig economy: evidence from Uber in China. J Ind Relat 61(4):574–596 Xiao Y, Bian Y (2018) The influence of hukou and college education in China’s labour market. Urban Stud 55 (7):1504–1524 Xie C (2014) Ways for the new generation peasant workers to realize decent work. J Harbin Univ 35(2):25–27

D

204 Xinhua News (2020) China to strengthen legal aid for migrant workers. 30 April 2020. http://www. xinhuanet.com/english/2020-04/30/c_139021364.htm. Accessed 02 May 2020 Xu F (2019) Labor regime behind the structuring of migrant workers. Zhejiang Soc Sci 2:74–85 Yan Y, Lin L, Qing T, Zhao N (2019) An integrative literature review and future direct of decent work. Hum Resour Dev China 36(11):93–109 Zhao R, Zhao Y (2018) The gender pension gap in China. Fem Econ 24(2):218–239

Decent Work Promotion in India Prabha Panth Department of Economics, Osmania University, Hyderabad, India

Definition of Goal 8: Decent Work Decent work involves providing opportunities for everyone to get productive work with fair incomes, security in the workplace, better prospects for personal development, social protection for families, and social integration (The SDG Report 2018). SDG No. 8 aims to foster a type of economic growth that is environmentally sustainable, and economically inclusive, by providing full and productive employment and decent work for workers around the world.

In this article a short overview of the 8th SDG is given in Part I. The SDG 8 Indicators and Targets, the importance of Decent Work and why it matters, and SDG 8 Global achievements have also been discussed here. Part II examines Goal 8 in India, particularly indicator 8.5. Next, Decent work in India, various Central Government measures, policies and programs to achieve it are examined, and the SDG India Index and progress made so far at the National and State levels in achieving Goal 8 are analyzed. This is followed by Conclusions drawn from this article, and a set of References.

Part I. Introduction: The need for Goal 8 Even though worldwide there is rising employment and standard of living, these are highly

Decent Work Promotion in India

skewed with large sections of society being left out of the improvements. This is particularly true of rising unemployment among youth, women, and disabled persons, between urban and rural workers, between formal and informal sectors, literate and illiterate workers, and primary vs. secondary and tertiary sectors. It is thus necessary to promote safe and secure working environments, and improve access to financial services to ensure sustained and inclusive economic growth. Economic development thus should encompass all sections of an economy, and the fruits of development have to be enjoyed by all, without affecting the natural environment (SDG Report 2018). Gender equality with equal opportunities in the workplace is also important. Without decent work and sufficient investment opportunities, labor is either unemployed, or forced into jobs that provide only low incomes. Therefore, poverty persists in a large section of population in every country, defeating the motto of democratic societies: that all must share in economic progress. It is not enough to ensure merely growth of employment, there should also be decent working conditions for labor and fulfilling jobs, without harming the environment. https://www.un.org/sustainabledevelopment/eco nomic-growth/ The benefits of Economic development should be shared by all. However, due to unavailability of decent work, lack of finance for investment, lack of training and literacy, lack of opportunities, etc., a large percentage of the population is caught in continuous and self-perpetuating vicious circles of poverty, with inhumane conditions of work and all its associated troubles. Hence it is important to remove or reduce the disparities in working and living conditions between various sectors of an economy, by fostering the growth of “decent working” conditions for the labor force. https:// www.un.org/sustainabledevelopment/economicgrowth/ The 8th Sustainable Development Global Goal of the 2030 Agenda aims to achieve full and productive employment, and decent work for all by 2030. The term Decent work covers the following features:

Decent Work Promotion in India

1. Everyone can freely choose a safe, fairly paid, secure, and fulfilling job with equal pay for work of equal value. 2. No one is excluded from work opportunities, i.e., men, women, people with disabilities, young people, and migrant workers. 3. It is necessary to reduce unemployment by providing training and finance for investment. 4. Child labor to be prevented and eradicated by 2025, along with forced labor, modern slavery, and human trafficking. 5. Labor rights have to be protected and safe and secure working environments for all workers should be provided to all workers, including migrant workers particularly women migrants, and those in precarious employment (de Heer, Margreet 2020). SDG 8 Indicators and Targets SDG 8 comprises of some 11 targets such as sustained economic growth, diversification, technical training, etc. (sdg-tracker.org/economicgrowth). These are given in Table 1. Although all these targets are interrelated, in this article the focus will be on target 8.5 decent work, i.e., full employment and decent work with equal pay, to achieve full and productive employment, and decent work for all women and men, young people, disabled persons, and equal pay for work of equal value. Decent Work and Economic Growth: Why It Matters Although global unemployment rate was 5.6% in 2017, down from 6.4% in 2000, the problems of distribution, as well as the conditions, opportunities, and biases in employment situations are yet to be resolved. For instance, 61% of all global workers were in informal employment in 2016, and if agricultural sector is excluded, then 51% of all workers were in this category (SDG Report 2018). Gender differences were also significant, for instance in 40/45 countries with data, men earned 12.5% more than women. At present the global gender pay gap is 23%, and it may take another 68 years for men and women to achieve equal pay. Women’s labor force participation rate is 63%, while that of men is 94% globally. However,

205

women still continue to do 2.6 times the unpaid care and domestic work than men. Further, as the global labor market grows, between 2016 and 2030, 470 million jobs have to be generated for new entrants (SDG Report 2018). Unemployment

According to A.C. Pigou (1933), “Unemployment means all those people in an economy who are willing to work, but are not able to find a job.” Unemployment rate is usually measured in terms of the percentage of labor force within a country that is without work. Unemployment rates for 191 countries for the year 2019 is available from World Bank website (data.worldbank.org/indica tor/SL.UEM.TOTL.ZS) see Fig. 1. The data shows that the average global unemployed labor was 5% in 2019. But large disparities in unemployment rates exist across the world, ranging from nearly 30% in the case of the West Bank and Gaza countries to 0.14% in Qatar. About 106 countries lie above the world average rate of 5%. Of these, while nearly 30% were African, another 26% were European countries. Top European countries unemployment rates were: Greece (18%), Spain (14.7), Italy (9.2), and France (9.1). Australia and Canada also had unemployment rates greater than the world average (data.worldbank. org/indicator/SL.UEM.TOTL). However, although some less developed countries had unemployment levels lower than some high-income ones, the quality of work involved is not comparable between them. Thus, the type and not merely the level of employment is important. For instance, from the World Bank data (data. worldbank.org/indicator/SL.UEM.TOTL) Afghanistan 1.72%, Rwanda 0.99%, Niger 0.26% had very low unemployment rates compared to many developed countries. Cameroon (3.34%) or Guinea (3.57%) had unemployment rates only slightly lower than USA (3.87%) or UK (3.81%). But the type and conditions of work in the former two countries are not equivalent to that of the latter. For, the quality of employment is as important as the quantity. In many low-income countries with low unemployment rates, the conditions and type of work, availability of tools, training, and techniques, availability of investible funds, wage rates, hours of work, and risk factors

D

206

Decent Work Promotion in India

Decent Work Promotion in India, Table 1 SGD 8 – Indicators and Targets Target No. 8.1

Indicator Sustainable Economic growth

8.2

Improve economic productivity,

8.3

Policies to support job creation and growing enterprises.

8.4

Improve resource efficiency in consumption and production.

8.5

Full employment and decent work with equal pay.

8.6

Promote youth employment, education and training End modern slavery, trafficking, and child labor

8.7

8.8

Protect labor rights and promote safe working environments

8.9

Promote beneficial and sustainable tourism Universal access to banking, insurance and financial services

8.10

8A

Increase aid for trade support

Target For all countries, and for less developed countries at least growth of 7% pa Diversity, innovate, upgrade technology. Focus on high value added and labor-intensive sectors Support productive activities by 2030, decent job creation, entrepreneurship, etc. in micro, small, and medium enterprises, with access to financial services. By 2030 improve global resource efficiency in consumption and production, and delink economic growth from environmental degradation. To be led by developed countries. By 2030, achieve full and productive employment and decent work for all women and men, young people, disabled persons, and equal pay for work of equal value. By 2020, substantially reduce the proportion of youth not in employment, education, or training. Immediate and effective measures to eradicate forced labor, end modern slavery, human trafficking, child labor, child soldiers. By 2025 end all forms of child labor. Protect labor rights and promote safe and secure working environments for all workers, including migrant particularly women migrants, and those in precarious employment. By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products. Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all by 2030 Increase Aid for Trade support for developing and least developed countries, through the Enhanced Integrated Framework for Traderelated Technical Assistance.

Source: https://sdg-tracker.org/economic-growth. Data and charts available under relevant headings in https:// ourworldindata.org

are not comparable with those of the high-income countries. Under-employment and disguised unemployment may also be quite rampant in many countries, as well as child labor, bonded labor, and slavery. Such workers, especially women, children, youth, and migrant workers though employed, do not have formal work arrangements, decent working conditions, adequate social security such as pensions, maternal benefits, health and life insurance, or trade union membership, they are inadequately paid, their earnings are low and highly volatile, with often risky, difficult, and dangerous conditions of work (Qatar football World Cup 2022). For instance, in many countries, municipal workers, miners, etc. often working in inhuman

conditions without gloves, masks, or other protective gear (www.mmpindia.in). It has also been estimated that around 1.5 billion people globally were engaged in what is called as “vulnerable employment” (https://www.ilo.org/ africa/media-centre). The share of “vulnerable employment” is calculated as the sum of contributing family workers and own-account workers as a percentage of total employment. Especially in Africa and Sub-Saharan Africa, over 70% of the workers are in vulnerable employment. This is a little less than double of the global average of 46.3%. Hence there is an urgent need to ensure that the work force not only gets employment, but is engaged in “decent” work to fulfil the conditions of sustainable development (Table 2).

Decent Work Promotion in India

207

Global Unemployment -2019 (% of country wise labour force) 30.00 28.00 26.00 24.00 22.00

PERCENTAGE

20.00

D

18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

COUNTRIES https://data.worldbank.org/indicator/SL.UEM.TOTL.

Decent Work Promotion in India, Fig. 1 Global unemployment – 2019 (% of country wise labur force)

Decent Work Promotion in India, Table 2 Some indicators of global development and employment 1. 2. 3.

4. 5.

6.

7.

8.

Indicator Global growth rate of real GDP per capita

Rates Year Remarks 1.9–2% 2017–2020 Less than SDG expected goal of 3% World’s labor productivity (GDP/employed person) 2.1% 2018 Highest since 2010 Informal employment in non-agricultural sectors in ¾ 50% 2018 Inadequate earnings, poor of world economies occupational safety, health and working conditions, In 62 countries, median hourly gender pay gap 12% 2017–18 Gender bias in earnings In managerial, professional, and informal sectors  20% ” Global unemployment 5% 2018 Recovered from global crisis But, unemployment amongst youth 3 time more World’s youth not in education, employment or 20% 2018 Not getting professional training, not in any educational or vocational experience, acquiring developing programs in their prime years skills Young women unemployed or outside the labor force 2 times and not in education or training more Workplace risks (Median deaths) in 55 countries 3 2018 100,000 employees Median nonfatal injuries per 100,000 employees 889 Global growth of ATMs per 100,000 adults 66% 2010 to Access to finance and 2017 In less developed countries, ATMs / 100,000 adults 3–5.8 ” automation grew from

Source: https://sustainabledevelopment.un.org/sdg8

208

The above table shows that there has been some progress in the various indicators of development, both globally and in less developed countries. However, a lot has to be done as the achievements are still short of the targets envisioned by the SDG goals. SDG 8 Global Achievements

The International Labour Organization (ILO) released a report, highlighting the fact that the achievements of SDG 8 have been slower than the target. At the current rate of progress, the report concludes that SDG 8 is unlikely to be achieved by 2030 (World Employment and Social Outlook (WESO)-Trends 2019). 1. Unemployment: Though unemployment rates were reduced around the world, they were not matched by improvements in the quality of work. This situation makes SDG achievement “unrealistic for many countries,” with major gaps within and across countries. 2. Growth: The report found that the least developed countries had recorded an annual PC GDP growth rate of oven-drying > sun-dried (Pereira and Correia 2015).

Some of seaweed species are already cultivated, varying from onshore to offshore methodologies techniques of cultivation, even aquaculture integrated systems that contribute for the sustainability of the marine ecosystems and to get the interested compounds. About 96% of the worldwide harvested seaweeds are produced by aquaculture according to the United Nations Food and Agriculture Organization (FAO), with seaweeds production doubled from 14 to 30 million tons, from 2005 to 2016 (FAO 2018). Onshore (or land-based) cultivation is performed in closed systems (e.g., tanks, ponds, lagoons) with the control and monitoring of the culture conditions allowing to improve and to promote the water quality (Dawes et al. 1998). Offshore cultivation is performed near coastline, with the production of seaweeds on longlines or seafloor (Choi et al. 2010). Integrated multitrophic aquaculture (IMTA) is other method to seaweeds cultivation, with faster production cycles, contributing to reduce eutrophication process due to the enrichment of nutrients in water systems associated to several activities like animal agriculture practices, animal aquaculture, or sewage treatment. In IMTA as the name indicates, species from different trophic levels are related to each other, using and recycling the co-products of each cultured species produce, and incorporate it as nutritional food source (Di Trapani et al. 2014). Macroalgae incorporate and convert into valuable biomass dissolved organic nutrients from fishes’ cultures, reducing the impact of these compounds at the aquatic system. Similar process occurs in aquatic systems (e.g., seas and oceans) where macroalgae growth occurs by the incorporation of inorganic nutrients taken from the aquatic systems and so reduce eutrophication process (Leandro et al. 2020; Talep 2020). The fast development of farming technologies also contribute to the large cultivation of seaweeds in Asia and more recently in Europe and Americas (Bostock et al. 2016; Cheng 1969; FAO 2014). All the processes involved in the nursery of seaweeds must be monitored, namely, by measuring indicators such as pH, salinity, temperature, and conductivity of the water/medium, so that the specimens

Sustainable Premium Ready Meals for a Daily Nutritional Diet

can attain their best conditions (MooneyMcAuley et al. 2016; Redmond et al. 2014). The nursing period depends on the species, with some of them belonging to the generalist spectrum and, therefore, being extremely adaptable to physical-chemical conditions. In 15 days some specimens may leave the nursery, some in a month or a month and a half. The cultivation period in nurseries is ideal to study the adequate physicochemical parameters to optimize a healthy seaweed growth, including the growth medium that will be used. Regardless of the chosen method and conditions, the previously mentioned physicochemical characteristics must be closely monitored until the ideal growth of the species is achieved, preparing them for the harvest. Salinity concentrations, water agitation, light, temperature, nutrients availability, and medium growth may affect seaweeds growth and thus the nutritional content. For instance, polysaccharides profile of seaweeds may be affected by salinity with seaweeds on low-salinity conditions exhibiting fewer polysaccharides quantity. On the other hand, water agitation will make seaweed maximize the production of polysaccharides. Seaweeds species require specific growth conditions, being crucial to know well their life cycles and the optimum growth and tolerance to achieve the best quality products and thus the compounds with crucial nutraceutical benefits to health and nutrition.

Premium Ready Meals to a Daily Nutritional Diet Algae have been gaining importance in the food industry due to their high nutritional value (Wells et al. 2017). Indeed, it is as a dietary supplement that seaweed has the most significant use (Marsham et al. 2007); in some countries, macroalgae are part of the traditional food culture (Biancarosa et al. 2018). Actually, the increase of world population and limitation of natural resources leads to new areas of exploitation, where new non-conventional food sources tend to appear (Nunes et al. 2017). As a way to suppress the nutritional needs of some diets,

1017

algae arise as a natural source of food that is wild and abundant with a fast-growing index (van den Hoek et al. 1995; Graham and Wilcox 2000). Thus, seaweeds may would future contribute for global food security in their entire form or by extraction of their nutrients. Indeed, they are able to provide a high nutritional value diet due to their vast range of essential constituents, such as minerals (iodine, iron, and calcium), proteins (with all essential amino acids), lipids (polyunsaturated fatty acids), vitamins, and fibers absolutely necessary to human metabolism, along with a low caloric value (poor in fat) because macroalgae have polysaccharides that behave as fibers with no caloric value, having a positive impact on the regulation of intestinal transit (Biancarosa et al. 2018; Pereira 2011; Pereira and Correia 2015). The minerals present in seaweeds are ten times higher the minerals present in terrestrial vegetables like iron in Himanthalia elongata compared to the iron present in Lens esculenta, or the calcium present in Undaria pinnatifida (common known as Wakame) and in Chondrus crispus (common known as Irish moss) compared to the calcium present in the milk. In addition, the proteins in seaweeds, crucial to the building of new animal tissues, contain the essential amino acids and present a high biological value compared to the protein value of birds’ eggs. Vitamins are also in high significant quantities, with a special reference to vitamin B12 absent in higher vegetables and indispensable for the formation of erythrocytes and maintenance of the animal nervous system (Pereira and Correia 2015). Fibers are observed in higher quantities compared to Lactuca sativa and similar to the amount detected in Brassica oleracea that regulates digestive tract. The low amount in fat and the low energetic value of these marine organisms make them a key food product to weight loss regimes. Thus, seaweeds are the best food product, to a worldwide population exponential growing, due to macroalgae essential constituents crucial to the human primary metabolism bridging the gap of food, nutritional deficiencies, and malnutrition registered nowadays and worldwide due to the consumption of fast food and other products rich in fat and with caloric value without food roles either food care.

S

1018

Sustainable Premium Ready Meals for a Daily Nutritional Diet

Edible Seaweeds and Phycogastronomy Some species of marine macroalgae are already harvested and consumed in some small coastal towns, namely, Pyropia (formerly known as Porphyra) spp., Osmundea pinnatifida, Ulva lactuca and Ulva rigida, Undaria pinnatifida, Palmaria palmata, Himanthalia elongata, Laminaria ochroleuca, Saccharina latissima, Saccharina japonica, Chondrus crispus, Mastocarpus stellatus, Fucus vesiculosus and Fucus spiralis, Gelidium corneum, Pterocladiella capillacea, and Gracilaria (Pereira and Correia 2015). Below are indicated the countries where some of these species are distributed and culinary application/recipes to some of them. Undaria pinnatifida also called Wakame is a brown macroalgae (Phaeophyceae) and is the second macroalgae most consumed worldwide in food. Its origin is from the seas of Korea, Japan, and China (aquaculture) with an annual production of 500 thousand tons (fresh weight). This seaweed is also present in the coasts of Iberian Peninsula and France. Regarding the culinary value, it is one of the species indicated to start tasting made-up seaweed due to its smooth texture and pleasant flavor. This seaweed is on the market in dry form, so it must be previously soaked (10 min), watered with lemon, and served raw (in salads). Wakame may be also used in soups and cooked with shellfish to be served as appetizers (FAO 2018; Pereira and Correia 2015). Its proteins are highly digestible, and the percentage of calcium is the highest among edible and commercialized algae. U. pinnatifida also is one of the richest in iodine, although all seaweeds can be an excellent source of this mineral. Palmaria palmata also called dulse is a red macroalgae (Rhodophyta) from the Atlantic Ocean. This was the first species stated as food consumption to human beings, traditionally used by coastal folk from Iceland, Norway, Ireland, Scotland, and French Brittany. Nowadays is used fresh at the north of Europe as a vegetable substitute, whereas it is used dried as an aperitif and condiment for various dishes. Trace elements (iron, potassium, and iodine) compose 30% of seaweed weight, and around 18% of the weight represents proteins of high nutritional value. This

species also contains high values of vitamin C that facilitates the absorption of iron, and phycoerythrin a red pigment precursor to vitamin A. Himanthalia elongata also called sea spaghetti is a brown macroalgae (Phaeophyceae) distributed from the Atlantic north to the Iberian coast and the English Channel. This species is not known in Asian countries; still it is widely valued in Europe, in restaurants and bakeries. For several years that sea spaghetti is applied in pies, pizzas, pastas, pates, fried snacks, rice, potatoes with bacon, and canned tins, since their flavor is reminiscent of some cephalopods (cuttlefish). Among the Atlantic species, it is one of the most successful and accepted macroalgae and at the same time one of the cheapest due to its large biomass and ease of collection in coastal areas. H. elongata is considered one of the delicacies of our seas due to its excellent nutritional richness, fleshy consistency, and smooth palate (Pereira and Correia 2015). Saccharina japonica, Laminaria ochroleuca, and Saccharina latíssima also called Japanese Kombu occurs in the sea of Japan, North Atlantic from Norwegian to North of Portugal, being also cultivated in aquaculture in Japan, Korea, and China. The Atlantic Kombu is a little harder than the Japanese Kombu, occurring in the Iberian Peninsula coast. Kombu increases the digestibility and avoids flatulence, which intensifies the flavor due to the presence of glutamic acid. It is used to make vegetable breads and hamburgers, using ground Laminaria (or Saccharina), in the form of flour. The tasty broths where Kombu is cooked are the basis of many traditional Japanese dishes (“dashi”) where can then be cooked pasta or cereals, as a complement to hydrocarbons. Kombu is also used as soup ingredient (FAO 2018). The commercial Kombu products present a high content in essential minerals magnesium, calcium, and iodine. Pyropia (formerly known as Porphyra) spp., P. yezoensis, P. tenera, and P. umbilicalis also called Nori are cultivated in Japan since the fifteenth century. The origin of “Nori” means alga. Nori is used in the wrapper of Japanese sushi. The Atlantic Nori composed by species of the genus Pyropia (P. umbilicalis, P. leucosticta, and P.

Sustainable Premium Ready Meals for a Daily Nutritional Diet

linearis) is traditionally consumed in the northern Celtic countries and also in the Azores, as well as in Wales and Ireland, generally used as an ingredient in the preparation of unleavened bread known as laverbread. In Chile Pyropia spp. after sun-dried and preheated cooked is pressed in bread and sold in the market to food consumption (FAO 2018). Nori may also be used as ingredient for soups but also in desserts. Nori is rich in minerals, intense flavor, characteristic aroma, and smooth texture, being one of the most appreciated and sought algae as well as the most expensive commercially. Chondrus crispus also called Irish moss is a red macroalgae (Rhodophyta), distributed along the eastern Atlantic being common at the coasts of Great Britain, Ireland, Island, and between Norway and the south of Spain and at the western Atlantic from Canada (Newfoundland) to the USA (Delaware). It may also occur in Morocco and Cape Verde Islands. C. crispus as well as Mastocarpus stellatus that occurs at the same habitat are harvested at the North of Portugal and Spain (Galiza) to commercial activities, mainly to the extraction of carrageenan, being one the food applications in puddings, mousse, or gelatin (FAO 2018; Pereira and Correia 2015). Fucus vesiculosus and Fucus spiralis also called bladder wrack or rockweed are brown macroalgae (Phaeophyceae). They are an excellent source of vitamins and minerals, especially potassium and iodine (Leandro et al. 2020). Fucus spp. may be cooked in main fish dishes. Gelidium corneum, Pterocladiella capillacea, and Gracilaria gracilis produce agar and are common along the Portuguese coast and Azores. P. capillacea mainly harvested in Azores islands present an industrial usage. It is great used to agar extraction in Namibia and South Africa. Agar is commonly used as a dessert item and as content of drinkings in Malaysia (FAO 2018). In light of these evidences, the under exploration of this source for food is hard to understand. Although macroalgae are part of the diet in some Asian countries, there is an absence of cooking tradition with algae, as sea vegetables, in most countries (e.g. in USA or Europe), that very recently starts to use seaweeds in their diet.

1019

Thus, it may be important to incorporate this complement in the diets of countries where it does not happen currently (Biancarosa et al. 2018; Fleurence et al. 2012). Although food industry widely use seaweed as a source in gelling and thickeners properties extracted from seaweeds, known as phycocolloids, used in a variety of prepared foods such as fresh vegetable, processed meats, sausages and fish, desserts, gelatin, ice creams, puddings, jellies, jam, milk chocolate, juices, wine, and beer, consuming public may be blissfully unaware of the consumption of seaweed-derived products. The three main phycocolloids used as natural additives are alginate (E400, extracted primarily from brown seaweeds), agar, and carrageenan (both extracted from red seaweeds, E406, and E407, respectively), representing the colloids with the highest economic and commercial importance due to their chemical properties. A hundred and one (101) seaweed species are used at the industry of extraction of phycocolloids: 41 seaweeds that produce alginate, 33 seaweeds that produce agar, and 27 seaweeds that produce carrageenan (Pereira and Correia 2015). Notwithstanding, to intensify this exploration, more information about the chemical and nutritional composition of these algae is needed and very important to obtain. Their potential as a primary resource for several products is unquestionable, and new approaches may appear, namely, as a source of food (Pereira and Correia 2015). Historically, except for Azores, consumption of macroalgae species in Portugal is sporadic and mainly linked to Japanese food (Soares et al. 2017). Because algae are naturally rich in valuable components, the consumption of macroalgae can increase the intake of these essential nutrients with a number of other benefits, such as lowering the occurrence of some chronic diseases (e.g., diabetes, obesity, heart disease) and the improvement of brain function (FAO 2018; Paiva et al. 2014; Pereira 2018; Soares et al. 2017). Benefits of Macroalgae Compounds A variety of proteins and amino acids is synthetized by seaweeds with essential amino acids representing 25–50% of the total of amino acids in

S

1020

Sustainable Premium Ready Meals for a Daily Nutritional Diet

seaweed dry weight (Torres et al. 2019). A set of multiple bioactive properties are associated to these biomolecules like inhibition of calcium precipitation, reduction of blood sugar, antioxidant, decrease of cholesterol levels, and improvement of hepatic function activities. A group of amino acids are under research due to their potential in the treatment of Parkinson’s and Alzheimer’s diseases and epilepsy (Smit 2004; Torres et al. 2019). Polysaccharides bioactive properties changes are related with the sulfation level acting as antitumoral, antioxidant, and in the treatment of hypertension (Cardozo et al. 2007; Makkar and Chakraborty 2018). Lipids extracted from seaweeds, namely, polyunsaturated fatty acids (PUFA), are constituted mainly by o-3 and o-6 fatty acids, essential fatty acids (EFA) with beneficial properties in the treatment and prevention of some cancer, cardiovascular, ocular, neurodegenerative, and autoimmune diseases (Gonçalves et al. 2017). EFA mainly docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA) play a crucial role in brain development, cellular signalling, regulation of transcription factors, and immunomodulation (Gonçalves et al. 2017). Sterols have many bioactivities, antioxidant, antiviral, antifungal, and antibacterial properties (Alves et al. 2018; Christaki et al. 2013; Lopes et al. 2013; Oren and Gunde-Cimerman 2007). Terpenes are included in the class of secondary metabolites and classified according to the number of carbon units, with seaweeds comprising a wide range of halogenated biomolecules with therapeutic potential: antitumor, antitubercular, and antimicrobial (Blunt et al. 2003; Darias et al. 2001; Fuller et al. 1992). Carotenoids are antioxidant and repairing compounds, assuming the role of cell protection. These compounds also have antitumoral and anti-inflammatory properties (Guedes et al. 2011; Leandro et al. 2020) that reduce the ophthalmological diseases in humans and the risk of occurrence of some chronic illnesses (Gao et al. 2011; Guedes et al. 2011). They may be also be used in photo-protection of the skin to adverse effects of solar UV radiation (Galasso et al. 2017). Phenolic compounds are precursors of several organic compounds acting at the biosynthesis of various secondary

metabolites and possessing an antioxidant, anticancer, and antidiabetic properties (Liu et al. 2011). Minerals act with the prevention of some diseases such as cancer, cardiovascular, degenerative and nutritional deficiency, as well as the synthesis of thyroid hormones by the consumption of iodine in the diet (Fenech and Ferguson 2001; Kersting et al. 2001; Haldimann et al. 2005). Seaweeds also contain the essential vitamins the human body needs and is not able to synthesize them, only obtain by diet food sources, offering the daily quantity required, mainly vitamin B12 that the terrestrial plants are not able to synthesize.

Processing Technologies and Seaweeds Sensory Profile The usage of marine macroalgae as a complementary food source may provide sustainable and healthy alternative recipes for a premium nutritional diet and may also contribute to explore seaweeds sub-products to soups, sauces, and other cooking ingredients, producing unique and innovative products with superior sensory quality, appropriate nutritional balance, and an unviable list of potential functional benefits. Ready-to-eat meals based on the combination of seaweeds with cereals, rice, pasta, and shellfish products seem particularly promising. At first glance, some macroalgae species seemed particularly promising, combining very well with the flavors of the brown rice. It should be noted in this regard coastal regions with distinct characteristics that favor the production of brown rice, for instance, such as high air humidity, less global radiation, less number of sunlight hours, and also mild average temperatures shows higher chances to produce rice with higher quality, namely, toward higher amylose content and higher percentage of whole grains. These are indeed fortunate combination of factors to the local economy contributing to the production of essential food products and to increase the employment at the region. The cultivation, production, and harvesting of macroalgae to nutraceutical sector (and to other industrial sectors) also contribute to the increase of

Sustainable Premium Ready Meals for a Daily Nutritional Diet

local employment and in industrial sector with the exploitation of this product worldwide raising a health nutritional diet. The product potential is excellent, but sensory characteristics are a significant hindrance for large market applications: chewy texture, nauseating odor, and unappealing taste. This is not widespread; some macroalgae can and are used today quite successfully in various cooking applications, but this is just the tip of the iceberg of their potential. Compositional, nutritional, and sensory profiles can be modulated, depending on algae species, of course, but also on growth conditions, processing technologies, and end-use applications, such as molecular gastronomy. The main challenge is to select algae and their growth conditions to obtain new sources of protein food for convenience ready-to-eat products, with an optimized balance between nutritional and sensory properties, further enhanced with the functional and healthy associations that can be made, for sweet and savory examples of premium products. To obtain ready-to-eat meals/snacks, with long-term shelf life at room temperature, and that are suited to the growing market of healthy and vegetarian/vegan food portions which has an excellent export potential to developed world markets, it becomes crucial to modulate the sensory properties of the cooked and preserved material with specific food technology and molecular cooking solutions. Molecular Cooking and Food Technology Molecular gastronomy (MG) focuses on innovative dishes cooked in restaurants and home residences that promotes chemical and physical food modifications during cooking process and sensory characteristics, with the outcomes become from the fruitful work and association of innovative chefs and food scientists. For the chief the goal of MG is the culinary creativity, whereas for the scientist, the objective is the culinary enlightenment, determining the effects of different culinary practice or discovering physical and chemical reactions. At home, the goal is to educate the consumers to food innovation and composition and to entertain food passionates. The tools used are the equipment of scientific laboratories like

1021

ultrasound probes, sintered glass filters, rotary evaporators, heating disc, etc. The ingredients used are also different from the ones used in the kitchen such as calcium lactate, sodium alginate, phenols extracted from flavors, grape juice, ascorbic acid, etc. (Caporaso and Formisano 2016). The final dish is the combination of new flavors, textures, tastes, and smells that meets the consumers’ preference. The social, familiar, and religious contexts and the price are some of the factors also important to our choices, although our preferences have a high weight at our decisions, being built as we grow, with the human beings showing few specific preferences at birth, being not an innate acquisition. Indeed, we eat what we prefer and we are what we eat. MG is another tendency of cooking food that may create opportunities of healthy diet applying new ingredients and merge chemical processes with novel technologies like microwave technique to obtain new food products. Seaweeds show a great potential that is for sure a novel ingredient to use in MG. Although this new scientific discipline, it is not yet very appreciate. In keeping with this target market and the desire for healthy products and maximum functional benefits, it is anticipated several combination of cereals, fish, and vegetables to combine with the algae material. Prior to the final use, though, algae material must also be preserved immediately after harvest to avoid excessive development of off-flavors and off-aromas. For this purpose, the most cost-effective method is dehydration as previous referred. The technology using microwave radiation is another novel method that allows to obtain the dried microalgae that constitutes the basic ingredient for the premium ready-to-eat meals along with a by-product. Therefore, with this technology it is possible to obtain the dried macroalgae and the water-soluble diffused compounds, namely, phenolic compounds (high antioxidant activity) and essential amino acids (Ferreira et al. 2018). This sub-product, water extract, as could have nutritional and functional value, and it will therefore be explored to produce ingredients for food products (e.g., soups, sauces). This application is particularly promising due to the potential presence of

S

1022

Sustainable Premium Ready Meals for a Daily Nutritional Diet

thickeners that convey a smooth, creamy texture to the liquids, while aromas and flavors may be well suited to products such as seafood chowders and prawn cocktails. Lipid exchange and various extractions processes can be used to affect the compositional balance of the material and, particularly, seeking to remove off-aromas, contributing to the modulation of sensory profile. Thermal processing can also be treated as a jellifying process, thus offering some clues as to the type of ingredients that can be added to the recipe to modulate the texture.

Conclusion Marine macroalgae are a great food source with bioactive components such as anticancer, antiviral, antifungal, antidiabetic, antihypertensive, immunomodulatory, anticoagulant, anti-inflammatory, antioxidant, UV-protective, and neuroprotective properties that promote a healthy diet (Leandro et al. 2020; Stengel et al. 2011; Yuan and Athukorala 2012). The association of seaweeds with other ingredients, the usage of their sub-products, and the modulation of their flavor and texture highlights the potential of these organisms to the nutraceutical industry. Furthermore, the cost-effective cultivation and IMTA technique contribute to the carbon footprint reduction and alleviate eutrophication contributing to circular economy and to the blue ecology. Macroalgae are indeed a sustainable and natural resource to incorporate in the diet of world population, meeting the requirements of global food security. Acknowledgments This work is financed by national funds through FCT – Foundation for Science and Technology, I.P., within the scope of the projects UIDB/04292/ 2020 – MARE – Marine and Environmental Sciences Centre and UID/AMB/50017/2019 – CESAM – Centre for Environmental and Marine Studies. This research was also financed by the project MENU – Marine Macroalgae: Alternative recipes for a daily nutritional diet (FA_05_2017_011), funded by the Blue Fund under Public Notice No. 5 – Blue Biotechnology. Ana M. M. Gonçalves acknowledges University of Coimbra for the contract IT057-18-7253.

References Alves C, Silva J, Pinteus S, Gaspar H, Alpoim MC, Botana LM, Pedrosa R (2018) From marine origin to therapeutics: the antitumor potential of marine algae-derived compounds. Front Pharmacol 9. https://doi.org/ 10.3389/fphar.2018.00777 Andrade PB, Barbosa M, Matos RP, Lopes G, Vinholes J, Mouga T, Valentão P (2013) Valuable compounds in macroalgae extracts. Food Chem 138:1819–1828. https://doi.org/10.1016/j.foodchem.2012.11.081 Biancarosa I, Belghit I, Bruckner CG, Liland NS, Waagbø R, Amlund H, Heesch S, Lock E-J (2018) Chemical characterization of 21 species of marine macroalgae common in Norwegian waters: benefits of and limitations to their potential use in food and feed. J Sci Food Agric 98:2035–2042. https://doi.org/10.1002/jsfa.8798 Blunt JW, Copp BR, Munro MHG, Northcote PT, Prinsep MR (2003) Marine natural products. Nat Prod Rep 20:1–48. https://doi.org/10.1039/c005001f Bostock J, Lane A, Hough C, Yamamoto K (2016) An assessment of the economic contribution of EU aquaculture production and the influence of policies for its sustainable development. Aquac Int 24:699–733. https://doi.org/10.1007/s10499-016-9992-1 Caporaso N, Formisano D (2016) Developments, applications, and trends of molecular gastronomy among food scientists and innovative chefs. Food Rev Intl 32 (4):417–435. https://doi.org/10.1080/87559129.2015 .1094818 Cardoso S, Carvalho L, Silva P, Rodrigues M, Pereira O, Pereira L (2014) Bioproducts from seaweeds: a review with special focus on the Iberian Peninsula. Curr Org Chem 18:896–917. https://doi.org/10.2174/13852728 1807140515154116 Cardozo KHM, Guaratini T, Barros MP, Falcão VR, Tonon AP, Lopes NP, Campos S, Torres MA, Souza AO, Colepicolo P, Pinto E (2007) Metabolites from algae with economical impact. Comp Biochem Physiol C 146:60–78. https://doi.org/10.1016/j.cbpc.2006.05. 007 Cheng T (1969) Production of kelp – a major aspect of China’s exploitation of the sea. Econ Bot 23:215–236. https://doi.org/10.1007/BF02860454 Choi TS, Kang EJ, Kim J, Kim KY (2010) Effect of salinity on growth and nutrient uptake of Ulva pertusa (Chlorophyta) from an eelgrass bed. Algae 25(1):17–26. https://doi.org/10.4490/algae.2010.25.1.17 Christaki E, Bonos E, Giannenas I, Florou-Paneri P (2013) Functional properties of carotenoids originating from algae. J Sci Food Agric 93:5–11. https://doi.org/ 10.1002/jsfa.5902 Darias J, Rovirosa J, San Martin A, Díaz A-R, Dorta E, Cueto M (2001) Furoplocamioids AC, novel polyhalogenated furanoid monoterpenes from Plocamium cartilagineum. J Nat Prod 64:1383–1387. https://doi. org/10.1021/np010297u

Sustainable Premium Ready Meals for a Daily Nutritional Diet Dawes CJ, Orduña-Rojas J, Robledo D (1998) Response of the tropical red seaweed Gracilaria cornea to temperature, salinity and irradiance. J Appl Phycol 10:419–425. https://doi.org/10.1023/A:1008021613399 Di Trapani AM, Sgroi F, Testa R, Tudisca S (2014) Economic comparison between offshore and inshore aquaculture production systems of European sea bass in Italy. Aquaculture 434:334–339 FAO (2014). The state of world fisheries and aquaculture – opportunities and challenges; Rome FAO (2018). The state of the world fisheries and aquaculture – meeting the sustainable development goals; Rome, vol 3. https://doi.org/10.1093/japr/3.1.101 Fenech M, Ferguson LR (2001) Vitamins/minerals and genomic stability in humans. Mutat Res Fundam Mol Mech Mutagen 475:1–6. https://doi.org/10.1016/ S0027-5107(01)00069-0 Ferreira SS, Passos CP, Cardoso SM, Wessel DF, Coimbra MA (2018) Microwave assisted dehydration of broccoli by-products and simultaneous extraction of bioactive compounds. Food Chem 246:386–393. https://doi. org/10.1016/j.foodchem.2017.11.053 Fleurence J, Morançais M, Dumay J, Decottignies P, Turpin V, Munier M, Garcia-Bueno N, Jaouen P (2012) What are the prospects for using seaweed in human nutrition and for marine animals raised through aquaculture? Trends Food Sci Technol 27:57–61. https://doi.org/10.1016/j.tifs.2012.03.004 Fuller RW, Cardellina JH, Kato Y, Boyd MR, Brinen LS, Clardy J, Snader KMA (1992) Pentahalogenated monoterpene from the red alga Portieria Hornemannii produces a novel cytotoxicity profile against a diverse panel of human tumor cell lines. J Med Chem 35:3007– 3011. https://doi.org/10.1021/jm00094a012 Galasso C, Corinaldesi C, Sansone C (2017) Carotenoids from marine organisms: biological functions and industrial applications. Antioxidants 6:96. https://doi.org/ 10.3390/antiox6040096 Gao S, Qin T, Liu Z, Caceres MA, Ronchi CF, Chen C-YO, Yeum K-J, Taylor A, Blumberg JB, Liu Y, Shang F (2011) Lutein and zeaxanthin supplementation reduces H2O2-induced oxidative damage in human lens epithelial cells. Mol Vis 17:3180–3190 Gonçalves AMM, Marques JC, Gonçalves F (2017) Fatty acids’ profiles of aquatic organisms: revealing the impacts of environmental and anthropogenic stressors. In: Catala A (ed) Fatty acids. IntechOpen, pp 89–117. https://doi.org/10.5772/intechopen.685447 Graham LE, Wilcox LW (2000) Algae. Prentice Hall, Upper Saddle River. 55 pp. ISBN: 0-13-660333-5 Guedes AC, Amaro HM, Malcata FX (2011) Microalgae as sources of carotenoids. Mar Drugs 9:625–644. https:// doi.org/10.3390/md9040625 Haldimann M, Alt A, Blanc A, Blondeau K (2005) Iodine content of food groups. J Food Compos Anal 18:461– 471. https://doi.org/10.1016/j.jfca.2004.06.003

1023

Kersting M, Alexy U, Sichert-Hellert W (2001) Dietary intake and food sources of minerals in 1 to 18 year old German children and adolescents. Nutr Res 21:607– 616. https://doi.org/10.1016/S0271-5317(01)00262-7 Leandro A, Pereira L, Gonçalves AMM (2020) Diverse applications of marine macroalgae. Mar Drugs 18:17. https://doi.org/10.3390/md18010017 Liu M, Hansen PE, Lin X (2011) Bromophenols in marine algae and their bioactivities. Mar Drugs 9:1273–1292. https://doi.org/10.3390/md9071273 Lopes G, Sousa C, Valentão P, Andrade PB (2013) Sterols in algae and health. In: Ledesma-Hernandez B, Herrero M (eds) Bioactive compounds from marine foods: plant and animal sources. John Wiley & Sons, Ltd, Chichester, pp 173–191. https://doi.org/10.1002/978111841 2893.ch9 Makkar F, Chakraborty K (2018) Antioxidative sulphated polygalactans from marine macroalgae as angiotensin-I converting enzyme inhibitors. Nat Prod Res 32:2100–2106. https://doi.org/10.1080/14786419.20 17.1363756 Makkar HPS, Tran G, Heuzé V, Giger-Reverdin S, Lessire M, Lebas F, Ankers P (2016) Seaweeds for livestock diets: a review. Anim Feed Sci Technol 212:1–17. https://doi.org/ 10.1016/j.anifeedsci.2015.09.018 Marsham S, Scott GW, Tobin ML (2007) Comparison of nutritive chemistry of a range of temperate seaweeds. Food Chem 100:1331–1336. https://doi.org/10.1016/j. foodchem.2005.11.029 Mooney-McAuley KM, Edwards MD, Champenois J, Gorman E (2016). Best practice guidelines for seaweed cultivation and analysis, public output report of the EnAlgae project, Swansea, June 2016, 36pp Nunes N, Ferraz S, Valente S, Barreto MC, Pinheiro de Carvalho MAA (2017) Biochemical composition, nutritional value, and antioxidant properties of seven seaweed species from the Madeira Archipelago. J Appl Phycol 29:2427–2437. https://doi.org/10.1007/ s10811-017-1074-x Oren A, Gunde-Cimerman N (2007) Mycosporines and mycosporine-like amino acids: UV protectants or multipurpose secondary metabolites? FEMS Microbiol Lett 269:1–10. https://doi.org/10.1111/j.15746968.2007.00650.x Paiva L, Lima E, Patarra RF, Neto AI, Baptista J (2014) Edible Azorean macroalgae as source of rich nutrients with impact on human health. Food Chem 164:128–135. https://doi.org/10.1016/j.foodchem.2014.04.119 Pereira L (2011) A review of the nutrient composition of selected edible seaweeds. In: Pomin VH (ed) Seaweed: ecology. Nutrient composition and medicinal uses. Nova Science Publishers Inc., New York, pp 15–47. ISBN: 978-1-61470-920-6 Pereira L (2016). Edible seaweeds of the world. Science Publishers. Science Publishers’ (SP), An Imprint of CRC Press/Taylor & Francis Group. 448 pp. ISBN 9781498730471

S

1024 Pereira L (2018). Therapeutic and nutritional uses of algae. Science Publishers’ (SP), An Imprint of CRC Press/ Taylor & Francis Group. 560 pp. ISBN 9781498755382 Pereira L, Correia F (2015). Macroalgas Marinhas da Costa Portuguesa – Biodiversidade, Ecologia e Utilizações. Nota de Rodapé Edições. 342 pp. ISBN 978-989-20-5754-5 Redmond S, Green L, Yarish C, Kim J, Neefus C (2014). New England Seaweed Culture Handbook-Nursery Systems. Connecticut Sea Grant CTSG-14-01. 92 pp Smit AJ (2004) Medicinal and pharmaceutical uses of seaweed natural products: a review. J Appl Phycol 16:245–262. https://doi.org/10.1023/B:JAPH.00000 47783.36600.ef Soares C, Machado S, Vieira EF, Morais S, Teles MT, Correia M, Carvalho A, Domingues VF, Ramalhosa MJ, Delerue-Matos C, Antunes F (2017) Seaweeds from the Portuguese coast: a potential food resource? IOP Conf Ser Mater Sci Eng 231:12126. https://doi. org/10.1088/1757-899X/231/1/012126 Stengel DB, Connan S, Popper ZA (2011) Algal chemodiversity and bioactivity: sources of natural variability and implications for commercial application. Biotechnol Adv 29:483–501. https://doi.org/10.1016/ j.biotechadv.2011.05.016 Talep M. https://margaritatalep.com/ (Accessed 2 April 2020) Torres MD, Flórez-Fernández N, Domínguez H (2019) Integral utilization of red seaweed for bioactive production. Mar Drugs 17:314. https://doi.org/10.3390/ md17060314 van den Hoek C, Mann DG, Jahns HM (1995) Algae: an introduction to phycology. Cambridge University Press, Cambridge. 623 pp. ISBN: 0-521-30419-9 Wells ML, Potin P, Craigie JS, Raven JA, Merchant SS, Helliwell KE, Smith AG, Camire ME, Brawley SH (2017) Algae as nutritional and functional food sources: revisiting our understanding. J Appl Phycol 29:949–982. https://doi.org/10.1007/s10811-016-0974-5 Yuan YV, Athukorala Y (2012) Algal mycosporine- like amino acids (MAAs) as potential cosmeceuticals. In: Kim SK (ed) Marine cosmeceuticals: trends and prospects. Taylor and Francis Group, Boca Raton, pp 143– 167. https://doi.org/10.1201/b10120-13

Sustainable Procurement ▶ Ethical and Sustainable Sourcing: Toward Strategic and Holistic Sustainable Supply Chain Management

Sustainable Purchasing ▶ Ethical and Sustainable Sourcing: Toward Strategic and Holistic Sustainable Supply Chain Management

Sustainable Procurement

Sustainable Supply Chain Management ▶ Ethical and Sustainable Sourcing: Toward Strategic and Holistic Sustainable Supply Chain Management

Sustainable Supply Management ▶ Ethical and Sustainable Sourcing: Toward Strategic and Holistic Sustainable Supply Chain Management

Sustainable Technology Impact on Agricultural Production Michaela Tomchek University of Oxford, Oxford, UK Royal Agricultural University, Cirencester, UK

Definition As populations continue to increase and land degradation ever-encroaching, a new form of agriculture must be utilized to maintain production and preserve natural resources to secure the longevity of the agricultural industry. This can be achieved via technology and the transference of knowledge regarding sustainable practices to farmers in developing nations. Additionally, new forms of agricultural technology must be adopted in developed nations in concurrence with conservation agriculture systems. Technology is not simply new forms of machinery or tools, but various practices and systems to promote sustainable production (Sims and Kienzle 2017). Yet, with lacking land tenure and proper infrastructure, it is difficult to spread this knowledge and technology to developing nations (Mkutu 2004). Furthermore, developed nations are reluctant to adopt more sustainable practices or new forms of

Sustainable Technology Impact on Agricultural Production

technology in fear of reduced yield or increased cost. Sustainable Development Goal 8 Indicator 8.2 clearly states a goal to increase economic productivity via technological upgrading and innovation, focusing on labor-intensive areas – hence the need for more sustainable agricultural technology.

Introduction The 2000 UN Millennium Development Goals (MDGs) set out to achieve a set of eight goals, agreed upon by the 191 UN member states by 2015 (UN 2015b). The renewal of the MDGs were passed in 2015 by the 193 member states named the Sustainable Development Goals (SDGs) to be achieved by 2030 (UN 2016). The 17 SDGs act as a guide for the member countries to work towards within each country’s political agenda. These are Global Goals, meaning that they are goals set out by a global governing body and agreed upon by member states, but it is up to National and Local policymakers to properly enforce and achieve the set goals. This chapter will focus on SDG 8 which specifically calls for Decent Work and Economic Growth, outlined by 29 indicators to guide member states towards achieving this goal (UN 2015a). Indicator 8.2 calls for more economic productivity to occur through technology and diversification, innovation and a heavy focus on labor-intensive sectors such as agriculture. Agriculture is the backbone of global trade and markets and ensures the health of populations – hence, it is essential to promote economic growth and maintenance of sustainable practices allowing for a future of food production and a preservation of livelihoods. With a focus on agriculture, member states must properly understand sustainable agriculture and the underlying contributing factors. The Food and Agriculture Organization (FAO) outline the definition of sustainable food and agriculture through five principles: 1. Increasing productivity and value within food systems 2. Preserving natural resources

1025

3. Improving livelihoods and promote economic growth 4. Enhancing resilience of people, communities and ecosystems 5. Adapting government to new challenges (FAO 2018a) This chapter will refer back to the aforementioned principles in relation to technology and sustainable agricultural mechanization in order to not only achieve SDG 8.2, but to ensure producers follow the sustainable agricultural principles. However, to successfully achieve these principles in addition to the SDGs collectively, the responsibility is held by not only national governments but also local and regional governments to connect communities with global achievements. Goals cannot be achieved at the global scale without the collective support of smaller governments and thus rely on the work of bottom-up policies to ensure sustainable development beginning with communities and ranging up to cities, nations, and the world (Wahyuni 2019). Yet, within developing nations, access to technology and resources requires the aid from outside developed nations and possibly NGOs. This chapter will address how sustainable agriculture has moved forward with the adoption of technology and how productivity is increasing thanks to innovative systems within agriculture. Agriculture relies heavily on smallholders for food production, and should be the focus of new innovative measures within the food system. Producing roughly 80% of the world’s agricultural products, smallholders are of utmost importance globally when it comes to food production (Sims and Kienzle 2017). Yet, a majority of smallholders exist within developing nations and require knowledge about new sustainable agricultural methods, easily accessible technology and forms of mechanization, and access to markets. Agricultural mechanization includes the application of tools, implements, and powered machinery and equipment to achieve production covering all levels of farming and processing technologies including basic hand tools to more sophisticated and motorized equipment (Sims 2016). With the adoption of mechanization, it can reduce hard

S

1026

labor, make up for labor shortages, improve productivity, resource-use efficiency, expand market access, and help build resilience to climate change. Sustainable mechanization, therefore, contains the aspects of agriculture that contribute to the sustainable development of the food and agriculture sector. To fully understand agriculture and how to improve power within the fields, it is essential to know the forms of agricultural power. Agriculture generally makes use of three levels of power sources: 1. Manual (human labor) 2. Animal 3. Motor

Sustainable Technology Impact on Agricultural Production

In order to successfully transition a human-animal-powered farm to a more mechanized system, academics have created a set of stages each farm will go through. The six stages in the process of agricultural mechanization can be seen in Fig. 1 (FAO 1981). This reveals how a farmer must transition from one form of mechanization to the next in order to become sustainably mechanized. Stage 1 indicates a system whereby farmers utilize animal power to replace human power. This then continues through the next stages to adopt mechanical weeding, cropping systems, more intensive practices, no-till adoption, and preparing land/livestock for a mechanized system. Stage 6 displays a system with higher production, precision agriculture, and more automated technology.

Sustainable Technology Impact on Agricultural Production, Fig. 1 Stages of agricultural mechanization (FAO 2018b, 5)

Sustainable Technology Impact on Agricultural Production

The impact sustainable mechanization, technology, and sustainable agricultural practices will be addressed in this chapter in relation to SDG 8 within developing and developed nations.

Sustainable Agriculture Academics and policymakers have debated the definition of sustainability over the past few decades. The term first appeared in 1987 during the Brundtland Commission and has since been redefined over 70 times; hence, properly defining sustainable agriculture is yet another hurdle (Pretty 1995). Broadly speaking, sustainability is the persistence of something over a long period of time, guaranteeing that resources are available for current and future generations and must include a harmonious balance between the people, the economy, and the environment. Thus, it can be concurred that sustainable agriculture is ensuring the longevity of agricultural production, preserving natural resources, and ensuring livelihoods and economic productivity are maintained. Yet, with time, the definition will continue to change – but it is vital to push forth past the struggle to define, and act to ensure sustainable agricultural production. Assuring agricultural production remains sustainable includes the adoption of certain practices to undertake during production such as intercropping, conservation agriculture, or a reduction in chemicals among a number of others (Hendrickson et al. 2008). It can also include the ability to maintain production by sustainably utilizing resources. Lastly, guaranteeing the livelihoods of all parties involved remain positively maintained and economically beneficial is essential. Technology, ideas, the transference of knowledge, and access all allow producers to become more sustainable. Further sections will address the foundation behind sustainable agriculture and how to begin transitioning to a more technology-based system. Conservation Agriculture In order for farms to adopt more mechanized systems, a base of conservation agriculture and associated practices must be attained.

1027

Conservation agriculture generates a more nutrient-rich soil and acts as a bridge towards sustainable mechanization (Johansen et al. 2012). The FAO outlines three principles of conservation agriculture including minimal soil disturbance, permanent soil organic cover, and species diversification. Specifically, this would include a no-till system whereby farmers would not alter the soil post-harvest and instead direct seed and utilize a more precise chemical application. Additionally, at least 30% of cover crops or crop residue must remain on the soil to preserve moisture and generate soil organic matter (FAO 2012). Lastly, with an increased variety in species, intercropping and utilizing at least three different crops at one time will greatly improve soil health. Soil health is essential to maintaining a sustainable agricultural system and preparing for more mechanization to be introduced onto a farm. This also enhances the biodiversity within a farm creating a more efficient system to sustainably utilize nutrients and water (Hobbs et al. 2008). Land Tenure Access to land and secure land tenure rights are essential to promote farmer’s investment on land and to reduce vulnerability. Land tenure also allows for better ability to preserve natural resources and allows for more productive and sustainable practices (Turner 2016). A wellstructured and organized land governance system allocating land tenure creates fairer systems whereby conflicts are reduced and help with conservation of natural areas. Pastoralists and indigenous peoples including rural populations benefit significantly from land tenure since they are the portion of populations that are likely to lose land to outside private industries (DFID 1997; Mkutu 2004). With proper land tenure, these peoples can maintain land rights and improve the area, which includes investing in sustainable practices and technologies. In order to achieve proper land governance, a government must create an existing tenure arrangement whether formal or informal. This provides a starting point to laying out users of land to ensure fair access is handed out in the future.

S

1028

Honduras and Guatemala Roughly seven million indigenous people reside within Guatemala and Honduras and are classified as some of the poorest in the region depending on land and natural resources to maintain livelihoods. Due to the rural areas in which they reside, these peoples generally lack legal ownership of land which can inhibit productivity (FAO 2018a). However, FAO and the World Bank are working together to ensure the rights of indigenous communities to land and natural resources within these areas are maintained. Specifically, in Honduras, an investment plan has been generated to create inter-communal titles in the Mosquita region pushing the President to recognize the ownership of more than one million hectares of communal land to indigenous people in 2016. This also included the passage of a Plan of Action to call for the conservation of natural resources and sustainable management of indigenous territories. This action allowed roughly 17,500 poor indigenous families to access and manage natural resources. The Guatemalan government, on the other hand, has benefitted from the World Bank and FAO partnership by allowing numerous indigenous and rural communities to obtain legal recognition of local land as communal land. The government is also undertaking projects to improve land governance and territorial management of communal lands. This reveals the importance governing bodies have within land tenure and securing land rights among producers to promote sustainable agricultural production and investment. Small Holder Farmers 500 million farms in the world, or 88% of the farms worldwide, are small family farms generating roughly 80% of the world’s food (Lowder et al. 2016). These rural populations are highly marginalized and have numerous inequalities inhibiting them from improving. Yet, these farms are stuck within a vicious cycle of poverty (Fig. 2), unable to increase income due to low productivity, lack of access to resources and markets and land degradation. As farmer income remains low, this leads to a decrease in farmers’ savings leading to a decreased

Sustainable Technology Impact on Agricultural Production

Sustainable Technology Impact on Agricultural Production, Fig. 2 Vicious cycle of lack of access to mechanization (Sims 2016, 19). (Source: FAO 2013)

demand for mechanization causing low yields and contributing further to a low income received by a farmer. Additionally, with a decreased demand in technology/mechanization, this leads to an increase in the cost to produce technology making it more inaccessible to farmers. Incorporating these farms within global markets requires an improvement of infrastructure and roads, access to new forms of knowledge and technology and sustainable agricultural methods (Vermeulen and Cotula 2010). To begin, productivity can be improved by opening access to newer seeds and planting materials. Rural youth have gradually been reverting to work within urban sectors, leading to a decrease in numbers and productivity. This can be resolved by investing in mechanization and technologies to regenerate

Sustainable Technology Impact on Agricultural Production

1029

Sustainable Technology Impact on Agricultural Production, Fig. 4 Stakeholders within farm machinery network supporting smallholder farmers (Sims 2016, 25)

Sustainable Technology Impact on Agricultural Production, Fig. 3 Virtuous cycles of sustainable mechanization (Sims 2016, 19). (Source: FAO 2013)

interest in farming – leading to the virtuous cycles (Fig. 3) laid out by the FAO (Sims and Kienzle 2017). Here, it is clear that as a farmer’s income is increased, savings are increased leading to an increased ability to purchase mechanization thus leading to higher productivity and more income. With a higher demand in mechanization, the cost of producing machinery decreases over time as communities begin constructing various forms of technology with investment. Smallholders have little access to markets, and through improved infrastructure, producer organizations, and introduction to newer forms of technology, doors will open for producers to

enhance productivity and improve sustainability. Mobile phones and apps can provide farmers with price information quickly, accurately, and transparently. This will also allow producers to communicate with each other. Additionally, if a new form of technology is available, information can reach smallholders more easily. The spread of knowledge is essential to creating a more sustainable food system in addition to investment in innovative technology (Chen et al. 2015). Currently, this trend has shifted to a more integrated, market-oriented, and farmer-driven system containing numerous stakeholders. Rural family farms are the key to innovative technology and systems guided by stakeholders and outside funders; this is also known as inclusive development. Figure 4 displays the necessary support needed to increase farm machinery within smallholder farms. This requires a cohesive relationship between farmers and outside NGOs, researchers, the public sector, private companies, and various governing agencies. Diversification of Crops and Agroforestry After WWII, the need to increase and maintain crop yield became a priority among producers and policymakers. This led to not only a transition to a more intensive agricultural system, but an upward trend of monoculture systems, whereby only one crop was planted and harvested within

S

1030

one area. Land degradation spread, contributing to biodiversity loss, desertification, increased dependence on chemicals, and decreased crop diversity. Monoculture systems were beneficial to farmers due to the ease of harvest and planting, chemical usage, and high yields providing access to markets. Yet, over time, these systems were proven to be harmful to soil, leading to erosion and lack of soil biodiversity, and had a greater impact on surrounding ecosystems and pests were beginning to adapt to chemicals. This called for a change among agricultural producers – which could be achieved simply by introducing more crop variety into the field. With an increase in variety of cultivated crops, there are a number of benefits that go beyond the farmer. This includes conservation of biodiversity, improved soil and plant health, reduction in pest exposure, reduced impact of drought or extreme weather conditions in addition to the increased income to farmers, reduced cost of input, more jobs, and elongated life of the land (Lin 2011). Increased crop diversity could be achieved by simply intercropping different crops within other cash crops, planting windbreakers surrounding a farm, crop rotations, or the adoption of an agroforestry system. Agroforestry and other integrated crop-livestock systems can be considered as a form of technology, and farmers can adopt to ensure the aforementioned benefits. Most smallholder farms are monocultured and know little about diversifying crops – yet through proper education, they can learn about how to not only increase productivity, but also increase revenue and increase the sustainability of the land. With investment in training and dispersal of mobile phones, farmers can easily access information on how to transition their land to an agroforestry or intercropped system in order to begin sustainably producing a diversified cropped area. A study among fruit and vegetable farmers in Kenya revealed that phone usage led to positive results among producers regarding exchange of information and communication to traders and other producers (Dannenberg 2013). Agroecology and the research surrounding increasing crop diversity is essential to answering the call for integrated approaches outlined by the

Sustainable Technology Impact on Agricultural Production

SDGs. Over 30 countries have passed public policies to educate and spread awareness about agroecology lending support towards the upscaling of adopting agroecological practices. Policies supporting agroecology involve cross-sectoral collaborations between farmers and consumer organizations (FAO 2018a). The adoption of diversification of crop systems allows farmers, whether within smallholder farms or large industrial farms, to push agricultural systems towards achieving SDG 8, increasing agricultural productivity, sustainability, and improving economic return.

Developing Countries In order to classify a country’s global standing, the UN categorizes countries based on economic standing: developed economies, economies in transition, and developing economies. Developing countries have an underdeveloped economy, low market access, and poor infrastructure with regards to agriculture. Developing economies are typically located in the southern hemisphere, Table 1 (indicator a) lists the countries by region (UN 2014). Agricultural production within these regions is primarily hand- or animal-powered and requires more technological innovations (Table 2). This reveals how much developing nations within Sub-Saharan Africa and East Asia rely on human and animal power compared to engine power. On the other hand, within Latin America and South Asia, there is an even distribution of farmers relying on human, animal, and engine power. Sustainable agriculture mechanization and adoption of technology has proven to be problematic for developed nations. This is due to lack of access to resources, affordability, limited training, poor infrastructure and roads, underdeveloped polices, land tenure difficulties, and poor transference of knowledge (Sims and Kienzle 2017). Additionally, agricultural land is heavily fragmented and degraded and producers rarely have access to international markets. Some potential solutions for increasing agricultural technology and progressing developing nations’ agricultural sector are primarily positioned

Sustainable Technology Impact on Agricultural Production

1031

Sustainable Technology Impact on Agricultural Production, Table 1 Developing economies by region (Adapted from UN 2014, 146) Africa North Africa Algeria Egypt Libya Mauritania Morocco Sudan Tunisia Central Africa Cameroon Central African Republic Chad Congo Equatorial Guinea Gabon Sao Tome and Prinicipe East Africa

Burundi Comoros Democratic Republic of the Congo Djibouti Eritrea Ethiopia Kenya Madagascar Rwanda Somalia Uganda United Republic of Tanzania

Southern Africa Angola Botswana Lesotho Malawi Mauritius Mozambique Namibia South Africa Zambia Zimbabwe West Africa

Benin Burkina Faso Cabo Verde Côte d’Ivoire Gambia Ghana Guinea Guinea-Bissau Liberia Mali Niger Nigeria Senegal Sierra Leone Togo

Asia East Asia

Latin America and the Caribbean Caribbean

Brunei Darussalam China Hong Kong SAR Indonesia Malaysia Myanmar Papua New Guinea Philippines Republic of Korea Singapore Taiwan Province of China Thailand Viet Nam South Asia

Barbados Cuba Dominican Republic Guyana Haiti Jamaica Trinidad and Tobago Mexico and Central America

Bangladesh India Iran (Islamic Republic of) Nepal Pakistan Sri Lanka Western Asia Bahrain Iraq Israel Jordon Kuwait

Costa Rica El Salvador Guatemala Honduras Mexico Nicaragua Panama South America

Argentina Bolivia (Plurinational State of) Brazil Chile Colombia Ecuador Paraguay Peru Uruguay Venezuela (Bolivarian Republic of)

Lebanon Oman Qatar Saudi Arabia Syrian Arab Republic Turkey United Arab Emirates Yemen

around policy innovation. Additionally, increased funding towards training and education and more investment in agricultural technology. The technology must be easily adopted and adapted to local

conditions and climate-smart. Lastly, technology will be more accessible if the machinery is made locally to reduce reliance on external markets and decrease the price.

S

1032

Sustainable Technology Impact on Agricultural Production

When considering developing countries, academics tend to veer towards discussions surrounding Sub-Saharan Africa (SSA). Within the 55 countries, 60% of the continent depend on agriculture for jobs and livelihoods, and national yields are 56% of international average (AfDB 2016; Jerome 2017). Yet, as populations are predicted to increase significantly by 2050, agricultural production must be increased by 60% to Sustainable Technology Impact on Agricultural Production, Table 2 Sources of power for land preparation (% of total) (Adapted from Sims 2016, 5 & FAO 2006)

Sub-Saharan Africa East Asia South Asia Latin America and the Caribbean

Human muscle power 65

Draught animal power 25

Engine power 10

40 30 25

40 30 25

20 40 50

Source: FAO 2006

maintain demand and food security. SSA has the potential to become a highly productive region with the establishment of a constructive land governance system and farmer-networking whereby knowledge is exchanged among farmers. If the aforementioned baseline is achieved, SSA producers could utilize more advanced technology, increase efficiency, preserve natural resources, increase economic value, and create a sustainable agricultural system.

Developed Countries Compared to developing countries, developed countries have a stable economy and a profitable agricultural sector with a cohesive and well-organized governing structure. Table 3 lists the developed countries by region. Technology may be slightly easier to transfer to farmers in these countries, yet has proven to be more difficult due to the nature of producers and governments. Developed nations focus on yield rather than sustainability

Sustainable Technology Impact on Agricultural Production, Table 3 Developed economies by region (Adapted from UN 2014, 145) Europe European Union EU-15 Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden United Kingdom

New EU member States Bulgaria Croatia Cyprus Czech Republic Estonia Hungary Latvia Lithuania Malta Poland Romania Slovakia Slovenia

Other Europe Iceland Norway Canada Switzerland

Other countries Australia Japan

Major developed economies (G7) Canada

Japan New Zealand United States

France Germany Italy United Kingdom United States

Sustainable Technology Impact on Agricultural Production

and after WWII and the Green Revolution, yield became a main priority among producers, leading to the previously mentioned intensive systems. These countries are able to maintain yield, however not sustainably, and somewhat face similar threats to developed countries, but have the upper hand when making a change. Developed countries’ agricultural systems are more focused on supply and demand rather than any external costs such as harm to the environment or sustainability, but within the last decade, this has changed with new innovative tools and systems. Sustainable intensification (SI) is a new concept to bring developed economies out of land degradation. This allows for the maintenance of food production while also reducing environmental impacts (Armstrong McKay et al. 2019). Scherer et al. (2018) state that SI is more likely to be implemented within countries that have similar socioeconomic characteristics as France, Italy, and Denmark in order to execute the goals of SI through four measures: multiple cropping, no-till farming, deficit irrigation, and cultivation of less luxury crops (Scherer et al. 2018). SI could be the link within developed economies to provide a buffer for traditional farmers to adopt new forms of technology and improve sustainable mechanization. There are a number of examples of innovative technology being utilized in various developed nations.

Forms of Technology Nanotechnology As an interdisciplinary field of research, nanotechnology is a promising solution in not only medicine and technology, but also agriculture. It involves the alteration of chemical and physical properties of a particular substance at the molecular level (Ram et al. 2014). This allows for enhanced food quality, a decreased reliance on agricultural inputs, and increasing a crop’s ability to absorb nutrients from the soil. Nanotechnology also has the potential to create safe foods and a healthier soil structure for future crop production (Prasad et al. 2017). In order to effectively use nanochemistry, scientists can apply

1033

nanofertilizers and nanopesticides to target crops without harming the soil. With this tool, scientists can provide the necessary molecular links to manage and detect diseases, enhance nutrient uptake, and drought tolerance within certain crops. This can also lead to the increase in crop yields or nutritional values. Testing of agricultural practices and controlled conditions occurs in the USA, Europe, and Japan within the Controlled Environment Agriculture (CEA) system. Crops are grown within a controlled environment to understand how various practices impact crop growth – providing a platform for testing nanotechnology and a bridge between agricultural production and technology. Nanotechnology has the potential to decrease reliance on chemicals yet comes with its set of risks including lack of public or government support. Through public awareness and rapid testing, these risks can be averted and nanotechnology can create new forms of crops able to withstand different climates or disease threats. Potentially, it could lend support towards increasing productivity within crop areas and decreasing the impact on the environment. Artificial Intelligence The increased demand for food production was coupled with an increase in agrochemical usage. The USA, for example, sprays more than 90% of acreage of crops with herbicides (Gianessi and Reigner 2007). Herbicides reduce the amount of labor needed to weed an area and allow for crops to grow without invasive competitors. Pests and weeds can reduce potential crop yield up to 40%, or even greater if no agrochemicals are used (Oerke 2005; Deutsch et al. 2018). Hence, the need to reduce pest and weed occurrences is vital to maintain crop production. Farmers will spray fields of crop uniformly to ensure the weeds are targeted. Yet, this may be ineffective due to the patchy nature of weed growth and are not present within the whole area sprayed, leading to a wastage of agrochemicals. Blanket spraying crops can also cause an increase in production costs and pose a threat to crops, pest resistance, and pollution. In order to reduce the negative impact of agrochemicals, a system was developed whereby

S

1034

artificial intelligence (AI) was utilized to detect the presence of a weed and precisely spray the desired location. Partel et al. (2019) tested a lowcost and smart technology for precision weed management and discovered the system was able to distinguish between weeds and crops (Partel et al. 2019). Numerous other AI prototypes and have been executed with success by leading scientists and engineers (Sennaar 2019). AI can be an affordable system requiring proper investment and with necessary training cannot only effectively reduce reliance on agrochemicals but significantly reduce production costs. Additionally, this will create a more sustainable agricultural system, utilizing less chemicals, and reducing the negative impact on the environment. Global Positioning System Global Positioning System (GPS) has the capacity to map farm areas and guide AI systems to a more sustainable system. The ability to monitor the temperature and humidity of soil can provide producers with necessary guidance to ensure successful crop production and improvement of crop yield. This can also lead to a high-precision monitoring system to calculate farmland drought and flood areas. Without necessary guidance, farmers face the risk of economic loss due to incorrect inferences of weather and poor agricultural systems (Satyanarayana 2013). Accurate systems recording soil and yield data would be useful to guide vehicles and ensure proper applications to necessary areas (Borgelt et al. 1996). GPS utilizes satellites to create a radionavigation system to create a three-dimensional position and velocity anywhere on the globe with high accuracy (Tyler 1992). The satellites transmit codes of different frequencies to pinpoint a certain location. Soil mapping has utilized GPS. Long et al. (1991) stated that GPS provided an accurate set of results for positioning and navigating within a field and created a digitized map of soil boundaries. Shropshire et al. (1993) utilized GPS to understand where to apply fertilizer and control the rate of application. GPS aids other forms of technology including AI and precision agriculture to create new forms of technology to reduce environmental impact and

Sustainable Technology Impact on Agricultural Production

maximize agricultural production. Acting as a component to various other forms of technology, GPS can aid farmers with the transition towards becoming a more efficient farm with a decreased environmental impact. Precision Agriculture Similar to AI, precision agriculture (PA) utilizes various technologies and principles to understand the spatial and temporal variability interlinked with agricultural production to improve crop yield and decrease the impact on the environment. In order to gain success, PA must be easily applied to a given crop field, manageable, and economically beneficial in the long term. It requires the application of traditional agricultural practices but at a finer more direct scale (Pierce and Nowak 1999). As farms increased in size post-WWII, farmers were unable to practice agricultural methods precisely, hence, the transition to blanket-spraying crops without the necessary development of new technologies. Essentially, farmers lost the ability to understand “within-field variability” which changed with the adoption of GPS (Stafford 2000). The information and technologybased farm management system is able to manage variability within each individual farm and is sitespecific (Roberts et al. 2004). PA is heavily reliant on technology and “information intense” requiring development of sensing and mapping systems to supply farmers with spatial and temporal data regarding crops, soil, and other underlying environmental factors. PA has the potential to meet the demands of sustainability – reducing the impact on the environment, improving economic returns, and reducing public pressures on arable agriculture. This would create a sustainable agricultural system comprised of low inputs and high efficiency. The marriage of GPS and geographic information system (GIS) among other technologies such as remote sensing, newly developed computer components, and telecommunications will allow for a successful and beneficial PA system (Gibbons 2000). Additionally, it includes monitoring yields, grid sampling, sensorbased mapping, and a select number of variable rate application methods, that is, variable rate fertilizer application (Motavalli et al. 2013). A fertilizer

Sustainable Technology Impact on Agricultural Production

strategy was developed by Motavalli et al. (2012) with corn production that uses a variety of fertilizer sources to be applied within a single field based on areas with varying levels of nitrogen (N) loss. The results revealed that this strategy improved overall productivity, reduced environmental N loss, and indicates how new technology can provide new forms of information to improve land use management and understand spatial variability within fields. Yet, PA has only been developing for 10 years and research is unable to compute the environmental and economic benefits (Stafford 2000). Lambert and Lowenberg-De Boer (2000) attempted to quantify the profitability of PA by examining 108 studies focused on agribusiness services. The results revealed that 63% indicated a positive net return for a proposed PA technology compared to the 11% stating that negative returns were received (Lambert and Lowenberg-De Boer 2000). Perhaps with more farmers involved, more research funding, PA could become an innovative tool for farmers to grow more sustainable and potentially help transition developed and even developing countries towards a more sustainable future.

Future Projections Sustainable agriculture has proven to be a significant movement, pushing academics, scientists, and policymakers towards adopting new agricultural practices and developing new technologies making it easier for farmers to be sustainable. Technology is a possible bridge between conventional and sustainably mechanized farms, to maintain yield while reducing the impact on the environment. It is important to consider different economies and farm size when integrating technology with sustainable agriculture. Discerning smallholders from industrial farms and understanding the differences with regards to policy implementation between developing and developed nations is essential towards creating a sustainable future for agriculture. Developing countries require necessary land tenure, baseline soil knowledge, and an affordable technology that is easy to access. These producers

1035

will also require access to markets and a possible partnership between producers, governing agencies, and external agribusinesses to create an inclusive development scheme ensuring producers receive economic benefits while gaining access to new markets. Developed countries, on the other hand, already have an established land tenure system and an organized agricultural policy scheme, mostly, and must learn to incorporate more sustainable practices and various forms of technology to maintain yield and reduce environmental impact. The FAO predicts that the population will grow by one third, or 2.3 billion people by 2050, primarily in the developing nations (FAO 2009). Feeding a population of 9.1 billion people in 2050 calls for an increase in food production by 70%, meaning that production in developing nations would need to nearly double. Arable land would have to expand by roughly 70 million ha and 120 million ha in developing countries offset by the decrease of 50 million ha in developed nations. Crop yield would grow, but not at the same speed in the past. Studies indicate that there is sufficient land area to feed the world population, only if investments are made to develop resources and focused on technological advances and research. SDG 8 calls for decent work and economic development, and indicator 8.2 seeks to achieve this goal via use of technology and diversification within labor-intensive sectors such as agriculture. Technology and mechanization can not only allow for a more efficient agricultural system, less reliant on labor, but also has the potential to create a sustainable agricultural system, resilient and prepared for the growing populations with a reduced impact on the environment.

Cross-References ▶ Community-Based Socioeconomic Development Programs: A Catalyst for SDGs ▶ Economic Growth, Technological Progress, and Employment ▶ Factors of Production, Economic Growth, and Sustainable Development

S

1036

References African Development Bank (AfDB) (2016) Organization for Economic Cooperation and Development (OECD) and United Nations Development Programme (UNDP). African economic outlook 2016: sustainable cities and structural transformation. Tunis, 400 pp Armstrong McKay DI et al (2019) To what extent has sustainable intensification in England been achieved? Sci Total Environ 648:1560–1569. https://doi.org/ 10.1016/j.scitotenv.2018.08.207. Elsevier B.V Borgelt SC et al (1996) Evaluation of GPS for applications in precision agriculture. Am Soc Agric Eng 12(6): 633–638 Chen Y-J, Shanthikumar JG, Shen Z-JM (2015) Incentive for peer-to-peer knowledge sharing among farmers in developing economies. Prod Oper Manag 24(9):n/a–n/a. https://doi.org/10.1111/poms.12328. Wiley-Blackwell Dannenberg P (2013) The use of mobile phones by Kenyan export-orientated small-scale farmers-Insights from fruit and vegetable farming in the Mt. Kenya region. Economia Agro-Alimentare. https://doi.org/10.3280/ ECAG2013-003005 Deutsch CA et al (2018) Increase in crop losses to insect pests in a warming climate. Science 361(6405):916–919. https://doi.org/10.1126/science.aat3466. American Association for the Advancement of Science DFID (1997) Conflict between Farmers and Herders in Africa : an Analysis, Semi-Arid (Rangelands) Production System, R6618 FAO (1981) Agricultural mechanization in development: Guidelines for strategy formulation. FAO Agricultural Services Bulletin No. 45. Rome. 77 pp. (also available at http://www.fao.org/3/a-be821e.pdf) FAO (2006) Farm power and mechanization in sub-Saharan Africa. B.G. Sims & J. Kienzle. Agricultural and Food Engineering Technical Report 3. Rome, Italy. 65 pp. FAO (2009) How to feed the world in 2050. Rome, Italy. 35 pp. (available at http://www.fao.org/fileadmin/templates/ wsfs/docs/expert_paper/How_to_Feed_the_World_in_ 2050.pdf). FAO (2013) Agricultural mechanization in sub-Saharan Africa: Guidelines for preparing a strategy. K. Houmy, L.J. Clarke, J.E. Ashburner & J. Kienzle. Integrated crop management, 22:1–92. Rome, Italy. FAO (2012) Conservation agriculture|Food and Agriculture Organization of the United Nations. http://www. fao.org/conservation-agriculture/en/. Accessed 1 Dec 2019 FAO (2018a) Transforming food and agriculture to achieve the sdgs. 20 interconnected actions to guide decisionmakers. Rome. Available at: http://www.fao.org/3/ I9900EN/i9900en.pdf (Accessed: 4 April 2020) FAO (2018b) Sustainable Agricultural Mechanization: A Framework for Africa. Available at: www.fao.org/pub lications. Accessed 5 Apr 2020 Gianessi LP, Reigner NP (2007) The value of herbicides in U.S. crop production. Weed Technol 21(2):559–566.

Sustainable Technology Impact on Agricultural Production https://doi.org/10.1614/wt-06-130.1. Cambridge University Press (CUP) Gibbons G (2000) Turning a farm art into science*/an overview of precision farming. http://www.pre cisionfarming.com Hendrickson JR et al (2008) Principles of integrated agricultural systems: introduction to processes and definition. Renewable Agric Food Syst 23(4):265–271. https://doi.org/10.1017/S1742170507001718 Hobbs PR, Sayre K, Gupta R (2008) The role of conservation agriculture in sustainable agriculture. Philos Trans R Soc B: Biol Sci:543–555. https://doi.org/10.1098/ rstb.2007.2169. Royal Society Jerome A (2017) Background Report for Global Expert Meeting on Agriculture and Agro-industries Development towards Sustainable and Resilient Food Systems to inform the 2017 ECOSOC Special Meeting on Innovations for Infrastructure Development and Promoting Sustainable Industrialization, 24–26, April 2017, Victoria Falls, Zimbabwe Johansen C et al (2012) Conservation agriculture for small holder rainfed farming: opportunities and constraints of new mechanized seeding systems. Field Crop Res 132:18–32. https://doi.org/10.1016/j.fcr.2011.11.026. Elsevier Lambert D, Lowenberg-De Boer J (2000) Precision agriculture profitability review. Purdue Univ, West Lafayette, pp 1–154 Lin BB (2011) Resilience in agriculture through crop diversification: adaptive management for environmental change. Bioscience 61(3). https://doi.org/10.1525/ bio.2011.61.3.4 Long DS, Degloria SD, Galbraith JM (1991) Use of the global positioning system in soil survey. J Soil Water Conserv 46(4):293–297 Lowder SK, Skoet J, Raney T (2016) The number, size, and distribution of farms, smallholder farms, and family farms worldwide. World Dev 87:16–29. https://doi. org/10.1016/j.worlddev.2015.10.041. Elsevier Ltd Mkutu K (2004) Pastoralism and conflict in the Horn of Africa. African Peace Forum/Safeworld University of Bradford. http://kms1.isn.ethz.ch/serviceengine/Files/ ISN/124889/ipublicationdocument_singledocument/ ee10725a-716d-4ef9-9edd-5bf2eedcfd16/en/WebLaiki pia.pdf Motavalli PP, Nelson KA, Bardhan S (2012) Development of a variable-source N fertilizer management strategy using enhanced-efficiency N fertilizers, soil science. Lippincott Williams and Wilkins 178(12):693–703. https://doi.org/10.1097/SS.0b013e31827dddc1 Motavalli P et al (2013) Global achievements in sustainable land management. Int Soil Water Conserv Res 1 (1):1–10. https://doi.org/10.1016/S2095-6339(15) 30044-7. International Research and Training Center on Erosion and Sedimentation and China Water and Power Press Oerke EC (2005) Crop losses to pests. J Agric Sci 144:31–43. https://doi.org/10.1017/S0021859605005708

System Innovation Partel V, Charan Kakarla S, Ampatzidis Y (2019) Development and evaluation of a low-cost and smart technology for precision weed management utilizing artificial intelligence. Comput Electron Agric 157:339–350. https:// doi.org/10.1016/j.compag.2018.12.048. Elsevier B.V Pierce FJ, Nowak P (1999) Aspects of precision agriculture. Adv Agron 67(C):1–85. https://doi.org/10.1016/ S0065-2113(08)60513-1. Academic Press Prasad R, Bhattacharyya A, Nguyen QD (2017) Nanotechnology in sustainable agriculture: Recent developments, challenges, and perspectives. Front Microbiol. https://doi.org/10.3389/fmicb.2017.01014. Frontiers Media S.A Pretty J (1995) Participatory learning for sustainable agriculture Ram P, Vivek K, Kumar SP (2014) Nanotechnology in sustainable agriculture: present concerns and future aspects. Afr J Biotechnol 13(6):705–713. https://doi. org/10.5897/ajbx2013.13554 Roberts RK, English BC, Larson JA, Cochran RL, Goodman WR, Larkin SL, . . ., Reeves JM (2004) Adoption of site-specific information and variable-rate technologies in cotton precision farming. J Agric Appl Econ 36 (1379-2016-112602):143–158 Satyanarayana GV (2013) Wireless sensor based remote monitoring system for agriculture using Zigbee and GPS. In: Conference on advances in communication and control systems 2013, 2013(Cac2s), pp 110–114 Scherer LA, Verburg PH, Schulp CJE (2018) Opportunities for sustainable intensification in European agriculture. Glob Environ Chang 48:43–55. https://doi.org/ 10.1016/j.gloenvcha.2017.11.009. Elsevier Ltd Sennaar K (2019) AI in agriculture – present applications and impact, Emerj. Available at: https://emerj.com/aisector-overviews/ai-agriculture-present-applicationsimpact/. Accessed 12 Apr 2020 Shropshire G, Peterson C, Fisher K (1993) Field experience with differential GPS. ASAE paper no. 93-1073. ASAE, St. Joseph Sims B (2016) Agricultural mechanization A key input for sub-Saharan African smallholders, Integrated Crop Management. www.fao.org/publications. Accessed 5 Apr 2020 Sims B, Kienzle J (2017) Sustainable agricultural mechanization for smallholders: what is it and how can we implement it? Agriculture (Switzerland) 7(6):1–21. https://doi.org/10.3390/agriculture7060050 Stafford JV (2000) Implementing precision agriculture in the 21st century. J Agric Eng Res 76(3):267–275.

1037 https://doi.org/10.1006/jaer.2000.0577. Academic Press Turner MD (2016) Rethinking land endowment and inequality in rural Africa: the importance of soil fertility. World Dev 87:258–273. https://doi.org/10.1016/J. WORLDDEV.2016.06.014. Pergamon Tyler DA (1992) Positioning technology (GPS). In: Robert PC, Rust RH, Larson WE (eds) Proceedings of the first workshop on soil specific crop management. ASA, CSSA, SSSA, Madison, pp 159–165 UN (2014) Country classification Data sources, country classifications and aggregation methodology Data sources. http://data.worldbank.org/about/country-class ifications. Accessed 6 Apr 2020 UN (2015a) Goal 8.: sustainable development knowledge platform. https://sustainabledevelopment.un.org/sdg8. Accessed 3 Apr 2020 UN (2015b) The Millennium Development Goals Report. Available at: https://www.un.org/millenniumgoals/2015_ MDG_Report/pdf/MDG2015rev(July1).pdf (Accessed: 4 May 2020) UN (2016) The sustainable development agenda. https:// www.un.org/sustainabledevelopment/development-ag enda/. Accessed 29 Mar 2020 Vermeulen S, Cotula L (2010) Making the most of agricultural investment: A survey of business models that provide opportunities for smallholders, Survey of Business. Available at: http://www.fao.org/docrep/012/ al297e/al297e00.pdf Wahyuni D (2019) Supporting the Sustainable Development Goals Through Partnerships and Local Development, Partnership for the Goals, Encyclopedia of the UN Sustainable Development Goals, (September 2015), pp. 1–13. https://doi.org/10.1007/978-3-31971067-9_10-1

Sustainable Value Creation ▶ Sustainable Business Strategies

S System Innovation ▶ Transitions to Sustainable Development

T

Technical and Vocational Education ▶ Technical and Vocational Education and Training (TVET) in South Asia

Technical and Vocational Education and Training ▶ Technical and Vocational Education and Training (TVET) in South Asia

Definitions The term Technical and Vocational Education and Training (TVET) is education and training that accords learners the opportunity to acquire vital knowledge and skills needed for employment, through formal, nonformal, and informal training and learning modes. Moreover, TVET serves multiple purposes of which a key purpose is the preparation of youth for work. Additionally, it is an accepted important conduit for delivering social parity, access, inclusion, and sustainable development.

Introduction

Technical and Vocational Education and Training (TVET) in South Asia Md Nazmus Sadekin, Kazi Mezbah Uddin Ahamad and Noushin Farjana Huda Chowdhury Department of Economics, Mawlana Bhashani Science and Technology University, Tangail, Bangladesh

Synonyms Technical and vocational education; Technical and vocational education and training; Technical and vocational training

The development agenda of policymakers in different decades may be based on a diversified range of factors as per the need of time among which education and training have always been considered a crucial one. This is mainly because returns to the investment in education and training have always been noteworthy and proven to be a major driving factor in enhancing the national income of a country. Besides, a welltrained and educated workforce can contribute to the society and country in various aspects. The Fourth Industrial Revolution is characterized by the inexorable pace of integrating artificial intelligence and mobile supercomputing in the production process. This has particularly rendered continuous learning and training an

© Springer Nature Switzerland AG 2021 W. Leal Filho et al. (eds.), Decent Work and Economic Growth, Encyclopedia of the UN Sustainable Development Goals, https://doi.org/10.1007/978-3-319-95867-5

1040

Technical and Vocational Education and Training (TVET) in South Asia

indispensable part of human life to thrive in the current situation of twenty-first century. Besides, to address the growth objectives in developing countries, which are characteristically burdened by the presence of massive youth unemployed and underemployed in the labor market, the necessity of skills development and training is much more relevant than ever before. The term “Technical and Vocational Education and Training” (TVET) was officiated at the World Congress on TVET in 1999 in Seoul, the Republic of Korea. Moreover, Congress recognized the term TVET to be broad enough to incorporate other terms that had been used to describe similar educational and training activities including Workforce Education (WE) and Technical-Vocational Education (TVE). The term TVET parallels other types of education and training, e.g., Vocational Education but is also used as an umbrella term to encompass education and training activities. The decision in 1999 to officiate the term TVET led to the development of the UNESCOUNEVOC International Centre for Technical and Vocational Education and Training in Bonn, Germany. According to UNESCO (2013), education is the Sustainable Development Goal (SDG) which will make all the others possible to fulfill. Ensuring quality education directly influences the cycle of poverty and contributes to development all over the world. Moreover, TVET has a cardinal part to contribute to the realization of the 2030 SDGs. It is a formidable instrument to support entry to respectable work in the world of work. It offers individuals opportunities for lifelong learning and enables personal development as well as civilized, developed, and sustainable communities and economies. Many countries view investing in skills development as a priority responsibility due to the significant socioeconomic benefits that can accrue to individuals, businesses, and the country as a whole. However, numerous challenges are encountered in developing workable financing mechanisms to change TVET systems to yield the desired developmental outcomes, mainly due to inadequate parliamentary appropriations to vocational training compared to other forms of higher education.

Additionally, TVET serves multiple purposes. A key purpose is the preparation of youth for work. This takes the form of learning and developing work-related skills and mastery of underlying knowledge and scientific principles. Work is broadly defined and therefore refers to both formal employment and self-employment. To support self-employment, TVET curricula often include entrepreneurship training. Related to this is the social reproduction and transformation of occupational and vocational practices. Furthermore, a related role of TVET is continuing professional development. It is because the rapid technological changes demand that workers continuously update their knowledge and skills. Unlike the past where a job could be held for life, it is commonplace to change vocations several times. Moreover, TVET enables flexibility in two ways. One is providing broad-based technical knowledge and transversal skills on which different occupations can be based on. The other one is providing continuing vocational training to workers. Besides, TVET today has the responsibility of reskilling such workers to enable them to find and get back to work apart from providing workrelated education; it is also a site for personal development and emancipation. These concerns the development of those personal capacities that relate to realizing one’s full potential concerning paid or self-employment, occupational interests, and life goals outside of work. At the same time, TVET seeks to enable individuals to overcome disadvantages due to circumstances of birth or prior educational experiences. From a development point of view, TVET facilitates economic growth by increasing the productivity of workers. The returns from increased output far exceed the costs of training, direct and indirect, leading to economic growth which is very crucial for developing countries like Bangladesh. On the other hand, like any other form of education, TVET also facilitates socioeconomic development by enhancing the capacity of individuals to adopt practices that are socially worthwhile. As a form of education similar to all others, TVET aims to develop a broad range of personal capabilities that characterize an educated person.

Technical and Vocational Education and Training (TVET) in South Asia

Theoretical Relevance of TVET The modern era is characteristically defined by the ones requiring a pool of talented and trained workforce to work in an environment of artificial intelligence and mobile supercomputing. As the army of complex and multifunctioning robots are occupying the jobs which once needed a careful pair of hands of a worker, still in many places of the world the relevance of trained and skilled workers are on the rise, especially in the case of developing countries. Developing countries in many aspects lag behind the developed countries and it may take a substantial amount of time and infrastructural changes to become a bigger economy. Before that, it requires a workforce with adequate training and education that can be employed to carry out specialized and recurrent tasks in an economy which is constantly transforming (Rostow 1991). And the population at large must be prepared to accept training for—and then to operate—an economic system whose methods are subject to regular change, and one which also increasingly confines the individual in large, disciplined organizations allocating to him specialized narrow, recurrent tasks.

The population at large who are intended to carry out the recurrent tasks are fittingly the TVET graduates with proper training and education. This is particularly true in the perspective of developing countries. Modernization paradigm introduced in the 1950s has dominated world strategy and development policy with its view of increasing economic growth in a country through industrial transformation. However, in the wake of basic need paradigm of the 1970s, the measurement of economic growth started to consider social indicators too during the 1980s (Stoian et al. 2019), which further consolidated the idea of education and training. Relevance of TVET to the policymakers and various stakeholders such as World Bank and UNESCO can be understood from the perspective of two dominant paradigms namely human capital theory and sustainable development. According to Tikly (2013): In the case of financial institutions such as the World Bank, for example, policies to promote TVET are principally seen as an investment in

1041

human capital and as a means for supporting economic growth. The underlying view of development in operation is an economic one in which ‘progress’ is measured in relation to levels of economic growth and prosperity. UNESCO’s longstanding interest in TVET on the other hand has been linked to a more human-centred view of TVET as a means for supporting sustainable development.

Human capital theory formalized by Becker (1962) can make the importance of TVET to various stakeholders quite discernible. Firms and workers both have impetus to invest in education and training as the investment provides returns in the form of competitive edge over rivals, profits, pay. Investment in education and training can make individuals more productive that eventually leads to an enhanced employability of the workforce. Policymakers around the globe are increasing investment on human capital including TVET as a mean of higher economic growth and national prosperity (Woßmann 2008). Though there is a common consensus as to the realization of returns from the investment in education and training, there also exists differing views regarding the time of investment in education and training in a person’s life. Evidence and theory suggest that economic returns to skills investment are higher in early childhood and decline over the life cycle (Backes-Gellner and Wolter 2010; Carneiro and Heckman 2003). That is, much of the investment in education and training should be carried out in the earlier period of life; otherwise, learning opportunity may eventually disappear. TVET in the perspective of human capital paradigm is not free of criticisms. It is often criticized for being “positive” in approach and for its “one size fits all” sort of policy prescription when economies around the globe may not be equal in so many aspects (Tikly 2013). Human capital approach also ignores important dimensions of skills development such as environmental, social, or cultural dimension. Sustainable development approach to TVET can address these omitted issues. The approach to development that “meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED 1987, p. 43) can be defined as the

T

1042

Technical and Vocational Education and Training (TVET) in South Asia

sustainable development. The concept of sustainable development is fundamentally a human-centered approach based on principles of environmental, economic, and social sustainability (Tikly 2013). It is the most dominant paradigm adopted by the UNESCO in relation to its promotion and formulation of policies regarding TVET. Sustainable development approach to TVET links various social, economic, and environmental issues to the TVET. For example, TVET curricula designed in the perspective of sustainable development are intended to address the issue of sustainable management of resources in sectors like forestry, construction, manufacturing, tourism, etc. It emphasizes on limiting pollutions and wastage of resources and on building social and environmental responsibility as a worker, entrepreneur, and a society member. In the process of learning to attain sustainable livelihood, TVET in the perspective of sustainable development aims at building social sustainability by focusing on gender and ethnic equality in the working place, in developing teams and group skills, the ability to explain, justify, and negotiate ideas and plans, and the promotion of practical citizenship in the wider community (Fien and Wilson 2005, p. 277). Though a major proponent of social, economic, cultural aspect of human life, sustainable development concept in relation to TVET often comes under criticisms for its conceptual ambiguity and uneven scope for different group of people. Issues regarding gender, ethnicity, language, race, etc. have not received proper weight in the perspective of present age.

Overview of the SDG 8 and the Indicators SDG 8 aims at the promotion of sustained, inclusive, and sustainable economic growth along with full and productive employment and decent work for all. The idea of decent work is based on the framework formulated by ILO (1999, 2018) which contains four key aspects – employment creation, social protection, rights at work, and social dialogue. GDP as a measure of economic growth remains as a vital indicator in this goal despite its many inadequacies in depicting a

broader socioeconomic scenario of a country. Table 1 provides an overview of the targets and indicators under SDG 8.

SDG 8 and the TVET In the SDG 8, a number of targets can be linked explicitly and implicitly to TVET: 8.3 Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services 8.5 By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value 8.6 By 2020, substantially reduce the proportion of youth not in employment, education or training 8.B By 2020, develop and operationalize a global strategy for youth employment and implement the Global Jobs Pact of the International Labour Organization

The most explicit mention of education and training under SDG 8 is in the target 8.6 that seeks to achieve a substantial reduction in “the proportion of youth not in employment, education or training.” In the context of developing nations, TVET is highly relevant to achieve this target. One of the most significant advantages of TVET is that it offers a graduate employability in short time. In the developing nations a large portion of youth population who do not have the required literacy and numeracy skills and the age for enrolling in formal education can effectively be brought under education and training through TVET programs. For example, the national technical and vocational qualification framework (NTVQF) in Bangladesh is rather a unique way that can integrate people of any age with little or no skills in literacy and numeracy (Haolader et al. 2017). Targets 8.5 and 8.3 can implicitly be linked to TVET from the perspective of development countries. Characteristically, developing countries are burdened with growing youth unemployment, mammoth informal sector. There are also growing evidences that existing education systems in many cases fail to produce enough skilled workers that can be

Technical and Vocational Education and Training (TVET) in South Asia

1043

Technical and Vocational Education and Training (TVET) in South Asia, Table 1 SDG 8 targets and indicators Targets 8.1 Sustained per capita economic growth – at least 7 % gross domestic product growth per annum in the LDCs 8.2 Achievement of higher levels of economic productivity 8.3 Promotion of development-oriented policies to formalize and help grow micro-, small-, and mediumsized enterprises 8.4 Improvement of global resource efficiency in consumption and production and decoupling economic growth from environmental degradation 8.5 Achievement of full and productive employment and decent work for all women and men, young people and disables, and equal pay for work of equal value

8.6 By 2020, a substantial reduction of the proportion of youth not in employment, education, or training 8.7 Eradication and prohibition of forced labor, modern slavery, human trafficking, and child labor in all worst forms (by 2025 child labor in all its forms) 8.8 Protecting labor rights and promoting safe and secure working environments for all workers

8.9 By 2030, devising and implementing policies for sustainable tourism to creates jobs and promotes local culture products 8.10 Strengthening domestic financial institutions for expanding access to banking, insurance, and financial services for all

8. A increasing aid for trade support for developing countries, in particular, least developed countries 8.B By 2020, developing and operationalizing a global strategy for youth employment and implementing ILOGlobal Jobs Pact

Goals 8.1.1 Annual growth rate of real GDP per capita 8.2.1 Annual growth rate of real GDP per employed person 8.3.1 Proportion of informal employment in nonagriculture employment (by sex) 8.4.1 Material footprint (per capita and GDP) 8.4.2 Domestic material consumption (per capita and GDP) 8.5.1 Average hourly earnings of female and male employees (by occupation, age, and persons with disabilities) 8.5.2 Unemployment rate (by sex, age, and persons with disabilities) 8.6.1 Proportion of youth (aged 15–24 years) not in education, employment, or training 8.7.1 Proportion and number of children aged 5–17 years engaged in child labor (by sex and age) 8.8.1 Frequency rates of fatal and nonfatal occupational injuries (by sex and migrant status) 8.8.2 Increase in national compliance of labor rights (freedom of association and collective bargaining, by sex and migrant status) 8.9.1 Tourism direct GDP (as a proportion of total GDP and in growth rate) 8.9.2 Number of jobs in tourism industries (as a proportion of total jobs and growth rate of jobs, by sex) 8.10.1 Number of commercial bank branches and ATMs (per 100,000 adults) 8.10.2 Proportion of adults (15 years and older) with an account at a bank or other financial institution or with a mobile-money-service provider 8.A.1 Aid for trade commitments and disbursements 8.B.1 Total government spending on social protection and employment programs (as a proportion of the national budgets and GDP)

Source: adapted from UN (2019)

absorbed into the fast moving economic engine. To reduce mismatch between skills demanded by the labor markets and skills available in the workforce, TVET can be integrated in to the education system (Hughes 2005). Though targets 8.3 and 8.5 both have an appropriate welfare indication regarding the social and economic dimension in a country, these targets seem to overlook the problem of informal sector in a country. For example, target 8.3 prescribes for the formalization and

T growth of micro-, small-, and medium-sized enterprises. Omission of plan regarding informal sector in SDG 8 is problematic, as in many developing nations it may work against the expected achievement of objectives described under SDG 8. According to McGrath et al. (2018), The aim of target 8.3 is to promote “developmentoriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation and formalization and growth of micro-,

1044

Technical and Vocational Education and Training (TVET) in South Asia

small- and medium-sized enterprises, including through access to financial services”. The implication of this target for the informal sector is that of formalization. However, this is problematic and does not take into consideration the complexities of formal-informal linkages and the needs of informal sector workers and employers. Some of the problems faced by workers in the informal sector include poor or lack of access to quality infrastructure and services such as transportation, electricity, internet and business advisory services. Of the many challenges, it is the financial constraint to the growth of SMEs that is acknowledged in target 8.3 and stressed in 9.3.

TVET in South Asia This section analyzes the TVET and other relevant statistics in a comparative manner for some selected South Asian countries. The rate of unemployment of youth female is higher in Sri Lanka – 29.82 in 2019. This is the highest among other South Asian countries considered here. About 11.87% of total youth is unemployed in Bangladesh in 2019 compared to 21.33% and 23.33% in Sri Lanka and India respectively. The higher percentage of youth unemployment in these economies indicates that a large portion of potential human capital is still untapped. Effective policy, especially policy in TVET sector, can substantially reduce this persistently growing youth unemployment. Unemployment rate of youth (15–24) total and female in selected South Asian countries

Total Female

2015 2019 2015 2019

Bangladesh 10.79 11.87 13.16 15.42

Sri Lanka 19.26 21.23 25.80 29.82

India 22.33 23.33 23.14 24.31

Source: World Bank Development Indicators 2020

In 2019, the female participation rate in the 15– 24 age group in Bangladesh was 26.32%, whereas in India and Sri Lanka the rate was 9.87% and 20.08%, respectively. This lower female participation rate in labor force can also justify the need

for technical and vocational education and training at a large scale (WDI 2020). Dearth of data on TVET enrolment for South Asian countries makes it harder to compare country-wise achievement in relation to TVET. However, available data can provide a comparable picture existing in the South Asian countries. In India during 2011–12, about 3.8% people received formal training and 7.3% received nonformal training (NSSO 2015). Enrolment in SSC (Voc) which is equivalent to grade 9–10 in Bangladesh is 11.01%, HSC (Voc) equivalent to grade 11–12 is 16.18%, and total (Voc) is 13.11%. In Sri Lanka, 16% of those aged 15–64 had completed vocational education or training and 15 % had completed apprenticeship. The proportion of both was higher in urban than rural areas and for men rather than women (Dundar et al. 2014). Overall, the situation in relation to enrollment in TVET is better in Bangladesh compared with other two countries. In the next section, we analyze the TVET structure in Bangladesh and identify some of the priorities that must be addressed to achieve SDG 8 objectives in the country.

Understanding the Local Priorities (the Case of Bangladesh) Structure of TVET in Bangladesh TVET system has been existent in the country since the 1960s. The early system of TVET, however, was plagued by various constraints and was not an adept one to help the economy achieve growth objectives and build a proficient stock of human capital. Although, the system has evolved since its inception, the pace has observingly been slower and changes have been made not according to the need of the country. At present, TVET in Bangladesh is quite diverse and fragmented (World Bank 2013). To coordinate among the intricate systems prevailing in TVET, government has brought multiple ambitious changes. For example, Education Policy 2010 has outlined strategies for a much comprehensive TVET system that aims at bringing underprivileged and marginalized segments of the population to TVET and ensuring expansion and vertical

Technical and Vocational Education and Training (TVET) in South Asia

movement across different levels of the system (Asian Development Bank 2015). NSDC a public–private partnership initiative has been formed by the government which helped develop National Skill Development Policy (NSDP). NSDP aims at enhancing the quality of the whole skills development system in the country. In this process, with the assistance of the ILO and the EU, a more flexible and comprehensive framework has also been formulated as a part of the TVET reform program initiated by the government of Bangladesh. This is known as National Technical Vocational Qualifications Framework (NTVQF). The NTVQF is a nationally consistent yet flexible framework for all qualifications in technical and vocational education and training and believed to enhance the standard and acceptance of the overall TVET program home and abroad (Khan 2019). The TVET system in Bangladesh can be divided into two segments, formal and nonformal. Both segments involve various public and private training providers and target audiences who are intended to receive trainings. Figure 1 depicts the whole system in a simpler illustration. Formal TVET offers three levels of skills development programs: basic, certificate, and diploma. Basic training program is a 360-hour course intended to develop practical skills in a trainee. This program is offered in technical training centers (TTCs), technical schools and colleges (TCS), polytechnic institutes, private institutions, and some Technical and Vocational Education and Training (TVET) in South Asia, Fig. 1 TVET audience and concerned organizations. (Source: Author’s own formulation based on Bangladesh Technical Education Board (https:// bteb.gov.bd))

1045

nongovernment organizations (NGOs). Certificate courses are offered at the SSC Voc and HSC Voc levels. Entry in SSC Voc requires a student to pass grade 8. After the completion of SSC Voc, students can either continue through grades 11 and 12 to obtain an HSC Voc certificate or enroll in a diploma course at a polytechnic which can take up to 4 years to complete the course. Diploma courses are offered in more than 384 public and private polytechnic institutes (ADB 2015), which also have an arrangement of three-month industry attachments for the students to enhance their practical knowledge. This also places them in the right place to attain a better job market orientation. Nonformal trainings are also provided in addition to the pieces of training imparted in the formal institutions. These trainings are not accredited by the BTEB and last 1–12 months. Both public and private institutes offer these sorts of informal TVET with the curricula developed in-house. These institutes also provide the trainees linkages to the job market to keep their programs worthwhile. Various government agencies and ministries also provide nonformal training services to various target groups. Priorities concerning the TVET in Bangladesh for spearheading the system to achieve objectives of SDGs can be narrowed down to two crucial areas: (i) Reform and modernization of the entire TVET system to achieve growth objectives and (ii) ensuring larger enrollment of women in TVET.

T

1046

Technical and Vocational Education and Training (TVET) in South Asia

Reform of the TVET System Even though the TVET system in Bangladesh is quite fragmented and complex, the system has a well-developed evaluation system for the formal TVET qualification. Prevalence of many admirable TVET providers at the private level is proven to be a sign of rising popularity and acceptance of TVET in the country. There are remarkable evidences of industry initiatives for providing skills development opportunities under public–private partnership (PPP), such as Bangladesh Garments Manufacturers and Exporters Association through technical training centers and Bangladesh Textile Mills Association with the National Institute of Textile Training Research and Design (ADB 2015). Measures to form National Skills Development Policy (NSDP) in 2011 and National Technical and Vocational Education Framework (NTVQF) and National Skills Quality Assurance System (NSQAS) have been a timely intervention to respond to the urgency of modernizing the TVET sector in the face of rising global and national challenges (MoE 2011). The NSDP has been formed in order to reduce the mismatch between the skills demanded and supplied in the labor market and building a skilled and efficient workforce that can contribute to the growth of the economy. The NSDP has projected to increase the TVET enrollment to 20% by 2020. National Technical and Vocational Education Framework (NTVQF) NTVQF has been formulated to enhance the quality and acceptance of training provided in the country. Given the complex nature and involvement of multiple providers in the training system, NTVQF aims at defining a unified vision for the whole system under which each stakeholder will have a clearly defined role (ILO 2013). Among others, NTVQF has the following objectives: • Improve the quality and consistency of nationally recognized qualifications • Introduce consistent naming of credentials for formal and nonformal skills-based education and training

• Provide formal recognition of workplace skills obtained in both the formal and informal economies • Provide high-quality skill outcomes to maintain individuals’ employability and increase their productivity • Improve the alignment of formal and nonformal training programs with industry requirements • Increase options for students by broadening program and progression pathways • Support lifelong learning by providing recognized pathways for workers to raise the level of their knowledge and skills throughout their working life and beyond NTVQF Management Information System (MIS) For a better coordination of the whole NTVQF system, an easy-to-use online platform has been formulated which is known as NTVQF management information system (MIS). NTVQF-MIS is intended for three levels of users (ILO 2013) who can have quick access to information about skills in Bangladesh: (i) Trainee (data input) (ii) Trainers, assessors (data input) (iii) BTEB (Bangladesh Technical Education Board), policy makers (data management/ monitoring) This online information management system is intended to replace paper-based information management system that consumes a lot of time. Besides, it will help assess the progress of trainees and their assessors and progress of the training institution which will ultimately help the stakeholders involved in various levels of the TVET system to take quality and informed decisions. The process is depicted in the following diagram (Fig. 2): A tracer study conducted in 2018 by the Bangladesh Technical Education Board, a statutory organization under the supervision of Ministry of Education, finds that about 77.1% of the NTVQFcertified graduates have managed to obtain jobs while 17.3% are self-employed. That is,

Technical and Vocational Education and Training (TVET) in South Asia

1047

Technical and Vocational Education and Training (TVET) in South Asia, Fig. 2 NTVQF Management Information System (Source: Author’s formulation based on ILO (2013))

approximately 94.4% of the graduates have been employed. Also, 88.4% of the employers are satisfied with the skills and performances of the NTVQF graduates (BTEB 2018).

Women Participation in the TVET TVET is one of the most convenient mediums to equip women with suitable skills and education for an immediate participation in the job market. Although the necessity and urgency of girls’ participation in TVET programs are greatly articulated in almost all policy prescriptions related to TVET over different periods, the actual scenario as to the implementation of gender equality in the TVET program is quite unsatisfying, especially in the developing countries. This particularly bars the developing countries from utilizing a great source of human capital. Some common factors are observed when it comes to the gender inequality in TVET programs. For example, historically, some TVET courses available in many developing countries do not observe a simultaneous and eager participation from male and female. Courses related to traditional low-skill and low productivity tasks such as garments, food, health, etc. tend to attract female students more than their male counterparts. Furthermore, males are generally discouraged to enroll in the courses which are traditionally taken by females because these courses have linkages to jobs that pay less and are socially less acceptable for a male (UNESCO-UNEVOC 2011). Financial

insolvency of households, geographic barriers and lack of family support (Kaaya and Waiganjo 2015), rearing child, family duties, lack of appropriate information regarding the job market, and low scope of received skills training are also some of the major prevalent factors hindering female participation in the TVET program in the developing countries. These factors are also attributable to the lower success in job market for those who have finished graduation. In Bangladesh, poverty and patriarchy are two main factors that exacerbate the problem of lower female enrollment in TVET program. Table 2 shows the gender parity index in education sector along with total enrollment by gender in 2018. Bangladesh has an outstanding GPI score when it comes to the general education at the primary, secondary, and higher secondary level. A bleak picture can be observed in the technical and vocational education in relation to female enrollment and gender parity index. Overall in the TVET sector, GPI score is only 0.33 and with just about 41,614 of female enrollment in 2018 GPI in polytechnic level is 0.20. This indicates that Bangladesh has a huge unutilized stock of human capital that can be trained and effectively employed to achieve country’s growth and SDG objectives. Though female enrollment is rising each year in Bangladesh, preferences of TVET courses by the female candidates is not very different in each year. The trait in case of female students is mainly to prefer courses based on softer skills that can balance life between job and household tasks and also provide a flexible

T

1048

Technical and Vocational Education and Training (TVET) in South Asia

Technical and Vocational Education and Training (TVET) in South Asia, Table 2 Gender parity index for general education and TVET in Bangladesh

Grade

Boys

Girls

GPI

Primary (Grade I-V)

8539067 8799033

1.03

Remarks (Parity exists when; 0.97≤PI≤1.03) Parity

Secondary (Grade VI- X) Higher Secondary (Grade XI-XII) Tertiary (Grade XIII-XVI) TVET (Grade VIII – XIV) Polytechnics (XI-XIV)

5933410 6951936 1143255 1164443

1.17 1.02

Disparity against boys Parity

1948424 1344957 803222 264262 209156 41614

0.69 0.33 0.20

Disparity against girls Disparity against girls Disparity against girls

Source: (BANBEIS 2018) (Green, yellow and orange denote parity, disparity against boys, disparity against girls, respectively)

Technical and Vocational Education and Training (TVET) in South Asia, Fig. 3 Female enrollment share in diploma courses in 2014. (Source: Rahman et al. (2017))

working time and environment. Jobs that are physically demanding are still male dominated (Fig. 3). For example, in 2014, top preference made by the female students in diploma courses taught in polytechnics as measured by enrollment rate was

architecture technology with 45% enrollment as opposed to a 1% enrollment in automobile which is physically demanding and involves heavy equipment. Other courses such as marine technology (2%), aircraft maintenance (5%), shipbuilding (8%), and mechatronics (8%) also

Technical and Vocational Education and Training (TVET) in South Asia

attracted less female participation due to fact that jobs related to these courses involves heavy machineries and tool. That is, courses which are related to jobs of sedentary nature are usually chosen by the female students in TVET program in Bangladesh. Rahman et al. (2017) has identified a number of key areas of intervention to fix this condition: 1. Creating a gender-friendly environment in polytechnics and workplaces 2. Developing more service-orientated diploma programs 3. Developing a TVET awareness campaign for females 4. Supporting a career counseling and guidance system for females 5. Improving access to higher education 6. Providing demand-stimulating incentives 7. Generating research and knowledge 8. Leveraging partnerships to promote opportunities for females 9. Generating more and better data to track progress and inform policy and operations for female-friendly TVET The government of Bangladesh has positively responded to form policy measures to improve the female participation in TVET program. For example, increase in female quota in TVET admission to 20% from 10%, introducing more femalefriendly trades, establishing more female hostels in major polytechnic institutes, establishing polytechnics solely for the women, and ensuring the facility of girls’ common room and toilets in each TVET institute. Bangladesh has ranked 50th in the global Gender Gap Index in 2019 (World Economic Forum 2019), which is a clear sign of improvement achieved in the country following the adoption of various gender friendly measures in education and job sector.

Conclusion TVET in Bangladesh is evolving to integrate a large community of people under proper training

1049

and education. With the help of various donors, the government has taken several steps to modernize the existing TVET system. Formulation of NSDP and NTVQF has increased the satisfaction regarding the education and training provided under this medium of education. Low female enrolment has still been a problem that results in lower female labor force participation. Effective gender friendly policy can improve the condition. Formal TVET institutes under BTEB often face problem regarding their limited autonomy. Due to this limitation, an institute under BTEB often finds it difficult to hire qualified teacher in a short period of time and generate finance for its own use. So, financial and administrative decentralization should be made in order to grant these institutes the freedom to pursue their own agenda.

Cross-References ▶ Economic Growth, Technological Progress, and Employment ▶ Inclusive Employment: A Global Concern ▶ Nurturing Career Development for Human Resource Sustainable Development ▶ Remediation Programs for Decent Work ▶ Transitions to Sustainable Development

References Asian Development Bank (2015) Innovative strategies in technical and vocational education and training for accelerated human resource development in South Asia: Bangladesh. Mandaluyong City. https://www. adb.org/sites/default/files/publication/167320/tvet-hrdsouth-asia-bangladesh.pdf. Accessed 29 Apr 2020 Backes-Gellner U, Wolter SC (2010) The economics of vocational education and training policies. Int J Manpow 31:193–203. https://doi.org/10.1108/ ijm.2010.01631eaa.001 BANBEIS (Bangladesh Bureau of Educational Information and Statistics) (2018) Bangladesh Education Statistics 2018. Available at: www.banbeis.gov.bd. Accessed 7 May 2020 Becker G (1962) Investment in human capital: a theoretical analysis. J Polit Econ 70(5):9–49

T

1050

Technical and Vocational Education and Training (TVET) in South Asia

BTEB (2018) Matching of NTVQF qualification with the occupations of present employment market. Bangladesh Technical Education Board, Dhaka. https://bteb.portal. gov.bd/site/page/2c4c1ed1-3853-4ab3-98cd-4c005524c 2eb. Accessed 7 May 2020 Carneiro P, Heckman JJ (2003) Human capital policy. NBER Work Pap Ser 53:556–581. https://doi.org/ 10.1017/CBO9781107415324.004 Dundar H, Millot B, Savchenko Y, Aturupane H, Piyasiri T (2014) Building the Skills for Economic Growth and Competitiveness in Sri Lanka. The World Bank, Washington DC Fien J, Wilson D (2005) Promoting sustainable development in TVET: the Bonn declaration. Prospects 35 (3):273–288 Haolader FA, Foysol KM, Clement CK (2017) Technical and Vocational Education and Training (TVET) in Bangladesh – systems, curricula, and transition pathways. In: Pilz M (ed) Vocational education and training in times of economic crisis: lessons from around the world. Springer International Publishing, Cham, pp 201–227 Hughes P (2005) Why access to TVET for all is essential if education for all is to be achieved. Prospects 35:253–267. https://doi.org/10.1007/s11125-005-4263-3 ILO (1999) Decent work: report of the director-general. In: 87th International Labour Conference, International Labor Office, Geneva. Available at: https://www.ilo. org/public/english/standards/relm/ilc/ilc87/rep-i.htm#1. Accessed 7 May 2020 ILO (2018) Decent work and the sustainable development goals: a guidebook on SDG labour market indicators. ILO, Department of Statistics (STATISTICS), Geneva International Labour Organisation (2013) National Technical and Vocational Qualifications Framework (NTVQF): fact sheet. https://www.ilo.org/dhaka/ Whatwedo/Publications/WCMS_226470/lang%2D% 2Den/index.htm Accessed 7 May 2020 Kaaya GB, Waiganjo E (2015) Factors affecting women enrolment in technical institutions in Tanzania: a case study of Arusha technical college. Int J Sci Technol Res 4(6):12–14 Khan MA (2019) Situation Analysis of Bangladesh TVET Sector: a background work for a TVET SWAp. https:// www.ilo.org/wcmsp5/groups/public/%2D%2D-asia/% 2D%2D-ro-bangkok/%2D%2D-ilo-dhaka/documents/ publication/wcms_735704.pdf. Accessed 29 Apr 2020 McGrath S, Alla-Mensah J, Langthaler M (2018) Skills for decent work, life and sustainable development: vocational education and the sustainable development goals, No 18, Briefing Papers, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE)/Austrian Foundation for Development Research. https://EconPapers.repec.org/RePEc:zbw: oefseb:18 MoE (Ministry of Education) (2011) National skills development policy. Ministry of Education, Government of Bangladesh. http://www.ilo.org/dhaka/Whatwedo/ Publications/

NSSO (2015) Status of education and vocational training in India, NSS 68th round (July 2011–June 2012), NSS report no. 566 (68/10/6). National Sample Survey Office, Ministry of Statistics and Programme Implementation, Government of India Rahman T, Nakata S, Rahman M, Nomura S (2017) Breaking the glass ceiling: challenges to female participation in technical diploma education in Bangladesh (English). World Bank Group, Washington DC. Available at: http://documents.worldbank.org/curated/en/ 717771486560820977/Breaking-the-glass-ceilingchallenges-to-female-participation-in-technicaldiploma-education-in-Bangladesh. Accessed 7 May 2020 Rostow WW (1991) The preconditions for take-off. In: The stages of economic growth, Cambridge University Press, Cambridge, pp 17–35 Stoian D, Monterroso I, Current D (2019) SDG 8: decent work and economic growth – potential impacts on forests and forest-dependent livelihoods. In: Katila P, Pierce Colfer CJ, de Jong W, Galloway G, Pacheco P, and Winkel G (eds) Sustainable development goals: their impacts on forests and people, Cambridge University Press, Cambridge, pp 237–278 Tikly L (2013) Reconceptualizing TVET and development: a human capability and social justice approach. In: Revisiting global trends in TVET: reflections on theory and practice, UNESCO-UNEVOC, Bonn, pp 3–39 UN (2019) Sustainable development goals knowledge platform. Available at: https://sustainablede velopment.un.org/. Accessed 7 May 2020 UNESCO (2013) Revisiting global trends in TVET: reflections on theory and practice. International Centre for Technical and Vocational Education and Training, Bonn. Available at: www.unevoc.unesco.org. Accessed 7 May 2020 UNESCO-UNEVOC (2011) Women and TVET: report of the UNESCO-UNEVOC online conference. pp 1–24. https://doi.org/10.1017/CBO9781107415324.004 World Bank (2013) Bangladesh education sector review: seeding fertile ground – education that works for Bangladesh (English). World Bank Group, Washington DC. Available at: http://documents.worldbank.org/curated/ en/344671468199728645/Bangladesh-education-sectorreview-seeding-fertile-ground-education-that-works-forBangladesh. Accessed 7 May 2020 World Commission on Environment and Development (1987) Our common future. Oxford University Press, Oxford World Development Indicators (2020) The World Bank. http://data.worldbank.org World Economic Forum (2019) Global Gender Gap Report 2020: insight report. https://doi.org/10.1002/ 9781119085621.wbefs350 Woßmann L (2008) Efficiency and equity in European education and training policies. Int Tax Public Financ 1:199–230

Tourism and the Sustainable Development of the Baltic Sea Region

Technical and Vocational Training ▶ Technical and Vocational Education and Training (TVET) in South Asia

1051

Tourism and the Sustainable Development of the Baltic Sea Region Elena G. Kropinova Immanuel Kant Baltic Federal University/Albertina, Kaliningrad, Russia

Technical Change Definitions ▶ Economic Growth, Technological Progress, and Employment

Sustainable tourism development

Technological Progress ▶ Economic Growth, Technological Progress, and Employment

Technological Revolutions ▶ Economic Growth, Technological Progress, and Employment

Technology ▶ Development of Skills for Technological Change in ASEAN-5

Terrorist Financing ▶ Human Trafficking as a Conflict Financing Measure

Total Material Requirement ▶ Material Footprint and Its Role in Agenda 2030

Tourism

tourism that takes full account of its current and future economic, social, and environmental impacts, addressing the needs of visitors, the industry, the environment, and host communities (STD, UNWTO). An official definition of tourism presented in UNWTO publications considers Tourism to be a social, cultural, and economic phenomenon (Glossary of tourism terms, UNWTO 2019). It is social, because on the one hand it provides employment opportunities and on the other leisure and recreation, and is accompanied by the movement of the people (including across national borders). This is a cultural phenomenon, since most of the activities are associated with obtaining new knowledge about the history and cultural features of tourist destinations. It is an economic phenomenon, since it is profit-oriented and is accompanied by the receipt of financial benefits by enterprises that provide travel services. Thus tourism is considered as a type of commercial activity, which includes sending clients to vacation and treatment places and so on. In this case, it is a source of income from tourist activity. It is

T

1052

The Baltic Region

Tourism and the Sustainable Development of the Baltic Sea Region

also necessary to mention that today tourism is a rather profitable business field in many countries. There are different approaches to the definition of the Baltic region. They depend on the objectives of the study. In our paper/research we will consider the Baltic region – the territory of countries with access to the Baltic Sea.

Introduction Sustainable development is not simply a combination of economic and ecological approaches to destination development but to be effective also involves the creation of ethical principles. Tourism is often seen as a good way of generating economic sustainability without too much impact on the environment. However, as tourism development differs between countries and destinations, unless planned and managed, not all tourism developments will be sustainable. In world practice there are both positive and negative experiences of tourism development. Tourism is often called a “smokeless industry.” Is it so? Currently, tourism is increasingly accused of negative environmental impacts. At the same time, criticism of this industry intensifies with increasing praise about the increase in the number of tourist trips and income from this type of activity. At present, the “7 sins” of tourism have shown themselves most vividly: 1. 2. 3. 4. 5.

Impact on climate change Effect on the degradation of the biosphere Use of non-renewable energy sources Use of water and other natural resources Degradation of landscapes as a result of the development of new territories 6. Loss of identity and loss of cultural values of local residents 7. Conflict of interest with other industries, the formation of single-industry towns (tourist specialization) 8. Plastic pollution on coasts

It is no accident that the concept of sustainable development should be applied to tourism, as well as to other sectors of the economy. That is why “Sustainable tourism development guidelines and management practices are applicable to all forms of tourism in all types of destinations, including mass tourism and the various niche tourism segments. Sustainability principles refer to the environmental, economic, and socio-cultural aspects of tourism development, and a suitable balance must be established between these three dimensions to guarantee its long-term sustainability” (UNWTO).

Concept of Sustainable Development and Tourism The concept of sustainable development has gained wide popularity over the past three decades. In 1987, the report of the World Commission on Environment and Development (the more commonly used name is the Brundtland Commission) was published, which for the first time gives a general definition of sustainable development (Our Common . . . 1989). In 1992, in Rio de Janeiro, at the UN World Conference on the Environment, which was attended by 179 governments and 120 heads of state, an action plan for a global transition to sustainable development, called “Agenda 21,” and the Commission on Sustainable Development was created. Agenda 21 calls on governments to adopt national strategies to sustainable development. The concept of sustainable development from an economic point of view is based on the premise that the same resource unit produces the same beneficial effect. With this in mind, development can be considered sustainable if the level of satisfaction of current needs does not preclude the ability to meet future needs (Sinclair and Stabler 1997). It should be noted that the general idea of sustainable development can be applied to the analysis of sustainability factors for the development of individual sectors of the economy, including tourism and recreation. However, a meaningful definition of the sustainability

Tourism and the Sustainable Development of the Baltic Sea Region

of tourism development is inseparable from clarifying a more general concept of sustainability, in which strong and weak formulations are highlighted (Kropinova 2016). Weak wording: development is considered sustainable if the achieved level of satisfaction of current needs does not impede the ability to meet future needs in the context of replacing one resource with another. Strong wording: development is considered sustainable if the achieved level of satisfaction of current needs does not impede the ability to meet future needs, and there is no opportunity to replace one resource with another. In other words, assumptions about perfect complementarity are used. The program “Agenda 21 for the Baltic Region” was approved in 1998 by the Councils of the Baltic Sea States – CBSS (Agenda 21 . . . 1998). This document sets out the principles for applying various methods of economic development of the Baltic Sea countries. Such a program, recognized by all the countries of the Baltic region, creates the institutional prerequisites for the formation of sustainable tourism in the Baltic region. To assess the implementation of the goals and objectives of the program, general and industryspecific indicators of development studies are substantiated. The objectives of the tourism sector in particular in developing sustainable tourism are correlated with the three main elements of sustainability, namely, the environment, the economy, and social, and should: • Maintain sustainable environment, maintain the recreational value of natural and artificial landscapes, and combine natural, cultural, and social environment. • Ensure and maintain appropriate quality and effectiveness of the tourism business. • Create favorable social conditions both for tourists and for the local population (Agenda . . . 1998). In line with Agenda 21, principles of sustainable tourism were identified. According to UNWTO (Sustainable tourism development, UNWTO 2019), sustainable tourism should:

1053

1. Make optimal use of environmental resources that constitute a key element in tourism development, maintaining essential ecological processes and helping to conserve natural heritage and biodiversity. 2. Respect the sociocultural authenticity of host communities, conserve their built and living cultural heritage and traditional values, and contribute to inter-cultural understanding and tolerance. 3. Ensure viable, long-term economic operations, providing socioeconomic benefits to all stakeholders that are fairly distributed, including stable employment and income-earning opportunities and social services to host communities, and contributing to poverty alleviation. The capacity of these components will be determined by the development of new activities in the tourism sector. Each action is subject to the influence of biophysical, environmental, social, and managerial factors, which changes the conditions of functioning and provision of these resources. These indicators play a key role in assessing the sustainability of each action. The overall goal is to achieve understanding and compliance with the requirements of sustainable tourism in the Baltic region. According to the definition of the Council of Europe, sustainable tourism is any form of tourism that is in harmony with the environment and provides long-term conservation of natural resources and cultural heritage, the most acceptable and beneficial from the point of view of society and economy. In Russian regional practice, the theory of noosphere development, created by the outstanding Russian scientist Vladimir Vernadsky in the 1930s, is based on the realization that Man is part of Nature and must obey its laws. According to V. Vernadsky, human activity becomes the main factor in the development of the Earth’s active shell and a comprehensive study of society and the biosphere is necessary in order to preserve and develop humanity (Vernadsky 1926, 2012). In 1994, by the Decree of the President of the Russian Federation, the Main provisions of the state strategy of the Russian Federation on environmental protection and sustainable

T

1054

Tourism and the Sustainable Development of the Baltic Sea Region

development were approved (On the state strategy . . . 1994). In 1996, the Concept of Transition of the Russian Federation to Sustainable Development was developed, which was also approved by the Decree of the President of the Russian Federation (On the Concept of Transition . . . 1996). In it, in particular, it was noted that the targets of the decision-making process can be expressed in indicators characterizing the quality of life and the level of economic development and environmental well-being. The task was set to ensure the formation of the noosphere by the middle of the twenty-first century, to harmonize socioeconomic and environmental development. Based on the essence of the concept of sustainable development, in the Russian Federation in general and its regions in particular, it is proposed, firstly, to achieve favorable dynamics of economic, social, demographic, and environmental processes and, secondly, to ensure their balance. Moreover, key importance is given to a balanced solution to the problems of socioeconomic development, on the one hand, and the preservation of the environment and natural resource potential, on the other. We are talking about the integrated development of the territory, about the regional socioeconomic complex; that is, strategic developments are carried out in the categories of complexation (or complex-formation) theory (theory which dates back to middle of the twentieth century and even earlier in Russia/USSR). With regard to the concept of sustainable development, the use of the geo-system approach, one of the leading ones in Russian geographical science, is of particular importance. P. Oldak proposed a model of a biosocial system in which the interaction of the three components of its subsystems is examined: social, economic, and environmental (Oldak 1979). E. Alaev proposed the concept of a socio-ecosystem that has various hierarchical levels: local, regional, and global (Alaev 1983). Optimization of the interaction within the distinguished territorial systems and their relations with the external environment is crucial to ensure sustainable development. Tourism has been given a significant role in shaping sustainable residency. For example, eco-

tourism is proposed by Prof. D. Sevastyanov as a factor in the sustainable development of the North-West of Russia (Sevastyanov 2006). Since one of the main negative consequences of economic development in modern conditions is environmental degradation, insofar as the use of the strong formulation of the definition of sustainable development indicated above means that tourism, in which the natural factor is of paramount importance, can be sustainable if the environment is preserved (Kropinova and Afanasyeva 2014; Kropinova et al. 2015). The most sensitive in this regard is ecological tourism (Kropinova 2008). But, on the other hand, it is ecological tourism that in its essence meets the basic principles of sustainable development to the greatest extent. Responsible tourism, gentle tourism, natureoriented tourism, and alternative tourism – all these terms are similar in their meaning and can be united in the term Sustainable Tourism. In general, sustainable tourism is a concept of environmentally friendly tourism. It implies the integration of social, economic and environmental aspects into the decision-making process in practical activities. Altered mentality of the society determines evolutional development of tourism. This not only resulted in creation of ecological types of tourism but also favored appearance of alternative type of tourism providing sustainability in this economy sector. The new way of thinking with sustainable development focus is currently developed in the society. It has already resulted in emergence of new motivation in tourism: tourists are eager to gain such a tourist experience, that could be environmentally and socially responsible. Worldwide development of tourism has a significant impact on the state of the environment, from the visual influence of hotels and resort complexes’ architecture to noise and air pollution, increased traffic, water sources pollution, and loss of natural habitats. The need for sustainable development is getting more evident with each year as the negative aspects of the tourism industry’s impact are getting ever more obvious. In 2000, at the European Conference of Ministers responsible for Regional Planning

Tourism and the Sustainable Development of the Baltic Sea Region

(CEMAT) of the Council of Europe, an important program document was adopted – “Guiding Principles for SD of the European Continent” (Guiding Principles . . . 2000). Among the ten fundamental principles is the support for highquality sustainable tourism. In 2011, within the framework of the EU Strategy for the Baltic Region, a pilot project 12.10 to develop strategies for sustainable tourism was implemented (Flagship project 12.10 – develop strategies for a sustainable tourism). Its result was the Strategic document “Sustainable Tourism Development in the Baltic Region” (12.10.2011) (Strategy Paper . . . 2011). There are such aspects outlined in this documents as following: the basics of joint social responsibility in tourism, the potential of sustainable tourism and major problems, the main development directions, goals and sustainable tourism objectives in the Baltic region, as well as indicators of sustainability and monitoring and evaluation tools for achieving the goals of SD. Sustainable tourism development is one of the main focuses of the UNWTO. In regard to the 2030 Agenda for Sustainable Development, UNWTO encourages the implementation of the Sustainable Development Goals (SDGs). As it is underlined by Freude T. (2019), “Even though the UNWTO recognizes linkages between tourism and all 17 SDGs, tourism is specifically mentioned in the following targets of Goal 8, Goal 12, and Goal 14” (Freude 2019), which are described in his paper “Ecotourism and Sustainable development.” So, the concept of “sustainable tourism” is developed in connection with the concept of sustainable development (UN conference: “Agenda for the 21st century”, Rio de Janeiro 1992). According to the definition of the World Tourism Organization, sustainable tourism presupposes “management of all resources in such a way that economic, social and aesthetic needs could be satisfied simultaneously with support of cultural integrity, significant ecological processes, biological diversity and life support systems” (UNWTO). Let us consider the socioeconomic principles of sustainable tourism to be as follows:

1055

• Minimization of negative tourism impacts on environment • Efficient use of resources • Natural and cultural preservation and conservation • Participation and information • More meaningful tourism experiences • Promotion of visitors’ observation and comprehension of the culture and of the environment • Sensitivity toward local people and other stakeholders • Importance of policy, planning, and management applying both for tourism enterprises and tourism destinations • Emphasis of limits to tourism development • Generation of economic profit and employment for local people • Economic independence of local people In the next part, let us examine how the Baltic Sea states develop tourism and how much the tourism development model fits into the sustainable development model (Fig. 1), which involves achieving a balance between economic and social development and improving the quality of the environment.

Tourism Industry in the Baltic Sea Region: A Comparative Analysis The development of tourism in the Baltic region countries to the great extent depends on the level of socioeconomic development. More developed countries, characterized by an increased level of GDP per capita production, have a higher value of the number of tourist arrivals per capita as well (Fig. 2). Several falls out of close to direct dependence could be observed for Estonia and Denmark. In Estonia, the number of arrivals is higher, while that in Denmark is lower than it is in the countries with a similar level of GDP per capita production (Fig. 3). Both indicators are led by Sweden and Denmark, while Germany and Finland have a large number of overnight stays per capita. Poland, Lithuania, and Estonia have high rates of development of international tourism.

T

1056

Tourism and the Sustainable Development of the Baltic Sea Region

Principles « for Strategic Tourism Planning for SD» Strategic Planning Approach Stakeholders Involvement

Strategic Planning for Sustainable Tourism

Tourism Carrying Capacity Assessment

Integrated Coastal Zone Management and Blue Economy

17 SDGs by UN

Tourism and the Sustainable Development of the Baltic Sea Region, Fig. 1 Source: Sustainable Coastal Tourism/An integrated planning and management

approach. Copyright © United Nations Environment Programme, 2009, with author modifications

Tourism and the Sustainable Development of the Baltic Sea Region, Fig. 2 Distribution of the countries of the Baltic region in the production of GDP per capita and number of arrivals per 1000 inhabitants (Compiled by the

author (Kropinova 2020) on the basis of data: Federal State Statistic Service . . .; Eurostat; World Economic Outlook Database; International Monetary Fund; UNWTO)

Toward Sustainable Tourism Development: Best Practices in BSR Countries

that aims to ensure sustainability from an environmental, social, and economic point of view and at the same time makes a direct contribution to the 17 SDGs in the field of sustainable development. “In its new strategy, Wonderful Copenhagen has identified 8 SDG’s and 15 targets that Tourism for Good will contribute to” (International Congress and Convention Association). “The key idea is that tourism is not a goal in itself; tourism is a means to a sustainable end – a reality where tourism contributes positively to society, to building better cities and destinations for locals and visitors alike and where tourism is a driver of positive change” (Tourism for Good 2019). For example, focusing on contributing to

Denmark Denmark was all the time among the leaders on promotion of sustainable development issues, namely, Danish municipalities in line with Swedish once developed strategies for SD within the Agenda 21 framework. And now it continues such approach by following the United Nations 17 SDGs (United Nations’ 17 Sustainable Development Goals). Thus, “Tourism for Good” is an example of a city-level policy and one of the first sustainable tourism strategies in the world

Tourism and the Sustainable Development of the Baltic Sea Region

1057

Tourism and the Sustainable Development of the Baltic Sea Region, Fig. 3 Estimation of the level and dynamics of development of tourism and recreation in the countries of the Baltic region on the basis of the number and dynamics of the number of nights spent (compiled by the author (Kropinova 2020) on the basis of data: Federal State Statistic Service is a Federal State Statistics Service http://www.gks.ru Accessed 01.08.2017; Eurostat)

the achievement of the SDGs 8, 9, and 11: due to the wide distribution of tourism revenues in terms of geography, time, and interests, tourism will create decent work and positive economic, social, and environmental ties between urban, suburban, and rural areas. For the benefit of both travelers and locals, tourism will contribute to inclusive and sustainable urbanization with sustainable infrastructure and universal access. Wonderful Copenhagen wants to achieve by 2021 the following targets: • At least 80 per cent of local residents support this idea of continued growth in tourism. • Regular opportunities for locals to be involved in tourism development. • To develop broader

tourism in terms of geography, interests and time (Tourism for Good 2019). The novelty the strategy is confirmed by the Innovation Award, which Copenhagen received in the frame of the Global Destination Sustainability Index awards – 2018 (Global Destination Sustainability Index). (Global Destination Sustainability Index). There are some more achievements to be mentioned as far as the Danish tourist industry’s commitment to environmental responsibility is concerned: cycling; using trains, buses, and boats; and staying at eco-accredited accommodation. The Green Key (Den Grønne Nøgle) logo

T

1058

Tourism and the Sustainable Development of the Baltic Sea Region

is the benchmark for hotels and guesthouses. Campsites approved by the Danish Camping Board are marked by a Green Flag (Responsible tourism in Denmark). Sweden “Outdoor recreation in the Nordic countries is more than just a leisure pastime. Known in Sweden and Norway as friluftsliv, literally translated as ‘life in the open air’, outdoor recreation is a tradition, a belief system, and, a way of life” (Laven et al. 2019). This Swedish approach to lifestyle in combination with wild nature and general image of Sweden as a “green” country in the last decades was transformed into the Nordic tourist brand. It is completely in line with main SDGs and SD principles. At the same time, it demonstrates well that to be sustainable is economically profitable: the Swedish Agency for Economic and Regional Growth (Tillväxtverket) reported an increase of 7.5% in tourism’s export value in 2012, measured as foreign visitors’ consumption in Sweden, to SEK 106.5 billion – almost 85% more than iron and steel exports and almost three times more than the value of Swedish car exports. According to the report provided by the Organization for Economic Co-operation and Development (OECD 2018), in 2016 compared to 2015, the value of tourism exports increased by 12.7%, while total exports grew by 1.9%. In 2016, the Swedish tourism industry accounted for 6.2% of the total export value of Swedish goods and services, compared with 3.9% in 2000. Tourism’s share of the Swedish economy remained unchanged at 2.7% of GDP in 2016. The tourism industry in Sweden employed 170,000 persons in 2016, up 6.9% on 2015. Over the same period, the total employment in Sweden increased by 1.7%. It is not surprising that the Travel and Tourism Competitiveness Index for Sweden in 2017 was the highest in the BSR – rank 20 among 136 countries (State of the Tourism Industry in the Baltic Sea Region 2019 edition by Baltic Sea Tourism Center). Finland Finland is enjoying sustainable development due to several reasons: beautiful wild nature and

happy people. This is easy to prove, since Finland is called the land of thousand lakes due to over 56,000, and for the second row, Finland ranked No1 in the world when it comes to happiness (2019 World Happiness Report 2019). In order for the tourism industry to respond to the changing demand and continue to grow, development must be sustainable. To help Finland’s tourism industry to adopt sustainable practices, a Sustainable Travel Finland Programme was developed (Sustainable travel Finland). It is known as “a Finland’s 7-step approach to sustainable tourism”. This 7-step programme is traversed on online platform, which is supported with an “e-guide” e-learning environment. It is accessible only by those accepted to the Sustainable Travel Finland Programme and consists on 7 steps are as follows such as: Step 1, Commitment; Step 2, increasing know-how; Step 3, development plan; Step 4, responsible communication; Step 5, certification; Step 6, verification and measurability; and Step 7, agreement on Sustainable Travel Finland. From business-customer point of view, Step 5 “Certification” is of special value. It helps to easily recognize a sustainable tourism provider or a destination including two components: (1) obtaining a certificate that supports sustainable development; (2) for a destination to become a Sustainable Travel Finland destination, 51% of the tourism companies within the destination must have Sustainable Travel Finland label. Eco-labels for sustainable tourism have been developed and are presented on the section Sustainable Travel Finland in the official website Visit Finland (https://www.businessfinland.fi/en/ do-business-with-finland/visit-finland/sustain able-travel-finland-label/). Another important experience that is practiced in the “country of thousands of lakes” – to be sustainable, you have to feel yourself a part of nature which means that in Finland you must be a Finnish. To make it possible a Sustainable Finland Pledge was developed and proposed to learn for any traveler visiting Finland (Visit Finland): • On my journey I pledge to be like a Finn, and by this, I mean slowing down from within.

Tourism and the Sustainable Development of the Baltic Sea Region

• The wilderness lets me relax and connect, I promise to treat it with the utmost respect. • Its forests and lakes should remain plastic-free, so I will not leave any rubbish behind me. • The world-class tap water shall quench my thirst, because in my choices the climate comes first. • In Finland it’s our equal right to roam free. This right should be enjoyed responsibly. • The berries and mushrooms are there to be eaten, but I’ll stick to the paths that are already beaten. • Long before humans the wildlife’s been there, so I won’t set up camp just anywhere. • I shall also respect the lives of locals, and will be considerate with cameras or loud vocals. • I know Finns can seem just a little reserved, but with this pledge their trust will surely be earned. Russia: The Republic of Karelia In the Republic of Karelia, extrabudgetary investments in tourism infrastructure projects are growing. The research conducted by Vasilieva (2015) presents that from 2000 to 2013 the volume of off-budget investments in the Republic of Karelia has grown more than 6 times (from 105 million rubles to 630 million rubles, which is about 90 million euros). This contributed to an increase in the length of stay of tourists in the territory of Karelia, which, accordingly, led to an increase in tourism receipts left in the region. Prior to this, the bulk of tourists was represented by visitors to cultural and historical sites concentrated on the territory of the so-called Holy Triangle – the pilgrimage islands of Kizhi, Valaam, and Solovki. “With this model (traveling on the Holy Triangle), tourists were participants in cruise tours, were at each of the facilities for a limited period of time, paying entrance tickets to the facilities, but did not use the services of other tourist enterprises (hotels, catering establishments, etc.). As a result, even with an increasing recreational load on the facilities, the economic and social effect for the territory and the local community was minimal (Vasilieva 2015). The project «Kalitka» (“kalitka” is a traditional pie) of the Karelia CBC (a Cross-border

1059

cooperation programme between Russia and Finland) aims at development of gastronomic tourism for social and economic benefit of the cross-border territory. Within the project enterprises from the Russian and Finnish border regions unite on the basis of cultural heritage in the national cuisine (Karelia CBC). In September 2019, the first international festival “Taste of Karelia” was held under the auspices of Rostourism as part of the abovementioned international project (Russiatourism). Promotion of gastronomic tourism in Russia and Europe will expand the geography of inbound tourism and increase its contribution to the region’s economy. At the same time, gastronomic tourism remains one of the most environmentally friendly, as it is focused on local producers and introduces local culture, traditions, etc. Estonia Estonia chose its islands in the Baltic Sea as the destination for the development of sustainable tourism. On the other hand, tourism is a relatively new activity on these islands in general, since in Soviet times they were a part of a border zone with restrictions on visits. There was a requirement at that time for a special permission or resident passport for these areas. After disintegration of the Soviet Union, a new era of tourism started. Since that time, the islands became a popular destination for local and international travelers. The West Estonian Archipelago Biosphere Reserve was established in 1990 under the aegis of UNESCO. The territory of the Reserve, together with its water areas, covers 15,600 km2. The Reserve was established to protect valuable and vulnerable ecosystems and to promote sustainable and balanced development of the islands (West Estonian islands). The West Estonian Archipelago consists of the islands Saaremaa, Hiiumaa, Vormsi, and Muhu. “Located in the transition zone between temperate needle-leaf to broad-leaf forests, terrestrial habitats contain pine forests, mixed spruce and deciduous forests, juniper and coastal meadows, swamps and peat bogs. The alvar forests (spruce, pine or birch forest on limestone plains with thin soils) are of particular interest”(West Estonian Archipelago).

T

1060

Tourism and the Sustainable Development of the Baltic Sea Region

These islands are famous for authentic settlements and promotion of local culture and sustainable way of life. The local population could easily find their own way of employment. The residents of the islands distribute duties on serving visitors among themselve: one family is providing accommodation, another breeding cows for milk and meat, another – hens for eggs, the next – organize bird-watching trips, one more – horse-riding etc. Most of them are among other 300 members of Estonian Rural tourism association, which consists on tourism farms, holiday houses, guest houses, motels, smallsize hotels, camping places, activity tourism companies, theme parks, national inns, local history museums and handicraft workshops. All this creates a special atmosphere and makes the place attractive both for tourists and for the local population. From this point of view, “the influence of tourism in a rural region can be wider than for the tourism sector itself. Tourism in such cases offers social benefits that are as important as the partnership outcomes: empowering vulnerable social classes, uniting community members and families, giving residents a sense of place and feelings of homeliness, gatherings for social entertainment and making rural people feel useful and needed” (Pilving et al. 2019). In 2007, the European Commission launched the European Destinations of Excellence (EDEN) competition. Muhu Island was a nominee in 2010 in the category “EDEN. Estonia’s hidden treasures. Water tourism”(Visit Estonia). Latvia Among the other Baltic countries, Latvia is distinguishable by its economic and social aspects of sustainability in tourism. The growth of 22.8% in the number of tourism arrivals as compared to an average increase of 14.6% is the second largest in the region (reached 2,6 mio.), and the contribution to the Latvian GDP is 4.2% in 2017. The share of employed in tourism in total employment is 4.2% (State of the tourism industry, 2019) and if take into consideration the induced industries – even 8,9% (Regional Survey of Tourism development in Latvia 2017). Even the largest share of overnights spent is from international tourists (68,8%), with countries of origin from Russia, Lithuania, and Estonia or in

the same region (Germany, Finland, Sweden). The rail and water transport currently occupy just a small share (4.6 and 4% correspondently) of the means of transport by which tourists arrive in Latvia. But in the future the share of these modes of transport will increase. As soon as railway project Rail Baltica (Trans-European Transport Network TEN-T) is implemented, it will facilitate the connection Tallinn (Estonia)-Riga (Latvia) – Kauna (Lithuania) It’s implementaion is shaduled for 2024. The main facilities providing sustainable tourism flow are nature tourism, MICE and event tourism, culture and creative industries, and health and recreation tourism, with main focus on MICE and health tourism as well as cross-border product development. Lithuania Eco-tourism is considered to be the most sustainable type of tourism. That is why so much attention is paid to protected areas in the Baltic Sea region. In Lithuania they occupy 17.6% of the area. There are 5 national parks, 30 regional parks, over 300 reserves in the country, and over 500 natural heritage objects. The country is focused on preserving the values of the European ecological network Natura 2000, RAMSAR, and UNESCO. The year 2020 has been declared in Lithuania the UNESCO World Heritage Year. This year is special for the Curonian Spit National Park. 20 years ago the Curonian Spit was anounced to be one of the UNESCO protected areas. The Curonian Spit is situated in the Kurshan Nerang National Park in Lithuania and the Kurshskaya kosa National Park of the Russian Federation. The status of these National Parks guarantees the protection of the cultural landscape. “The Curonian Spit is an outstanding example of a landscape of sand dunes that is under constant threat from natural forces (wind and tide). After disastrous human interventions that menaced its survival, the Spit was reclaimed by massive protection and stabilization works that began in the 19th century and are still continuing to the present day” (UNESCO). Both national parks have the common goal of preserving the natural and cultural attributes that

Tourism and the Sustainable Development of the Baltic Sea Region

express the outstanding universal value of the property. A very important prerequisite for the protection of the outstanding universal value is state land ownership by the national parks and their strong cooperation. Russia: The Kaliningrad Region The interaction between countries in order to promote sustainable tourism can be seen in the example of the implementation of a large-scale construction project CBCycle: Cross-border cycle routes for promotion and sustainable use of cultural heritage under the Russia-Poland 2014–2020 cross-border cooperation program. The total budget is 4.5 million euros, including its infrastructure part 4.39 million euros. The program is funded by the Russian Federation and the European Union. The length of the cycle road will be 34 km. In addition to the parking lots for rest, three bridges over the rivers will be equipped on this site. The project aims to improve the attractiveness and competitiveness of the Kaliningrad region and northeastern Poland by creating a common cycle route, integrated and connected with EuroVelo cycle routes. The project envisages construction of a new cycling route in the coastal area of the Kaliningrad region. The length of the bike lane connecting Zelenogradsk with the settlement Primorye of the Svetlogorsk urban district will constitute 33.94 km. Besides, a scheme and a catalogue of the cycling routes of cross-border significance located in the Kaliningrad region and North-East Poland regions will be developed and published in English, Polish, and Russian. In result, over 80 historical and cultural heritage sites will be integrated into unified cross-border tourist routes. Finally, three study tours for professionals involved into development of cycling infrastructure and tourism will be organized. One of them will focus on the experience of constructing and promoting the Green Velo cycling route in the Warminsko-Mazurskie Voivodship, while the other two will be dedicated to the newly constructed cycling route in the Kaliningrad region as well as other areas of the region demonstrating potentials for the development of the cycling tourism. As a consequence, in a long-

1061

term perspective, the project will contribute to the development of infrastructure; preservation and sustainable use of natural, cultural, and historical heritage of the cross-border region; promotion of environmentally friendly tourism; and strengthening cross-border cooperation. By the end of 2019 visiting Kaliningrad President of Russian Federation Vladimir Putin instructed the government to ensure the construction of a bike path on the Curonian Spit. The order is published on the official website of the President of the Russian Federation. This cycle road will be a good supplement to the project mentioned above since it will provide EuroVelo along the Baltic Sea coast to Lithuania and guarantee possibility for the ecological mode of transport along the National Park included into UNESCO list of heritage. Poland As it is possible to investigate while visiting the Polish coastal municipalities, there is highly intensive increase in the development of coastal and marine tourism infrastructure in the last decade. Polish coastal area to a large extent is oriented on tourism, and most of the plans of social and economic transformation and spatial development were connected to tourism industry. These transformations affect both the hotel industry (about 1/3 of the accommodation facilities of Poland is concentrated along the coast) and development of the ecological modes of transport, such as the internal coastal passenger fleet’s (the so-called White Fleet) cruises along the coast. As it is underlined in the Study of Conditions of Spatial Development of Polish Sea Areas conducted for the Maritime Spatial Planning (MSP) platform, the growing number of mooring places creates good conditions for short (fewdays) coasting cruises linked with the opportunity of sightseeing in coastal towns (MSP 2016). Coastal municipalities have swiftly changed their fishery- and/or agriculture-oriented character and transformed into coastal housing estate or (more often) recreational amorphous areas, blurring the initial rural arrangement of space. Development of touristic functions in the coastal areas is based also on the infrastructure of commercial ports

T

1062

Tourism and the Sustainable Development of the Baltic Sea Region

(coasting passenger services), fishing ports and havens, marinas, ferry terminals, and the presence of open to public objects of maritime culture, closely linked with Baltic Sea nature (MSP 2016). The municipalities took the best from their location and new trends of tourism development. They worked out in their strategies the possibilities for investment into sustainable tourism New approach “would allow gaining profits and satisfaction from the contact with nature, and at the same time will not disturb the biological equilibrium and in effect destroy the unique characteristics and tourist value of the region. Many plans of the municipalities are aimed at regulating tourism in their area in a way which would reduce anthropogenic pressure by marking tourist trails, beach entrances, piers and localization of marinas” (MSP 2016, p. 116). Spatial planning for sustainable tourism growth could be well demonstrated on the example of the realization of the Żuławy Loop – a supra-regional (Pomeranian and Warmian-Masurian Voivodeship) project for the revitalization of waterways, ports, and marinas. The “Żuławy Loop” project involves the creation of a network of ports, marinas, and moorings, which allow to practice water sports and other forms of tourism on the waterways of the Vistula Delta and the Vistula Lagoon. As part of the project, three sailing ports were expanded (Elbląg, Krynica Morska, and Tolkmicko), six marinas and two mooring piers were built, and two drawbridges were rebuilt. 300 new mooring stations were created in total. They significantly strengthened tourist and recreational potential of individual communes of the subregion (The Żuławy Loop – A Water Tourist’s Guide). The economic results of the realization of the project could be already investigated: spatial distribution of entrepreneurship, i.e., the number of economic operates per 10,000 inhabitants demonstrates that entrepreneurial attitudes appear mainly in municipalities having a well-developed tourism-oriented profile. It is possible to distinguish the leaders among such municipalities as far as the income per inhabitant is concerned. For example, in Krynica Morska (settlement on the Vistula spit)

the sum of 20,529 PLN is four and a half times the regional average (MSP 2016). So we could investigate the role of tourism in the economic and social sustainable development of the area, which is in a way a perephiria of the Pomorskij Voevodship (Region) (remoted from the TriCity: Gdansk-Sopot-Gdynia). As it is underlined in the paper “Development of tourism in Polish poviats in the years 2010– 2017” (Korzeniewski and Kozłowski 2019), Article 4 of the Polish Act on County Self-Government states that self-government performs public tasks defined by acts of supra-municipal nature in the following areas: physical culture and tourism, counteracting unemployment and activation of the local labor market, and poviat promotion (Act on County Self-Government 1998); this clearly indicates that it is necessary to conduct activities aimed to develop tourism, which is probably one of the most interdisciplinary branches of the economy. The poviat’s most important tourism-related tasks are as follows (Borzyszkowski and Marczak 2010): running institutions of physical culture, tourism, and recreation; registration and supervision over activities, as well as co-financing of associations operating in the fields of sports and tourism; financial support for tourism events; and so on. This for sure proves the idea of Nakao and de Andrade Guerra (2019) that “to better represent sustainable development, innovation studies need include additional dymanics like civil society and social movements.” Germany The Federal Government of Germany adopted a new, extensive program of measures for sustainable administrative activities in 2015 with the theme “Setting a good example” (German Sustainable Development Strategy 2017). In 2017 the National Sustainable Development Strategy which is aligned with the UN’s 17 SDGs was adopted. It focuses more on global responsibility. The main activity toward SDGs of the Federal Government was promotion of the Climate Action Programme 2030 (Climate Action Programme 2030) The incentive for more climate protection generated a set of measures

Tourism and the Sustainable Development of the Baltic Sea Region

for environmentally responsible behavior in traffic: the tax on airline tickets – depending on the route – will increase by around 6 to 17 euros per ticket. This is provided for by the law amending the Air Traffic Tax Act. The current tax rates will be increased on April 1, 2020. The Federal Government is thus strengthening the incentives already. In addition, the revenue also serves to finance the necessary measures of the 2030 Climate Protection Program. In return, the value-added tax on long-distance train tickets is to be reduced by 19% to the reduced VAT rate of 7%. By putting a price on climate-damaging CO2 emissions, introducing promotion measures, and setting legal standards for greater innovation and investment, we intend to achieve the climate targets Germany has set for 2030: greenhouse gas emissions are to be cut by 55% of the 1990 level (Climate Action Programme 2030). Sustainable tourism is also a field of action for the “National Program for Sustainable Consumption,” which was adopted by the German government in 2016 (Federal Minister for Environment, Nature Conservation and Nuclear Safety). The approaches included in the program with regard to tourism are aimed, among other things, at strengthening the transparency of sustainable tourism offers and promoting climatefriendly holiday travel. In March 2016, the Federal Ministry of Economic Cooperation and Development (BMZ) and the Federal Association of the German Tourism Industry (BTW) launched an industry dialogue “Tourism for Sustainable Development.” Representatives from politics, tourism, civil society, and science come together at the semi-annual meetings to develop solutions for tourist destination regions and thus exploit the potential of tourism for sustainable development.

Conclusions Tourism has an impact on the economy, the natural and built environment, the local population at

1063

the places visited, and the visitors themselves. “According to Burton et al. (2011), development and change are realized via tourism, thus it should be recognized as an agent thereof. It concerns consumption like any other industry with the level of consumption being determined tourism development scale and type. Tourism may operate at a sustainable level at low levels and with through design; the long-term perspective controlling of level and style of development presents challenges which have not been successfully met. Tourism has a potentially high impact and should be subjected to the same environmental and social impact assessment processes at the planning stages” (Woodley 1993). A well-known definition of tourism is the formulation offered by Professor Leiper considering tourism as “A model of whole tourism system” (Leiper 1995) consisting of the following basic elements: geographical elements, tourists, and tourism industry. The geographical elements are subdivided into region generating tourists, transit region, and region of tourist’s destination. By the tourists’ destination region, Leiper understands an area proposing a certain set of services meeting the tourist’s requirements and satisfying her demand for transportation, overnight stay, meals, entertainment, etc. Leiper has offered these definitions, one of tourism and the other of tourists: “Tourism comprises the ideas and opinions people hold which shape there decisions about going on trips, about where to go (and where not to go) and what to do or not to do, about how to relate to other tourists, locals and service personnel. And it is all the behavioural manifestations of those ideas and opinions Tourists can be defined in behavioural terms as persons who travel away from their normal residential for a temporary period of at least one night, to the extent that their behavior involves a search for leisure experiences from interactions with features or characteristics of places they choose to visit (Leiper 1995, p. 20, p. 11)” (Richardson and Fluker 2004). Developing Leiper’s ideas, it can be argued that the way relations between tourists and tourist organizations will develop depends on what kind

T

1064

Tourism and the Sustainable Development of the Baltic Sea Region

of tourism model is formed in the host country. This means that a lot depends on the government, business, and the local population. So, tourism is the best way to achieve sustainable development. “Tourism for good,” promoted in Denmark, is an example of city-level politics. Finland will also contribute to this, which will offer every tourist to make a choice of tourist center by relying on eco-logos that guarantee an environmentally friendly product. Estonia teaches us to take good care of our habitat. All you need to imagine yourself on a small island in the Baltic Sea where there is everything you need is a clean coast and fresh products prepared by the local population. The protection of natural objects, such as the Curonian Spit, divided by the Russian-Lithuanian border, but being a unified object of UNESCO, is a guarantee of the continued coexistence of man and nature. A common natural heritage is the best way for nations to find common ground and start working together. For residents of all the Baltic countries, the Baltic Sea is a common tourist resource. The infrastructure built for water tourism in Polish municipalities creates added value and ensures a decent living for residents of even remote but coastal municipalities. Tourism is an activity that provides long-term sustainable development for all living on coast of the Baltic Sea it is a tool for their social and economic well-being. Germany is currently the leader in the tourist inflow, but Latvia has a higher dynamics both of GDP and employment in its sphere. And in Sweden a new concept called “Scandinavian style of tourism” has already been introduced This means that it is possible to promote a single brand “Baltic Sustainable Tourism” – a model that combines all the elements of sustainable development.

Cross-References ▶ Creativity, Innovation, and Sustainable Development ▶ Ecotourism and Sustainable Development

References 2019 World Happiness Report (2019) Editors: John F. Helliwell, Richard Layard, and Jeffrey D. Sachs. Associate Editors: Jan-Emmanuel De Neve, Haifang Huang, Shun Wang, and Lara B. Aknin. https://s3.amazonaws. com/happiness-report/2019/WHR19.pdf. Accessed 15 Jan 2019 Agenda 21 for the Baltic Sea Region // Adopted at the 7th Ministerial Session of the Council of the Baltic Sea States, Nyborg, June 22–23, 1998. http://www.un. org/esa/agenda21/natlinfo/action/baltic.htm. Accessed 01 Sept 2016 Alaev B (1983) Socio-economic geography: a conceptual and terminological dictionary. Mysl, Moscow. (in Russian) Borzyszkowski J, Marczak M (2010) Turystyka w strukturach jednostek samorządu terytorialnego – jej umiejscowienie i zadania właściwych podmiotów Ekonomiczne Problemy Usług nr 53, 105–116. http:// bazhum.muzhp.pl/media//files/Ekonomiczne_Problemy_ Uslug/Ekonomiczne_Problemy_Uslug-r2010-t-n53/ Ekonomiczne_Problemy_Uslug-r2010-t-n53-s105-116/ Ekonomiczne_Problemy_Uslug-r2010-t-n53-s105-116. pdf. Accessed 20 Dec 2019. (in Polish). Burton RM, De Sanctis G, Obel B (2011) Organizational Design. 2d edition. University Press, Cambridge. 272р. CBCycle: Cross-border cycle routes for promotion and sustainable use of cultural heritage https://www. svetlogorsk39.ru/okrug/mezhdunarodnoe/cbcycle/ english.php. Accessed 15 Jan 2019 Climate Ation Programme 2030. https://www.bundesre gierung.de/breg-en/issues/climate-action/klimaschutzp rogramm-2030-1674080. Accessed 15 Jan 2019 Eurostat. Official portal. http://ec.europa.eu/eurostat. Accessed 20 May 2019 Federal Minister for Environment, Nature Conservation and Nuclear Safety. https://www.bmu.de/fileadmin/ Daten_BMU/Pools/Broschueren/nachhaltiger_konsum_ broschuere_bf.pdf. Accessed 15 Jan 2019 Federal State Statistics Service. http://www.gks.ru. Accessed 01 Aug 2017 Flagship project. 12.10 – Develop strategies for a sustainable tourism Freude T (2019) Ecotourism and sustainable development. In: Leal Filho W, Azul A, Brandli L, Özuyar P, Wall T (eds) Decent work and economic growth. Encyclopedia of the UN sustainable development goals. Springer, Cham German Sustainable Development Strategy (2017) Summary. German Government web-site. https:// www.bundesregierung.de/resource/blob/998220/4185 54/b428f6c54e1dc6f829da02325648fd2f/2017-04-12kurzpapier-n-en-data.pdf?download¼1. Accessed 15 Jan 2019 Global Destination Sustainability Index. Official website. https://www.gds-index.com/awards. Accessed 15 Jan 2019

Tourism and the Sustainable Development of the Baltic Sea Region Glossary of tourism terms. World Tourism Organization. https://www.unwto.org/glossary-tourism-terms. Accessed 15 Jan 2019 Guiding Principles for Sustainable Development of the European Continent (2000). Publications. Council of Europe https://www.coe.int/en/web/landscape/publica tions. Accessed 15 Jan 2019 International Congress and Convention Association. Official website. https://www.iccaworld.org/knowledge/ article.cfm?artid¼580. Accessed 15 Jan 2019 International Monetary Fund. https://www.imf.org/exter nal/index.htm. Accessed 20 Aug 2018 Karelia CBC. Official website. https://kareliacbc.fi/en/pro jects/kalitka-ka4007#home Accessed 15 Jan 2019 Korzeniewski J, Kozłowski M (2019) Development of tourism in Polish poviats in the years 2010–2017. In: Qual Quant. https://doi.org/10.1007/s11135-01900923-4. https://link.springer.com/article/10.1007/ s11135-019-00923-4#citeas. Accessed 15 Jan 2019 Kropinova E (2008) Biological resources of the Kaliningrad region in the development of ecotourism. In: Bulletin of the I. Kant. Russian State University. Natural sciences, vol 7. Publishing House of the IKRSU, Kaliningrad, pp 84–87 Kropinova E (2016) An integrated approach to the planning and management of a transboundary tourism cluster (The case of Russian-Lithuanian-Polish crossborder tourism and recreational region, adjacent to the Vishtynetskoe Lake). In: Service and Tourism: Current Challenges, vol 10, No. 1, pp 117–128. https://www. spst-journal.org/papers/2016/1-2. Accessed 20 Dec 2019. (in Russian). Kropinova EG (2020) The role of tourism in cross-border region formation in the Baltic region. In: Fedorov G, Druzhinin A, Golubeva E, Subetto D, Palmowski T (eds) Baltic region – the region of cooperation. Springer proceedings in earth and environmental sciences. Springer, Cham. https://doi.org/10.1007/978-3030-14519-4_10 Kropinova E, Afanasyeva E (2014) Sustainable development of coastal territories as the basis for integrated coastal zone management. In: Bulletin of the I. Kant Baltic Federal University. Natural sciences, vol 1, pp 152–156. (in Russian) Kropinova EG, Belova AV, Afanasyeva EP (2015) Sustainable tourism – an alternative to the development of coastal cities (on the example of small cities of the Kaliningrad region). In: Bulletin of the I. Kant Baltic Federal University, No. 7, pp 104–113 (in Russian). Laven D, Chekalina T, Fuchs M, Margaryan L, Varley P, Taylor S (2019) Building the slow adventure brand in the northern periphery. In: Cassinger C, Lucarelli A, Gyimothy S (eds) The Nordic wave in place branding. Edward Elgar Publishing, Northampton MSP (2016) Study of conditions of spatial development of polish sea areas. GDYNIA, March 2016. On official site of the Maritime Spatial Planning. https://www. msp-platform.eu/sites/default/files/study_of_conditions_ of_spatial_development_0.pdf. Accessed 15 Jan 2019

1065

Nakao BHT, de Andrade Guerra JBSO (2019) Creativity, innovation, and sustainable development. In: Leal Filho W, Azul A, Brandli L, Özuyar P, Wall T (eds) Decent work and economic growth. Encyclopedia of the UN sustainable development goals. Springer, Cham. https://doi.org/10.1007/978-3-319-71058-7 OECD Tourism Trends and Policies (2018). https://www. oecd-ilibrary.org/docserver/tour-2018-en.pdf?expires¼ 1579538733&id¼id&accname¼guest&checksum¼B6 85503E3F3BB93443CB3F02D6EE911E. Accessed 15 Jan 2019 Oldak P (1979) Modern production and the environment. Science. Sib. Department, Novosibirsk. (in Russian) On the Concept of the transition of the Russian Federation to sustainable development (1996) Decree of the President of the Russian Federation of 04/01/1996, No. 440. http://kremlin.ru/acts/bank/9120 Our Common Future. Report of the World Commission on Environment and Development (1989). https://sustaina bledevelopment.un.org/content/documents/5987our-com mon-future.pdf On the State strategy of the Russian Federation for environmental protection and sustainable development: Decree of the President of the Russian Federation of February 4, 1994 No. 236. (lost force in 2017). Access from the consultant-legal system “Consultant Plus”. http://www.consultant.ru/document/ cons_doc_LAW_3079/. Accessed 20 Dec 2019. (in Russian). Pilving T, Kull T, Suškevics M, Viira AH (2019) The tourism partnership life cycle in Estonia: striving towards sustainable multisectoral rural tourism collaboration. In: Tourism Management Perspectives, vol 31, pp 219–230. https://doi.org/10.1016/j.tmp.2019.05.001. Accessed 1 Feb 2020. Regional Survey of Tourism development in Latvia (2017). https://www.interregeurope.eu/fileadmin/user_upload/ tx_tevprojects/library/file_1508254284.pdf. Accessed 15 Jan 2019 Responsible tourism in Denmark. Responsible Traveler. Denmark. https://www.responsibletravel. com/holidays/denmark/travel-guide/denmark-responsi ble-tourism-issues. Accessed 15 Jan 2019 Richardson JI, Fluker M (2004) Understanding and managing tourism. Frenchs Forest, NSW: Pearson/Hospitality Press Russiatourism. Official website of the Federal Agency for tourism of the Russian Federation https:// www.russiatourism.ru/anonsy/16352/. Accessed 15 Jan 2019 Sevastyanov D (2006) Ecological tourism in the NorthWest of Russia as a factor in the sustainable development of the region. In: Tourism and recreation: fundamental and applied research. Proceedings of the international scientific and practical conference. M.V. Lomonosov Moscow State University, Geographical faculty, Moscow, pp 368–372. (in Russian) Sinclair MT, Stabler M (1997) The economics of tourism, Routledge, London/New York. 264p

T

1066 State of the Tourism Industry in the Baltic Sea Region – 2019 edition. (ed: Jacobsen). D. Baltic Sea Tourism Center Sustainable tourism development (STD, UNWTO). World Tourism Organisation https://www.unwto.org/sustain able-development. Accessed 15 Jan 2019 Sustainable tourism development in the Baltic region. Strategy Paper (2011). http://www.baltic-sea-strategytourism.eu/serviceassistent/_php/download.php? datei_id¼1581153. Accessed 15 Jan 2019 Sustainable travel Finland. Visit Finland. Business Finland. Official website. https://www.businessfinla nd.fi/en/do-business-with-finland/visit-finland/sustain able-travel-finland-label/. Accessed 15 Jan 2019 The Żuławy Loop – A Water Tourist’s Guide. Publisher: Office of the Marshal of the Pomorskie Voivodeship. http://petla-zulawska.pl/aplikacja/pdf/przewodnik_e.pdf. Accessed 15 Jan 2019 Tourism for Good (2019) An invitation to a journey towards sustainable tourism by 2030. A summary of Wonderful Copenhagen's strategy for sustainable tourism. On:Wonderful Copenhagen. Official website. https://www.wonderfulcopenhagen.dk/wonder ful-copenhagen/om-os/tourism-good. Accessed 15 Jan 2019 UNESCO. World Heritage List. Curonian Spit. https://whc.unesco.org/en/list/994/. Accessed 15 Jan 2019 Vasilieva AV (2015) Features of sustainable tourism development in the border region (by the example of the Republic of Karelia) // Bulletin of the Belgorod University of Cooperation, Economy and Law, No. 3 of 2015, pp 350–357. (in Russian) Vernadsky V (1926) Biosphere. NKhTI, Leningrad. (in Russian) Vernadsky V (2012) Biosphere and noosphere. Iris Press, Moscow. (in Russian) Visit Estonia. Official tourism information website. https://www.visitestonia.com/en/where-to-go/islands. Accessed 15 Jan 2019 Visit Finland. https://www.visitfinland.com/sustainable-fin land/. Accessed 15 Jan 2019 West Estonian Archipelago. In: UNESCO official webpage. http://www.unesco.org/new/en/natural-sciences/environ ment/ecological-sciences/biosphere-reserves/europenorth-america/estonia/west-estonian-archipelago/. Accessed 15 Jan 2019 West Estonian islands. In: Estonica. Encyclopedia about Estonia. http://www.estonica.org/en/Nature/West-Esto nian_islands/The_islands_in_the_V%C3%A4inamer i_ Sea_and_the_Gulf_of_Riga/. Accessed 15 Jan 2019 Woodley A (1993) In: Nelson J, Butler R, Wall G (eds) Tourism and sustainable development: the community perspective. Heritage Resources Centre Joint Publication Number 1. University of Waterloo, Waterloo World Economic Outlook Database. https://www.imf. org/external/pubs/ft/weo/2018/01/weodata/index.aspx. Accessed 20 Aug 2018

Trade

Trade ▶ Globalization, Democracy, and Inequality

Trade-Related Assistance ▶ Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth and Structural Changes in Developing Countries

Trade-Related ODA ▶ Aid for Trade (AfT): Leveraging Trade as a Booster for Economic Growth and Structural Changes in Developing Countries

Trafficking in Human Beings ▶ Human Trafficking as a Conflict Financing Measure

Transformations ▶ Transitions to Sustainable Development

Transformations Toward Sustainability ▶ Transitions to Sustainable Development

Transitions ▶ Transitions to Sustainable Development

Transitions to Sustainable Development

Transitions to Sustainable Development Michael P. Schlaile1,2 and Sophie Urmetzer1 1 Department of Innovation Economics, University of Hohenheim, Stuttgart, Germany 2 Center for Applied Cultural Evolution, Eugene, OR, USA

Synonyms Sustainability transitions; System innovation; Transformations; Transformations toward sustainability; Transitions

Definitions Sustainability transitions can be regarded as “multidimensional and co-evolutionary processes that involve changes in technology, user practices, business models, policies and governance approaches, and cultural meanings” (Geels 2018). These transition processes consequently involve long-term fundamental changes in societal systems toward more sustainable modes of production, consumption, and living (based on Loorbach et al. 2017; Markard et al. 2012). Although this entry adopts the term transitions, it is important to note that different scientific communities in sustainability research have used the terms transitions and transformations rather interchangeably, albeit sometimes also with particular differences in meaning (e.g., Chappin and Ligtvoet 2014; Hölscher et al. 2018; Scoones et al. 2018). Examples of prominent research communities are the Sustainability Transitions Research Network (STRN) (https:// transitionsnetwork.org/) and the researchers associated with Future Earth (http://www. futureearth.org/) and the Transformations to Sustainability (https://transformationstosustain ability.org/) research program launched by the Michael P. Schlaile and Sophie Urmetzer contributed equally to this entry.

1067

Belmont Forum, NORFACE, and the International Social Science Council (ISSC).

Introduction Many scholars have argued that the multiple crises humanity is facing – including climate change, dwindling natural resources, and the unjust distribution of wealth and security – are rooted in the underlying structures of currently unsustainable societal systems. Such problems are wicked and persistent (Grin et al. 2010; Rotmans and Loorbach 2009), meaning, among other things, that they are hard to pin down, they are nested in lifestyles and perceptions of members of societies, and solution approaches often create new problems, which renders them insurmountable by means of market forces or current governance approaches. A first step toward identifying more effective ways of dealing with such challenges has been the development of a better understanding of previous change processes in lifestyles, perceptions, and practices. Such fundamental transformations always resulted from dynamic interactions between societal structures, individual behavior, and (radical) technological innovations (Rotmans et al. 2001). This recognition provided the foundation for transitions research and has since informed an increasing number of scholars and policymakers striving to guide the creation of solution pathways for persistent problems. Many of these solution pathways share objectives that are in line with the notion of sustainable development, including issues of equity, quality of life, and the endurance of ecosystems. However, the open-ended, uncertain, long-term, and often emergent nature of transitions creates strong tensions (Frantzeskaki et al. 2012) with the urgent and relatively clear-cut objectives of sustainable development as, for instance, formulated in the 17 Sustainable Development Goals (SDGs) in general and SDG 8 (decent work and economic growth) in particular. From a systemic and coevolutionary perspective, sustainable development cannot be regarded as a predefined transition pathway to a static endpoint. More precisely, any long-term fundamental

T

1068

changes in societal systems (i.e., transitions) imply feedback effects and ongoing processes of transformation. This means that transitions themselves regularly lead to unexpected and unforeseen effects on both people and planet on multiple scales, ranging from consumer preferences to changes in the composition of species and ecosystems. It is exactly in this twofold dynamic sense that the title of this entry must be understood. Therefore, the present entry echoes the title of the seminal book by Grin, Rotmans, and Schot (2010) – Transitions to Sustainable Development – in line with these authors’ notion of sustainable development “as an open-ended orientation for change” (Grin et al. 2010, p. 2, emphasis added). The overall goal of this entry is to give an overview of current systemic research and governance approaches to societal change toward sustainable development. However, due to the vast literature on sustainability transitions, this overview will be unable to do justice to the complete range of research strands. The following section sheds light on the roots of sustainability transitions research. Subsequently, three currently prominent research approaches to sustainability transitions are introduced and then linked to governance implications. After a brief section highlighting important challenges for sustainability transitions research, the entry concludes with a summarizing overview.

The Emergence of Transitions Research Sustainability transitions research has emerged especially from the recognition of the futility of (prevalent) policy approaches to tackle ever more complex and persistent sustainability problems within networked societies. During the late 1980s, researchers and policymakers started to acknowledge the need for fundamentally different governance approaches. In their quest for innovative strategies to overcome detrimental developments such as environmental pollution or growing inequality, especially the Dutch government started to generously support research into the

Transitions to Sustainable Development

role of technology in sustainable development and its potential for reducing the stress of development processes on the environment. It was found that incremental improvements of problematic technologies would not be sufficient to overcome pressing global sustainability challenges (Grin et al. 2010). Instead, more effective radical innovations were needed requiring not only novel technologies but also changed user practices (e.g., consumption), new institutions (e.g., regulation), and other improvements (e.g., infrastructure). The governmental program was followed by the foundation of a privately funded interdisciplinary network of over 80 researchers to further develop a better understanding of such systemic innovations and transitions (http://www.ksinetwork.nl/home). Luckily, transition theory needed not be built from scratch. According to an illuminating overview published by Markard and colleagues, several theoretical areas have been tapped by the transitions scholars; in particular, they were inspired by evolutionary economists (Markard et al. 2012), by discoveries in the environmental sciences, and by sustainability studies (Loorbach et al. 2017). All these theoretical foundations contribute to understanding technological development as dynamically interconnected with societal development and environmental consequences. Based on this central idea of interconnected (sub)systems, sustainability transitions research has established a very active interdisciplinary academic community, which was institutionalized with the foundation of the Sustainability Transitions Research Network (STRN) at the first European Conference on Sustainability Transitions in Amsterdam in 2009 and the launch of the Environmental Innovation and Societal Transitions journal in 2011 (https://www.journals.elsevier.com/environmen tal-innovation-and-societal-transitions/). Despite this diversification, the socio-technical origins of the STRN school are still apparent in the frameworks used today. However, research on the required and observed change processes toward sustainable development has also been undertaken and refined in communities far distant from the concerns of technology policy: Global environmental change research has been inspired

Transitions to Sustainable Development

by Earth system science and sustainability science building on knowledge bases of natural sciences, social sciences, and humanities. These collaborations initiated research into change processes within other societal systems such as socio-institutional and social-ecological systems (Loorbach et al. 2017). In these contexts, also other streams of research and other terms have been established in parallel to the STRN school. One of them is transformations to sustainability, which takes on a somewhat broader view by considering systemic relations between social and natural subsystems. The research community around the notion of transformations seems to be larger and methodologically as well as geographically more scattered (e.g., Chappin and Ligtvoet 2014; Hölscher et al. 2018). A prominent global research platform for this community is Future Earth, created during the UN Conference on Sustainable Development (Rio + 20) in 2012. It aims at creating and connecting new knowledge on global change and at developing and implementing transformations to prosperous and equitable futures (Future Earth 2013).

Transitions Research: Explaining Change Transitions research can be classified according to various criteria ranging from intellectual roots to dominant research object. Nevertheless, one generic differentiation of concepts that can be found in various literature reviews is the one between analytical/descriptive and the more prescriptive/solution-oriented approaches (e.g., Feola 2015; Köhler et al. 2019; Loorbach et al. 2017; STRN 2017). Accordingly, this section gives an overview of prominent analytical or diagnostic frameworks that aim at advancing the understanding of transitions, while the subsequent section focuses on approaches aimed at influencing or governing transitions. For a more exhaustive overview on transitions to sustainable development, the reader is referred to two very recent publications by Loorbach et al. (2017) and the European Environment Agency (2018).

1069

Socio-technical Transitions A socio-technical system can be defined as “a configuration of products, processes, services and infrastructures, regulations, skills, preferences, expectations, and actors (e.g., producers, suppliers, policymakers, users) that fulfill societal needs such as energy, food, or mobility provision” (Schot 2016, p. 447). The environmental problems created by cars, for example, cannot be tackled without regarding and potentially reconfiguring the whole socio-technical system of road transportation including industry structure, markets and user practices, road networks, fuel stations, maintenance workshops, the cultural meaning of cars, and policies (Geels 2018). According to recent reviews of the literature by Geels (2018), Loorbach et al. (2017), and STRN (2017), two main analytical frameworks exist that aim to make sense of transitions in these socio-technical systems: (i) the multilevel perspective (MLP) developed by Rip and Kemp (1998), Geels (2002, 2011), and Geels and Schot (2007) and (ii) the technological innovation systems (TIS) approach devised by Bergek et al. (2008), Hekkert et al. (2007), Jacobsson and Bergek (2011), and others as a part of the broader literature on innovation systems (e.g., see the entry by ▶ Innovation Systems for Sustainability in this encyclopedia). Note that the approaches of strategic niche management (SNM) and transition management (TM), which are sometimes mentioned on the same level as MLP and TIS, will be described in the section on transitions governance below. Originally, despite some common intellectual roots, both the MLP and the TIS frameworks were developed quite independently from each other and without an explicit normative orientation toward sustainability. Nevertheless, they have been increasingly adopted by researchers interested in analyzing (and promoting) the emergence of sustainable (technological) innovations (e.g., see Jacobsson and Bergek 2011; Markard et al. 2012; Suurs 2009). The key message of the MLP is that transitions in socio-technical systems can be conceptualized in terms of reconfigurations of dynamically stable

T

1070

Transitions to Sustainable Development

Socio-technical landscape developments (exogenous context) Landscape developments put pressure on the regime, which opens up, creating windows of opportunity for novelties.

Phase 4: The new socio-technical regime

Markets, user preferences Industry

Socio-technical regime

Science Policy Culture Technology The socio-technical regime is dynamically stable. taking advantage of windows of opportunity. Adjustments occur in the socio-technical regime.

(via expectations and networks)

Phase 2: Elements become gradually aligned and stabilize in a dominant design. Internal momentum increases.

Niche innovations Phase 1: Small networks of actors support novelties on the basis of expectations and visions. Learning processes take place on multiple dimensions (co-construction).

Time Transitions to Sustainable Development, Fig. 1 Schematic overview of the MLP. (Adapted from Geels (2002, p. 1263) and Loorbach et al. (2017, p. 606)

with permissions from Elsevier (© 2002) and Annual Reviews (© 2017))

socio-technical regimes within these systems. These regimes constitute the dominant configuration of existing technologies, established scientific disciplines, incumbent industrial actors, and established institutional arrangements (represented by black hexagon in Fig. 1). According to the MLP, reconfigurations of regimes emerge from the interplay between processes at the three levels of (i) niches, (ii) socio-technical regimes themselves, and (iii) the exogenous socio-technical landscape. Niches denote “protected spaces” (e.g., subsidized projects, market niches, research and development laboratories, etc.) where entrepreneurs, inventors, and other niche actors strive for radical innovations (yellow arrows in Fig. 1) (Geels 2018; Kemp et al. 1998). The socio-technical landscape (coined by Rip and Kemp 1998) forms the external context shaping transitions by means of (physical) geography, climate, infrastructure, and other exogenous factors that cannot be influenced by niche or regime actors – at least not in the short

term – such as demographic, political, or similarly deep structural trends (blue arrows in Fig. 1) (Geels 2002, 2018). Both niche innovations and landscape developments may exert pressure on existing regimes, thereby opening so-called windows of opportunity for transitions in general and sustainability transitions in particular (Geels 2018). Based on various case studies, different transition phases and dynamics have been conceptualized (again, see Fig. 1). Recent applications of the MLP to sustainability transitions include discussions of renewable energy niches and regime resistance against low-carbon transitions (Geels 2015). In summary, it can be said that the MLP contributes to the understanding of both stability and change of socio-technical systems. The other important analytical framework addresses the evolution of specific technologies within their innovation system: TIS are comprised of interacting actors, networks, institutions, and technologies involved in the creation, diffusion, and use of a particular technology (e.g., Bergek

Transitions to Sustainable Development

1071

et al. 2008; Köhler et al. 2019; STRN 2017). The successful diffusion and implementation of new technologies has been understood to depend on the fulfillment of a set of important functions of TIS (Bergek et al. 2008; Hekkert et al. 2007). For analyzing the performance of a specific TIS, Bergek et al. (2008) propose to follow an analytical schema (Fig. 2): After having decided which technological field or product to consider within its innovation system (step 1), the structural components of the TIS have to be identified and analyzed (step 2). These structural components have been specified by Suurs (2009) in terms of (i) supply side, (ii), demand side, (iii) knowledge structure, (iv) government structure, and (v) intermediary structure. In the subsequent step (step 3), the researcher must work out the specific interactions between these components. To facilitate this step, seven relevant functions of TIS have been defined (see Fig. 2, sphere “3a. Functions”). By mapping the TIS in terms of its so-called achieved functional pattern, the analyst can describe how the functions are filled in the TIS in question (step 3b). Then (step 4), it is assessed how well these functions are fulfilled, and a desired functional pattern is defined in terms of

process goals. Thereupon (step 5), mechanisms can be identified that either mitigate or hinder the development toward the defined process goals. Finally (step 6), key policy issues related to the identified mechanisms can be determined. Although described as a sequence, Bergek et al. (2008) caution against viewing these analytical steps in a linear fashion, since analyses of TIS will usually proceed in a nonlinear way and with various iterations. Examples of case studies applying the TIS framework to socio-technical sustainability transitions include the development of different environmental technologies such as biomass gasification or photovoltaic applications.

Socio-institutional and Socio-economic Transitions The technology-focused approaches introduced in the preceding section have proven very illuminating in mapping sustainability transitions and highlighting typical patterns common across diverse empirical cases. They have later on experienced refinement by integrating strands of institutional theory to enhance the conceptualization

5. Inducement & blocking mechanisms 4. Assessing functionality & setting process goals

6. Key policy issues

3a. Functions 2. Structural components • Actors • Networks • Institutions

1. Starting point; defining the TIS in question

• Knowledge development and diffusion • entrepreneurial experimentation • influence on the direction of search • market formation • legitimation • resource mobilization • development of positive externalities

T

3b. Achieved functional pattern

Transitions to Sustainable Development, Fig. 2 The analytical schema of TIS. (Adapted from Bergek et al. (2008), p. 411, with permission from Elsevier (© 2007))

1072

of cultures, structures, and practices contributing to or inhibiting transitions to sustainable development (Loorbach et al. 2017). The exploration of socio-institutional change processes thus facilitated more detailed analyses of the core characteristics and behavior patterns of actors, or how and why certain practices emerge and diffuse, by shifting attention to higher-order principles such as rules, norms, and culture. Drawing from disciplines such as economics (especially “heterodox” schools of thought such as institutional, behavioral, evolutionary, ecological, and complexity economics), sociology, governance studies and political science, and geography, research in this area thus involves the exploration of institutional dynamics, social innovations, social learning, normative issues, politics, and power relations as influencing factors of sustainability transitions. Consequently, scholars of these approaches frequently apply qualitative, action-oriented, transdisciplinary research methods, thereby frequently considering rather sectoral objects of study (Loorbach et al. 2017). A similar stance is taken by socio-economic transitions research (Kemp et al. 2018), which has sometimes been used as a synonym for research on socio-institutional transitions. While research on economic systems traditionally is concerned with the emergence of market systems or transitions from socialist to capitalist economies (or vice versa), parts of the diverse academic community increasingly delve into sustainability-relevant change within restructuration processes of current institutions. The object of interest is often the rule system or the level of paradigms, worldviews, and visions of (economic) actors and systems (e.g., Almudi et al. 2016; Beddoe et al. 2009; Göpel 2016; Schlaile et al. 2017). Socio-economic sustainability transition approaches were mainly prompted by the recognition of a societal minority that the prevailing paradigm of economic growth in industrialized economies (which is also an underlying notion of SDG 8) is increasingly compromising social well-being and intact ecosystems (Kemp et al. 2018). But instead of completely discarding capitalism and associated values of freedom and democracy, tendencies can be observed toward reforming some of the inherited mechanisms of it

Transitions to Sustainable Development

(e.g., see the entries on “▶ Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals,” “▶ circular economy,” “▶ Conceptualizing Green Economies: Origins, Evolution, and Imperatives,” or “▶ Decoupling of Economic Growth from Environmental Degradation” in this encyclopedia). To this end, several social innovations are currently gaining a foothold by offering alternative ways of living (e.g., ecovillages), consuming (e.g., sharing), or spending time (e.g., basic income) (Kemp et al. 2018). However, before the “great mindshift” (Göpel 2016) will stir up large parts of society, such alternative ways of living or utopias must win the “battle of ideas” – to use the metaphor by Almudi et al. (2016). This battle will extend over a longer period of time than observed for socio-technical transitions, and the protagonists will not be politicians but individual economic citizens influencing and responding to the ideas of their surroundings (Almudi et al. 2016).

Socio-ecological Transitions The rationale behind each of the transition perspectives described above (socio-technical, socio-economic, and socio-institutional) is rather anthropocentric in the sense that nature is usually regarded as exogenous to the societal system, providing services to and often being depleted by human activity. Proponents of transitions of and within socalled social-ecological systems (SES), instead, see the necessity to abandon the artificial and arbitrary distinction between ecological and social systems by emphasizing the dynamic interconnections and interdependencies between humans and the natural environment. Considering feedback effects between natural and societal subsystems adds to the complexity of the investigation and has important implications for the conceptualization of systemic change (Folke et al. 2005). From a socio-ecological perspective, climate change, for instance, is no longer merely a troublesome phenomenon created by human activity that must be suspended by a reduction of greenhouse gas emissions. Instead, the climate dynamically responds – often with a time lag – to a variety of natural and human activities, sometimes in very counterintuitive ways.

Transitions to Sustainable Development

The analytical conceptualization of change processes in SES has been undertaken by scholars of Earth system science. Some frame the dynamics in human-nature systems quite naturally as cycles of disruption and reorganization (see, for instance, the panarchy framework proposed by Gunderson and Holling 2002). Another approach to grasping the complex dynamics contributing to (un)sustainable shifts in systems is the multitier framework developed by Ostrom (2007), which attempts to bridge biophysical and social science research. It supports the analysis of change processes in SES by aggregating the multitude of variables affecting the systems’ performance into attributes of the four systemic components, (i) the resource system (e.g., a forest), (ii) the resource units (e.g., wood), (iii) the users of the system, and (iv) the governance system, while also taking into account the socio-economic, political, and ecological setting in which they are embedded. Instead of techno-managerial approaches on the level of the resource systems (e.g., changing forest management practices), social ecologists propose to frame transitions to sustainable development as necessary adaptations within the entire system (including changes in, e.g., perceptions, power, and politics) (O’Brien and Sygna 2018). This is mainly due to the complexity of interdependent processes that are likely to prove detrimental to humanity when crossing certain thresholds, which have been labeled planetary boundaries (e.g., Steffen et al. 2015).

Transitions Governance: Inducing Change In contrast to the above frameworks used for analyzing, theorizing, and understanding transitions, transitions governance refers to approaches that relate to steering, coordination, and directionality at the system level with an overarching normative orientation toward sustainable development (Geels 2018; Patterson et al. 2017). Although transitions often involve uncertainty and so-called emergent properties (e.g., meaning that the system itself or the transition process has properties that cannot be reduced to the properties

1073

of its elements), the overall assumption of transitions governance is that these complex processes can, to a certain extent, be steered and influenced by humans (Young 2017). Hence, despite different foci and approaches, one general difficulty of transitions governance is the tension between open-endedness/uncertainty and directionality/ normativity (Frantzeskaki et al. 2012). Given different worldviews and visions of sustainability or desired system states (e.g., Beddoe et al. 2009; Hedlund-de Witt 2014), transitions governance is a highly contested and conflict-laden field (Johnson et al. 2018). Another general problem is policy resistance, that is, the tendency of policy interventions to fail due to delays and dilution, defeat by the responses of the system, or by actually making a (persistent) problem worse instead of contributing to its solution (de Gooyert et al. 2016). Various governance measures have thus been developed that aim at overcoming these difficulties. Transitions governance strategies can be classified according to various criteria. For example, while Geels (2018) takes up the tripartition into bottom-up, top-down, and network governance approaches, Patterson et al. (2017) propose to distinguish between governance for transitions (i.e., creating conditions for the emergence of transitions in complex systems), governance of transitions (i.e., actively triggering and steering transitions), and transitions in governance (i.e., transitions in governance regimes). Note, however, that Patterson et al. (2017) use the term transformations in their publication instead of transitions; for the sake of terminological consistency, transitions is used here. While all of these distinctions are useful and insightful for the given context, the following summary of governance approaches takes up the above classification according to socio-technical, socio-institutional/ socio-economic, and socio-ecological transitions.

Governing Socio-technical Transitions Strategic Niche Management Strategic niche management (SNM) has been applied as an analytical research approach and as

T

1074

a policy framework (e.g., Loorbach et al. 2017). Due to its orientation toward a deliberate process of governing the emergence of niches, it is listed here among other governance frameworks. As its name implies, the key idea behind SNM is that niches (in terms of protected spaces for radical innovations) can be deliberately managed or at least supported, for example, by governmental policies (e.g., Kemp et al. 1998). Already with an explicit focus on sustainability transitions, an early definition of SNM was provided by Kemp et al. (1998): SNM “is the creation, development and controlled phase-out of protected spaces for the development and use of promising technologies by means of experimentation, with the aim of (1) learning about the desirability of the new technology and (2) enhancing the further development and the rate of application of the new technology” (p. 186). The literature on SNM has also identified three interacting processes that facilitate the emergence of radical (technological) novelties in niches: (i) learning processes (e.g., about societal problems and needs as well as the possibilities of a technology), (ii) articulating (and adjusting) visions and expectations of different actors, and (iii) building and expanding the social networks of actors involved in niche innovations (Geels 2018; Kemp et al. 1998). Some obstacles to SNM in practice are discussed, for example, by Lovell (2007) using the case of low-energy housing niches in the United Kingdom, thereby particularly highlighting the difficulties of governments becoming involved in niche management in a coherent and well-organized way. Transition Management Transition management (TM) can likewise be regarded as both an analytical framework and a prescriptive policy tool (Loorbach 2010; Rotmans et al. 2001; Rotmans and Loorbach 2009). TM aims at developing a governance approach by drawing, among others, on research on sociotechnical systems and complexity theory. In short, TM “injects goal-directing processes into socio-technical transformations” (Smith and Stirling 2010). The literature on TM distinguishes four types of governance activities (e.g., Frantzeskaki et al. 2012; Loorbach 2010): (i)

Transitions to Sustainable Development

strategic, (ii) tactical, (iii) operational, and (iv) reflexive. Strategic activities involve the development of visions and the formulation of transition goals within so-called transition arenas (i.e., a small group of front-runners); tactical activities refer to interest-driven steering activities for developing concrete transition agendas related to the regime level; operational activities include short-term experimental activities, and reflexive activities aim at evaluating and monitoring both the transition process and the TM process itself (Köhler et al. 2019; Loorbach 2010; STRN 2017). The practical implementation of TM in the Dutch energy transition program (2002–2010) has been one of the first attempts to apply such complexity-based governance ideas to real-world sustainability transition issues. However, the concrete realization of TM in the Netherlands (Kemp 2010) has also attracted some criticism not least from other transitions scholars (e.g., see Geels 2018). Reflexive Governance Closely related to TM – especially in terms of reflexive activities mentioned above – is the approach of reflexive governance (RG) (Voß and Kemp 2006). In this sense, RG can be regarded as a specification or derivative of TM (Voß et al. 2009) with a primary focus on the problem of reflexivity of governance strategies, that is, “the phenomenon that thinking and acting with respect to an object of steering also affects the subject and its ability to steer” (Voß and Kemp 2006, p. 4). Based on a reflection on specific problem features (e.g., coevolution, uncertainty, path dependence, value trade-offs, and distributed transformative capacities), Voß and Kemp (2006) describe a set of strategy requirements for RG, including (i) transdisciplinary knowledge production, (ii) experiments and adaptivity of strategies and institutions, (iii) anticipation of long-term systemic effects of measures, (iv) iterative participatory goal formulation, and (v) interactive strategy development. More recently, the ideas of RG have been taken up again to develop the notion of reflexive innovation systems (see the entry on “▶ Innovation Systems for Sustainability” by Urmetzer and Pyka for details).

Transitions to Sustainable Development

Transformative Innovation Policy One of the most recent developments in the literature on governance of socio-technical transitions is the discussion about transformative innovation policy (TIP) (Diercks et al. 2019), advanced particularly by members of the so-called TIP Consortium initiative (Schot and Steinmueller 2018; http://tipconsortium.net). A new policy framing around transformative change and socalled transformational system failures is being developed, which primarily aims at addressing (i) directionality failure, (ii) demand articulation failure, (iii) policy coordinationfailure, and (iv) reflexivity failure in addition to the “traditional” market failures (e.g., information asymmetries, knowledge spillovers, cost externalization, overexploitation of commons) and structural system failures (e.g., infrastructural, institutional, network, and capabilities failures) (Schot and Steinmueller 2018; Weber and Rohracher 2012). While market failures and structural system failures have received much attention from policymakers and innovation scholars (e.g., see Weber and Rohracher 2012), the four transformational system failures have only recently started to attract attention from the innovation policy community. According to Weber and Rohracher (2012), directionality failure refers, for example, to the lack of shared visions and goals of sustainability transitions as well as a lack of means for collective coordination and targeted funding. Demand articulation failure refers, for example, to inadequate or lacking spaces, user environments, or markets where new types of demand and user preferences can be developed, articulated, or anticipated. In an extended sense, demand articulation failure may also include an insufficient recognition of the role and responsibility of consumers in innovation processes (see Schlaile et al. 2018, on a related discussion). Policy coordination failure includes a lacking ability to coordinate policies from various domains both horizontally (e.g., between taxes, economic, environmental, and social policies) and across multiple levels (e.g., between regional, national, and international policies), and it may be questioned if the usual coordination approaches (e.g., national innovation councils or

1075

committees) may help to overcome this failure (Schot and Steinmueller 2018). Finally, reflexivity failure relates back to the issues of RG mentioned above, including, for example, failures to monitor, anticipate, and involve stakeholders, lacking arrangements for knowledge brokering, or insufficient spaces for experimentation both in terms of spaces for learning and adaptive policy portfolios that deal with uncertainty (Weber and Rohracher 2012). In summary, it can be said that explicit recognition of transformational failures by TIP implies not only opening up corridors for sustainable socio-technical transitions but also closing down options for unsustainable development pathways (Schot and Steinmueller 2018). Therefore, TIP aims not only at creating niches for experimentation but also at actively destabilizing unsustainable socio-technical regimes. In general, the objectives of TIP are more ambitious than other innovation policy approaches (Diercks et al. 2019; Steward 2012).

Governing Socio-institutional and Socio-economic Transitions Transformational Sustainability Interventions The basic premise of a socio-institutional and socio-economic perspective is the recognition that underlying intangible intellectual frameworks (ideas, paradigms, values, culture, policy styles, or institutions) influence individual decisions (and vice versa) and thus the (un)sustainability of the system’s performance. Consequently, the governance approaches proposed by this school of thought target changes in the systemic characteristics that guide individual and collective actions. One quite recent framework of inducing system change toward sustainable development has been termed transformational sustainability interventions by Abson et al. (2017). Building on the concept of leverage points proposed by Meadows (1999), Abson et al. (2017) argue that truly effective sustainability interventions are required that may be less obvious than the highly tangible, but essentially ineffective, policy interventions implemented to date. The set of 12 points to intervene in systems proposed by Meadows

T

1076

range from shallow leverage points such as changing system parameters by introducing taxes to deep leverage points such as changing the paradigm out of which the system arises, for example, by overcoming the prevailing focus on economic growth (Meadows 1999). The deeper the leverage point, the more effective it is in transforming the system, but also the harder it is to implement. Broadly speaking, socio-institutional approaches postulate changing individual values and systemic intent rather than enforcing certain behavior. From this perspective, setting emission thresholds for private cars, for instance, might be less effective in reducing CO2 and particulate matter in cities than awareness campaigns along with the offer of alternative concepts to induce a societal mindshift (Göpel 2016) toward less detrimental and socially more desirable institutions.

Governing Socio-ecological Transitions From the SES point of view, a transition of sociotechnical systems, for instance, can only be one part of a more holistic socio-ecological transformation aiming at reducing risk and vulnerability of the planet and its inhabitants while protecting its viability and integrity (O’Brien and Sygna 2018). This all-embracing perspective also shifts away the focus from planning and controlling transition processes to facilitating experimentation, learning, and adaptation of all elements of the system, including humans (Folke 2006). The underlying assumption of this approach is that SES generally possess the capacity to deal with disruptive change, i.e., they are resilient. In the context of sustainable development, resilience plays an ambiguous role (Chapin et al. 2010): On the one hand, the system’s capacity to absorb shocks or perturbations and to sustain its fundamental function is crucial for humanity’s survival on this dynamic planet. On the other hand, resilience also causes unsustainable configurations to endure longer than desired (e.g., the lock-in effect). The goal of deliberately transforming SES must be to (i) preserve or even increase resilience of desirable systems (e.g., those natural systems that sustain humanity) and (ii) to

Transitions to Sustainable Development

overcome resilience of harmful systems to counteract current trends of crossing critical thresholds in the Earth system (O’Brien and Sygna 2018). Adaptive Governance This perception resonates with the concept of adaptive governance proposed by Folke et al. (2005). From their perspective, the key to dealing with the complexity and unpredictability of SES faced with sustainability challenges lies in adaptive co-management. Here, crucial tasks of a truly transformative governance involve creating and safeguarding legislation that enables multiple stakeholders, guaranteeing democratic and flexible institutions, and recognizing central network actors (Folke et al. 2005). Other approaches, such as transformative adaptation, more strongly address the need for dealing with the systemic causes of the Earth’s vulnerability and unsustainability. The proponents of such governance for navigating change argue that adapting to dwindling ecosystem services must be complemented with action contesting its causes by altering the systemic structures and paradigms in the social sphere (Patterson et al. 2017). This approach more strongly emphasizes the normative dimension of transformation, which adds controversy to the hitherto descriptive nature of traditional Earth systems research (Johnson et al. 2018; O’Brien and Sygna 2018). The way research on transformations of SES frequently deals with such debatable governance aims is by engaging with society and practitioners (Chapin et al. 2010; Future Earth 2013). Such transdisciplinary research design values the prolific source of nonscientific knowledge and recognizes the fact that co-created and culturally embedded knowledge generally holds a higher chance of being accepted and implemented into practice (WBGU 2011). Earth System Governance Recent developments in the literature on governance of (transitions of) SES have been advanced particularly by the Earth System Governance (ESG) project (Biermann et al. 2010; Biermann 2014; http://www.earthsystemgovernance.org).

Transitions to Sustainable Development

ESG is a core project of Future Earth and has been developed in response to the complex challenge of “protecting the entire earth system, including most of its subsystems, and building stable institutions that guarantee a safe transition process and a coevolution of natural and social systems at planetary scale” (Biermann 2014, p. 9). Biermann (2014) and other proponents of the framework have defined ESG as “the sum of the formal and informal rule systems and actor networks at all levels of human society that are set up to steer societies toward preventing, mitigating, and adapting to environmental change and earth system transformation” (p. 9). As lucidly summarized by Patterson et al. (2017), the ESG framework comprises five key governance challenges, i.e., the “five As” of (i) architecture (e.g., active and valid norms, principles, regulations, procedures, institutions, and organizations), (ii) agency (i.e., according to Biermann et al. 2010, p. 283: “the capacity to act in the face of global environmental change or to produce effects . . . that ultimately shape natural processes”), (iii) adaptiveness (i.e., an umbrella term for related concepts such as resilience and adaptation; it involves both the governance of adaptations to socio-ecological transitions and adaptations within governance systems), (iv) accountability and legitimacy (e.g., questions about sources, forms, degrees, transparency, and institutionalization of regulations and actors), and (v) allocation & access (issues related to the key question of “[w]ho gets what, when, where and how” as explained by Biermann et al. 2010, p. 283). Moreover, these “five As” are addressed and conceptualized in ESG together with the four cross-cutting themes of (i) power, (ii) knowledge, (iii) norms, and (iv) scale. In summary, it can be said that ESG is currently a growing research field on governance issues and not a practically tested governance approach. In fact, in October 2018, a new scientific journal was launched, which “seeks to align our current institutions and governance systems with the fundamental 21st century challenges of global environmental change and earth-system transformation” (https://www.journals.elsevier. com/earth-system-governance).

1077

Current Issues and Criticism The sheer number of global sustainability challenges, their interrelation with societal systems, their connection to multiple disciplines, and the resulting complexity of potentially effective approaches to dealing with them obviously renders research on sustainability transitions prone to critique. For socio-technical transitions research, the points of criticism have included an insufficient recognition of agency, inconsistent definitions of regimes, overemphasis on bottomup change processes, indistinct conceptualizations of the landscape level, a misleading terminology (e.g., hierarchical notions in the MLP), the usage or lack of scale and spatial dimensions, and an insufficient conceptualization of destabilization, phaseout, and unlearning in incumbent regimes (e.g., Geels 2011; STRN 2017). Approaches to sustainability transitions from socio-institutional/socio-economic perspectives have been criticized for a lack of true interdisciplinarity due to topic specialists (e.g., sociologists, philosophers, political scientists, and economists) conducting research in rather fragmented fields (Kemp et al. 2018). Similarly, transitions research on SES has been found to rely on a mixture of approaches, and it has been criticized, among other things, for a relative weakness in explaining how transitions can be achieved and governed, a lacking framework that connects the individual level (e.g., in terms of power and interests) to systemic outcomes, and an insufficient integration of natural science with social science aspects (O’Brien and Sygna 2018). The ongoing vigorous debate about individual shortcomings of approaches and conceptualizations is likely to help scholars refine their research in response to these points of critique. However, a few rather general challenges apply to all the above-illustrated research and governance approaches to a greater or lesser degree. For example, due to their interdisciplinary nature, transitions researchers frequently seem to get caught up in intellectual debates about methodological issues (e.g., STRN 2017) or terminological issues and nuances of transitions vs. transformations (e.g., Hölscher et al. 2018),

T

1078

Transitions to Sustainable Development

although the value of pluralism in methods is generally acknowledged. Another quite general issue relates to the (insufficiently considered) complexity of the normative dimension of sustainability transitions (e.g., Schlaile et al. 2017). Sustainable development itself is a highly contested normative issue, and the fact that systemic changes involve trade-offs and various alternative pathways as well as human actors with different worldviews adds to this complexity. This issue also relates to often-downplayed feedbacks, trade-offs, and target conflicts between some of the SDGs (e.g., SDG 8’s global target of economic growth – especially when captured by gross domestic product – and SDG 12: responsible consumption and production, for instance). This is why recently not just moral philosophers and ethicists but also various sustainability transitions researchers have called for acknowledging the complexity of this normative

dimension, for example, by taking the evolutionary processes at the level of paradigms, cultures, and worldviews more explicitly into consideration (e.g., Almudi et al. 2016; Beddoe et al. 2009). In this regard, it can also be argued that sustainability transitions research tends to disregard the literature on cultural evolution that has been addressing this dimension, but which, in turn, arguably also failed to establish sufficient connections to the transitions literature (e.g., Waring and Tremblay 2016). A further layer of complexity is added by the fact that transitions researchers are frequently part of the systems they strive to explain and change, rendering distinctions between observing entities and observed systems somewhat fuzzy (see also the related distinction between ontological and epistemological approaches to systems in Abson et al. 2017, p. 32). Thus, scientific knowledge alone will arguably not be sufficient for understanding and

Transitions to Sustainable Development, Table 1 Comparison of key transition concepts

Concept Focus

Sustainability transitions in socio-technical systems Technological innovation in a social context; coevolution, path dependency, interplay of niches, regimes, and landscapes

Typical empirical domains Main academic disciplines

Energy, mobility, water, waste

Rationale for governance approach

Addressing persistent problems, market failures, structural system failures, and transformational system failures; (technological) innovations as solution to (predominantly environmental) sustainability problems; fulfillment of SDGs

Innovation studies, history (of technology), science and technology studies, practice theory, etc.

Sustainability transitions in socio-institutional/socioeconomic systems Markets, institutions and institutional transformation, agency, structure, power relations, multi-actor networks, social innovation, culture, worldviews, and paradigms Energy, water, resources, food, health care, education, labor, finance Sociology, economics, governance studies and political science, geography, applied philosophy, etc.

Tapping the potential of transformational sustainability interventions (leverage points), social innovations, networked governance, and transdisciplinarity; fulfillment of SDGs

Sustainability transitions in SES Human-nature relations, resilience and vulnerability of systems, adaptive and transformative capacity

Forestry, fisheries, agriculture, biodiversity Ecology, environmental studies, sustainability science, geography, biology, (complex) systems science, governance studies and political science, etc. Navigating planetary boundaries, achieving desired resilience, and overcoming undesired resilience/lock-in; fulfillment of SDGs

Source: primarily based on and expanded from Loorbach et al. (2017) and the European Environment Agency (2018)

Transitions to Sustainable Development

governing transitions. Not least against this background, calls for participatory approaches as well as co-creating, co-designing, and co-producing knowledge with practitioners and societal stakeholders have recently gained momentum (e.g., European Environment Agency 2018; Scoones et al. 2018; WBGU 2011).

Conclusion In view of the multitude and diversity of approaches to analyzing and governing sustainability transitions, a concluding summary seems appropriate. The following table proposes such a synopsis inspired by earlier overviews by Loorbach et al. (2017) and the European Environment Agency (2018) (Table 1). It is important to note that this summarizing overview may create the impression that the literature on sustainability transitions can be quite easily categorized, which is not the case. In fact, the approaches and concepts often overlap, and the boundaries between them are ambiguous and blurred. Despite rather obvious differences – especially in terms of intellectual history and disciplinary background – it can be concluded that all concepts mentioned in this overview deal with wicked or persistent systemic problems, complex systems, nonlinear and path-dependent changes as well as lock-ins, emergence, and multiple levels of systemic change. Why then, have researchers not managed to merge all these approaches into one overarching concept for saving the Earth? In fact, the hope for a silver bullet is inconsistent with systemic thinking. Indeed, considering the magnitude of the multiple crises humanity is facing, the diversity of research and governance approaches is quite advantageous. Different conceptual lenses, methods, and decentralized attempts to tackle diverse global problems offer opportunities for learning, crossfertilization, and adaptation. Trade-offs, throwbacks, and uncertainty must be accepted, provided that the overall destination remains on the horizon: the transition to sustainable development.

1079

Cross-References ▶ Biobased Economy: Critical Foundation for Achieving Sustainable Development Goals ▶ Circular Economy ▶ Decoupling of Economic Growth from Environmental Degradation ▶ Conceptualizing Green Economies: Origins, Evolution, and Imperatives ▶ Innovation Systems for Sustainability ▶ Responsible Research and Innovation ▶ Sustainable Innovation: Creating Solutions for Sustainable Development

References Abson DJ, Fischer J, Leventon J, Newig J, Schomerus T, Vilsmaier U, von Wehrden H, Abernethy P, Ives CD, Jager NW (2017) Leverage points for sustainability transformation. Ambio 46:30–39. https://doi.org/ 10.1007/s13280-016-0800-y Almudi I, Fatas-Villafranca F, Potts J (2016) Utopia competition: a new approach to the micro-foundations of sustainability transitions. J Bioecon 19:165–185. https://doi.org/10.1007/s10818-016-9239-2 Beddoe R, Costanza R, Farley J, Garza E, Kent J, Kubiszewski I, Martinez L, McCowen T, Murphy K, Myers N, Ogden Z, Stapleton K, Woodward J (2009) Overcoming systemic roadblocks to sustainability: the evolutionary redesign of worldviews, institutions, and technologies. Proc Natl Acad Sci 106:2483–2489. https://doi.org/10.1073/pnas.0812 570106 Bergek A, Jacobsson S, Carlsson B, Lindmark S, Rickne A (2008) Analyzing the functional dynamics of technological innovation systems: a scheme of analysis. Res Policy 37:407–429. https://doi.org/10.1016/j.respol. 2007.12.003 Biermann F (2014) Earth system governance: world politics in the Anthropocene. The MIT Press, Cambridge, MA Biermann F, Betsill MM, Gupta J, Kanie N, Lebel L, Liverman D, Schroeder H, Siebenhüner B, Zondervan R (2010) Earth system governance: a research framework. Int Environ Agreements: Polit Law Econ 10:277–298. https://doi.org/10.1007/ s10784-010-9137-3 Chapin FS, Carpenter SR, Kofinas GP, Folke C, Abel N, Clark WC, Olsson P, Smith DMS, Walker B, Young OR, Berkes F, Biggs R, Grove JM, Naylor RL, Pinkerton E, Steffen W, Swanson FJ (2010) Ecosystem stewardship: sustainability strategies for a rapidly changing planet. Trends Ecol Evol

T

1080 25:241–249. https://doi.org/10.1016/j.tree.2009. 10.008 Chappin EJL, Ligtvoet A (2014) Transition and transformation: a bibliometric analysis of two scientific networks researching socio-technical change. Renew Sust Energ Rev 30:715–723. https://doi.org/10.1016/j. rser.2013.11.013 de Gooyert V, Rouwette E, van Kranenburg H, Freeman E, van Breen H (2016) Sustainability transition dynamics: towards overcoming policy resistance. Technol Forecast Soc Chang 111:135–145. https://doi.org/ 10.1016/j.techfore.2016.06.019 Diercks G, Larsen H, Steward F (2019) Transformative innovation policy: addressing variety in an emerging policy paradigm. Res Policy 48:880–894. https://doi. org/10.1016/j.respol.2018.10.028 European Environment Agency (2018) EEA report no 25/ 2017: perspectives on transitions to sustainability, Luxembourg. https://doi.org/10.2800/332443 Future Earth (2013) Initial design: report of the transition team, Paris. http://www.futureearth.org/sites/default/ files/Future-Earth-Design-Report_web.pdf. Accessed 3 Oct 2018 Feola G (2015) Societal transformation in response to global environmental change: a review of emerging concepts. Ambio 44:376–390. https://doi.org/10.1007/ s13280-014-0582-z Folke C (2006) Resilience: the emergence of a perspective for social–ecological systems analyses. Glob Environ Chang 16:253–267. https://doi.org/10.1016/j. gloenvcha.2006.04.002 Folke C, Hahn T, Olsson P, Norberg J (2005) Adaptive governance of social-ecological systems. Annu Rev Environ Resour 30:441–473. https://doi.org/10.1146/ annurev.energy.30.050504.144511 Frantzeskaki N, Loorbach D, Meadowcroft J (2012) Governing societal transitions to sustainability. Int J Sustain Dev 15:19–36. https://doi.org/10.1504/ ijsd.2012.044032 Geels FW (2002) Technological transitions as evolutionary reconfiguration processes: a multi-level perspective and a case-study. Res Policy 31:1257–1274. https://doi.org/10.1016/S0048-7333(02)00062-8 Geels FW (2011) The multi-level perspective on sustainability transitions: responses to seven criticisms. Environ Innov Soc Trans 1:24–40. https://doi.org/ 10.1016/j.eist.2011.02.002 Geels FW (2015) The arduous transition to low-carbon energy: a multi-level analysis of renewable electricity niches and resilient regimes. In: Fagerberg J, Martin BR, Laestadius S (eds) The triple challenge for Europe: economic development, climate change, and governance. Oxford University Press, Oxford, UK, pp 91– 118 Geels FW (2018) Socio-technical transitions to sustainability. Oxford research encyclopedia of environmental science. https://doi.org/10.1093/acrefore/ 9780199389414.013.587

Transitions to Sustainable Development Geels FW, Schot J (2007) Typology of sociotechnical transition pathways. Res Policy 36:399–417. https://doi.org/10.1016/j.respol.2007.01.003 Göpel M (2016) The great mindshift. Springer, Cham Grin J, Rotmans J, Schot J (2010) Transitions to sustainable development: new directions in the study of long term transformative change. Routledge, New York Gunderson LH, Holling CS (eds) (2002) Panarchy: understanding transformations in human and natural systems. Island Press, Washington, DC Hedlund-de Witt A (2014) Rethinking sustainable development: considering how different worldviews envision “development” and “quality of life”. Sustainability 6:8310–8328. https://doi.org/10.3390/ su6118310 Hekkert MP, Suurs RAA, Negro SO, Kuhlmann S, Smits REHM (2007) Functions of innovation systems: a new approach for analysing technological change. Technol Forecast Soc Chang 74:413–432. https://doi. org/10.1016/j.techfore.2006.03.002 Hölscher K, Wittmayer JM, Loorbach D (2018) Transition versus transformation: what’s the difference? Environ Innov Soc Trans 27:1–3. https://doi.org/10.1016/j. eist.2017.10.007 Jacobsson S, Bergek A (2011) Innovation system analyses and sustainability transitions: contributions and suggestions for research. Environ Innov Soc Trans 1:41– 57. https://doi.org/10.1016/j.eist.2011.04.006 Johnson JL, Zanotti L, Ma Z, Yu DJ, Johnson DR, Kirkham A, Carothers C (2018) Interplays of sustainability, resilience, adaptation and transformation. In: Leal Filho W, Marans RW, Callewaert J (eds) Handbook of sustainability and social science research. Springer International Publishing, Cham, pp 3–25 Kemp R (2010) The Dutch energy transition approach. IEEP 7:291–316. https://doi.org/10.1007/s10368-0100163-y Kemp R, Schot J, Hoogma R (1998) Regime shifts to sustainability through processes of niche formation: the approach of strategic niche management. Tech Anal Strat Manag 10:175–198. https://doi.org/ 10.1080/09537329808524310 Kemp R, Weaver PM, Strasser T, Backhaus J, Golland A (2018) Socio-economic transformations: insights for sustainability. In: EEA report no 25/2017: perspectives on transitions to sustainability. Publications Office of the European Union, Luxembourg, pp 70–94 Köhler J, Geels FW, Kern F, Markard J, Wieczorek A, Alkemade F, Avelino F, Bergek A, Boons F, Fünfschilling L, Hess D, Holtz G, Hyysalo S, Jenkins K, Kivimaa P, Martiskainen M, McMeekin A, Mühlemeier MS, Nykvist B, Onsongo E, Pel B, Raven R, Rohracher H, Sandén B, Schot J, Sovacool B, Turnheim B, Welch D, Wells P (2019) An agenda for sustainability transitions research: state of the art and future directions. https://transitionsnetwork.org/wp-con tent/uploads/2016/09/STRN_Research_Agenda_2019c-

Transitions to Sustainable Development 2.pdf. Published version in EIST available via https:// doi.org/10.1016/j.eist.2019.01.004 Loorbach D (2010) Transition management for sustainable development: a prescriptive, complexity-based governance framework. Governance 23:161–183. https://doi.org/10.1111/j.1468-0491.2009.01471.x Loorbach D, Frantzeskaki N, Avelino F (2017) Sustainability transitions research: transforming science and practice for societal change. Annu Rev Environ Resour 42:599–626. https://doi.org/10.1146/annurev-environ102014-021340 Lovell H (2007) The governance of innovation in sociotechnical systems: the difficulties of strategic niche management in practice. Sci Public Policy 34:35–44. https://doi.org/10.3152/030234207X190540 Markard J, Raven R, Truffer B (2012) Sustainability transitions: an emerging field of research and its prospects. Res Policy 41:955–967. https://doi.org/ 10.1016/j.respol.2012.02.013 Meadows D (1999) Leverage points: Places to intervene in a system. Sustainability Institute, Hartland O’Brien K, Sygna L (2018) Transformations in socio-ecological systems. In: EEA report no 25/2017: perspectives on transitions to sustainability. Publications Office of the European Union, Luxembourg, pp 28–44 Ostrom E (2007) A diagnostic approach for going beyond panaceas. Proc Natl Acad Sci U S A 104:15181–15187. https://doi.org/10.1073/pnas.0702288104 Patterson J, Schulz K, Vervoort J, van der Hel S, Widerberg O, Adler C, Hurlbert M, Anderton K, Sethi M, Barau A (2017) Exploring the governance and politics of transformations towards sustainability. Environ Innov Soc Trans 24:1–16. https://doi.org/10.1016/j.eist.2016.09. 001 Rip A, Kemp R (1998) Technological change. In: Rayner S, Malone EL (eds) Human choice and climate change, vol 2. Battelle Press, Washington, DC, pp 327–399 Rotmans J, Loorbach D (2009) Complexity and transition management. J Ind Ecol 13:184–196. https://doi.org/ 10.1111/j.1530-9290.2009.00116.x Rotmans J, Kemp R, van Asselt M (2001) More evolution than revolution: transition management in public policy. Foresight 3:15–31. https://doi.org/10.1108/ 14636680110803003 Schlaile MP, Urmetzer S, Blok V, Andersen A, Timmermans J, Mueller M, Fagerberg J, Pyka A (2017) Innovation systems for transformations towards sustainability? Taking the normative dimension seriously. Sustainability 9:2253. https://doi.org/10.3390/ su9122253 Schlaile MP, Mueller M, Schramm M, Pyka A (2018) Evolutionary economics, responsible innovation and demand: making a case for the role of consumers. Philos Manag 17:7–39. https://doi.org/10.1007/ s40926-017-0054-1 Schot J (2016) Confronting the second deep transition through the historical imagination. Technol Cult 57:445–456. https://doi.org/10.1353/tech.2016.0044

1081 Schot J, Steinmueller WE (2018) Three frames for innovation policy: R&D, systems of innovation and transformative change. Res Policy 47:1554–1567. https://doi. org/10.1016/j.respol.2018.08.011 Scoones I, Stirling A, Abrol D, Atela J, Charli-Joseph L, Eakin H, Ely A, Olsson P, Pereira L, Priya R, van Zwanenberg P, Yang L (2018) Transformations to sustainability: STEPS working paper 104. https://stepscentre.org/publication/transformations-to-sustainabil ity-wp104/ Smith A, Stirling A (2010) The politics of social-ecological resilience and sustainable socio-technical transitions. Ecol Soc 15: 11. https://www.ecologyandsociety.org/ vol15/iss1/art11/ Steffen W, Richardson K, Rockström J, Cornell SE, Fetzer I, Bennett EM, Biggs R, Carpenter SR, de Vries W, de Wit CA, Folke C, Gerten D, Heinke J, Mace GM, Persson LM, Ramanathan V, Reyers B, Sörlin S (2015) Planetary boundaries: guiding human development on a changing planet. Science 347:1259855:1–1259855:12. https://doi.org/10.1126/ science.1259855 Steward F (2012) Transformative innovation policy to meet the challenge of climate change: sociotechnical networks aligned with consumption and end-use as new transition arenas for a low-carbon society or green economy. Tech Anal Strat Manag 24:331–343. https://doi.org/10.1080/09537325.2012.663959 STRN (2017) A research agenda for the sustainability transitions research network. https://transitionsnetwork.org/ wp-content/uploads/2018/01/STRN_Research_Agenda_ 2017.pdf Suurs RAA (2009) Motors of sustainable innovation: towards a theory on the dynamics of technological innovation systems, Utrecht University Voß J-P, Kemp R (2006) Sustainability and reflexive governance: introduction. In: Voß J-P, Bauknecht D, Kemp R (eds) Reflexive governance for sustainable development. Edward Elgar, Cheltenham, pp 3–28 Voß J-P, Smith A, Grin J (2009) Designing long-term policy: rethinking transition management. Policy Sci 42:275–302. https://doi.org/10.1007/s11077-0099103-5 Waring TM, Tremblay E (2016) An evolutionary approach to sustainability science. Cliodynamics 7:119–167. https://doi.org/10.21237/c7clio7131139 WBGU (2011) World in transition: a social contract for sustainability. WBGU, Berlin Weber KM, Rohracher H (2012) Legitimizing research, technology and innovation policies for transformative change: combining insights from innovation systems and multi-level perspective in a comprehensive ‘failures’ framework. Res Policy 41:1037–1047. https://doi.org/10.1016/j.respol.2011.10.015 Young OR (2017) Governing complex systems: social capital for the Anthropocene. The MIT Press, Cambridge, MA

T

1082

Triple Bottom Line ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs)

Typologies of Sustainable Business Rodrigo Lozano1 and María Jesús Muñoz-Torres2 1 University of Gävle, Gavle, Sweden 2 University Jaume I, Castellón de la Plana, Spain

Synonyms Typologies of sustainable business models

Definitions A more sustainable business model is a holistic and systemic reflection of how a company operationalizes its strategy, based on resource efficiency (through operations and production, management and strategy, organizational systems, governance, assessment and reporting, and change), so that the outputs have more value and contribute to sustainability more than the inputs (in regard to material and resources that are transformed into products and services, economic value, human resources, and environmental value). The business model is affected by the company’s resources (tangible and intangible), the supply chain, and the company’s stakeholders (internal, interconnecting, and external), including the environment (inside and outside the company).

Introduction According to the Sustainable Development Goal 8, labor productivity has increased and the unemployment rate has decreased, but progress is still limited particularly for young people, inequalities,

Triple Bottom Line

and safe and secure working environments (United Nations 2018). In this context, companies have been considered as responsible for many negative impacts on the environment and on societies (Dunphy et al. 2003). To respond to these, corporations have engaged in efforts to integrate sustainability into their operations and better contribute to making societies more sustainable (Elkington 2002) and satisfy the needs of today’s societies without compromising the needs of tomorrow’s societies (WCED 1987), i.e., the time dimension. It should be noted that sustainability is an ideal dynamic state (Reid 1995). Interest in sustainability from the corporate sector is evidenced by over 12,000 companies in 160 countries that have signed the UN Global Compact (UNGC 2010). In this context, businesses have been increasingly considering the entire life cycle of a product or service, from upstream (i.e., extraction) to downstream (i.e., disposal), and its use (DeSimone and Popoff 2000; Holliday et al. 2002; Robèrt 2000). Corporate Sustainability (CS) has been proposed as a framework to address the full array of sustainability challenges and issues such as (see Bartelmus 1999; GRI 2006; Lozano 2012) value added, capital formation, depreciation, capital stock, net worth (assets and liabilities), savings, market presence, customers, earnings, value creation and shareholders, acquisitions, and patents and intellectual property in the economic dimension; environmental cost, defense expenditures, emissions and effluents (including greenhouse gases), energy, noise, wastes and recycling, water and wastewater treatment, land use and restoration, biodiversity, and certifications in the environmental dimension; value of social and human capital, time budgets, social indicators, wages, work hours, benefits, development, training and education, human rights, health and safety, political funding, volunteering and philanthropy, communities, and products for the social dimension; and eco-efficiency and earnings and communities and the environment, as interconnecting issues. CS must be addressed in a holistic way (as highlighted by Linnenluecke et al. 2009), which means addressing the four dimensions of sustainability (i.e., economic, environmental, social, and

Typologies of Sustainable Business

time, as well as their interconnections (Lozano 2012)). It should be noted that hitherto a large body of sustainability literature has focused almost exclusively on environmental issues (e.g., Atkinson 2000; Costanza 1991; Rees 2002; Reinhardt 2000), with many sustainability initiatives by companies focusing mainly on technological and managerial ploys (Lozano 2013). Dyllick and Hockerts (2002) defined CS as “. . .meeting the needs of a firm’s direct and indirect stakeholders, such as shareholders, employees, clients, pressure groups, communities without compromising its ability to meet the needs of future stakeholders as well.” Another definition proposes CS as corporate activities that proactively seek to contribute to sustainability equilibria, including the economic, environmental, and social dimensions of today, as well as their interrelations within and throughout the time dimension while addressing the company’s system (including operations and production, management and strategy, organizational systems, procurement and marketing, governance, and assessment and communication) and its stakeholders (Lozano 2012; Lozano et al. 2017). CS encompasses the entire life cycle of a product or service (DeSimone and Popoff 2000; Holliday et al. 2002; Robèrt 2000). Dyllick and Muff (2015) propositioned four stages of business sustainability typology based on three approaches (input, process, and output),

1083

as shown in Table 1. As it can be observed, the process has been from business-as-usual to business sustainability 3.0 by focusing on the triple bottom line and adding and combining the insideout and the outside-in organizational perspectives. CS has challenged traditional business models (Lozano 2012; Murray et al. 2015), which have fostered a shift from selling products to providing service solutions to customer needs (Lay et al. 2009; Mont et al. 2006) and better engaging with stakeholders while creating competitive advantages to the customers, company, and society (Boons and Lüdeke-Freund 2013; Porter and Kramer 2011; Stubbs and Cocklin 2008). A number of alternative, or sustainable, business models have been proposed to better contribute to sustainability (Bohnsack et al. 2014; Dunphy et al. 2014; Mont et al. 2006; Schaltegger et al. 2016; Stubbs and Cocklin 2008). The chapter is structured in the following way: Section “Sustainable Business Model Definitions” analyzes sustainable business model definitions; section “Sustainable Business Models Typology from a Sustainability Perspective” proposes a typology of sustainable business models based on a sustainability perspective; section “Sustainable Business Models Typology from a Stakeholder’s Perspective” offers a typology of sustainable business models based on a stakeholder’s perspective; section “Sustainable Business Models Typology from an Incorporation into the Corporate System Perspective” proposes

Typologies of Sustainable Business, Table 1 The business sustainability typology with key characteristics and shifts (Source: Dyllick and Muff 2015) Business sustainability typology (BST) Business-as-usual

Concerns (what?) Economic concerns

Values created (what for?) Shareholder value

Organizational perspective (how?) Inside-out

Business sustainability 1.0

Three-dimensional concerns

Refined shareholder value

Inside-out

Business sustainability 2.0

Three-dimensional concerns

Triple bottom line

Business sustainability 3.0

Starting with sustainability challenges 1st shift: broadening the business concern

Creating value for the common good 2nd shift: expanding the value created

The key shifts involved

Inside-out Outside-in 3rd shift: changing the perspective

T

1084

a typology of sustainable business models based on an incorporation into the corporate system perspective; section “Sustainable Business Models Typology from a Value Creation Perspective” focuses on a value creation perspective typology; and section “Conclusions”presents the conclusions of the entry.

Sustainable Business Model Definitions Business models (BMs) are a comprehensive understanding of how a company does business (Beattie and Smith 2013; Teece 2010) and how value is created (Afuah 2004). A good business model takes into consideration human motivations in the generation of profits (Magretta 2002). BMs articulate the logic, the data, and the other evidence that support a value proposition for the customer and a viable structure of revenues and costs for the enterprise delivering that value (Teece 2010). BM can help to focus on how all the elements of the system fit together as a whole (Magretta 2002). A BM clarifies the chosen position of the company within the value chain, i.e., what are the key assets to own and control in order to capture value (Teece 2010). A BM is a reflection of the company’s strategy (CasadesusMasanell and Ricart 2010), where all the company’s BMs should coalesce to meet the company’s strategic objectives (Thomas Burkhart 2012). BMs also represent a transformational approach, where the BM addresses change and focuses on innovation, either in the organization or in the BM itself (Demil and Lecocq 2010). Although BM and strategy are used interchangeably, they are different; a BM describes the company system and how its elements fit together, but it does not consider competition, as strategy (Magretta 2002). A number of alternative, or sustainable, business models have been proposed to reduce the environmental burdens, with a particular focus toward switching from product sales to a service approach (Dunphy et al. 2014; Mont et al. 2006; Stubbs and Cocklin 2008). Lay et al. (2009) proposed three alternative business models: (1) leasing, where the supplier becomes a service

Typologies of Sustainable Business

provider by retaining the ownership and assuming responsibility for maintenance, in this case the customer pays a regular fee for unlimited individual access to the product; (2) renting, similar to leasing, however, the customer does not have unlimited access; and (3) “product pooling,” where the equipment is used simultaneously by several users instead of a sequential mode of use. Companies need business models that transform the specific characteristics of sustainable technologies into new ways to create economic value to secure better market penetration (Bohnsack et al. 2014; Schaltegger et al. 2016). Three examples of sustainability-oriented business models are selling the function that baby prams provide (Mont et al. 2006); chemical leasing, where chemical companies move from selling tons of chemicals to a service-oriented business (Lozano et al. 2013); and ridesharing business models for sustainability (Cohen and Kietzmann 2014), such as carpooling, flexible carpooling, vanpooling, and ridesharing. According to Stubbs and Cocklin (2008), “a sustainability business model (SBM) could be conceptualized in various ways such as a narrative of sustainability practices; a description of features, attributes, and/or characteristics; a list of necessary and sufficient conditions; a representation of business processes; a firm-level description; a systemslevel description; or some combinations of these.” A SBM uses a triple bottom-line approach in measuring performance; a SBM considers the needs of all stakeholders rather than giving priority to shareholders’ expectations; a SBM treats nature as a stakeholder and promotes environmental stewardship; sustainability leaders, or champions, drive the cultural and structural changes necessary to implement sustainability; and an SBM encompasses the systems perspective, as well as the firm-level perspective. The authors highlight that a SBM requires that the vision and mission of the company are expressed in terms of economic, environmental, and social outcomes, where profits are the means to achieve such outcomes. This approach can be labelled as “more sustainable.” According to Boons and Lüdeke-Freund (2013), there are four elements of a SBM: (a) value proposition, providing measureable ecological and/or

Typologies of Sustainable Business

social value in concert with economic value; (b) supply chain, involving suppliers who take responsibility for their own as well as the focal company’s stakeholders; (c) customer interface, motivating customers to take responsibility for their consumption as well as for the focal company’s stakeholders; and (d) financial model, reflecting an appropriate distribution of economic costs and benefits among actors involved in the business model and accounting for the company’s ecological and social impacts. This approach could be labelled as “more sustainable.” Bocken et al. (2014) stated that the development of more sustainable business models requires adjustments throughout value chains, where producers, consumers, investors, distributors, and recyclers are better connected to ensure a fair distribution of costs and benefits. They proposed eight SBM archetypes, grouping them into (1) technological (maximize material and energy efficiency, create value from “waste,” and substitute products and processes with renewable and natural ones), (2) social (deliver functionality, instead of having ownership; adopt a stewardship role; and encourage sufficiency), and (3) organizational (repurpose the business for society and the environment and develop scale-up solutions). These three groupings are based on resource efficiency. Although this definition mentions social issues, these are addressed indirectly through stewardship. This approach could be labelled as “eco-efficient.” Abdelkafi and Tauscher (2015) proposed a model for business models for sustainability (BMfS) that connects four partial models: the firm, the environment, the decision-maker, and the customer. The BMfS is built on the firm’s value creation capacity, value to the customers, value to the natural environment, and the value that the firm captures. The environment is conceptualized by means of three main stocks: renewable resources, nonrenewable resources, as well as pollution and waste. This approach could be categorized as “ecoefficient.” According to Roome and Louche (2016), new business models for sustainability are developed through interactions between individuals and groups inside and outside companies, which are based on three elements: building networks and

1085

collaborative practices for learning and action around a new vision; deploying new concepts drawn from outside the company; and elaborating and implementing structure within a reconfigured network. This approach could be labelled as “socialitarian.” Schaltegger et al. (2016) proposed the following definition: “A business model for sustainability helps describing, analyzing, managing, and communicating (i) a company’s sustainable value proposition to its customers and all other stakeholders, (ii) how it creates and delivers this value, (iii) and how it captures economic value while maintaining or regenerating natural, social, and economic capital beyond its organizational boundaries.” This is based on Teece’s (2010) work. This approach could be labelled as “more sustainable.” Upward and Jones (2016) provided an ontological discussion to define sustainable business models and propose a framework. These are based on (1) stakeholders considering human and nonhuman, (2) governance, (3) tools and framework to embed sustainability, (4) biomimicry frameworks, and (5) industrial ecology principles. The authors explicitly mention the time perspective in their arguments. The authors propose the following components: actor, stakeholder, target customer, channel, value proposition, decision (governance), relationship, value configuration, partnership, capability, process measure (nonfinancial), profit, cost, revenue, and assets. It is the most complete definition in respect of sustainability covering the economic, environmental, social, and time dimensions. It could be labelled as “more sustainable,” but since it addresses the time dimension explicitly, it would be better to label it as “holistic.” Lozano (2018) proposed more sustainable business models to be “A holistic and systemic reflection of how a company operationalises its strategy, based on resource efficiency (through operations and production, management and strategy, organisational systems, governance, assessment and reporting, and change), so that the outputs have more value and contribute to sustainability more than the inputs (in regards to material and resources that are transformed into products

T

1086

Typologies of Sustainable Business

and services, economic value, human resources, and environmental value). The business model is affected by the company’s resources (tangible and intangible), the supply chain, and the company’s stakeholders (internal, inter-connecting, and external), including the environment (inside and outside the company).” This definition, as Upward and Jones’ (2016) definition, could be labelled as “holistic.” Table 2 shows an analysis of the eight SBM definitions presented above against the sustainability dimensions. Three definitions can be considered to be: two “Holistic,” Upward and Jones (2016) and Lozano (2018); “More sustainable,” Stubbs and Cocklin (2008) and Schaltegger et al. (2016); two “Eco-efficient,” Bocken et al. (2014) and Abdelkafi and Tauscher (2015); and one “Socialitarian” Roome and Louche (2016). Most definitions are based on a narrow, business-oriented perspective of value proposition, creation, and delivery (see Abdelkafi and Tauscher 2015; Bocken et al. 2014; Boons and Lüdeke-Freund 2013; Schaltegger et al. 2016), with the exception of Upward and Jones (2016) and Lozano (2018). This arises from the traditional BM perspective, i.e., from a (mainly economic) value point of view (as discussed in section “Sustainable Business Models Definitions”). Sustainability encompasses the economic, environmental, social, and time dimensions (see Lozano 2012); thus, a SBM should be seen from a

sustainability perspective on how to add value to the four dimensions of sustainability and not from value focused on how to increase sustainability performance. The time dimension is conspicuously missing in SBM discourses. Upward and Jones (2016) and Lozano (2018) are the most complete in regard to sustainability, with the latter considering the time dimension.

Sustainable Business Model Typology from a Sustainability Perspective A typology of sustainable business models could be proposed from the previous analysis (see Fig. 1). In this setting, the following categories can be proposed, based on a low-high ranking of the economic, environmental, and social dimensions of sustainability. Given the restrictions in representing four dimensions in a two-dimensional chapter, only the economic, environmental, and social dimensions of sustainability are illustrated: • More sustainable, with high benefits in the three dimensions, including (but not limited to) value added, capital formation, depreciation, capital stock, net worth (assets and liabilities), savings, market presence, customers, earnings, value creation and shareholders, acquisitions, and patents and intellectual property (in the economic dimension);

Typologies of Sustainable Business, Table 2 Analysis of sustainable business model definitions against the four dimensions of sustainability (Source: updated from Lozano (2018))

Authors Stubbs and Cocklin (2008) Boons and Lüdeke-Freund (2013) Bocken et al. (2014) Abdelkafi and Tauscher (2015) Upward and Jones (2016) Roome and Louche (2016) Schaltegger et al. (2016) Lozano (2018)

Sustainability dimensions Economic Environmental Yes Yes Yes Yes

Sustainable business model type Social Yes Yes

Yes Yes

Yes Yes

Yes

Yes

Yes

Yes Yes

Yes Yes

Yes Yes Yes Yes

Time Somehow

More sustainable More sustainable Eco-efficient Eco-efficient

Yes

Yes

Holistic Socialitarian More sustainable Holistic

Typologies of Sustainable Business Typologies of Sustainable Business, Fig. 1 Business model typology based on their contribution (low or high) to the economic, environmental, and social dimensions of sustainability

1087

High

Low

High

Eco-social

More Sustainable

Low

High

Socialitarian

Anthropocentric

High Low Social benefits

Eco-efficient

Ecocentric

Low

Traditional Noxious

Low

environmental cost, defense expenditures, emissions and effluents (including greenhouse gases), energy, noise, wastes and recycling, water and wastewater treatment, land use and restoration, biodiversity, and certifications (in the environmental dimension); and value of social and human capital, time budgets, social indicators, wages, work hours, benefits, development, training and education, human rights, health and safety, political funding, volunteering and philanthropy, communities, and products (in the social dimension) • Eco-efficient, with high benefits in the economic and environmental dimensions, but few or none in the social ones, including (but not limited to) value added, capital formation, depreciation, capital stock, net worth (assets and liabilities), savings, market presence, customers, earnings, value creation and shareholders, acquisitions, and patents and intellectual property (in the economic dimension); and environmental cost, defense expenditures, emissions and effluents (including greenhouse gases), energy, noise, wastes and recycling, water and wastewater treatment, land use and restoration, biodiversity, and certifications (in the environmental dimension) • Eco-social, with high benefits in the environmental and social dimensions, but few or none in the economic one, including (but not limited to) value added, capital formation,

High Economic benefits

High Low

Environmental benefits

depreciation, capital stock, net worth (assets and liabilities), savings, market presence, customers, earnings, value creation and shareholders, acquisitions, and patents and intellectual property (in the economic dimension); and environmental cost, defense expenditures, emissions and effluents (including greenhouse gases), energy, noise, wastes and recycling, water and wastewater treatment, land use and restoration, biodiversity, and certifications (in the environmental dimension) • Anthropocentric, with high benefits in the economic and social dimensions, but few or none in the environmental one, including (but not limited to) value added, capital formation, depreciation, capital stock, net worth (assets and liabilities), savings, market presence, customers, earnings, value creation and shareholders, acquisitions, and patents and intellectual property (in the economic dimension); and value of social and human capital, time budgets, social indicators, wages, work hours, benefits, development, training and education, human rights, health and safety, political funding, volunteering and philanthropy, communities, and products (in the social dimension) • Socialitarian, with high benefits in the social dimension but few or none on the economic and environmental ones, including (but not limited to) value of social and human capital,

T

1088

time budgets, social indicators, wages, work hours, benefits, development, training and education, human rights, health and safety, political funding, volunteering and philanthropy, communities, and products • Eco-centric, with high benefits in the environmental dimension but few or none on the economic and social ones, including (but not limited to) environmental cost, defense expenditures, emissions and effluents (including greenhouse gases), energy, noise, wastes and recycling, water and wastewater treatment, land use and restoration, biodiversity, and certifications • Traditional, with high benefits in the economic dimension but few or none on the environmental and social ones, including (but not limited to) value added, capital formation, depreciation, capital stock, net worth (assets and liabilities), savings, market presence, customers, earnings, value creation and shareholders, acquisitions, and patents and intellectual property • Noxious, where there are few or no benefits in the three dimensions The business model typology provides a visual representation on how a business model can better address economic, environmental, and social dimensions of sustainability. It should be noted that to become more holistic, sustainable business model must have benefits in the short and long terms; thus a “holistic” type should be added to the aforementioned categorization.

Sustainable Business Model Typology from a Stakeholder’s Perspective Lantos (2001) categorized sustainable business as (1) ethical, based on avoiding societal harms by fulfilling the corporation’s ethical duties, i.e., the corporation is morally responsible to its stakeholders; (2) altruistic (or philanthropic), which demands that corporations help to alleviate societal problems, even if it reduces shareholder profits; and (3) strategic, based on benefiting society through activities that will bring benefits to the corporation in the long term. This categorization

Typologies of Sustainable Business

approach is mainly as an administrative exercise. It fails to engage with the different stakeholders. The stakeholder emphasis typology is concerned with attention given to stakeholders. It is subdivided into three categories: firstly, inward-looking, dealing mainly with internal issues and stakeholders, such as human capital, health and safety, managing change, quality employment, lifelong learning, information, consultation and participation of workers, equal opportunities, integration of people with disabilities, anticipation of industrial change, and restructuring (Levitt 1958); secondly, outwardlooking, dealing mainly with external issues and stakeholders, i.e., involvement with local communities, business partners, suppliers, customers, public authorities, and nongovernmental organizations (NGOs) (Avi-Yonah 2005; C.E.C. and Commission of the European Communities 2001; Waddock and Bodwell 2007) (such efforts are usually linked to reputation); and thirdly, broad perspective, dealing with both internal and external stakeholders (Frehs 2003; Holme and Watts 2000; Hopkins 2002; Kaku 2003; Welford 2005). This typology fails to include the motivations to engage with CSR and CS and to explain who should be responsible and accountable within the company, and it omits the environment as an explicit stakeholder. Lozano (2012) proposed the Corporate Sustainability strategic influence typology is aimed at integrating the typologies discussed, thereby providing a starting point to help managers identify how they are influencing and where they could better influence, the different stakeholders, and their explicit motivations in doing so. (For simplicity, all external stakeholders have been grouped together, but in reality, they are quite different.) Table 3 illustrates this typology: • The Holistic type generates profits, and it benefits the environment, the company’s employees, and its external stakeholders • The Anthropocentric type generates profits and improves the welfare of all the social stakeholders (employees and external ones). It does not consider influences on the environment

Typologies of Sustainable Business

1089

Typologies of Sustainable Business, Table 3 Corporate Sustainability strategic influence typology. (Source: Lozano 2011)

Influences Strategy

Profit generation

Environment

Employees

External stakeholders

Holistic Anthropocentric Insular Green indulgences Philanthropic Fordian Enronian Cell coding Beneficial influences Neutral influences Negative influences

• The Insular type refers to activities that focus only on improving profits and employees’ welfare. The effects on external stakeholders and the environment are neutral. It is driven mainly by strategy • The Green indulgences type focuses on improving profits and the welfare of the environment. It is generally driven by environmentalism. The effects on employees and external stakeholders are neutral. It is driven mainly by strategy and environmentalism • The Philanthropic type includes those activities aimed at improving the welfare of external stakeholders, such as the communities where the company operates. It is based on the precept that the company generates profits. The effects on employees and the environment are neutral. Employees and shareholders may be involved in such activities. It is mainly driven by ethics and a quest for indulgences • The Fordian type (following Henry Ford, who used brute force to break picket lines) refers to a focus solely on maximizing shareholders’ profits, but this ends up being detrimental to the welfare of employees. It may be motivated by strategic decisions

• The Enronian type refers to those company activities that reduce shareholders profits, the welfare of employees, and external stakeholders and have negative impacts on the environment. These activities promote the profit of the few, in general the ones managing the corporation, by misleading/cheating the other stakeholders. In a great majority of cases, it is used for public relations, but it generally backfires. Two key examples of this type are Enron (see Mardjono 2005) and WorldCom (see Frehs 2003) From these seven strategies, the Holistic type has the most beneficial influences. The Anthropocentric tends to be closer to the majority of the CSR types previously discussed, benefiting both employees and external stakeholders while generating profits. The Insular, Green indulgences, and Philanthropic types are only beneficial to two stakeholder groups. Among the seven, the ones that companies should expressly avoid are the Fordian and Enronian, especially since company claims tend to be mere public relation’s exercises, for the most part, and will be exposed as such sooner or later.

T

1090

Typologies of Sustainable Business

Sustainable Business Model Typology from an Incorporation into the Corporate System Perspective

• No incorporation, when sustainability has not yet been incorporated into any of the six elements of the corporate system

Another way to characterize sustainable business models is through the incorporation into the corporate system, which includes operations and production, management and strategy, organizational systems, procurement and marketing, governance, and assessment and communication (Lozano 2012; Lozano et al. 2017). If the incorporation was considered to be binary, i.e., it is either incorporated or not with 720, it can be categorized into (as illustrated in Table 4):

Another possibility is partial incorporation into different system elements; however, an indicator must be developed to assess the incorporation in a holistic way transversally in the elements.

• Full incorporation, when sustainability has been incorporated into the six elements of the corporate system • High incorporation, when sustainability has been incorporated into five elements of the corporate system • Medium incorporation, when sustainability has been incorporated into three or four elements of the corporate system • Low incorporation, when sustainability has been incorporated into one or two elements of the corporate system

Sustainable Business Model Typology from a Value Creation Perspective Under stakeholder management theory, different market actors influence the definition and creation of value for sustainability. This affects management processes, business practices, and therefore business models. Sustainable value creation, therefore, involves structuring all aspects of the core business, seeking to generate economic, social, and environmental value at the same time. Muñoz et al. (2019) proposed the “Integrative ESG Sustainable Value Framework” to identify and drive more sustainable business models to create sustainable value. The Integrative ESG Sustainable Value Framework is based on sustainable business model conceptualization and

Typologies of Sustainable Business, Table 4 An illustration of Corporate Sustainability integration typology. (Source: Lozano 2012, 2018; Lozano et al. 2017) System elements Incorporation

Operations and production

Full High Medium Medium Low Low No Cell coding Incorporated Not incorporated

Strategy Organisational Governance and systems management

Assessment and reporting

Supply chains

Typologies of Sustainable Business

sustainable value creation (see Manda et al. 2016). The framework is aimed at integrating governance, organizational systems, procurement and marketing, and assessment and communication processes. It proposes four quadrants for a multidimensional construct of the ESG Sustainable Value Framework using two dimensions: time (present and future) and skills for management and growth (internal and external). The framework, thus, proposes four categories of sustainable business model from a value creation perspective (see Muñoz et al. 2019): (1) achieving operational efficiency; (2) implementing product stewardship; (3) reinventing processes, products, corporate governance, and business models; and (4) providing for societal needs by aligning corporate vision. Among the different market actors, environmental, social, and governance, rating agencies (ESG rating agencies or sustainability rating agencies) emerge as key actors (Muñoz et al. 2019), and their analysis constitutes the most important source of information to connect how companies manage their contribution to sustainable development through value creation for sustainability, when decisions are taken by the financial markets. Although knowledge is limited on how ESG information providers provoke organizational change, there is evidence that sustainability index membership influences companies’ behavior.

Conclusions Corporate Sustainability must be addressed in a holistic way, which means addressing the four dimensions of sustainability (i.e., economic, environmental, social, and time, as well as their interconnections). This has challenged traditional business models in better engaging with stakeholders and incorporating sustainability into corporate systems. This entry proposes three typologies for sustainable business models based on sustainability, stakeholders, and incorporation into corporate system approaches. The typologies are aimed at helping corporate decision-makers navigate the complex waters of sustainable

1091

business models, so they can better contribute to making societies more sustainable. Businesses have the responsibility to develop and foster sustainable business models that address the company system (operations and production, management and strategy, organizational systems, procurement and marketing, governance, and assessment and communication), stakeholders, and the four dimensions (economic, environmental, social, and time) of sustainability. This will have direct impacts in achieving the Sustainable Development Goal 8. The discourses on sustainable business models have remained, to a great extent, academic. Such discourses need to be brought to real life, so that businesses can learn from theory, and, at the same time, theory can learn from practical experiences and improve the theory.

Cross-References ▶ Business Models for Sustainability (BMfS) ▶ Corporate Social Responsibility and the Sustainable Development Goals (SDGs) ▶ Corporate Sustainability

References Abdelkafi N, Tauscher K (2015) Business models for sustainability from a system dynamics perspective. Organ Environ:1–23. https://doi.org/10.1177/108602661559 2930 Afuah A (2004) Business models: a strategic management approach. McGraw-Hill/Irwin, New York Atkinson G (2000) Measuring corporate sustainability. J Environ Plan Manag 43(2):235–252 Avi-Yonah RS (2005) The cyclical transformations of the corporate form: a historical perspective on corporate social responsibility. SSRN Electron J 30:767–818. https://doi.org/10.2139/ssrn.672601 Bartelmus P (1999) Economic growth and patterns of sustainability. Wuppertal Institute, Wuppertal Beattie V, Smith SJ (2013) Value creation and business models: refocusing the intellectual capital debate. Br Account Rev 45:243–254. https://doi.org/10.1016/j. bar.2013.06.001 Bocken NMPMP, Short SWW, Rana P, Evans S (2014) A literature and practice review to develop sustainable business model archetypes. J Clean Prod 65:42–56. https://doi.org/10.1016/j.jclepro.2013.11.039

T

1092 Bohnsack R, Pinkse J, Kolk A (2014) Business models for sustainable technologies: exploring business model evolution in the case of electric vehicles. Res Policy 43(2):284–300. https://doi.org/10.1016/j.respol.2013. 10.014 Boons F, Lüdeke-Freund F (2013) Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. J Clean Prod 45:9–19. https://doi.org/10.1016/j.jclepro.2012.07.007 Burkhart T, Wolter S, Schief M, Krumeich J, Di Valentin C, Werth D, . . . Vanderhaeghen D (2012) A comprehensive approach towards the structural description of business models. In Proceedings of the International Conference on Management of Emergent Digital EcoSystems - MEDES ’12(p. 88). New York, New York, USA, New York, USA: ACM Press. https://doi.org/ 10.1145/2457276.2457294 C.E.C., & Commission of the European Communities (2001) Promoting a European framework for corporate social responsibility. Commission of the European Communities, Brussels Casadesus-Masanell R, Ricart JJE (2010) From strategy to business models and onto tactics. Long Range Plan 43 (2–3):45. https://doi.org/10.1016/j.lrp.2010.01.004 Cohen B, Kietzmann J (2014) Ride on! Mobility business models for the sharing economy. Organ Environ 27 (3):279–296. https://doi.org/10.1177/10860266145 46199 Costanza R (1991) Ecological economics. The science and management of sustainability. Columbia University Press, New York Demil B, Lecocq X (2010) Business model evolution: in search of dynamic consistency. Long Range Plan 43(2– 3):227–246. https://doi.org/10.1016/j.lrp.2010.02.004 DeSimone LD, Popoff F (2000) Eco-efficiency. The business link to sustainable development. MIT Press, London Dunphy D, Griffiths A, Benn S, Dunphy D, Griffit A, Durphy D, . . . Benn S (2003) Organizational change for corporate sustainability(Third). London: Routledge Dunphy D, Griffiths A, Benn S (2014) Organizational change for corporate sustainability, 3rd edn. Routledge, London Dyllick T, Hockerts K (2002) Beyond the business case for corporate sustainability. Bus Strateg Environ 11:130– 141 Dyllick T, Muff K (2015) Clarifying the meaning of sustainable business: introducing a typology from business-as-usual to true business sustainability. Organ Environ 29(2):156–174. https://doi.org/10.1177/ 1086026615575176 Elkington J (2002) Cannibals with Forks. The Triple Bottom Line of the 21st Century Business. Conscientious Commerce. Oxford, UK: Capstone Publishing Co. https:// doi.org/http://doi.wiley.com/10.1002/tqem.3310080106 Frehs J (2003) Corporate social responsibility: lessons learned. Natural Resources Canada, Ottawa GRI (2006) Sustainability reporting guidelines version 3.0 (G3), vol 2007. Global Reporting Initiative,

Typologies of Sustainable Business Amsterdam. Retrieved from http://www.global reporting.org/index.asp Holliday COJ, Schmidheiny S, Watts P (2002) Walking the talk. The business case for sustainable development. Greenleaf Publishing, Sheffield Holme R, Watts P (2000) Corporate social responsibility: making good business sense. WBCSD, ConchesGeneva Hopkins MJD (2002) Sustainability in the internal operations of companies. Corp Environ Strateg 9(2):1–11 Kaku R (2003) The path of Kyosei. In: Harvard business review on corporate responsibility. Harvard Business School Press, Boston Lantos G (2001) The boundaries of strategic corporate social responsibility. J Consum Mark 18(7):595–630 Lay G, Schroeter M, Biege S (2009) Service-based business concepts: a typology for business-to-business markets. Eur Manag J 27:442–455. https://doi.org/ 10.1016/j.emj.2009.04.002 Levitt T (1958) The dangers of social responsibility. Harv Bus Rev 36:41–50 Linnenluecke MK, Russell SV, Griffiths A (2009) Subcultures and sustainability practices: the impact on understanding corporate sustainability. Bus Strateg Environ 18:432–452 Lozano R (2011) Addressing stakeholders and better contributing to sustainability through game theory. J Corp Citizsh 43:44–62 Lozano R (2012) Towards better embedding sustainability into companies’ systems: an analysis of voluntary corporate initiatives. J Clean Prod 25:14–26. https://doi. org/10.1016/j.jclepro.2011.11.060 Lozano R (2013) Are companies planning their organisational changes for corporate sustainability? An analysis of three case studies on resistance to change and their strategies to overcome it. Corp Soc Responsib Environ Manag 20(5):275–295. https://doi. org/10.1002/csr.1290 Lozano R (2018) Sustainable business models: providing a more holistic perspective. Bus Strateg Environ. https:// doi.org/10.1002/bse.2059 Lozano R, Carpenter A, Satric V (2013) Fostering green chemistry through a collaborative business model: a chemical leasing case study from Serbia. Resour Conserv Recycl 78(November):136–144. https://doi. org/10.1016/j.resconrec.2013.07.007 Lozano R, Suzuki M, Carpenter A, Tyunina O (2017) An analysis of the contribution of Japanese business terms to corporate sustainability: learnings from the “lookingglass” of the East. Sustainability 9(2):1–17. https://doi. org/10.3390/su9020188 Magretta J (2002) Why business models matter. Harv Bus Rev 80(86–92):133. https://doi.org/10.1016/j.cub.2005. 06.028 Manda BMK, Bosch H, Karanam S, Beers H, Bosman H, Rietveld E, . . . Patel MK (2016) Value creation with life cycle assessment: An approach to contextualize the application of life cycle assessment in chemical companies to create sustainable value. J Clean Prod

Typologies of Sustainable Business Models 126:337–351. https://doi.org/10.1016/j.jclepro.2016. 03.020 Mardjono A (2005) A tale of corporate governance: lessons why firms fail. Manag Audit J 20(3):272–283 Mont O, Dalhammar C, Jacobsson N (2006) A new business model for baby prams based on leasing and product remanufacturing. J Clean Prod 14:1509–1518. https://doi.org/10.1016/j.jclepro.2006.01.024 Muñoz-Torres MJ, Fernández-Izquierdo MÁ, Rivera-Lirio JM, Escrig-Olmedo E (2019) Can environmental, social, and governance rating agencies favor business models that promote a more sustainable development? Corporate Social Responsibility and Environmental Management 26(2):439–452. https://doi.org/10.1002/csr.1695 Murray A, Skene K, Haynes K (2015) The circular economy: an interdisciplinary exploration of the concept and application in a global context. J Bus Ethics. https://doi.org/10.1007/s10551-015-2693-2 Porter ME, Kramer MR (2011) Creating shared value. Harv Bus Rev:63–77. https://doi.org/10.1108/ 09600039410055963 Rees WE (2002) An ecological economics perspective on sustainability and prospects for ending poverty. Popul Environ 24(1):15–46 Reid D (1995) Sustainable development. An introductory guide, 1st edn. Earthscan Publications Ltd., London Reinhardt FL (2000) Sustainability and the firm. Interfaces 30(3):26–41 Robèrt K-H (2000) Tools and concepts for sustainable development, how do they relate to a general framework for sustainable development, and to each other? J Clean Prod 8(3):243–254. https://doi.org/10.1016/ S0959-6526(00)00011-1 Roome N, Louche C (2016) Journeying toward business models for sustainability: a conceptual model found inside the black box of organisational transformation. Organ Environ 29(1):11–35. https://doi.org/10.1177/ 1086026615595084

1093 Schaltegger S, Hansen EG, Lüdeke-Freund F (2016) Business models for sustainability: origins, present research, and future avenues. Organ Environ 29(1):3–10. https:// doi.org/10.1177/1086026615599806 Stubbs W, Cocklin C (2008) Conceptualizing a “Sustainability business model”. Organ Environ 21(2):103–127. https://doi.org/10.1177/1086026608318042 Teece DJ (2010) Business models, business strategy and innovation. Long Range Plan 43:172–194. https://doi. org/10.1016/j.lrp.2009.07.003 UNGC (2010) Overview of the UN Global compact. Retrieved from http://www.unglobalcompact.org/ AboutTheGC/index.html United Nations (2018) Sustainable development goals. Retrieved from http://www.un.org/sustainablede velopment/sustainable-development-goals/ Upward A, Jones P (2016) An ontology for strongly sustainable business models: defining an enterprise framework compatible with natural and social science. Organ Environ 29(1):97–123. https://doi.org/10.1177/10860 26615592933 Waddock S, Bodwell C (2007) Total responsibility management. Greenleaf, Sheffield WCED (1987) Our Common Future(First). Oxford: Oxford University Press Welford R (2005) Corporate social responsibility in Europe, North America and Asia. 2004 survey results. J Corp Citizsh 17:33–52

Typologies of Sustainable Business Models ▶ Typologies of Sustainable Business

T

U

Underage Combatant ▶ Recruitment and Use of Child Soldiers in International Law: Prohibition and Elimination

Underground Economy ▶ Informal Employment

Understanding Market Failure in the Developing Country Context Emerson Abraham Jackson1,2 and Mohamed Jabbie3 1 Centre of West African Studies, University of Birmingham, Birmingham, UK 2 Model Building Analysis Section, Research Department, Bank of Sierra Leone, Freetown, Sierra Leone 3 Balance of payment Analysis and External Relations Section, Research Department, Bank of Sierra Leone, Freetown, Sierra Leone

Definition of Market Failure As defined by Winston (2006), “market failure is an equilibrium allocation of resources that is not Disclaimer: Views expressed in this chapter are those of the authors and do not reflect any of the named institutions for which they are associated.

Pareto Optimal – the potential causes of which may be market power, natural monopoly, imperfect information, externalities, or public good.” In this context, the Pareto Optimality or efficiency paradigm states that for microeconomic efficiency to be achieved, there should be no room to make one person better-off without making another worse-off. Dollery and Wallis (2001) on the other hand defined market failure as “the inability of a market or system of markets to provide goods and services either at all or in an economically optimal manner.” In terms of allocative efficiency as postulated by Pigou (1920), market failure occurs when marginal social costs do not equal marginal social benefits – that is, the lack of simultaneity between market prices and marginal social costs, indicating that market prices do not precisely signal social costs incurred in the production of a good, which often leads to under- or overproduction (Dollery and Wallis 2001).

Introduction Market failure makes it difficult to achieve the condition of economic efficiency by distorting price mechanisms and normal distribution of goods and services thereby, leading to welfare loss. They are entrenched in the socioeconomic fabrics of most developing countries, underpinned by the lack of well-functioning market structures and economic systems – which are supposed to

© Springer Nature Switzerland AG 2021 W. Leal Filho et al. (eds.), Decent Work and Economic Growth, Encyclopedia of the UN Sustainable Development Goals, https://doi.org/10.1007/978-3-319-95867-5

1096

Understanding Market Failure in the Developing Country Context

make the market economy resilient to such economic shortcomings. Conventionally, governments have the responsibility of ensuring that markets are functioning perfectly through their allocative role to correct imbalances that may emanate from market failures. However, the question is based on whether government policy is reducing or worsening economic inefficiencies or deadweight losses from market failures (Winston 2006). In essence, is government policy optimal, by efficiently correcting market failures and maximizing economic welfare (Winston 2006)? In circumstances where governments’ intervention exacerbates inefficiencies or failed at engendering net benefits instead of reducing them, it eventually leads to government failure (Winston 2006). It is difficult for governments to perfectly determine the extent to which market outcomes deviate from their optimal level, hence intervention to allocate resources efficiently do not always yield desired outcomes. The second best theory, for instance, proposed by Lipsey and Lancaster (1956), expresses that even if policy makers can fully determine the degree of market failure and thus intervene efficiently, with altruistic intentions, the outcome of the policy could still not stimulate allocative efficiency. This theory, as further explained by Dollery and Wallis (2001), exhibits that the presence of market failure in one sector of the economy can lead to the attainment of higher level of social welfare gain in that sector, while purposely flouting allocative efficiency conditions in some other sectors. In this context, several scholars, including Winston (2006) believe that market failure should become government priority when the deviation of actual market performance from its potential trend or equilibrium levels is significant. The last section of this chapter will provide an understanding of market failure in the context of a developing country using Sierra Leone as a case study.

Impairment of Market Failure in Achieving SDG8 There has been a very high global focus on ensuring that resources of individual economies are

judiciously utilized to improve productivity, which will ultimately impact employment opportunities positively. It is believed that such focus is also a means to reducing inequalities in the labor market, particularly in areas connected with gender pay gap, youth unemployment, and improved access to financial services. The concept of market failure itself is considered an impairment to the achievement of SDG8 given that in the midst of such economic shortcoming, the economic system normally does not function well to ensure sustained and inclusive economic growth in the much needed sectors of the economy. Despite the call across the world for decent work and higher living standards, there are still parts, more so around developing countries, where inequalities in work life is highly prevalent, attributed mainly to the failure in existing market structures as well as failed governance or legislations to address existing concerns around (human) inequalities. Rai et al. (2019: 368) emphasized such impairment of market failure in the achievement of SDG8 in their work by emphasizing on gendered unpaid work which is so far unrecognized and hence making it very impossible for people to be able to live a decent life. The next section provides a comprehensive account of how functioning market system can serve its purpose of supporting SDG8 that seek to support sustained employment and equality for all, irrespective of where in the world people may find themselves.

Functioning Markets: Requirements A market as defined by Cunningham (2011) is the most important place for producers and customers to coordinate. In other words, a market is an environment where a group of buyers and sellers meet to transact or exchange goods and services. The use of environment in the definition denotes a shift from the conventional understanding of a market being a physical place, to also include virtual or abstract environments, such as online stores, futures market, and digital markets among others. There is a widespread consensus among economists that markets are the most efficient

Understanding Market Failure in the Developing Country Context

mechanisms to allocate resources to various economic agents. Put differently, a perfectly working market system by default is expected to efficiently and effectively allocate scarce economic resources to where they are needed. Consequently, the price mechanism is labelled the main channel for communicating market dynamics, where rising prices signal producers to produce more and vice versa, while the same price mechanism is used as an evaluation tool by consumers to determine the quality, as well as value of a product (Cunningham 2011). The efficiency of the market in allocating resources and the effectiveness of the price mechanism as the appropriate channel for communicating market dynamics are features akin to markets that are functioning well. However, the ideal of a completely efficient market is rare, if ever, observed in practice (Winston 2006). The reality in developing countries, in particular, depicts that in the absence of regulations and other control measures, markets in entirety do not function well, underpinned by several structural rigidities. A dysfunctional market system is a deterrent to achieving high employment and sustainable economic growth. This is anchored on the backdrop that in the presence of market failures, the market’s free handle to efficiently allocate resources to productive sectors is distorted, with the resultant impact being a deterioration in growth performance and the possibility of high unemployment. In essence, a well-functional market system is a prerequisite for job creation and sustained economic growth. However, as rooted in microeconomics, for a market to be considered perfectly competitive or functioning smoothly, it must satisfy some specific requirements. Melody (2006), in his study, “Liberalising Telecommunication Markets,” noted that in most sectors of the economy, active competition is the most effective means to achieve – (1) efficiency and innovation in the supply of goods and services; and (2) consumer protection, by providing choice among competitive offerings. In view of this, he underscored that well-functioning competitive markets have several important features, which include the following:

1097

Free Entry and Exit The absence of barriers to entry, such as business registration bottlenecks, restrictive licenses, and large investment requirements, would increase the level of participation, spur competition, and lead to allocative efficiency (Melody 2006). No Monopoly Power For a market to efficiently allocate resources, no single firm should be allowed to dictate price and output decisions, since the presence of significant monopoly power in a market deters participation of smaller competitors and potential new market entrants. This distorts competitive efficiency and innovation, as well as consumer choice and price protection (Melody 2006). Information Symmetry Well-functioning markets are attributed with full information disclosure, where all parties, including firms and consumers alike, are provided with adequate and accurate information about market dynamics in making effective market decisions. In essence, there should be symmetric flow of information, since barriers to information wane the ability of markets to function efficiently (Melody 2006). Absence of Market Externalities In a well-functioning market, the social costs and benefits from production should be equitably distributed. In essence, all the costs of producing a good or service, including pollution as a form of social cost, should be borne by firms supplying it, while the benefits (for example, public health as a form of social benefits) to society should be included in the prices that consumers pay and the revenues firms collect. Essentially, this eliminates spillover effects in relation to the production processes (Melody 2006). Similarly, McMillan (2002) indicated that a well-functioning market is characterized by information that flows smoothly, including property rights that are protected, people that must be trustworthy to fulfil their promises, while side effects on third parties should be curtailed and competition in the market fostered. In addition, Rodrik (2000) identified some nonmarket factors that are prerequisites for a smooth functioning market,

U

1098

Understanding Market Failure in the Developing Country Context

and these include property rights, regulatory institutions, and institutions for macroeconomic stability, institutions for social insurance, and institutions for conflict management. These nonmarket requirements are basically government’s role in ensuring that there is efficiency in resource allocation in a market economy.

Reasons for Market Failure The inefficient allocation of resources in an economy is described as market failure. The term “market failure” does not mean the market is not working at all, but taken to mean that the market is not operating at its potential or equilibrium efficiency because it is not producing goods that are wanted (Cunningham 2011). Another description of market failure is embedded in the imperfection of price mechanism, which deters allocative efficiency (Samuelson and Nordhaus 1992). In this context, price systems should capture the true costs and value of a product. However, when the price system is imperfect in reflecting the true value of goods or services, it leads to market failure through the inefficient allocation of resources (Cunningham 2011). Typically, markets fail because of the dysfunctional nature of price systems, as well as the presence of structural imperfections like information asymmetry, externalities, and monopolies among others in the market. In view of this, the extensive literature covered identifies the following as typical forms of market failures present in any economy: Externalities Externalities are one of the classic cases of market failure, which relate to how the activities of economic agents impact other agents that are excluded from the transaction or operation, but however ends up suffering (incurring social costs) or benefitting (social benefits). In this context, the producers of the costs or benefits neither incur the social costs nor receive the social benefits. Externalities lead to market failure by inefficiently allocating resources, on the basis that market prices do not capture the social costs involved in production and hence will not attain

socially efficient levels of consumption and production (Dollery and Wallis 2001). Asymmetric Information This form of market failure occurs where one agent in a market transaction has more information than the other. There are classically two forms of asymmetric information, namely adverse selection and moral hazard. Imperfect information flows between or among economic agents’ results in inefficient allocation of resources on the back of inefficient decision making on the part of organizations or individuals, due to a collapse of the whole market (Cunningham 2011). Public Goods A key characteristic of public goods is that consumption by one individual does not diminish the quantity available to another, that is, they are nonrivalrous. In addition, public goods are nonexcludable. In line with the Pareto Optimality condition, which states that there should be no room for improvement without making someone else worse off, means that excluding an individual from consuming a public good, will make that individual worse off, thus violating the Pareto Optimality condition. Public goods include free health care, free education, national defense, and legal systems among others. As noted by Cunningham (2011), “a market failure from public goods occurs when these goods are provided to benefit very little in society or where the public sector fails to respond to a demand that is in the interest of society as a whole.” Natural Monopoly There are products and services where markets cannot work efficiently, supported mainly by technical reasons. A typical example is water distribution (Cunningham, 2006). Imperfect Competition The presence of market imperfections such as monopoly, oligopoly, and duopoly, distort the market’s “invisible hand” to allocate resources efficiently. Factors that can prevent perfect competition in the market include the creation of monopolies by governments through the legal

Understanding Market Failure in the Developing Country Context

system, licensing regulations, patent laws, and import restrictions among others (Dollery and Wallis 2001). Business Cycles Fluctuations in the business cycle, indicated by the up and down deviations of output from its potential, are another form of market failure, which distorts price mechanism and the flow of goods and services, and eventually leads to an inefficient allocation of resources. Most often, these fluctuations are preceded by government intervention, to smoothen out the volatility and bring the economy back to its potential (Dollery and Wallis 2001).

Heterodox View of Market Failure: Ecological Approach More lately, the concept of market failure seem to have taken varied view in the direction of heterodox thinking given the extent of market failure manifested across the globe, on account of human selfish exploitation of the earth’s nonrenewable resources. An ecological market failure exists when human activities in a market economy result in the exhaustion of nonrenewable resources, thereby giving rise to fragile ecosystem services, or overloading of wastes on the biosphere, and hence making it impossible for the criterion of Pareto efficiency to be achieved. Heterodox opinion here can be critically construed on account of weak governance structure in a system, which thereby result in a situation of unequal allocation of goods and services that ultimately leads to a net social welfare loss to society. In this context, market failure may arise when selfish individual’s pursuit of destructive ventures to the environment results in the inefficient utilization of the earth’s nonrenewable resources, for example, exploitation of mineral wealth and also degradable forest environment that is of little benefit to communal usage and also biodiversity extinction (Jackson 2015). In some cases, unplanned intervention strategies carved by governments and some international regulatory institutions to mitigate the extent of market failure in areas associated with the natural ecology

1099

can also be counterproductive, and hence result in a situation of inefficient allocation of resources, commonly referred to as government failure (Weiner and Vining 2004). The need to preserve the environment is critical to biodiversity well-being, and where the dominance of imperfect market seem to predominate, it is highly likely for society to collapse and ultimately result in market failure. Ecological economist like McCauley (2006) has argued his points in such a way that the attachment of monetary value to ecological conservation is counter-sustainable, while his appeal is geared toward moral persuasion for the protection of nature. In this case, good governance and strong institutions would be very critical rather than just a focus on the concept of market failure all the time. The dominant terminology of resource curse thesis is more so a common phenomenon when one considers the situation of market failure in most regions across the world, particularly in the south of the African continent, Latin America, and some parts of Asia (Jackson 2016). The failure of those in authority to judiciously utilize the natural endowments of their nations is a typical attestation of market failure that contravenes the agenda of SDG8 and other associated goals as perceived in SDG5 (Rai et al. 2019; World Bank 2016) – which seeks to recognize those in breach of unpaid care and services through domestic and social protection policy. In view of the call to improve productivity under the SDG8 agenda, good governance of nonrenewable (natural) resource as witnessed in countries like Botswana in the African continent, Oil exploration in the Middle-East, and also Norway in the Scandinavian bloc is an attestation of how well standard of living through sensible utilization of natural wealth can be achieved for the good of all in society. This invariably averts the resource curse syndrome that is normally attributed to nations normally considered to be naturally endowed.

Leading the Situation: Policies to Combat Failures Problems associated with market failure can be identified through prescriptive measures, mostly

U

1100

Understanding Market Failure in the Developing Country Context

spearheaded by governments, normally considered the engine of economic prosperity in an economy. As highlighted by Cunningham (2011), the process can be done through creation of market structures, hierarchy, or networks. Market failure in most cases leads to a complete anarchy in an economy, but the severity of it can be contained with appropriate measures set in place. The undermentioned points highlight some measures to address problems caused by market failure: – Legislative measure: This, for example, has a wider remit as it involves the establishment of legal powers that identify loopholes, normally viewed as the responsible factors for market failures in society. In a situation where a corrupt political–economic structure seems to predominate, it is almost very impossible for institutional duties, required for the existence of a sustained and successful market structure, to be executed. This is considered a deterrent to addressing market failure, mostly faced by underdeveloped economies, found in some parts of Asia and Africa. In principle, it is very essential that institutions in an economy prepare themselves to enact specific laws to address or combat unwarranted failure to an economic system. This may include the enactment of laws to prevent big monopolistic firms from restricting smaller firms to enter a product market. In this type of situation, it means that such big monopoly establishments can be at liberty of setting outrageous prices, which are mostly out of range for low-income earners. Smaller firms can strive to gain access into a market as new entrants, with production devoted segregating commodities, thereby creating opportunities for decent standard of living for low-income earners. The enactment of legislations can be extended widely to cover anything that seeks to derail a progressive or sustainable society, more so in ensuring that resources are judiciously utilized in the best interest of citizens rather than favoring those considered to be in the elite group or part of a cabal.

– Setting reasonable taxation measure: In this situation, governments are considered to be the bedrock of tax policies, which means that sensible taxation policies may need to be considered, mostly viewed as progressive to society. In this regard, levying taxes on certain products like tobacco may have its desired good impacts as the cost of future illnesses from smoking may be used to fund relevant health care provision or even supporting victims who may be addictive to nicotine, derived from high consumption of tobacco products. While in some cases taxes levied can be viewed as a burden to those in active employment, its desired [positive] effects far outweighs that of the cost to those being taxed. Governments around the world need resources to fund publicly “freeriding” services, which are mostly accessible to everyone irrespective of status in society; in this situation, the levying of taxes can be seen as a good base for governments around to support well-structured market system in an economy, hence mitigate the failure of market structures. This, for example, is considered vital in terms of ensuring that government commitments to delivering public goods like the provision of parks, libraries, and free education to students are achieved, and hence creating opportunities to support a near efficient market economy that is capable of delivering on the merit of demand and supply. – Creation of property rights: In order to deter or limit the abusive utilization of publicly accessible goods or services like lakes, forest, and sea front/beaches, government as a central authority may need to establish some level of privatization measures of these named publicly utilized assets to continue their usage for both present and future generations. In this case, market failure can be prevented by levying fines to make sure the environment is not overly depleted at the expense of the present and future generations. – Provision of subsidies: This, in most cases, can be a responsibility for central governments to make sure opportunities are created for citizens in areas concerned with facilities

Understanding Market Failure in the Developing Country Context

like education and public health. This is considered to favor positive externality as the provision of subsidy geared toward reducing high tuition fees, for example, leads to a situation of increased level of access to postsecondary education, where prospective students are made to enter universities to improve their knowledge to compete in the open market. This also comes with the benefit of improving quality of graduate entry into the world of work. – International cooperation: This is a common practice among governments; it is possible that governments would be inclined to work with their counterparts (regionally or across continental borders) on issues that are considered detrimental to the environment, for example, that which concern nuclear disarmament. In the present age, the rise of wars in regions around Africa, Asia, and some parts of the middle-east warrant such type of international cooperation in limiting war-torn country’s usage of destructive weaponries and also the curtailment of abuse inflicted on humanity.

Country Case Study of Market Failure: Sierra Leone Market failure is a common phenomenon to all types of economic system, and for which its acuteness is heavily prevalent in developing/underdeveloped regions of the world due to the absence of prudent democratic governance structure. In developed economies like the UK, the USA, and Western Europe, the presence of critical voices from opposing factions in politics and also the educated masses are making it possible for acute market failure to be brought under control, while the situation is different in underdeveloped economies, mostly located in the Southern region of Africa, Latin America, and Asia. A particular case of country-specific market failure is that of Sierra Leone: the country is a former British colony, once considered as the Athens of West Africa (Jackson 2018). Successive bad governance in the early part of 1980s

1101

have progressively spearheaded the collapse of a well-structured colonial nation, which was practically viewed as a model of the West African subregion. Scholarly arguments from writers like von Hayek (1944, reprinted in 2001) have argued his points to imply “that market failure does not imply that government should attempt to solve market failures, because the costs of government failure might be worse than those of the market failure it attempts to fix” (Cunningham 2011). This situation is typical in many of the underdeveloped economies around the West African subregion where poor intervention of governments and their agents normally result in the inefficient allocation of goods and resources than would have considered in situations of planned intervention. Specific to Sierra Leone, failed governance system can be directly associated with the concept of Market Failure (also referred to as government failure), which prevent an economy from making effective use of available resources to facilitate growth and development. As emphasized by McMillan (2002) and Fligstein (2001:3), it is thought that the prevalence of strong market requires the existence of strong government, which has been a complete opposite with many of the postcolonial governance structure seen in Sierra Leone. The existence of skewed and corrupt governance system in Sierra Leone between 2007 and 2018 have made it possible for public officials in key ministries and parastatals to become “patronisers” of a failed market system, despite successive interventions made by international bodies like the International Monetary Fund [IMF] to support the country’s pathway of failed market system. Heterodox economics views around postcolonial occurrences of the successive failed governance systems would testify deliberate failure of a corrupt governance system to deliberately deviate from program activities devised by international institutions like the IMF aimed at shaping the country’s failed market structure, already burdened by high fiscal indiscipline. The result of this was seen where further loan disbursement was

U

1102

Understanding Market Failure in the Developing Country Context

halted, thereby leaving the economy in a state of nearly collapse, while at the same time government officials were seen moving around negotiating unsustainable loan programs that would have almost placed the country in an endless state of indebtedness to a country like China. As stated by Messner and Meyer-Stamer (1992), efficient markets require strong government and transparent institutions to ensure economic agents are acting in the best interests of the nation. Sierra Leone for over decades after independence has been battered by weak and corrupt governance structure, which ultimately has placed the country and its citizens in a precarious situation. Corruption in politics by successive government has infiltrated into the fabrics of the Sierra Leone economy to an extent where there seem to have being little or no confidence on the part of citizens on their leaders in managing the affairs of the economy. Selfishness manifested by successive corrupt governments in Sierra Leone to protect themselves in power normally result in asymmetric market information, given the fact that government would mostly provide weak measures like subsidy to services that are not economically viable to effectively drive developmental efforts in the country. Over the years, the country has witnessed an almost complete state of anarchy, more so as a result of the politicization of institutions that seek to support the operation of illegal activities. This was clearly seen lately with the breakdown of confidence on the part of international institutions like International Monetary Fund [IMF] to suspend loan agreement to a reigning regime given the undisciplined nature of public servants’ abuse of public funds (Thomas 2018), and even the collapse of government-owned parastatals like commercial banks, which nearly brought a sink in the country’s financial system. The deliberate and almost wicked manifestation of elected and public servants in ministries and parastatals to become prudent in their act of public services is almost tantamount to the death of a nation, where institutions are almost considered nonexistent due to failed market system. Such type of inept manifestation of public

services requires strong individuals or citizens to transform institutions, and one way this can be achieved is through the establishment of strong legislations and high level of discipline infused in public servants to deliver on merit as opposed to being considered politically connected. As emphasized by Cunningham (2011: 28–29), there are serious consequences for market failure by a nation, and particularly in a small and endowed country like Sierra Leone and some of these are highlighted below: – High level of uncompetitive market situation: As dictated by the corrupt political system that was established by past regimes since the early 1980s, poor governance created a situation whereby new entrants were prevented from entering essential markets, hence creating an artificial monopolistic market system. The direct consequences of this is seen where prices of basic commodities have risen to an unsustainable level, with salaries of low income earners not sufficient to match the high/inflated cost of living. Politically connected market players were able to step up their influences in the corrupt system to an extent of preventing (local) competitiveness as witnessed in the case with business investors like Dangote, who was prepared at first time of entering the market from selling Cement at a reduced price compared to that of already established competitors. – Generation of low level equilibrium: This makes it very highly possible for productivity to remain relatively low as connected players reinforces their influences in the market, thus keeping others away from entry, while also making it possible for them to continue dictating market prices. The impact of this is evident with producers in rural areas who are almost kept away from the market and hence making it impossible for them to increase their income potential on account of the mired condition and almost deplorable investment environment they are exposed to. The corrupt level of connectedness instilled by successive regimes meant that collapse of important industry like

Understanding Market Failure in the Developing Country Context

the Iron Ore market resulted in serious knockon effect for other investors, who were not able to find ways around the embargo that confront their access into the market. – Creation of suboptimal delivery of critical investment: This is apparent in the face of the country’s very low research potential at national and as well as individual businesses’ limited scope of expanding competitively through research innovations at national and international levels in a dynamic market environment. In the midst of corrupt and cabal establishment(s) created by successive regime change witnessed in the country, potential investors are more scared of hedging their risks when considering investment potential in a country like Sierra Leone. – Market failure create reduced scope for the establishment of welfare opportunities: In a country like Sierra Leone, market failures have resulted in the country’s lagged state of development, with bleak scope for the creation of growth in the midst of monopolistic environment, artificially established through corrupt governance structure. This comes with high level of poverty as witnessed in the country’s low record of human development index produced more lately by the United Nations Development Program (UNDP 2018). Intervention by successive governments to establish watchdog institutions like the Anticorruption Commission (ACC) and, more recently, the Ombudsman Office have made little or no impact in addressing the acute level of market failure witnessed in the country due to the high nature of corruptive connectedness that continues to manifests itself in every corners of the country’s institutional setup.

Conclusion Based on the introductory definition of market failure according to Winston (2006), the theoretical approach of market failure needs to be actualized in practice through its application in the

1103

eyes of SDG8 and other related goals like SDG5, which actually emphasize efforts in the direction of increasing employment opportunities, more so for young people, while also ensuring that informal unemployment is targeted with better working conditions created to minimize market inequality in the direction of targeting acute gender pay gap. The acute state market failure is not only typical to the Sierra Leone economy, but a concern in Sub-Saharan Africa and other regions like Latin America, some parts of Asia, and even in developed nations – which is more typical to the notion of government failure (Wolf 1979; Cunningham 2011 and Rai et al. 2019). In order to address such situation, there is a need to nurture strong leadership, with the culture of ensuring that citizens are educated to develop a culture of honesty throughout their lifetime in a bid to prevent the acute failure of markets. It is considered necessary for empirical research to be used as a supporting tool in identifying concerns around areas responsible for market failure, which researchers like Rai et al. (2019) and also the US federal government devoted efforts toward, particularly during the reign of President George W. Bush, who appointed John D. Graham to head the Office of Information and Regulatory Affairs within the Office of Management and Budget (Wolf 1979: 1). While the empirical approach is considered very important, so too is the need to ensure that, practically, the ills of failed market system is actualized through didactic approach. Targeting market failure should be made a phronetic obligation by leaders around the world, more specifically so in underdeveloped/ developing economies where governments are seen to be architect of the problems through their implied selfish acts/failed policies, which are mostly considered contrary to SDG8 and other associated goals aimed at raising decent living standards for mankind. The acute state of market failure can be a thing of the past for nations that are ready to embrace a new direction of development in ensuring that the efforts of leaders around the world to embrace the United Nations SDGs, and more specific to this chapter, SDG8, is

U

1104

Understanding Market Failure in the Developing Country Context

realized through action(s). Many countries around the world, for example, Singapore in the Asian continent and also Brazil in Latin America have and are continually taking steps in addressing failed governance, normally considered the basis of market failure (Altenburg 2011). Typical to the African continent in practicalizing market failure more recently is Rwanda; the effort of a concerned leader by the name of “Paul Kagame” have demonstrated through his actions how good leadership can transform a nation to becoming less blighted by the demise of self-inflicted human disaster/ genocide to a modern state of development, where citizens at all levels are encouraged to be active players in making efforts to build a cohesive nation by ensuring that measures already addressed to combat market failure are didactically applied (Buckley 2014). In conclusion, countries around the world considered to be blighted by failed market system as in the case with Sierra Leone are equally capable of achieving such state of progressive development of effective market system, but only through the manifestation of Practical Wisdom, a translated Greek terminology from the word “Praktisches Wissen” in the early days of Gadamer (Dottori 2009 and Jackson 2016: 3) of public officials to deliver highlevel services that are free of the vices of corruption and nepotism. The effort of such nations should be geared toward ensuring that the 16 SDGs are placed at the heart of governance, where leaders are made to be seeking the good of a nation by promoting safe and secure working environments capable of improving much needed inclusive and sustained economic growth.

References Altenburg T (2011) Industrial policy in developing countries: overview and lessons from seven country cases. Discussion paper, 4/2011. German Development Institute, Bonn Buckley R (2014) Affordable housing in Rwanda: opportunities, options and challenges: some perspectives from the international experience. The international growth Centre (ICG) conference, Rwanda National Forum on sustainable urbanization. Available at:

https://www.theigc.org/wp-content/uploads/2014/08/ Buckley-2014.pdf. Accessed 10 Feb 2019 Cunningham S (2011) Understanding market failures in an economic development context. Mesopartner Press, Pretoria, South Africa, vol 4 Dollery, B. and Wallis, J. 2001. The theory of market failure and policy making in contemporary local government. ISSN 1442 2980. Also accessed via: http://www.une. edu.au/febl/EconStud/wps.htm. Accessed: 23 Nov 2018 Dottori R (2009) The concept of phronesis by Aristotle and the beginning of hermeneutic philosophy. Etica Politica/Ethics Politics XI(1):301–310 Fligstein N (2001) The architecture of markets: an economic sociology of twenty-first century capitalist societies. Princeton University Press, Princeton Jackson EA (2018) Political economy of forest ecology in Sierra Leone: a focus on the Western area peninsular Forest (WAPFoR). Postmodern Openings 9(1):63–90. https://doi.org/10.18662/po/06 Jackson EA (2016) Phronesis and resource curse hypothesis in post-independent Sierra Leone. Ilorin J Econ Policy 3(1):1–10 Jackson EA (2015) FLEGT mandate: its applicability and effectiveness in Sierra Leone. J Appl Thought 4(3):84–100 Lipsey RG, Lancaster K (1956) The general theory of the second best. Rev Econ Stud 24(1):11–23 McMillan J (2002) Reinventing the bazaar: a natural history of markets, 1st edn. Norton, New York McCauley DJ (2006) Selling out on nature. Nature 443(7):27–28 Melody WH (2006) Liberalising telecommunication markets: a framework for assessment. Policy Paper No. 3, Learning Initiatives on Reforms for Network Economies, Technical University of Denmark Messner D, Meyer-Stamer J (1992) Recipe for success: strong state and strong enterprises. Dev Coop, Berlin, 19(2) Pigou AC (1920) The economics of welfare. Macmillan, London Rai SM, Brown BD, Ruwanpura KN (2019) SDG8: decent work and economic growth – a gendered analysis. World Dev 113(2019):368–380 Rodrik D (2000) Institutions for high-quality growth: What they are and how to acquire them. Stud Comp Int Dev 35(3):3–31. Samuelson PA, Nordhaus WD (1992) Economics, 14th edn. McGraw-Hill, New York Thomas RA (2018) IMF confirms suspension of funding as APC government fails to generate revenue. Available at: https://www.thesierraleonetelegraph.com/imf-confirmssuspension-of-funding-as-apc-government-fails-togenerate-revenue/. Accessed 22 Nov 2018 UNDP (2018) Human development indices and indicators: 2018 statistical update. Available at: http://hdr.undp.org/ sites/default/files/Country-Profiles/SLE.pdf. Accessed 19 Nov 2018

Unemployment Weiner D, Vining AR (2004) Policy analysis: concepts and practice. Prentice Hall, Harlow Winston C (2006) Government Failure versus Market Failure: Macroeconomics Policy Research and Government Performance. AEI-Brookings Joint Center for Regulatory Studies, the American Enterprise Institute for Public Policy Research, Washington, DC, and the Brookings Institution, Washington, DC Wolf C (1979) A theory of nonmarket failure: framework for implementation analysis. J Law Econ 22(1):107–139 World Bank (2016) Development goals in an era of demographic change. International Bank for Reconstruction and

1105 Development/The World Bank, Washington, DC. https:// doi.org/10.1596/978-1-4648-0669-8. Also available at: http://pubdocs.worldbank.org/en/503001444058224597/ Global-Monitoring-Report-2015.pdf. Accessed 8 Feb 2019

Unemployment ▶ Globalization, Democracy, and Inequality

U

V

Value Creation in a Circular Economy: An Interdisciplinary Approach Harold Krikke Department of Marketing and Supply Chain Management, Open University of the Netherlands, Heerlen, Netherlands

Synonyms Closed loop supply chains; Cradle-to-cradle; Product stewardship

Definitions Circular Economy A regenerative system in which resource input and waste, emission, and energy leakage are minimized by slowing, closing, and narrowing material and energy loops. This can be achieved through longlasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling (Geissdoerfer et al. 2017). Key feature is servitization of the economy. Cradle-to-Cradle (Design) The practical, strategic expression of the ecoeffective philosophy; Cradle-to-Cradle design defines a framework for designing products and

industrial processes that turn materials into nutrients by enabling their perpetual flow within one of two distinct metabolisms: the biological metabolism and the technical metabolism (Braungart et al. 2006). Traditionally this is known as product eco-design. Product Stewardship This means extending the traditional focus on manufacturing processes inside the factory toward life-cycle management, which involves preparing for the reuse, remanufacturing, recycling, or final safe disposal already at the manufacturing phase (Lane and Watson 2012). Legislation or industry self-regulations make the original equipment manufacturer responsible for takeback and recovery of returned products by imposing collection and recovery quota, aka extended producer responsibility (Zuidwijk and Krikke 2008). Closed Loop Supply Chains Closed Loop Supply Chain management is the design, control, and operation of a system to maximize value creation over the entire life cycle of a product with dynamic recovery of value from different types and volumes of returns over time (Guide and Van Wassenhove 2003). While the other three concepts create potential and favorable conditions for reuse and recycling, Closed Loop Supply Chains create the actual value, where values can be economical but also social and environmental.

© Springer Nature Switzerland AG 2021 W. Leal Filho et al. (eds.), Decent Work and Economic Growth, Encyclopedia of the UN Sustainable Development Goals, https://doi.org/10.1007/978-3-319-95867-5

1108

Value Creation in a Circular Economy: An Interdisciplinary Approach

Introduction Business needs natural resources to produce goods and services. From the point of origin to point of consumption, raw materials feed supply chains, but also energy and water are inputs. For example, the water footprint of a ham and cheese sandwich is about 50 l. Recent research shows that a number of natural resources are becoming scarce, e.g., the impact of rare earth minerals has been felt in the electronics industry. The consequences of resource scarcity include volatile and rising commodity prices and ultimately supply disruptions. Four concepts are often mentioned as a possible remedy and defined above: circular economy, Closed Loop Supply Chains, Cradle-toCradle, and Product Stewardship. Having the common aim of reducing virgin material consumption, each concept’s approach is different. They can be classified according to two dimensions: (1) product or process orientation and (2) economic or business level. This is represented in the figure below (Fig. 1). The most important contribution of CE is the articulation of new business models emphasizing servitization. Cradle-to-Cradle focuses on product design, Product Stewardship on extended producer responsibilities across the life cycle by legislation, as well as industry self-regulation. Closed Loop Supply Chains deal with actual value creation. We postulate that the concepts are partly overlapping but foremost complementary. We discuss them all below in separate sections and conclude with synergy effects and the contribution to SDG in the final section. It is important to notice that circular economy and related concepts are not the same as sustainability. Geissdoerfer et al. (2017) describe differences and concurrencies Value Creation in a Circular Economy: An Interdisciplinary Approach, Fig. 1 The circular playing field. (Source: PhD thesis Maren Schenkel 2016)

between circular economy and sustainability where they sometimes go hand in hand and sometimes not.

Circular Economy: Servitization Over the last decades, a paradigm shift has emerged, moving away from selling products toward servitization. This change in thinking is based on the assumption that economic value is not necessarily associated with the production and distribution of tangible products but rather with the use and functionality that the products offer. This contrasts with traditional business models as it emphasizes a combination of products and services in one system, to fulfil customer demand (Ceschin 2012). It is important to notice that servitization-based business models involve far more than “product leasing” which seems to be advocated widely by the MacArthur Foundation. Another concern is the fact that the concept seems to be more vendor than customer driven. Tunn et al. (2019) state that proper business models cover three main elements: customer value proposition (promise), value creation and delivery (fulfilment), and value capture (“bottom line”). They present an approach in which the customer effort and their consumption level are integrated with (vendor) revenue model and resource strategy, showing that both parties are relevant. Bocken et al. (2016) articulate the importance of aligning product design strategies and circular business models for slowing down material use (hence extending life cycles) and closing the loop. Urbinati et al. (2017) presents a taxonomy emphasizing a proper match between product design, marketing, and the value creation network in

Product Stewardship (PS): extended producer responsibility (EPR)

Circular Economy (CE): servitization

Economy level

Cradle-to-Cradle (C2C): product eco-design

Closed loop supply chains (CLSC): multiple value creation

Business level

Product oriented

Process oriented

Value Creation in a Circular Economy: An Interdisciplinary Approach

order to maximize customer value. Finally, close buyer-supplier collaboration increases dependency and the risk of lock-ins. Lockett et al. (2011) emphasize that trust and relationships management is crucial for circular business models, which also applies to complementary concepts like industrial symbioses and shared economy. They also present a case discussing product service systems. This concept is elaborated on below as it presents the most concrete form of servitization. The concept of product service systems (PSSs) has been widely studied, and different definitions can be found in literature (Ceschin 2012). However, within this paper, PSSs are defined as: “. . . a specific type of value proposition that a business (network) offers to (or co-produces with) its clients, consisting of a mix of tangible products and intangible services designed and combined so that they jointly are capable of fulfilling final customer needs” (Tukker and Tischner 2006, p. 1552). From the viewpoint of vendors, this approach offers new strategic opportunities. Compared to traditional sales, PSSs give more attention to the use phase of the product. A higher degree of involvement and increased responsibilities for vendors is often accompanied with a change of ownership (Ceschin 2012). As a result, products are treated as capital assets rather than consumables. This creates a handle to manage the full product life and to add services. Concepts like smart maintenance and installed base management come into play. Installed base management concerns the care and support during operations of all products placed in the market. Vendors offer services such as proactive replenishment, condition-based repairs, overhaul, spare parts management, and system upgrades. Installed base support is traditionally looked at from a technical point of view but can also involve more commercial parameters. For example, when a customer with a highvolume copier only makes a few copies a week, there is a clear misfit, and early takeback and product exchange or upgrade may be appropriate. Reuse and remanufacturing can be integrated as a service as well. Recently, car insurance companies offer green policies, through which a damaged car

1109

is repaired with parts harvested from dismantled wrecks. Smart maintenance exploits new technologies such as sensoring, big data, and advanced planning to optimize the support. Identifying market segments plays a significant role. Markets can be segmented in distinct newnessconscious customers (who will not buy recovered products); functionality-oriented customers, who are particularly price sensitive (and may buy refurbished); and green customers (ditto). The market’s perception of quality is crucial and partly depending on customer’s familiarity with CE. A certain degree of overlap between segments for new and recovered products, known as a market cannibalization, is likely to occur. PSSs provide a tool to manage segments and minimize market cannibalization risk. Vendors need to identify customers’ demands per segment as well as their inherently related responsibilities and relationships. A long-term relationship between vendor and customer is a key driver for an effective design and execution of PSSs (Mont 2002). These changes in relationships intensify operational links, legal ties, information exchange, and the need for cooperative rules leading to a stronger cooperation between buyers and suppliers (Matthyssens and Vandenbempt 2010; Tukker 2015). As originally described by Tukker (2004), most PSS classifications make a distinction between three main categories, which can be subdivided into eight specific subcategories. This classification is shown in Fig. 2 suggesting a continuum where, from left to the right, the (tangible) product content decreases and the (intangible) service content increases. Simultaneously, the dependence on the product as the core content of the PSS decreases, and customer demands can be formulated more in terms of requirements, providing flexible fulfilments options for the vendor. Product ownership and responsibility gradually shift from customer to vendor. Note that feasibility of these different PSS models varies per industry segment. Case Coffee 3 Coffee 3 is a Dutch family-owned vendor of coffee machines and ingredients. Products are sold, leased, and rented to a variety of customers in retail, agriculture, car services, schools, industrial

V

1110

Value Creation in a Circular Economy: An Interdisciplinary Approach

Value Creation in a Circular Economy: An Interdisciplinary Approach, Fig. 2 PSS categories and subcategories. (Source: Tukker 2004)

estates, and soccer stadiums. Coffee 3’s offering consists of the delivery of coffee machines accompanied with the supply of ingredients and a set of use-related services. Coffee 3 does not produce machines but buys from brand owners (suppliers). Also, Coffee 3 has well-developed recovery activities. Just selling coffee machines without the service components is not considered to be a feasible business model. For this reason, Coffee 3 exclusively offers the following three PSSs. Product-related service: In case of direct sales of coffee machines, the client is obliged to buy their ingredients and services from Coffee 3. Customers are periodically visited by a service engineer for coordinating ingredient supply and small maintenance activities like cleaning and inspection. Meanwhile, this engineer plays an important role in managing the relationship with the customer. As an additional option, Coffee 3 offers a full maintenance contract that includes all-in maintenance activities and an emergency repair service. Product lease: A leasing concept was introduced some years ago in close cooperation with one of the strategic suppliers (brand owner), mainly to meet the requirements of bigger end customers. This concept is named “coffee care” and offers the full package of a coffee machine, ingredients delivery, six weekly small services, and all-in maintenance. In this PSS Coffee 3 leases the products from its supplier (brand owners) and

passes on the lease conditions/fee to their customers accordingly. Refurbished products are used regularly in this PSS, provided that they meet the latest standards of the brand owner (supplier). Since its introduction, the proceeds of this lease concept have grown to approximately 40% of Coffee 3’s total turnover. Product renting: The renting option is particularly offered for short-term, temporary solutions and poses a minor activity for Coffee 3. Coffee 3’s end customer base can be segmented in four types where type I are SMEs from different branches, type II larger companies, type III customers who specifically buy refurbished products named “high brand reduced price,” and a small group of type IV customers who rent a temporary solution. Table 1 presents a Business Model Canvas (BMC) on the PSSs of Coffee 3. The lease concept boosts circularity. When a coffee machine must be replaced, Coffee 3 inspects the returned product in order to assess its potential for recovery. It offers its customers a return fee, even if no further extension of the product life cycle is expected. Depending on the quality state of the product, recovery will be considered on product, parts, or material level. Parts harvesting is widely applied. Due to recovery activities, Coffee 3 has a large stock of cheap refurbished spares, which otherwise must be newly acquired. This enables Coffee 3 to engage

Value Creation in a Circular Economy: An Interdisciplinary Approach

1111

Value Creation in a Circular Economy: An Interdisciplinary Approach, Table 1 Business Canvas Model for the case of Coffee 3 PSSs and segments. (Source: master thesis F. Nouws 2018) Key partners Well-known partners with high brand products (dealership) Some partners act as an initiator for leasing concepts

Key activities Product acquisition of used products by offering a buyback fee on end of contract Maintenance and repair activities Reverse logistics Refurbishing Stock of used products and parts Periodical service (small maintenance ingredient sale) Comprehensive maintenance and availability for fault clearing Remarketing/ secondary market development Key Recourses Refurbishing competences Capital for stocked products Knowledge and competences for remarketing Capital for leasing options by supplier

Value propositions General A total coffee concept consisting of high-quality and reliable coffee machines, delivery of high quality ingredients, personal service PSS1 (direct sale and use related services) PSS1: machine ownership and ingredients supply complemented with small maintenance and repair, relieving the customer from use-related activities and acquiring ingredients Optional full maintenance and repair contract (yearly comprehensive maintenance and faultclearing service) PSS2 (advice and consultancy) N.A. PSS3 (leasing) Coffee care concept: original VP included with a leasing option with full maintenance Relieves customers from activities and responsibilities related use and disposure Relieving customers from capital investments PSS4 (renting and sharing) Renting option of coffee machines and ingredient sale for short term temporary solutions EOU recovery Extended and quick availability of refurbished products and parts Return fee for used products High brand products against lower costs Relieved from disposal activities and responsibilities

Customer relationships Long-term relationship based for all segments, by account management and/or service representatives

Channels Personal account management Service representatives (6w visit) for small maintenance, ingredient supply, additional sales Website

Customer segments Type I Small- and mid-sized companies (0–50 employees) in several branches like retail, agriculture, cars, schools, industrial estates, soccer stations Type II Bigger (corporate) companies (200–300 employees), mainly prefer the coffee care concept Type III Companies who prefer to buy recovered products because of “high-end product against reduced prices” motives Type IV Customers who demand a temporary (functional) renting solution

V

(continued)

1112

Value Creation in a Circular Economy: An Interdisciplinary Approach

Value Creation in a Circular Economy: An Interdisciplinary Approach, Table 1 (continued) Key partners

Key activities

Cost Cost for: Product acquisition Capital for stock option Service representatives Maintenance and repair service Reversed logistics Refurbishment

Value propositions

Customer relationships

Customer segments

EOL take back Relieved from disposal activities and responsibilities Revenues Revenues from: Direct sale of new and recovered products Direct sale of new and recovered products and parts Leasing fees for new and recovered products Maintenance contracts

in responsive maintenance, (temporary) replace, and repair activities, which strengthens the leasing PSS. Originally, the main part of Coffee 3’s customer base consisted of small companies with 1 to 50 employees. However, due to the leasing PSS, the client base has been extended with bigger (corporate) clients with up to 200 employees. For this segment, customer relations management is now executed by account managers since a periodical visit of a (more operationally focused) service engineer proved inadequate. Given the fixed contract term of 5 years, the stream of product returns from the leasing PSS can be forecast reasonably well. In some cases however, contracts are extended, and also premature terminations or product failures occur causing early returns, so additional stock is inevitable. The management realizes that coffee care concept will increase the flow of product returns and refurbishment operations must be scaled up. The coffee care concept requires capital investment by suppliers, and the mentioned increased return/ refurbished stock will raise capital cost for Coffee 3 as well. Finally, more types of PSS related to remarketing of refurbished products must be developed, perhaps for more segments.

Product Stewardship: Extended Producer Responsibility The term Product Stewardship and extended producer responsibility (EPR) represent different

things but are strongly interlinked. EPR makes the original equipment manufacturer responsible for takeback and recovery of returned products. Its main aims are to promote reuse and recycling by imposing collection and recovery quota and hence to reduce waste. In Europe EPR is mostly regulated by governments and applied to major “priority” waste flows such as electronics, automotive, batteries, tires, packaging, and construction waste. Japan has introduced EPR legislation very similar to the European Directives, except that their system is more simple. The Chinese laws regarding e-waste are similar to the ones in the EU, but they focus on banning the import of e-waste. This proves to be difficult; illegal smuggling of waste still occurs in countries with a strong informal sector, like China and others. In North America, the related concept Product Stewardship is more common. Rising waste levels in Canada necessitate renewed waste reduction efforts, with a focus on prevention. In the United States, 25 states have implemented laws that require the recycling of electronic waste. Of those, 23 have incorporated some form of extended producer responsibility or Product Stewardship into their law (McKerly et al. 2006). Below we elaborate on electronics and automotive waste regulations in Europe. e-waste production by households exceeded an annual amount of 30 million tons globally in 2015. In Europe, the Directive 2002/96/EC of the European Union on Waste Electrical and Electronics Equipment (WEEE) imposes on all EU member states to develop legislation based on

Value Creation in a Circular Economy: An Interdisciplinary Approach

extended producer responsibility (EPR) since 2003. Also, certain product recycling information must be made public. Originally the WEEE Directive distinguished for ten product categories both concerning B2B and B2C markets. For each category minimum rates of recovery of 70–80% were set. Also, a collection target of 4 kg annually per head of capita was set, and fractions that contain hazardous materials, such as batteries, printed circuit boards, cathode ray tubes, and external electric cables, must be removed. The RohS Directive was complementary to the WEEE Directive to stimulate eco-friendly design of products. Most countries set up a national collection and recycling scheme. Several actors, retail, city collection, recycling firms, and government bodies work together to implement the EU directives. To cover the recycling cost, a fee was charged on new products at the moment of sale, varying from 5 to 10 euros. Later, these fees were significantly reduced and in some cases even abolished as the recycling system broke even at some point in time. Yet, some parties collecting e-waste complained that they were not compensated sufficiently. Some municipalities in Europe even started trading to e-waste to brokers to generate extra income instead of transferring it to the national recycling system. The WEEE Directive was significantly revised around 2012. The Directive was seen by EU politicians as failing to achieve some of its goals, in particular because much e-waste was not collected through the proper channels and exported illegally (Zoeteman et al. 2010). The changes include the method for calculating collection rates, which was previously 4 kg per inhabitant per year, but are now expressed in % of new products sold 2 years preceding. For the first 3 years of the amendment, the calculation of collection rates will be 45% of the weight of E&E products entering the market. Once this transitional period is over, EU member states will individually select the actual collection options they wish to use. The overall aim was for the EU to collect and recycle at least 85% of electrical and electronics waste equipment by 2016. This proves hard to achieve in practice in EU member states (EU 2014). The automotive industry is one of the major European industries confronted with a massive amount of end-of-life products. In Europe alone,

1113

over 15 million passenger cars are sold annually, which will all be discarded at some time. With the implementation of the European directive on the recycling of end-of-life vehicles (2000/53/EC), collective initiatives were taken in many EU member states around 2004. Similar to e-waste EU legislation originally prescribed a recovery target of at least 85%, of which 80% by reuse and recycling. In the Netherlands, the national representatives of the automotive industry, including all car manufacturers, acted together with the foundation of Auto Recycling Nederland (ARN). Up until today, ARN is responsible for the funding and the operational implementation of EPR regulations. For each new car sold, a fee is charged by ARN. This provides the resources to conduct research and to monitor, report, and foremost hire third parties in logistics and recycling to do the actual operations. Although not as drastically revised as the WEEE Directive, around 2016 targets were increased to 85% and 95% for reuse/recycling and total recovery rate, respectively (Fig. 3). The main weakness of the EPR systems lies in collection, which is not orchestrated by the national collectives or producers but lies in the hands of retailers and municipalities. In particular for smaller, low-value goods, it proves difficult to realize collection rates higher than 30%. Moreover, the collective systems minimize competition, and do not give incentives for eco-design to individual brand owners as fees are averaged. Some argue that technological innovations are held up due to the recycling (and not reuse) focus of the national systems. Also, since every country has its own regulations, cross border transport is complicated. Finally there is the double counting issue of recovery quota, i.e., reused products add to the sales and (potentially) collection quota. It is unclear to what degree they pollute statistics.

V Cradle-to-Cradle: Product Design Cradle-to-Cradle ® (C2C) provides designers with three design principles for achieving ecoeffectiveness, namely, “waste equals food,” “use renewable energy,” and “celebrate diversity” (McDonough et al. 2003). Prof Walter R. Stahel

1114

Value Creation in a Circular Economy: An Interdisciplinary Approach

Hulk

Spare parts

Shred der

Landfill site

Shredder residual

Shredding and separation of metals

Separated material fraction

Shredder entry report ELV-dismantler

Vehicle fleet

De-pollution, dismantling and trade of spare parts

ARN materials

Collection company Transportation and consolidation

ARN materials

Recycler Recycle and market the reclaimed materials

Resource markets

ELV Report on amount of recycled materials

Deregistration in vehicle register

Report on amount of dismantled materials

Report on amount of collected materials

Report on amount of transferred materials

National vehicle register

Auto Recycling Nederland

keeps track of all vehicles in the Netherlands

Organizing, controlling and financing the ELV-recycling on behalf of the OEMs satisfying the extended producer responsibility

Physical flows Overview of deregistered vehicles per ELVdismantler including weight and fuel type

Information flows

Value Creation in a Circular Economy: An Interdisciplinary Approach, Fig. 3 The Dutch ARN system for ELV vehicles. (Source: PhD thesis Ieke le Blanc 2006)

has been credited introducing concepts similar to Cradle-to-Cradle as early as the 1980s. Faced with an increasing number of their copiers ending up in the landfills, e.g., Xerox, in the late 1990s, initiated a zero-to-landfill program, in which all parts of their copiers could be reused. Later, other copier firms replicated the concept. William McDonough, a sustainable architect, and Michael Braungart, a chemist, published their book in 2002. They were able to attract global attention for C2C. Companies were presented the opportunity to make their products as no longer just for sale but as available for use. After use the products are taken back to enter a material reprocessing system and therefore remain in circulation. Benefits include becoming less dependent on price fluctuations in raw materials markets, lower cost, and improved sustainability. Waste materials in an old product become the “food” for a new product. The concept distinguishes between the biological and the technological cycles for materials. In the biological cycle, materials are returned to the biosphere in the form of compost or other nutrients, from which new materials can be created. In the

technical cycle, materials that are not used up during use in the product can be reprocessed to allow them to be used in a new product (Braungart et al. 2006). Eco-effectiveness is crucial to the C2C approach. It presents a product design and production strategy alternative to the strategies of zero emission and eco-efficiency. Where ecoefficiency and zero emission seek to reduce the unintended negative consequences of processes of production and consumption, eco-effectiveness creates value by producing goods and services that incorporate social, economic, and environmental values, enabling triple P growth. Products and industrial systems maintain or enhance the productivity of materials through multiple life cycles. According to Braungart et al. (2006), major shortcomings of eco-efficiency and zero emission approaches include their inability to address the necessity for fundamental redesign of material flows, their inherent failure toward long-term economic growth and innovation, and their inability to deal with toxicity issues.

Value Creation in a Circular Economy: An Interdisciplinary Approach

The transition to eco-effective industrial systems is a five-step process starting with an elimination of undesirable substances and ultimately calling for a reinvention of products. By critically reconsidering how products may optimally fulfil the needs for which they are actually intended, they can become more supportive of ecological and social systems. The concept of intelligent materials coordination among actors illustrates how such an eco-effective system might take shape. In reality however, so called downcycling occurs: a downgrade in material quality which limits (re)usability and maintains the linear, cradle-to-grave material flow system. Instead C2C aims to generate cyclical systems that enable materials to maintain or improve as resources (Braungart et al. 2006). This is referred to as “upcycling,” hence quality improvement with renewed functionality. This inherently generates a synergistic relationship between ecological and economic systems (Braungart and McDonough 2002). Bakker et al. (2009) argue that this “guilt-free (C2C) approach has enthused many new people, drawing them into the field of sustainability. However, the question of when and how the Cradle-toCradle concept can be applied successfully in business is still being debated.” Based on student design projects for several multinationals, they discuss strengths and weaknesses of the concept and conclude that LCA should be used as a complementary tool to assess whether Cradle-toCradle pilots make environmental sense if implemented in reality. de Pauw (2015) discusses an explorative case study in which three approaches are compared for two products: biomimicry, Cradle-to-Cradle, and Eco-design. Biomimicry and Cradle-to-Cradle provide an approach to product design that is distinct from eco-design in several respects. For the cases studied, the biomimicry and C2C strategies prove particularly equipped to broaden the designers’ solution space and to generate solutions at a function and/or system level. However, both strategies currently do not offer quantitative design tools (as eco-design does) for evaluating the environmental impact of the solutions across the product

1115

life cycle. This induces the risk of unforeseen impacts of the design strategies applied in isolation. It is also concluded that complementary foot printing (like LCA) is needed (Table 2). Apart from the lack of footprint quantification, a main criticism is that the business case is insufficiently addressed in the C2C theory. In business, loops will not be closed unless there is a financial incentive. So far, the concept is mainly driven by material recycling and reuse, and refurbishing and remanufacturing are hardly mentioned. Moreover, upcycling is still in its infancy and cannot be applied in practice yet. Some argue that Closed Loop Supply Chains are needed to create actual value. Please note that the interpretation of value is broadening and social and environmental values gain momentum.

Closed Loop Supply Chains: Multiple Value Creation Supply chains are essential to thrive in today’s marketplace. In order to mitigate costs and maximize performance, business companies have to constantly reconsider strategic choices regarding, e.g., facility locations, modalities, routing, and outsourcing. On top of that, environmental issues gain momentum. For example, water scarcity has caused the closure of plants in the automotive business and the implementation of water recycling systems in the beverage industry. Greenhouse gasses are also impacting logistics optimization, e.g., by CO2 taxes. Until recently Closed Loop Supply Chain was no boardroom priority. As a result, end-of-pipe solutions were implemented. However, companies todays face growing pressure to implement a closed loop system for a variety of reasons. Examples include customer demand for takeback, directives on Product Stewardship, resource scarcity, corporate citizenship, landfill bans, warranty issues, rapid product replacement cycles, servicelevel agreements, global warming, and so on. The rise of the circular economy makes Closed Loop Supply Chains a value creator rather than a cost of doing business. Once products are designed,

V

Tableware and cutlery (2011) Biomimicry Meal box-system with three components: cups-box/tray-cutlery. Meal box, tray, and plate are integrated, disposable, and recyclable. Food is sold unpacked. [bio3]

The “Ardente” is inspired on mammals, molars, segmentation, and capillarity. Designed to produce multiple cups at a time and makes both coffee and espresso. [bio2]

Coffee machine (2012)

Value Creation in a Circular Economy: An Interdisciplinary Approach, Table 2 Comparing three design methods to two products. (Source: PhD thesis Ingrid de Pauw 2015)

1116 Value Creation in a Circular Economy: An Interdisciplinary Approach

Cradle-to-Cradle Cutlery and tableware are reused as raw material for 3D printed models at the faculty or for designs from the Porceleine Flos. [c2c3]

(continued)

“WiRed” brings people together (Wi) and shows them how the Redbeans (Red) should be processed into very good coffee. [c2c5]

Value Creation in a Circular Economy: An Interdisciplinary Approach 1117

V

Tableware and cutlery (2011) Ecodesign This biodegradable set of cutlery and tray create awareness of usage thanks to small inscriptions. Overuse is discouraged by design (break off cutlery) and by cost.[eco3]

Value Creation in a Circular Economy: An Interdisciplinary Approach, Table 2 (continued)

The coffee maker is mounted on the wall for the users to enjoy a “personal handmade” expresso. A lever is used for manual grinding of the beans and building up pressure. [eco5]

Coffee machine (2012)

1118 Value Creation in a Circular Economy: An Interdisciplinary Approach

Value Creation in a Circular Economy: An Interdisciplinary Approach

“Cradle-to-Cradle” and circular business models are employed, and the loop must be closed by applying recovery options such as harvesting, remanufacturing, or recycling. Literature distinguishes four business values. We elaborate on how to realize these values by Closed Loop Supply Chains and how they can reinforce one another (Schenkel et al. 2019). “Sourcing value” refers to the economic gains that come from efficient sourcing, reducing the cost or resources, providing higher availability, and avoiding disposal fees. The price of remanufactured and refurbished products, for instance, is known to be about significantly lower than new built products. Compliance and green image are denoted as “environmental value.” As mentioned, Europe has been leading in formulating directives for producer responsibility (consumer electronics, automotive, hazardous materials), but Asia and a number of North American states have followed. Lowering footprints creates environmental value too. “Customer value” refers to activities that enhance customer satisfaction and loyalty through the offering proper product return channels. Especially in e-commerce, where consumer return rates are relatively high, this is critical. PSS also add customer value by providing services such as upgrades, smart maintenance, and refurbishing. Perhaps the least known value is “informational value” derived from analyzing returns data on common production or supply disruptions, product failures, useful lifetime, consumer usage patterns, and complaints. Such information is extremely valuable for improving processes throughout the whole supply chain (product design, production, distribution, marketing). It connects to “big data” trends and organizational learning. Companies should aim for synergy between values. For instance, integrating used parts and products in production provides sourcing value, which may be the firm’s primary concern, but it also lowers the footprint, which creates environmental value. We present an example on environmental and sourcing value in the copying business. The ecofootprint comprises all kinds of environmental impact, but it is often narrowed down to the carbon footprint. Although returns give rise to an

1119

additional goods flows, hence emissions, from customers back to producers, CLSCs usually reduce the carbon footprint due to the substitution effect. This means that the reverse channel supplies high-quality (recovered) products, components, and materials to the forward channel, thereby substituting (replacing) virgin sourcing and (basic) production (Krikke 2011). The carbon footprint of the return channel depends on the recovery option chosen but is usually much lower than the equivalent forward (new built) production-distribution channel. To obtain the best result, recovered items must reenter the original supply chain by remanufacturing, refurbishing, or closed loop material recycling. Open loops (reuse in other supply chains) involve scrap and disposal, and create less value, at least from an environmental point of view. Figure 4 presents results of the carbon footprint involving a copier (closed loop) supply chain. It shows the result per single recovery option. In reality a mix of recovery options is applied, but a reduction of the carbon footprint by 50% is no exception. Please note that the user phase is not included in the data, only the (closed loop) supply chain processes, forward and reverse (Fig. 4). The sourcing value recovery options partly depend on the network design and return quality, but cost reductions of 40% are realized. For the electric motor of the copier, the refurbished version was even 88% cheaper. A frequently recurring criticism to Closed Loop Supply Chain concept is that it is too operationally focused. Indeed, many studies deal with optimizing the return channel, not taking an integral approach. Creating value can be challenging, but leading companies in e-tailing, IT, capital goods, and office supplies have found ways to leverage multiple value types. Table 3 offers possible options toward synergies in value creation for various industries. We conclude that the four concepts discussed in sections “Definitions,” “Introduction,” “Circular Economy: Servitization,” and “Product Stewardship:Extended Producer Responsibility” are complementary though not mutually exclusive and to some degree competing. In section “Cradle-toCradle: Product Design” we discuss how they contribute to the SDGs.

V

1120

Value Creation in a Circular Economy: An Interdisciplinary Approach

1200 New 1000 Repair 800 Reman

600 400

Scrap

200

Disposal

0

To

ta l

CO 2

CO 2 Ga

tio nf

igu

ra

in

CO 2 n

CO 2 e ak

rs

CO 2 M

CL recycle

Co

Su

pp

lie

-200

Refurbish

Value Creation in a Circular Economy: An Interdisciplinary Approach, Fig. 4 Carbon footprint of copier closed loop supply chain per recovery option and new. (Source: Krikke 2011)

Value Creation in a Circular Economy: An Interdisciplinary Approach, Table 3 Synergy in value creation. (Source: PhD thesis of Maren Schenkel 2016) Industry Initial trigger End of pipe solution

Capital goods Resource scarcity

Single value creation (initial)

Sourcing value: company has a mature sourcing policy that integrates remanufacturing with manufacturing. Environmental value: company communicates lower footprints with stakeholders Informational value: company extracts vital information from remanufacturing process

Multiple value creation (synergy)

Company reuses materials/parts on an ad hoc basis to minimize costs

Office Corporate social responsibility Avoid negative image related to potentially hazardous chemicals in the product Environmental value: company positions itself as environmental leader

e-commerce Customer complaints

e-waste Compliance

Dealing with complaints on ad hoc basis; threshold for customers to return products is high

Company is forced to lower emission rates

Customer value: complete transparency towards customer; return policies are fair and hassle free

Environmental value: company positions itself as environmental leader

Sourcing value: cheaper sourcing through material recycling

Informational value: on product return, company extracts customer information regarding product satisfaction and use

Sourcing value: company extends environmental leadership to full-scale product recycling and reuse

Value Creation in a Circular Economy: An Interdisciplinary Approach

Circular’s Contribution to Sustainability Goals The Sustainable Development Goals (SDGs), or the Global Goals for Sustainable Development, are a collection of 17 global goals set by the United Nations General Assembly in 2015 for the year 2030. The SDGs are part of Resolution 70/1 of the United Nations General Assembly: “Transforming our World: the 2030 Agenda for Sustainable Development,” aka Agenda 2030. Circular economy has impact on the following goals: • Goal 6: Clean water and sanitation – water recycling programs reduce water footprint. • Goal 7: Affordable and clean energy – reuse and recycling reduce energy use of supply chain. • Goal 8: Decent work and economic growth – refurbishing creates jobs, for example, for disabled people. • Goal 9: Industry, innovation, and infrastructure – new business models and Cradle-to-Cradle design spur innovation. • Goal 11: Sustainable cities and communities – in particular in developing economies waste management should develop circular instead of end-of-pipe solutions. • Goal 12: Responsible consumption and production – circular, for example, prevents marine litter to pollute the oceans. • Goal 13: Climate action – carbon footprint is reduced by reuse and recycling. Companies struggle to implement CE on a business level as it is defined on a macroeconomic level. In order to narrow the intention-action gap, a good understanding of the full circular playing field is needed. All four approaches discussed have their own strengths and weaknesses. Bringing them together is crucial for successful implementation.

Cross-References ▶ Life Cycle Sustainability Assessment ▶ Sustainable Business models

1121

References Bakker CA, Wever R, Teoh C, De Clercq S (2009) Designing Cradle-to-Cradle products: a reality check. Int J Sustain Eng 3(1):2–8. https://doi.org/10.1080/ 19397030903395166 Bocken NMP, Ingrid de Pauw, Conny Bakker & Bram van der Grinten (2016) Product design and business model strategies for a circular economy. J Ind Prod Eng 33(5): 308–320. https://doi.org/10.1080/21681015.2016. 1172124 Braungart M, McDonough W (2002) Cradle-to-Cradle: remaking the way we make things. North Point Press, New York Braungart M, McDonough W, Bollinger A (2006) Cradleto-Cradle design: creating healthy emissions e a strategy for eco-effective product and system design. J Clean Prod 15(13–14):1337–1348. https://doi.org/ 10.1016/j.jclepro.2006.08.003 Ceschin F (2012) The introduction and scaling up of sustainable product-service systems. PhD thesis, Politecnico di Milano March. https://www.politesi. polimi.it/handle/10589/56785?locale¼en de Pauw IC (2015) Nature-inspired design – strategies for sustainable product development. PhD thesis, TU Delft Academic Press https://repository.tudelft.nl/islandora/ object/uuid:0980cda8-3074-4bb7-80f5-c873ca39f7d1? collection¼research EU website (2014) http://ec.europa.eu/environment/archives/ waste/eu_guidance/introduction.html. Accessed 18 Apr 2019 Geissdoerfer M, Savaget P, Bocken NMP, Hultink EJ (2017) The circular economy – a new sustainability paradigm? J Clean Prod 143:757–768. https://doi.org/ 10.1016/j.jclepro.2016.12.048 Guide VDR, Van Wassenhove L (2003) Business aspects of Closed Loop Supply Chains. Carnegie Mellon University Press, Pittsburgh. http://www.personal.psu.edu/ drg16/CLSC%20Book%20flyer.pdf Krikke H (2011) Impact of closed-loop network configurations on carbon footprints: a case study in copiers. Resour Conserv Recycl 55:1196–1205. https://doi.org/ 10.1016/j.resconrec.2011.07.001 Lane R, Watson M (2012) Stewardship of things: the radical potential of Product Stewardship for re-framing responsibilities and relationships to products and materials. Geoforum 43:1254–1265. https://doi.org/10.1016/j. geoforum.2012.03.012 le Blanc I (2006) Closing loops in supply chain management. PhD thesis, Tilburg University Press. https:// pure.uvt.nl/ws/portalfiles/portal/725776/160_Ieke_le_ Blanc.pdf Lockett H, Johnson M, Evans S, Bastl M (2011) Product service systems and supply network relationships: an exploratory case study. J Manuf Technol Manag 22:3. https://doi.org/10.1108/17410381111112684/full/html Matthyssens P, Vandenbempt K (2010) Service addition as business market strategy: identification of transition

V

1122 trajectories. J Serv Manag 21(5):693–714. https://doi. org/10.1108/09564231011079101 McDonough W, Braungart M, Anastas PT, Zimmerman JB (2003) Applying the principles of green engineering to Cradle-to-Cradle design. Environ Sci Technol 37:434A–441A McKerly K, Knight K, Thorp B (2006) Advancing extended producer responsibility in Canada. J Clean Prod 14(6/7):616–628. https://doi.org/10.1016/j.jclepro.2005. 08.001 Nouws F (2018) Circularity, a synergy between closing the loop and service strategies? Master thesis Open Universiteit Nederland Schenkel M (2016) Value creation in Closed Loop Supply Chains. PhD thesis, Open University Netherlands Schenkel M, Caniels M, Krikke H, Lambrechts W (2019) Vicious cycles that hinder value creation in Closed Loop Supply Chains: experiences from the field. J Clean Prod 223:278–288. https://doi.org/10.1016/j. jclepro.2019.03.088 Tukker A (2004) Eight types of product-service system: eight ways to sustainability? Experiences from suspronet. Bus Strateg Environ 13(4):246–260. https://doi.org/10.1002/bse.414 Tukker A (2015) Product services for a resource-efficient and circular economy – a review. J Clean Prod 97: 76–91. https://doi.org/10.1016/j.jclepro.2013.11.049 Tukker A, Tischner U (2006) Product-services as a research field: past, present and future, reflections from a decade

Vocation of research. J Clean Prod 14(17):1552–1556. https://doi. org/10.1016/j.jclepro.2006.01.022 Tunn VSC, Bocken NMP, van den Hende EA, Schoormans (2019) JPL business models for sustainable consumption in the circular economy: an expert study. J Clean Prod 212:324–333. https://doi.org/10.1016/j.jclepro. 2018.11.290 Urbinati A, Chiaroni D, Chiesa V (2017) Towards a new taxonomy of circular economy business models. J Clean Prod 168:487–498. https://doi.org/10.1016/j. jclepro.2017.09.047 Zoeteman BCJ, Krikke HR, Venselaar J (2010) Handling WEEE waste flows: On the effectiveness of producer responsibility in a globalizing world. Int J Adv Manuf Technol 47(5–8):415–436 Zuidwijk R, Krikke HR (2008) Strategic response to EEE returns: product eco-design or new recovery processes? Eur J Oper Res 191(3):1206–1222. https://doi.org/ 10.1016/j.ejor.2007.08.004

Vocation ▶ Nurturing Career Development for Human Resource Sustainable Development

W

War Economy ▶ Human Trafficking as a Conflict Financing Measure

Women and Agriculture: Addressing Hidden Work in Land-Based Livelihoods Felix Kwabena Donkor College of Agriculture and Environmental Sciences, University of South Africa (UNISA), Johannesburg, South Africa

Definition A livelihood denotes the range of activities that enables an individual or household to secure the basic necessities on a sustainable basis with dignity (Ellis 2000). Land-based livelihood strategies such as crop production, livestock farming, and natural resources trade are important components of the rural economy (Shackleton et al. 2010).

Introduction The economic empowerment of women has gained increasing attention in key global development policy processes. This is more so as research

points to the immense benefits of women empowerment not only on the female populace but on the broader social fabric including wealth, wellbeing, early childhood development, social security, and civil liberties (FAO 2013). Thus, giving credit for the work done by women and giving them due acknowledgment is a major theme of feminist advocacy and scholarship (Rao 2010). Interventions to support women’s economic empowerment are often focused on different sides of the economic spectrum. This includes corporate leaders and entrepreneurs on one hand and the women ensnared in the informal economy or totally excluded (Davis et al. 2010). It is argued that empowering women on the margins of the formal economy or those totally excluded from it is a viable development intervention in poor countries. In majority of the developing nations, the poorest – mainly women – can be largely found in agricultural-related work, which provides an avenue for tailored interventions. Women are key role players in the agricultural labor force and across its value chain, even though it is challenging to accurately measure. Some also opine that the underperformance of the agricultural sector in many developing nations is partly because women, who are a vital resource in the grass roots economy and are faced with enormous challenges that limit their productivity. Women represent circa 43% of the agricultural work force worldwide and in developing nations. The labor requirements of rural females are often greater than that of males and involve a greater

© Springer Nature Switzerland AG 2021 W. Leal Filho et al. (eds.), Decent Work and Economic Growth, Encyclopedia of the UN Sustainable Development Goals, https://doi.org/10.1007/978-3-319-95867-5

1124

Women and Agriculture: Addressing Hidden Work in Land-Based Livelihoods

component of unpaid domestic work associated with food preparation and collection of fuel and water. As women form a significant segment of the global populace, this is crucial to addressing some of the core issues relating to social inequalities and decent work which are encapsulated in the sustainable development goals (SDGs). This theme is therefore gradually acknowledged as critical in the realization of larger local and international development aspirations. In some contexts, this thematic area is couched in the obvious and stocktaking of the wider feminine-based care economy (Appelbaum et al. 2002; Razavi 2007; Settle et al. 2014). It is noteworthy that in several developing nations, the growth of the market economy assimilated rather than completely marginalized household-based production (Boserup 1973; Waddington et al. 2014). Moreover, it is argued that although the dichotomy between productive and reproductive labor undergirds gender-based economic inequities, it is not easily observable in economic administration (Beneria 1979, Beneria and Sen 1981; David and Asamoah 2011). In this regard it is worth considering that the academic, political, and policy agenda needs to give focus to the significant sections of the labor market which rely on the vital labor or productive contribution of women devoid of acknowledgment or remuneration (Davis et al. 2010). Agricultural value chain represents an important area where the clear distinction between productive and reproductive labor is nuanced can translate into the widespread removal of remunerated and unremunerated work on a big scale (Mijung and Diong 2012). Throwing the Spotlight on Women’s Contribution in the Agricultural Sector Globally, women are key actors in the agricultural value chain. In developing countries, they represent 43% of the work force. Moreover, in South Asia and sub-Saharan Africa, agriculture is the major avenue by which women obtain an occupation (FAO 2011; FAO 2015). It is argued that the development of agriculture in recent times has been along gender lines, a phenomenon often

termed “feminization of agriculture” (FAO 2012). The rise in women’s participation along the agricultural value chain is against a backdrop of steep decline in men’s involvement in the sub-sector some argue (de Schutter 2013; Slavchevska et al. 2016). This phenomenon has been attributed to a number of underlying influences such as the migration of the male folk, mechanization of land-based livelihoods such as agriculture, and outbreak of pandemic that impacts comparatively more men, war, climatic fluctuations, and technology (Davis et al. 2012; Slavchevska et al. 2016). Others contend that this situation can be attributed to issues such as improved surveying that better captures women’s contribution such as acknowledgment of subsistence work, or the evolution of women’s role from subsistence agriculture to commercial agriculture or the shift from family labor to income generation in agricultural-related activity could be influencing the gradual female domination of the work profile (Deere 2005; de Schutter 2013). In addition to their common responsibilities as key source of agricultural products, women have a higher probability of being caregivers in their homes (Anriquez 2010; Mahmud and Tasneem 2011). Owing to this, there is increased demand on their time which limits their options and optimization of time, compromises their agricultural output coupled with the value of the care provision, and overloads them with limited avenue leisureliness (Carmona 2013; Arora and Rada 2016). The rising involvement of females in the agricultural value chain, as a result, exacerbates their time constraint, compromising their individual quality of health with potentially devastating consequences on the quality of caregiving, thus impacting other related people’s well-being (FAO 2013; Kadiyala et al. 2014). The nature of female domination along the agriculture value chain comes with consequences on the household and communal socio-economy. Female Engagement in the Grassroots Economy Women and Unpaid Domestic Labor

The capacity of women to fully engage in economic opportunities is often compromised given

Women and Agriculture: Addressing Hidden Work in Land-Based Livelihoods

that they are confronted with a labor burden that men are often spared. The extra domestic responsibilities reduce the ability of women to participate in income generating activities, which demand a certain investment of time to begin yielding profits. Moreover, the provision of care for children and the elderly in the home is such that women are forced to be close to the homestead, hence placing a limitation on their opportunities to earn a living. Hence, time scarcity compels women to start-up cottage industries, like craftwork, which are low yielding and offer poor opportunities for expansion. Gender variances are more vivid in the context of females’ women’s workloads. Some estimates indicate that women account for 85–90% of the time invested on household food provisioning and handling across the globe. This is addition to the taking of children and household responsibilities. When the household structure and size are taken into consideration, these roles can be enormously time consuming. Time allocation assessments indicate that women invest far more in work than men if the provision of care is integrated in the measurements. There are glaring inequalities in countries in the southern hemisphere when it comes to the opportunities and resources available to female in comparison to males (Samee et al. 2015). It has been observed that men have an unfair advantage when it comes to owning land-based assets, such as land resources, poor technological access, novel practices in agriculture, and agricultural services such as extension and financial particularly. The inequalities are also evidenced when it comes to the usage of implements and apparatus. This is because although such are to inherently neutral, they are largely ideal for men (FAO 2011; Quisumbing et al. 2014). There have been several suggested solutions to effectively addressing these gender disparities in land-based livelihoods such as agriculture (Lyon et al. 2010). These include enhancing the gathering and integrity of related facts and figure to better capture gender variances and consequences for enhanced gender mainstreaming in policy as encapsulated in the FAO State of Food and Agriculture Report 2011. Gender relations in agriculture are increasingly

1125

being highlighted in agricultural research and development and being taken into consideration by agricultural development programs and policies. Developments in data collection and analytical methods in the last few years have helped researchers, program implementers, and policymakers increase their knowledge of gender issues in agriculture (Quisumbing et al. 2014). This includes the collection of sex-disaggregated data and going beyond the household to collect data on labor consumption and other indicators at the individual level to understand how time and resources are allocated (Doss 2014; Buvinic et al. 2014). Women and Crop Production

Women who are engaged in crop production are often observed to be involved in the growing of lower-value subsistence crops simply because they unable to afford the resources that enable them to cultivate high-end crops (Guendel 2009; Doss 2017). It is therefore not surprising that cash and export crops are often considered as “men’s crops,” while crops cultivated on subsistent basis are commonly referred to as “women’s crops.” One main reason for this scenario is that women are often bearing the responsibility for meeting the domestic nutritional needs of the family and hence choose to cultivate plants on a subsistent basis for their families (Guirkinger et al. 2015). On the contrary, men are often charged with supplying waged income and hence cultivate cash and crops for exportation. Overall, it is a bit cumbersome to accurately predict if the cultivation of low-value crops by women is due to their likings and concerns or simply due to the fact that they are unable to afford the core resources needed such as land, inputs, credit, information, and markets which would enable them to function accordingly (Hill and Vigneri 2011). For example, in some case studies, it was observed that female producers consider the cultivation of maize as a fruitful, wage-generating action however desist from planting maize because they do not have the means to afford the needed inputs or pay for hired labor in ploughing the farm land. On the contrary, they persisted in the cultivation of cassava and yams, which demand limited external

W

1126

Women and Agriculture: Addressing Hidden Work in Land-Based Livelihoods

inputs (Palacios-Lopez et al. 2017).The cultivation of plants and crops also comes with activities regarded as “men’s tasks” and others as “women’s tasks.” In some instances, men are charged with the constructing of the granary, and women are tasked with hand digging, harvest of produce and transport of farm harvests (Peterman et al. 2011). Even though several farm activities are considered as the reserve of men or women; in reality majority of farm activities are however carried out by both men and women. Comparatively very limited activities are exclusively carried out by men or women. Highlighting the Role of Women in the Livestock Sector

In the domain of pastoral and combined farming systems, livestock is critical in the socioeconomic upliftment of women who consequently are disproportionately represented in this sector. They perform role sharing with the menfolk and children in looking after livestock, while specific activities are more related with women than men. It has been observed that women play significant roles in the poultry industry and are heavily represented in this sector. Similar patterns have been observed in the dairy industry as well as in the provision of care for domestic animals in the homestead. In terms of task allocation, men are more often engaged in the construction of buildings and tending livestock, as well as in publicizing of farm produce in cases where females are faced with mobility challenges (Rao 2012). Women are also major players in the usage of eggs, milk, and poultry meat for domestic purposes and regularly exercise control over the selling and the revenue accruing from these items. This accounts for the prominence of poultry and small-scale dairy programs in several development interventions seeking to enhance the upliftment of rural women. Small-scale piggeries in some regions have also been a major domain of females. Moreover, women-headed households are equally as effective men-headed households in income generation activities from their animals; however they are often engaged with less numbers of animals, possibly due to labor challenges.

Owning of livestock is especially important to women in communities where ownership of land and land rights are in favor of men. Unravelling the Influence of Women in Fisheries and Aquaculture

Women are also key players in the fisheries sector ranging from primary to secondary activities serving as fishers and fish farmers among others. Females are seldom found in offshore and long distance fishing due to the strenuous work involved and because of their household duties and/or social customs. On the contrary, females are often found in subsistence and large-scale fishing from little boats and canoes along the coast or in inland waters (Samee et al. 2015). Women also represent as entrepreneurs and offer labor along all the stages in both artisanal and large-scale fishing. In some cases, they control assets and are actively engaged in the management of the fisheries chain, from production to marketing of fish. The most prominent contribution of women in the subsistence and commercial fishing sectors can be seen in the processing and marketing phases, where they are found to be extremely proactive in all areas (Mahmud and Tasneem 2011). In certain instances, women have emerged as key businesspersons in fish processing, whether at the domestic level business or as waged workers in the commercial processing sector. Addressing Women’s Needs for Technology and Information

Correct information when timeously delivered facilitates the developing and usage of technical innovations and enhancements (Guendel 2009; Doss 2017). However, women often lack this kind of information. It is evident that research and development in agriculture (as well as extension services) is largely under the influence of men, while the peculiar concerns of women are not mainstreamed. Furthermore, social customs and cultural practices can inhibit women’s participation in the development of interventions or awareness programs (wa Githinji et al. 2014). The use of appropriate technology in facilitating

Women and Agriculture: Addressing Hidden Work in Land-Based Livelihoods

the spread of information can help address this situation. Furthermore, this can be tackled by giving more appropriate information by particularly with gender issues in farming systems. For centuries, there have been significant investments in institutional frameworks for advancing agricultural innovation. However, majority of such have adequately addressed the needs of women farmers with regard to technology adoption (Doss et al. 2015). Gender-friendly interventions will aid women farmers to effectively harness extension systems and optimize novel agricultural techniques and innovations. Novel organizational approaches like participatory research, connecting farmers with extension systems and enhancing the connections between formal and local production systems, can uplift women’s livelihood fortunes by helping the technologies address their peculiar needs and concerns (Doss 2017). Misrepresentation of Women in Labor It is argued that there are two core areas of work where the underrepresentation of female engagement in labor is evident, namely, subsistence production and informal income generating jobs (Benería 1992; Bello-Bravo et al. 2011). Moreover, some point that the high prevalence of women in these sectors may explain the under recording of their engagement in the job market. Others point to other factors such as women misreporting their domestic chores as their primary engagement even though they are involved in income generating activities; surveys often focus on economic activities to the detriment on subsistence activities; the description of agricultural or farming activities largely comes with a limited focus on the growing of crops without consideration of animal or homestead production; and surveys characterize economic activity as participation in an income generating activity for a limited period such as week which does not represent the seasonal nature of work in land-based livelihoods such as agriculture (Deere 2005; Friis-Hansen and Duveskog 2012). Furthermore, surveys on land-based livelihoods are constrained in other ways in ensuring women are well accounted for. Much of these censuses are based on the assumption that the farmer is male.

1127

However, in reality, actual interractions during field work show that women are frequently the decision makers of the household. Moreover, in cases where they are not taksed with taking decisions they continue to exert significant influence along the agricultural value chain (Doss 2014). High education correlates with less engagement of women in both farm and livestock associated work. Thus educated women have a high tendency to be engaged in nonagricultural work than women without education. Similarly, women from wealthier households are less likely to be found engaging in agricultural work unlike those from poor households (Friis-Hansen et al. 2012; Balagamwala et al. 2015). The engagement of women in agricultural activities is mainly fuelled by household demands and not considered a means of agency or empowerment. Women from poor households are relatively more engaged and also in sensitive stages of their lives and those of their offspring such as pregnancy and lactation (Friis-Hansen et al. 2011; Balagamwala and Gazdar 2013).

Conclusion Women make critical contributions in all phases of the food cycle all over the world; however such responsibilities differ by region. Acknowledging the heterogeneity of their contribution is critical to rolling out robust policies and interventions. The acknowledgment of women’s contribution marks a substantial progress in terms of the broader acknowledgment of their economic participation. This acknowledgment is critical for the attainment of women’s suffrage, as well as more proactive policies and programs in areas like agriculture, health, and nutrition. The argument that women often supply more agricultural labor than men has consequences for the adoption of technology. This is because even though they are capable of improving farm output, women realize they are not able to augment the time invested in working (Twyman et al. 2015). Often the comparing of time invested does not reflect the matters concerning the nature of work being carried out and the energy spent. The value of hours invested

W

1128

Women and Agriculture: Addressing Hidden Work in Land-Based Livelihoods

also differs according to the season and the activity (wa Githinji et al. 2014). Hence, people are more inclined to saving hours that is the most costly. Nevertheless, given that farm activities differ by gender and the value of women’s time is often less, farmers have a high tendency to adopt technologies that favor men and are less demanding on men’s time (KinkingninhounMêdagbé et al. 2010). The gendered patterns of labor allocation apparently vary in light of fluctuations in economic opportunities (Hill and Vigneri 2011). For example, in cases whereby men quit agricultural communities while seeking higher incomes, women take over the activities that are traditionally considered “men’s tasks.” On the other hand, men adopt activities that are considered women’s domain when such tasks are regarded as progressively more cost-effective or lucrative (Doss et al. 2015). Furthermore, an underlying issue in the division of labor for different activities is the adoption of novel technologies. The mechanization of activities regarded as feminine can make men to exercise more control of such activities, for example (de la O Campos et al. 2016). The degree to which such changes benefit or disadvantage the genders is not obvious, and it is problematic to determine by forecast what changes might happen. It is important to understand the unique responsibilities, opportunities, and constraints of various members of a household (Adeleke et al. 2008; Aly and Shields 2010). This can then feed into the development of more robust farming systems that are gender sensitive and sustainable (Donkor et al. 2019). Studies indicate that there are gendered preferences and criteria for selecting between plants and animals, as well as carrying out farm tasks like seed selection, cultivation, harvest of farm produce, and processing. Moreover, due to women often managing complex farming systems, they tend to exhibit several evaluation criteria for optimum farm system functioning. This includes limiting risk and enhancing resilience and other objectives that need to be taken into consideration in facilitating innovations. The indigenous knowledge of both male and female farmers is crucial in developing further innovation and technology particularly with regard to core topics like

improved varieties, resilience, and fertility management (Donkor et al. 2019). Insights on the gendered differences in local knowledge and acknowledging the role of females are vital, given that females tend to be more engaged in traditional farming practices (wa Githinji et al. 2014). Variances in experiences can highlight opportunities to assist in enhanced farming systems with improved varieties of crops and animals. Such variances in experience and knowledge can also help to enhance the robustness of technology diffusion or extension processes.

Cross-References ▶ Decent Work for Women through Digital Social Network ▶ Decent Work in China ▶ Decent Work Promotion in India ▶ Decent Work: Conceptualization and Policy Impact ▶ Gender Inequality and Female Entrepreneurship in Developing Countries ▶ Gender Roles, Cultural Norms, and Role of Income in Perceived Value: Women and Unpaid Work ▶ Inclusive Employment: A Global Concern ▶ Inclusive Growth in India: Issues and Challenges ▶ Informal Employment ▶ Women, Growth, and Empowerment

References Adeleke OA, Adesiyan OI, Olaniyi OA, Adelalu KO, Matanmi HM (2008) Gender differentials in the productivity of cereal crop farmers: a case study of maize farmers in Oluyole Local Government Area of Oyo State. Agric J 3:193–198 Aly HY, Shields MP (2010) Gender and agricultural productivity in a surplus labor, traditional economy: empirical evidence from Nepal. J Dev Areas 43:111– 124. https://doi.org/10.1353/jda.0.0069 Anríquez G (2010) Demystifying the agricultural feminization myth and the gender burden. Background paper prepared for The State of Food and Agriculture 2011 Appelbaum E, Bailey T, Berg P, Kalleberg A (2002) Shared work, valued care. Economic Policy Institute, Washington, DC

Women and Agriculture: Addressing Hidden Work in Land-Based Livelihoods Arora D, Rada C (2016) A gendered model of the peasant household: time poverty and farm production in rural Mozambique. 23 (2):93–119. https://doi.org/10.1080/ 13545701.2016.1220676 Balagamwala M, Gazdar H (2013) Agriculture and nutrition in Pakistan: pathways and disconnects. IDS Bull 44:66–74 Balagamwala M, Gazdar H, Mallah HB (2015) Women’s agricultural work and nutrition in Pakistan: findings from qualitative research. LANSAworking paper series no. 2. LANSA, Brighton Bello-Bravo J, Seufferheld F, Agunbiade T (2011) Gender and farmer field schools in agricultural production systems in West Africa. Int J Sci Soc Champaign, Illinois. https://doi.org/10.18848/1836-6236/CGP/ v02i04/51280 Beneria L (1979) Reproduction, production and the sexual division of labour. Camb J Econ 3(3):203–225 Benería L (1992) Accounting for women’s work: the progress of two decades. World Dev 20(11):1547–1560 Beneria L, Sen G (1981) Accumulation, reproduction, and “Women’s role in economic development”: Boserup revisited. Signs 7(2):279–298 Boserup E (1973) Employment of women in developing countries. International Union for the Scientific Study of Population. International Population conference, vol 1, Liege, Belgium Buvinic M, Furst-Nichols R, Koolwal G (2014) Mapping gender data gaps. Data2X report. United Nations Foundation, Washington, DC Carmona MS (2013) Report of the special rapporteur on extreme poverty and human rights: unpaid care work and Women’s human rights. United Nations General Assembly A/68/293 David S, Asamoah C (2011) The impact of farmer field schools on human and social capital: a case study from Ghana. J Agric Educ Ext 17(3):239–252. Routledge (available at http://www.iita.org/c/document_library/get_ file?p_l_id¼98898&folderId¼104025&name¼DLFE3451.pdf) Davis K, Nkonya E, Kato E, Mekonnen DA, Odendo M, Miiro R, Nkuba J (2012) Impact of farmer field schools on agricultural productivity and poverty in East Africa. World Dev 40(2):402–413. http://www.sciencedirect. com/science/article/pii/S0305750X11001495 de la O Campos AP, Covarrubias KA, Patron AP (2016) How does the choice of the gender indicator affect the analysis of gender differences in agricultural productivity? Evidence from Uganda. World Dev 77:17–33 De Schutter O (2013) The agrarian transition and the “feminization” of agriculture. Conference paper 37, Food sovereignty: a critical dialogue, Yale University, New Haven Deere CD (2005) The feminization of agriculture? Economic restructuring in rural Latin America (no. 1). UNRISD Occasional Paper Donkor FK, Howarth C, Ebhuoma E, Daly M, Vaughan C, Pretorius L, Mambo J, MacLeod D, Kythreotis A, Jones L, Grainger S, Golding N, Anderson AA (2019)

1129

Climate services and communication for development: the role of early career researchers in advancing the debate. Environ Commun 13(5):561–566. https://doi. org/10.1080/17524032.2019.1596145 Doss CR (2014) Data needs for gender analysis in agriculture. In: Quisumbing A, Meinzen-Dick R, Raney T, Croppenstedt A, Behrman JA, Peterman A (eds) Gender in agriculture and food security: closing the knowledge gap. Springer, New York Doss CR (2017) Women and agricultural productivity: reframing the issues. Dev Policy 36(1):35–50. https:// doi.org/10.1111/dpr.12243 Doss CR, Kovarik C, Peterman A, Quisumbing A, Van den Bold M (2015) Gender inequalities in ownership and control of land in Africa: myth and reality. Agric Econ 46:403–434. https://doi.org/10.1111/agec.12171 Ellis F (2000) Rural Livelihoods and Diversity in Developing Countries. J Agri Econ 51(2):289–302. https:// doi.org/10.1111/j.1477-9552.2000.tb01229.x. Food and Agricultural Organization (FAO) (2012) The role of women in agriculture. ESA working paper no 11–02 Food and Agricultural Organization (FAO) (2013) Empowering farmers to reduce pesticide risks. FAO Regional IPM/Pesticide Risk Reduction Programme in Asia, Bangkok. http://v1.vegetable ipmasia.org/ docs/Empowering%20Farmers%20To%20Reduce% 20Pesticide%20Risks%2028Oct.pdf Food and Agricultural Organization (FAO) (2015) Women in agriculture in Pakistan. FAO, Islamabad Food and Agriculture Organization (FAO) (2011) The State of Food and Agriculture 2010–2011. Women in agriculture: closing the gender gap for development. FAO, Rome Friis-Hansen E, Duveskog D (2012) The empowerment route to Well-being: an analysis of farmer field schools in East Africa. World Dev 40(2):414–427. http:// isiarticles.com/bundles/Article/pre/pdf/5482.pdf Friis-Hansen E, Duveskog D Taylor EW (2011) Farmer field schools in rural Kenya: a transformative learning experience. J Dev Stud 47(10):1529–1544. https://doi. org/10.1080/00220388.2011.561328 Friis-Hansen E, Duveskog D, Taylor EW (2012) Less noise in the household: the impact of farmer field schools on gender relations. J Res Peace Gend Dev 2(2):44–55 Guendel S (2009) What are “women’s crops”, and why? FAO, Rome. http://www.fao.org/gender/insights/ detail/en/c/36003/ Guirkinger C, Platteau J, Goetghebuer T (2015) Productive inefficiency in extended agricultural households: evidence from Mali. J Dev Econ 116:17–27. https://doi. org/10.1016/j.jdeveco.2015.03.003 Hill RV, Vigneri M (2011) Mainstreaming gender sensitivity in cash crop market supply chains. ESA Working Paper 11–08. Retrieved from http://www.fao.org/3/aam313e.pdf Kadiyala S, Harris J, Headey D, Yosef S, Gillespie S (2014) Agriculture and nutrition in India: mapping evidence to pathways. Ann N Y Acad Sci 1331 (1):43–56

W

1130 Kinkingninhoun-Mêdagbé FM, Diagne A, Simtowe F, Agboh-Noameshie AR, Adégbola PY (2010) Gender discrimination and its impact on income, productivity, and technical efficiency: evidence from Benin. Agric Hum Values 27:57–69. https://doi.org/10.1007/ s10460-008-9170-9 Lyon S, Bezaury E, Mutersbaugh L (2010) Gender equity in fair trade–organic coffee producer organizations: cases from Mesoamerica in Geoforum 41(1):93–103 Mahmud S, Tasneem S (2011) The under reporting of women‟s economic activity of Bangladesh: an examination of official statistics. BRAC Development Institute working paper No. 01 Mijung K, Diong CH (eds) (2012) Biology education for social and sustainable development. Sense Publishers, Rotterdam, pp 173–182 Palacios-Lopez A, Christiaensen L, Kilic T (2017) How much of the labor in African agriculture is provided by women? Food Policy 75:52–63 Peterman A, Quisumbing AR, Behrman JA, Nkonya E (2011) Understanding gender differences in agricultural productivity in Uganda and Nigeria. J Dev Stud 47:1482– 1509. https://doi.org/10.1080/00220388.2010.536222 Quisumbing AR, Meinzen-Dick R, Raney TL, Croppenstedt A, Behrman JA, Peterman A (2014) Closing the knowledge gap on gender in agriculture. In: Quisumbing A, Meinzen-Dick R, Raney T, Croppenstedt A, Behrman JA, Peterman A (eds) Gender in agriculture and food security: closing the knowledge gap. Springer, New York Rao N (2010) Women’s Access to Land: An Asian Perspective. https://www.un.org/womenwatch/daw/csw/ csw56/egm/Rao-EP-3-EGM-RW-30Sep-2011.pdf Rao N (2012) Male providers and female housewives – a gendered co-performance in rural North India. Dev Chang 43(5):1025–1048 Razavi S (2007) In: United Nations Research Institute for Social Development (ed) The political and social economy of care in a development context: conceptual issues, research questions and policy options. Gender and development, Programme paper, Geneva Samee D, Nosheen F, Khan HN, Khowaja IA, Jamali K, Paracha PI, Akhtar S, Batool Z, Khanum Z (2015) Women in agriculture in Pakistan. Food and Agriculture Organization of the United Nations, Islamabad Settle W, Soumare M, Sarr M, Garba MH, Poisot A-S (2014) Reducing pesticide risks to farming communities: cotton farmer field schools in Mali. Philos Trans R Soc B 369:20120277. http://rstb.royalsocietypublishing. org/content/369/1639/20120277.full-text.pdf Shackleton CM, Shackleton SE, Cousins B (2010) The role of land-based strategies in rural livelihoods: The contribution of arable production, animal husbandry and natural resource in communal areas in South Africa. Development Southern Africa 18(5):581–604. https:// doi.org/10.1080/03768350120097441 Slavchevska V, Kaaria S, Taivalmaa SL (2016) Feminization of agriculture in the context of rural transformations: what is the evidence? The World Bank report no. ACS20815

Women and Entrepreneurship Twyman J, Muriel J, García MA (2015) Identifying women farmers: informal gender norms as institutional barriers to recognizing women’s contributions to agriculture. J Gend Agric Food Secur 1(2):1–17 wa Githinji M, Konstantinidis C, Barenberg A (2014) Small and productive: Kenyan women and crop choice. Fem Econ 20:101–129. https://doi.org/10.1080/ 13545701.2013.878467 Waddington H, Snitstveit B, Hombrados J, Vojtkova M, Phillips D, Davies P, White H (2014) Farmer field schools for improving farming practices and farmer outcomes: a systematic review. Campbell Syst Rev 2014:6. Oslo, Norway

Women and Entrepreneurship ▶ Gender Inequality and Female Entrepreneurship in Developing Countries

Women Empowerment ▶ Decent Work for Women Through Digital Social Network

Women in Business ▶ Gender Inequality and Female Entrepreneurship in Developing Countries

Women, Growth, and Empowerment Hadia Majid Department of Economics, Lahore University of Management Sciences, Lahore, Pakistan

Definitions The United Nations (UN) defines empowerment as a process that enables people increase control over their lives by controlling the factors and decisions that shape their lives. This in turn

Women, Growth, and Empowerment

requires that people must gain access to resources and build capacities to foster partners, networks, and a voice (UN 2013). According to UN Women, women’s economic empowerment is multifaceted and hinges on women’s equal participation in existing markets such that they have both access to and control over productive resources. At the same time, the work that women do must be decent and should ultimately allow them control over their own time, lives, and bodies. Finally, this agency must extend not just to the personal but to other spaces too, both within the household and beyond, such that women have a voice and participate meaningfully in economic decisionmaking at all levels from the household to international institutions (UN Women 2018).

Introduction Women’s status vis-à-vis various development indicators has increasingly become one of the primary measures to consider when cataloguing a country’s development performance. This is evident in the yearly publication of such rankings as the Global Gender Gap Index, and the increased focus of governments across the globe on reducing genderbased inequalities. Much of this emphasis owes to the extensive literature that has highlighted that women’s rank in development indicators holds tremendous importance both as an end and because of its instrumental value in achieving other development goals (Kabeer 2005). For example, women’s health, education earnings, and crucially their say in household decision-making have multiplier effects on child human capital (Mincer and Polachek 1974; Blundell et al. 2005). In this, the literature shows that women’s status within the household and ability to affect decisions is related to their access to and control over economic resources (Agarwal 1997; Osmani 2007). At the same time, women’s say in household matters as well as their capacity to generate earned income is directly related to their own overall well-being (Kabeer and Natali 2013). Thus, women’s empowerment, and thereto their economic empowerment, is crucial in achieving development goals related to not just women themselves but other vulnerable groups in the global context.

1131

In view of this, it is no surprise that women’s overall and economic empowerment has received focused attention from the UN in its Agenda 21, Millennium Development Goals (MDGs), and Sustainable Development Goals (SDGs). Indeed, SDG 5 seeks to “. . .achieve gender equality and empower all women and girls” (UN 2019). Similarly, women’s access to empowering work is not just considered crucial in its own right but is essential to achieving Goal 8, i.e., to promote productive and decent work for all, Goal 1 on ending poverty, Goal 10 on reducing inequalities, and even for Goals 2 and 3 on food security and ensuring health, respectively (UN Women 2018). It is clear then that women’s increased access to economic resources is significantly related to economic development. Additionally, there is strong empirical evidence to show that gender equality in various indicators, including those related to employment and education, has a positive impact on growth, where the relationship is bidirectional (Kabeer 2012; Kabeer and Natali 2013). This chapter reviews the literature on growth and women’s empowerment. The focus of the chapter is on the relationship between growth and women’s economic empowerment where economic empowerment is defined as women’s ability to participate in markets so as to access and control productive resources. Growth is taken in the conventional sense, i.e., an increase in output or Gross Domestic Product (GDP). The chapter proceeds by engaging with both directions of the link between growth and women’s empowerment while paying special attention to how the relationship is mediated by norms vis-à-vis gendered roles and women’s access to decent work – the latter comprises of work that is well-paid, includes safeguards for health and safety and other workers’ rights (Ghai 2003).

Growth’s Effects on Women’s Economic Empowerment Orthodox literature has largely viewed growth in a gender-neutral fashion. Growth, i.e., increases in average income, raises aggregate demand which in turn spurs employment creation and improves

W

1132

earning capacities of both genders at the extensive and intensive margins. Here, the former refers to entry into the labor market while the latter is an increase in earnings for those already in the market. Earnings in turn are associated with an increase in access to other resources – both economic and noneconomic. For example, increase in earnings is expected to improve saving capacities and asset ownership leading to investment in businesses and human capital acquisition of especially the next generation (Lydall 1955; Mincer and Polachek 1974). Yet, even within the orthodox stream, there is literature that considers gendered differences in growth’s benefits. For example, Galor and Weil (1996) argue that growth and a transformation of the economy leading to an increase in the capital to labor ratio would favor women and raise their relative wages. Becker’s (1957) seminal work too indicates that growth would favor women because gender-based discrimination would become too costly for employers. Becker argues that employers that discriminate would be disadvantaged as others could then hire the lower cost female workers thereby gaining a cost benefit. In either scenario, improvements in women’s economic resources would in turn strengthen their fallback options – options outside the household and/or marriage – improving their status within the household and increasing their say in decisions, including those related to their own lives (Manser and Brown 1980). Under this line of argument, growth, through its effect on women’s access to economic resources, would result in their empowerment. However, access is not the same as control over resources (Mason 1986) and theoretical and empirical work has shown that it is control rather than mere access that significantly affects female empowerment (see Agarwal 1997 for a detailed discussion). Thus, despite gaining access to resources, the shift in the power balance within the household is not guaranteed. Similarly, increased economic resources in the women’s hand may in fact increase tensions within the household or result in a reinforcement of existing gender roles – raising women’s reproductive burden and tilting decisions-making even more in

Women, Growth, and Empowerment

favor of the man (Kabeer 1999). This is especially true in sociocultural contexts where the institutional environment, both within and outside the home, is biased against women (Mabsout and van Staveren 2010; Majid and Siegmann 2017). Finally, the nature of the work also matters. Not all work is equally empowering (Faulkner and Lawson 1991), and it is important to consider not just the type of work that women are doing but also where they work. Hence, in order to understand growth’s effects on women’s empowerment, special attention must be paid to different facets of the gendered response to growth. Particularly when it comes to employment responses to growth, the empirical literature has shown that this is uneven across the genders and depends crucially on the sectors experiencing growth as well as the underlying norms surrounding gender roles. In the case of export-led growth witnessed across the developing world on the heels of increased globalization, there was a surge in the feminization of labor-intensive export sectors with a simultaneous entrenchment of the gender wage gap. Thus, while female labor supply was seen to grow, it was women’s “comparative disadvantage” in the labor market that drove product demand for companies (Arizpe and Aranda 1981: 473; Standing 1989). In fact, for a sample of Asian countries with significant laborintensive export orientation, there is evidence that growth occurred hand in hand with widening gender gaps in wages (Seguino 2000, 2019). It is perhaps unsurprising then that with the adoption of export-oriented strategies; there have been major gains in women’s employment levels in these sectors – to the extent that women represent more than one-third to up to half of the manufacturing labor force in developing and some Asian countries (Barrientos et al. 2004). However, female employment in manufacturing and even services in most developing countries largely occurs on casual contracts. Here, a significantly higher percentage of women relative to men see themselves in contracts which afford little to none of the benefits and bargaining rights associated with regular-paid contracts. In fact, there has been a greater “casualization” of working conditions for all workers in the

Women, Growth, and Empowerment

manufacturing sector with employment becoming less secure, as well as less well paid (Barrientos et al. 2004). Finally, Kapsos (2005) finds evidence of greater sensitivity of women’s employment to the economic cycle particularly in South Asia, indicating that female workers bear the majority of the burden during periods of decline vis-à-vis employment in the manufacturing sector. The buffering role of female labor supply, especially in factory jobs, and whether women’s work is distress sale of labor has both social and economic dimensions. One view put forward by Goldin (1994) is that society may stigmatize men whose wives work in blue-collar jobs considering such men as those who shirk their familial responsibilities. This is further discussed in Mammen and Paxson (2000) who note that to the extent norms preventing women from accepting factory jobs exist, they appear to apply to married and not unmarried women (p. 144). Another important reason for why wives may be avoiding blue-collar jobs goes back to the U-shaped relationship between female labor supply and income or wealth. In low-income and very poor countries, female labor force participation is typically high, and women usually work in farm or non-farm family enterprises. As income levels rise, and men’s market opportunities improve, women move out of the labor market partly because of the entry of men and partly because of the reinforcement of social barriers against higher income households seeing their women work in especially the blue-collar labor market. However, continued growth and development also sees an improvement in women’s education levels. When these levels are high enough, women move back into the labor market but now in white-collar jobs, such as in the clerical sector, which are considered more socially acceptable forms of employment for women (Goldin 1994). Thus, married women may be steering clear of formal sector jobs until female education levels rise, increasing women’s market wages and reducing fertility rates, thereby reducing women’s reproductive burden (Mammen and Paxson 2000). Yet, even as low-income economies have become more integrated in the global market

1133

and have seen greater technological change, the increased availability of more and better employment has not always translated into gains in formal employment and income generation for women (Mehra and Gammage 1999; Frota 2008). In fact, the shift of workers out of agriculture and subsistence production into manufacturing and services sector has been gendered such that there is feminization of agriculture, while the informal sector has also witnessed a dominance of women in both developing and transition economies (Mehra and Gammage 1999). Besides, while agricultural and informal sector work may be considered sources of outside earnings, the reality is that women are frequently unpaid family help in both these sectors, and the work that they do is often considered “invisible” not just in terms of its economic contribution to the household but is often not even counted in national accounts (Sen 1987; Mehra and Gammage 1999). Moreover, both of these sectors typically see much lower average compensation levels when compared to manufacturing and services resulting in large gender wage-gaps. Much of the work also takes place either in or near the home with women continuing to perform all of their care duties. In fact, time-use surveys show that even when engaging in employment, women in most countries continue to bear the burden of reproductive work resulting in significant time poverty and reducing their overall well-being. The above discussion suggests that the generation of the employment that occurs as a consequence of growth may well be rooted in an exploitation of women. This runs counter to the idea of economic empowerment as enshrined in the definition promulgated by UN Women. When considering whether paid work is empowering, it is then essential to ensure that it is “decent” and increases women’s overall well-being. In this, the terms on which women gain access to resources becomes crucial (Esplen and Brody 2007). Whether the conditions under which women access paid work are empowering or exploitative are in turn mediated by social norms that determine gender roles and women’s relationship to work. If women’s work is considered secondary to that of men, it is taboo for them to access public

W

1134

spaces, and they are expected to continue to perform care duties in addition to productive work, then it becomes increasingly difficult for them to carry out their work with dignity.

Women’s Empowerment and Its Effects on Growth In contrast to growth’s effects on economic empowerment, which are crucially dependent on the nature of the work that growth generates as well as the circumstances under which women work, the effect of women’s economic empowerment on growth is less ambiguously determined and is largely positive. Women’s employment, as all employment, contributes positively to GDP. This link between employment and output has been formalized as “Okun’s law” which is based on empirical work showing a 3% increase in output for every percentage decline in unemployment (Okun 1962). This output growth induces shifts in labor productivity as emphasized in the Kaldor-Verdoorn effect which relates expansion of the labor market, specialization and learning by doing, and output growth endogenously (Tejani 2016). It is unsurprising then that calculations vis-à-vis the cost of women’s unemployment on economic growth have estimated that GDP per capita losses attributable to gender gaps in the labor market amount to as much as 27% in certain regions (Cuberes and Teignier 2012). Yet, neither Okun’s Law nor the KaldorVerdroon effect consider how the relationship between growth and employment may vary by gender. Indeed, if there is a gender wage gap, then employing women instead of men would provide firms with a cost benefit, boosting profits. Thus, although there are models that show that job segregation reduces efficient allocation of labor (Blecker and Seguino 2002), job segregation in conjunction with wage discrimination, as has been the case in export (labor-intensive) industries, would increase both export demand and (business) investment thereby stimulating aggregate demand (Seguino 2019). Additionally, estimates have shown that there is an economic

Women, Growth, and Empowerment

benefit of greater diversity which goes beyond the benefit of simply having more workers (Ostry et al. 2018). This benefit depends primarily on two factors: women bring new skills to the workplace, which depending on the complementarity between these and the skill-set of the existing workers and technology employed, can then substantially increase output (Ostry et al. 2018). Second, hiring women can increase the productivity of women already employed in the firm. Aside from the macroeconomic effects of women’s employment on growth, there are important household level effects as well. First, given the gendered nature of productive and reproductive work in most societies, women’s employment usually implies the addition of an earner within the household. Hence, it represents an expansion of the household’s total income, and an increase in its consumption levels. For poor households in particular, an increase in household income implies a larger calorie intake (Banerjee and Duflo 2007). Besides, children of undernourished mothers are more likely to suffer from nutritional deficits affecting child cognitive development and future labor productivity (Seguino 2019). Income gains also increase the accumulation of assets and investment in human capital. Increased nutritional intake for adults and children alike, along with education and skill acquirement increase productivity and earning capacity both in the short and long run. This, along with higher levels of assets, increase the ability of households to obtain credit to invest in businesses. Increased access to financial capital in turn allows for greater specialization and profit generation. Thus, a virtuous cycle increasing both intergenerational household and macroeconomic output is set in motion. Of course, these effects of women’s employment on the household assume that the work is paid well enough to generate these positive cycles. Hence, gains in (employment) income generate effects on GDP through changes in (private) aggregate demand. These are not just restricted to consumption and investments (and savings) but also relate to the demand for exports versus imports which in turn affect the balance of payments (Seguino 2019; Onaran and Obst 2016). In

Women, Growth, and Empowerment

this regard, though it is important to consider the profit and wages shares in national income as while the latter will drive changes in output through effects on consumption, the former is more likely to affect output through positive changes in investment and net exports (Onaran and Obst 2016). Similarly, the country’s male versus female participation and wage rates are also relevant as men and women not only have different consumption and savings rate but also vary in their demand for different products (Seguino 2019). Mother’s income has been found to have a differential effect on the demand for child-related products when compared to that of the father’s (see, e.g., Blundell, Chiappori, and Meghir 2005), generally leading to higher human capital acquisition of children, especially for girls (Duflo 2003). This investment in girls’ health and education becomes especially relevant in societies with high gender inequalities. Assuming that cognitive ability is equally distributed across males and females, a reduction in the gendered health and education gap improves the average quality of labor, increasing labor productivity and resulting in an efficient allocation of labor thereby increasing growth (Seguino 2019). Similarly, there is a documented link between women’s labor supply and fertility levels (see for example Galor and Weil 1996) with higher participation and hours worked increasing the opportunity cost of having children and causing a substitution from child quantity toward child quality. Not only does reducing women’s care burden facilitate greater female labor force participation (Seguino 2019), but the higher investment in child human capital in turn affects the growth potential of the economy. Additionally, as fertility declines there is a period where the working age population grows faster than the overall population, lowering the dependency ratio and raising per capita income. The decline in dependency ratio and simultaneous growth in per capita income allows for an increase in the savings ratio, which when invested in the economy, allows for capital accumulation and output growth. Particularly for the effects vis-à-vis child consumption products and fertility decisions, a

1135

distinction must be made between participation in the labor market and economic empowerment. As described in the preceding section, women’s work is often in the informal sector, on a casual basis, and even un-remunerated. For employment to result in empowering effects where women have increased agency in decision-making, and control over their bodies and time, women’s participation in labor markets must be on equal footing with that of men. Their work must be valued in the same way as men’s and must be associated with not just a generation of productive assets but control over these too. Only then would labor force participation result in the changes in aggregate demand as detailed in this section. Moreover, women would also witness an improvement in their status within the household, changing household consumption patterns vis-à-vis child investments and resulting in multiplier effects on growth.

Growth and Women’s Empowerment: A Virtuous Cycle? Higher participation of women in the labor market spurs income growth. This growth in turn, would create employment hence generating a mutually reinforcing cycle between employment and growth. However, the discussion so far has shown that while work that is empowering for women results in economic growth, there is no guarantee that the relationship will be sustained in the opposite direction too. This is because growth, while having effects on employment, may not necessarily be empowering for women unless it is inclusive and generates “decent” work. Policy interventions are then vital to generate a sustained and virtuous cycle of improving circumstances for women and economic prosperity (Duflo 2012). When it comes to inclusive growth, renewed research in the last two decades has increasingly highlighted that economic growth does not always benefit all citizens equally and that these exclusions in turn can be harmful to macroeconomic indicators. Thus, many countries along with international agencies have stated their commitment to making growth inclusive while paying

W

1136

special attention to inequality levels. In this, there is a strong role for domestic policies. The International Monetary Fund (IMF), for example, has emphasized the importance of tax collection in expanding health, education, and infrastructure, deepening financial inclusion and incentivizing female labor participation (IMF 2017). Improving tax revenue collection systems, especially when average incomes are rising, will in turn allow for greater public spending and reduce supply-side issues in financial, health, education, and other sectors. At the same time, a more efficient and larger tax machinery will create the space for programs that help alleviate demand-side constraints in the financial, labor, human capital, and other markets. Of course, when it comes to taxes there are two primary issues faced by lower-income economies in particular: tax evasion and corruption. In this, the IMF has been working with various governments to improve tax compliance and reduce corruption through reforms of the sector. Aside from tax-related policies, there are several others that have been evaluated within the literature on female employment generation and economic empowerment. Trade and investment liberalization have generally been considered to be positively associated with creating employment opportunities for women. Similarly, an expansion of the services sector, especially tourism and call centers, has been found to provide jobs for women (Staritz and Reis 2013). Yet, spurring female labor by incentivizing the expansion of these sectors must be approached with caution. Not only has the feminization of laborintensive export sectors, such as the garment industry, seen women stuck in low-wage jobs with limited scope for skill development, but employment for women in the tourism sector and call centers tends to be more precarious and less well-paid than that for men. Whether trade and investment policies result in gender equality vis-à-vis employment and wages is crucially dependent on the gendered division of labor in the economy, the structure of the economy and its position in world trade (Seguino 2019). For example, women’s share in manufacturing employment has been seen to

Women, Growth, and Empowerment

decline relative to men’s as economies grow and become more capital-intensive. This preference for men in part relates to the poor education and skill levels of women, but also has to do with women’s secondary status relative to men in labor markets (Siegmann and Majid 2014). Similarly, in the African case, not only has the laborintensive manufacturing sector lost out to Asia as a result of trade liberalization, but in many agriculture-based African nations it is men, due to their higher asset ownership, who have been better able to produce cash crops for exports (Bussolo and De Hoyos 2009; Seguino 2019). It seems then that women’s poor asset ownership and skill levels reduce their ability to take advantage of expanding employment opportunities. Keeping this in mind, financial inclusion and skills training policies have been adopted by several emerging economies as they have prospered. With regard to female access of institutional financial services, low education levels, mobility restrictions, lack of collateral and little say in financial decisions within the household compound lack of flexibility in available financial instruments to limit women’s use of formal institutions. In light of this, organizations like the Asian Development Bank (ADB) have been working with governments to improve financial literacy while simultaneously increasing the types of lending instruments available to female microentrepreneurs. Similarly, the United Nations Development Programme (UNDP) has been supporting skills development and vocational training programs in various countries to improve women’s livelihoods and living conditions. Yet, evaluations of the impact of financial inclusion and skills training programs on women’s ability to generate income that has empowering effects have been discouraging. The failure of such programs in affecting female earning outcomes is perhaps best reflected in the significantly lower returns on investments in female-owned businesses relative to men’s (see Dulfo 2012 for a review of the associated literature): the skills that women typically acquire under such programs often relegate them to small businesses with poor profit-streams. Similarly, even with access to financial services, women continue to rely

Women, Growth, and Empowerment

heavily on male kin to access markets for their products. This is especially relevant in patriarchal economies and where women practice norms of seclusion. Thus, female control over their earnings and the empowering effects of work remain limited. One important policy area when considering measures to improve gender equality vis-à-vis employment relates to increased public spending on physical and social infrastructure (Seguino 2019). Given the disproportionate share of care and house work performed by women, public spending on provision of public goods such as those related to water supply to households, would help reduce women’s work burden. In the same vein, public provision of care and preschool facilities would reduce time spent on childcare. In either case, women will potentially have more time to spend in the labor market. Moreover, public spending on social infrastructure would mean an increase in the number of jobs in early childhood education, a sector that typically sees a higher supply of women than men (Seguino 2019). The discussion above indicates that there are several policy measures that can be used to make growth inclusive. However, the caveats also indicate that there is no one-size-fits-all solution and that policymakers must pay attention to the structure of the economy. Indiscriminate policy application could result in employment being created for men rather than women. Similarly, policies enacted to support and improve women’s work must account for local norms or women’s participation in labor markets will remain on unequal footing and their access to and control over productive resources will remain limited. With regard to the other side of the relationship, the last few decades have seen increased interventions aimed at improving women’s economic and overall empowerment. These interventions have occurred across a slew of countries ranging from low to higher income economies and have occurred regardless of growth projections. The most common among these remain income and asset transfer programs, with some featuring complementary financial literacy, and skill and business development. Although the

1137

overall aim of most such transfer programs is household poverty alleviation, the transfer is typically made to women. This is primarily due to two factors: one, gender inequalities most often manifest as extreme poverty for girls and women who then constitute one of the chief groups in need of relief packages. Two, the expectation behind the female-centric nature of transfer programs is that the receipt of cash/assets in the woman’s hand will improve her standing within the household. This not only has intrinsic value but is instrumental in improving the human capital accumulation of the next generation thereby stimulating economic growth. Evaluations of transfer programs on women’s economic empowerment show mixed results (see Bastagli et al. 2016 for a review). While some have found positive effects of conditional cash transfers on women’s labor force participation rates on both the extensive and intensive margins, others find no significant effects. Some, such as those that evaluate Lesotho and Mexico’s programs, find a reduction in paid work outside the household or a shift from paid work to working on a family business (Galiani and McEwan 2013). Enterprise-based loans designed specifically to increase self-employment have yielded some positive results with the program in Uganda in particular seeing significant increases in women’s overall working hours (Blattman et al. 2012). However, these changes in productive work have often been found to take place without simultaneous reductions in women’s domestic burden thereby increasing their time poverty and reducing overall well-being. When it comes to effects on women’s decisionmaking, the results are not straight-forward either. While there is evidence of positive effects on women’s sole and joint decision-making within the household, the results depend on spheres of responsibility and complementary conditions within the household. Thus, even if female autonomy rises, it is often restricted to domains traditionally held by women such as food or clothing. Moreover, if male partners receive business training too, or the assets that women receive complement family or male-owned businesses, then women’s autonomy worsens. Some studies

W

1138

also show that better earning prospects precipitated by the receipt of transfers come at the expense of higher physical and emotional abuse from male partners (Green et al. 2015). It is clear that improving female labor force participation rates such that their work allows women to access and control productive assets and increase their autonomy is crucially dependent on the structure of the macroeconomy, the dynamics within the household, and the norms surrounding the division of labor with respect to productive and reproductive work. The strength of the bidirectionality of the relationship between growth and women’s economic empowerment is then reliant on the sustainability of multi-pronged reforms that can simultaneously affect several layers of institutions across the economy.

Conclusion This chapter reviews the literature on either side of the relationship between women’s economic empowerment and growth. Starting with the evidence on whether and how growth affects women’s empowerment, the literature asserts that while increasing output may be successful in generating employment for women, the work that women do may not always be empowering. Here then, it is necessary to consider the nature of the work that women do. In contrast, if women’s participation in the labor market is under the same circumstances as that for man and they control productive assets then there are significant and long-run effects on growth. Thus, the channel through which economic empowerment affects growth is more straightforward. Yet, women’s economic empowerment is a difficult goal to achieve. There have been significant policy reforms and interventions, financed both through the growth process and without, aimed at increased women’s labor force participation rates and ultimately their autonomy. One of the first and most heavily evaluated such interventions has been the Prospera, a conditional cash transfer (CCT) program (previously known as Oportunidades and Progresa) in Mexico. Prospera was launched in 1997 and transfers money to women in beneficiary households

Women, Growth, and Empowerment

with conditions attached to school and health clinic attendance. Aimed at poverty alleviation, the program hence looks to increase human capital accumulation of children too. Moreover, given the higher gender-based inequalities in Mexico, transfers under the program increase as schoolgoing girls within beneficiary households progress through secondary school. Evaluations of the Mexican CCT have found positive effects on reductions in gender inequalities in educational attainment and health, and reductions in intergenerational poverty transmission while allowing for greater savings and productive asset accumulation among beneficiaries (Bastagli et al. 2016). There has also been some evidence of positive effects of the CCT on women’s labor participation with women receiving the transfer also seeing greater autonomy over their own income (Bastagli et al. 2016). Prospera’s sustained success in reducing poverty and improving gender equality owes to a design and implementation process that pays attention to the economic, social, institutional, and political realities in Mexico (Levy 2007). In the same vein, the long-term success of any policy reform or intervention is dependent on the extent to which it accounts for the structure of the economy and the underlying sociocultural context driving individual and household behavior. After all, it is only upon carefully considering the various mechanisms affecting women’s economic participation and empowerment and how these connect with growth that the linkage between the two can be harnessed to effectively achieve the sustainable development goals.

Cross-References ▶ Decent Work in China ▶ Decent Work Promotion in India ▶ Decent Work: Conceptualization and Policy Impact ▶ Maternity Protection At Work: Decent Work for All During Pregnancy and New Motherhood ▶ Supporting Sustainability for a Decent Work and Economic Growth in Ghana ▶ Women and Agriculture: Addressing Hidden Work in Land-based Livelihoods

Women, Growth, and Empowerment

References Agarwal B (1997) “Bargaining” and gender relations: within and beyond the household. Fem Econ 3(1):1–51 Arizpe L, Aranda J (1981) The “comparative advantages” of women’s disadvantages: women workers in the strawberry export agribusiness in Mexico. Signs J Women Cult Soc 7(2):453–473 Banerjee AV, Duflo E (2007) The economic lives of the poor. J Econ Perspect 21(1):141–168 Barrientos S, Kabeer N, Hossain N (2004) The gender dimensions of the globalization of production. Policy Integration Department, World Commission on the Social Dimension of Globalization. International Labour Office, Geneva Bastagli F, Hagen-Zanker J, Harman L, Barca V, Sturge G, Schmidt T, Pellerano L (2016) Cash transfers: what does the evidence say. In: A rigorous review of programme impact and the role of design and implementation features. Overseas Development Institute, London Becker GS (1957) The economics of discrimination. University of Chicago Press, Chicago Blattman C, Fiala N, Martinez S (2012) Employment generation in rural Africa: mid-term results from an experimental evaluation of the Youth Opportunities Program in Northern Uganda. World Bank, Washington, DC Blecker RA, Seguino S (2002) Macroeconomic effects of reducing gender wage inequality in an export-oriented, semi-industrialized economy. Rev Dev Econ 6(1):103–119 Blundell R, Chiappori PA, Meghir C (2005) Collective labor supply with children. J Polit Econ 113(6):1277– 1306 Bussolo M, De Hoyos RE (eds) (2009) Gender aspects of the trade and poverty nexus: a macro-micro approach. The World Bank, Washington, DC Cuberes D, Teignier M (2012) Gender gaps in the labor market and aggregate productivity. Working Paper. Department of Economics, University of Sheffield ISSN 1749-8368 Duflo E (2003) Grandmothers and granddaughters: old-age pensions and intrahousehold allocation in South Africa. World Bank Econ Rev 17(1):1–25 Duflo E (2012) Women empowerment and economic development. J Econ Lit 50(4):1051–1079 Esplen E, Brody A (2007) Putting gender back in the picture: rethinking women’s economic empowerment. Sussex: BRIDGE (Development – Gender), Institute of Development Studies, University of Sussex Faulkner AH, Lawson VA (1991) Employment versus empowerment: a case study of the nature of women’s work in Ecuador. J Dev Stud 27(4):16–47 Frota L (2008) Securing decent work and living conditions in low-income urban settlements by linking social protection and local development: a review of case studies. Habitat Int 32(2):203–222 Galiani S, McEwan PJ (2013) The heterogeneous impact of conditional cash transfers. J Public Econ 103:85–96 Galor O, Weil DN (1996) The gender gap, fertility, and growth. Am Econ Rev 86(3):374–387

1139 Ghai D (2003) Decent work: concept and indicators. Int Labour Rev 142(2):113–145 Goldin C (1994) The U-shaped female labor force function in economic development and economic history. Working Paper No. 4707. National Bureau of Economic Research, Cambridge, MA Green EP, Blattman C, Jamison J, Annan J (2015) Women’s entrepreneurship and intimate partner violence: a cluster randomized trial of microenterprise assistance and partner participation in post-conflict Uganda (SSM-D-14-01580R1). Soc Sci Med 133:177–188 International Monetary Fund (2017) Fostering inclusive growth. Accessed on 11 April 2020. https://www.imf. org/external/np/g20/pdf/2017/062617.pdf Kabeer N (1999) Resources, agency, achievements: reflections on the measurement of women’s empowerment. Dev Chang 30(3):435–464 Kabeer N (2005) Gender equality and women’s empowerment: a critical analysis of the third millennium development goal 1. Gend Dev 13(1):13–24 Kabeer N (2012) Women’s economic empowerment and inclusive growth: labour markets and enterprise development. Int Dev Res Cent 44(10):1–70 Kabeer N, Natali L (2013) Gender equality and economic growth: is there a win-win? IDS Work Pap 2013(417):1–58 Kapsos S (2005) The Employment Intensity of Growth: Trends and Macroeconomic Determinants. Employment Strategy Papers No. 12. ILO, Geneva Levy S (2007) Progress against poverty: sustaining Mexico’s Progresa-Oportunidades program. Brookings Institution Press, Washington, DC Lydall H (1955) The life cycle in income, saving, and asset ownership. Econometrica 23:131–150 Mabsout R, Van Staveren I (2010) Disentangling bargaining power from individual and household level to institutions: evidence on women’s position in Ethiopia. World Dev 38(5):783–796 Majid H, Siegmann KA (2017) Has growth been good for women’s employment in Pakistan? ISS Work Pap Ser/ Gen Ser 630(630):1–33 Mammen K, Paxson C (2000) Women’s work and economic development. J Econ Perspect 14(4):141–164 Manser M, Brown M (1980) Marriage and household decision-making: a bargaining analysis. Int Econ Rev 21:31–44 Mason KO (1986) The status of women: conceptual and methodological issues in demographic studies. Sociol Forum 1(2):284–300. Kluwer Academic Publishers Mehra R, Gammage S (1999) Trends, countertrends, and gaps in women’s employment. World Dev 27(3):533–550 Mincer J, Polachek S (1974) Family investments in human capital: earnings of women. J Polit Econ 82(2, Part 2): S76–S108 Okun AM (1962) Potential GNP: Its Measurement and Significance. Proceedings of the Business and Economics Statistics Section of the American Statistical Association: 98–104 Onaran O, Obst T (2016) Wage-led growth in the EU15 member-states: the effects of income distribution on growth, investment, trade balance and inflation. Camb J Econ 40(6):1517–1551

W

1140 Osmani LNK (2007) A breakthrough in women’s bargaining power: the impact of microcredit. J Int Dev 19(5):695–716 Ostry JD, Alvarez J, Espinoza R, Papageorgiouc C (2018) Economic gains from gender inclusion: new mechanisms, new evidence. IMF Staff Discussion Note 18/ 06, International Monetary Fund, Washington, DC Seguino S (2000) Accounting for gender in Asian economic growth. Fem Econ 6(3):27–58 Seguino S (2019) Engendering macroeconomic theory and policy. Fem Econ 26(2):1–35 Sen A (1987) Gender and cooperative conflicts. World Institute for Development Economics Research, Helsinki, p 58 Siegmann KA, Majid H (2014) Empowering growth in Pakistan?. Available at SSRN 2499491 Standing G (1989) Global feminization through flexible labor. World Dev 17(7):1077–1095 Staritz C, Reis JG (eds) (2013) Global value chains, economic upgrading, and gender. Case studies of horticulture, toursim, and call center industries. World Bank, Washington, DC Tejani S (2016) Jobless growth in India: an investigation. Camb J Econ 40(3):843–870 UN Women (2018) Facts and figures: economic empowerment. Accessed on 20 Mar 2020. https://www. unwomen.org/en/what-we-do/economic-empower ment/facts-and-figures United Nations (2019) Sustainable development goals. Accessed on 20 Mar 2020. https://sustainablede velopment.un.org/sdgs United Nations Social Development Network (2013) Empowerment: What does it mean to you? Accessed on 20 Mar 2020. https://www.un.org/esa/socdev/ngo/ outreachmaterials/empowerment-booklet.pdf

Women’s Economic Empowerment ▶ Gender Inequality and Female Entrepreneurship in Developing Countries

Work ▶ International Labour Organization: A Short History

Work Quality ▶ Decent Work: Conceptualization and Policy Impact

Women’s Economic Empowerment

Worked Hours ▶ Economic Growth, Technological Progress, and Employment

Worker-Driven Initiatives to Tackle Modern Slavery Bindhulakshmi Pattadath1, Lorena Arocha2, Roshni Chattopadhyay1 and Meena Gopal1 1 Advanced Centre for Women’s Studies, Tata Institute of Social Sciences, Mumbai, India 2 Wilberforce Institute, University of Hull, Hull, UK

Definition As part of the SDG goal 8, which calls for promoting inclusive and sustainable economic growth, productive employment, and decent work for all, goal 8.7 as one among its 12 targets urges stakeholders to take immediate and effective measures to eradicate forced labor, modern slavery, and human trafficking. Modern slavery as used in the current juncture attempts to provide an expanded definition of exploitative conditions of work, but how these conditions are framed and whether these are situated within questions of political economy are fundamental to understanding the likely impact of interventions on the ground to achieve goal 8.7. The definition of modern slavery needs to be culturally located as well. Its use has been recently incorporated into national legislation in developed countries to refer to extreme cases of labor and sexual exploitation, especially with respect to migrant populations, prevalent in most parts of the world where production has been decentralized. This definition has encouraged a shift in approaches, moving away from criminal antitrafficking rescue and rehabilitation measures that do not recognize the agency of workers to those that start to acknowledge worker participation in production. In this context, worker-driven initiatives to tackle modern slavery by workers and worker organizations

Worker-Driven Initiatives to Tackle Modern Slavery

in select sectors have emerged as a response to address the tensions between the requirements of decent work and the imperatives of economic growth. The attempt in this entry is to unravel the varied dimensions of this complex relationship and the tensions and contradictions in the fulfillment of goal 8.7.

Introduction Following the global reorganization of production in the last decades of the twentieth century, countries of the Global South attempted to combine economic growth with provision of employment. Structural Adjustment Programmes encouraged export oriented production and global supply chains and were accompanied by a decrease in formal contracts and an increase in informalization of labor. These programs were to provide a fillip to economic growth while curbing wasteful and inefficient public expenditure. Private investment to boost economic growth and efficient production was encouraged with the potential to create employment. However, efficient deployment of production resulted in keeping a workforce that had flexible terms of work and less bargaining power. Workers within these sectors, although out of the purview of existing worker mobilization, made efforts to engage with the state, in the absence of employer-employee relations. In most parts of the developing world or countries of the Global South, economic activities are located within the informal economy. In the twenty-first century, this global capitalist model based on economic growth and development, understood in terms of market competitiveness, became the status quo. Here, labor market flexibility was defined as crucial in guaranteeing that market competitiveness. This labor market flexibility created the “global precariat” (Standing 2011), whose conditions of work are characterized by instability, informalization, and insecurity and no safety nets. Under such conditions, exploitation in the world of work swelled. And yet only the extremely exploitative conditions are depicted as “modern slavery.” The informal economy across the Global South is to be understood within its specific historical

1141

trajectory. In India, vast sections of workers in informal and unorganized sectors are from the lowest sections of society, who, unable to meet their basic needs in their rural environments, migrate to urban centers, sometimes across states, in search of employment and better conditions of work and life. This work is often seasonal and cyclical and rarely leads to immediate relocation or a complete break from contexts of origin. Oftentimes, persons who choose to migrate this way have experiences that resemble trafficking. However, this trafficking is not a specific and extraordinary case of exploitation, but the result of everyday conditions that structure the world of work. In discussions of economic growth and sustainability of resources, which is the foundation of the SDGs, scholars aver that the modern market system traces its roots to the colonial and mercantilist era, evident in the impoverishment and vast differences in accumulated wealth between the developed and developing economies (Venkatesan and Luongo 2019). Any discussion of achieving the goals of the SDGs has to acknowledge this preexisting inequality within which aspirations to development are articulated by the countries of the Global South. Developing countries are further encumbered by reliance on commoditization of natural resources, weak export dependent growth, and dependence on developed countries’ demand, continuing a vicious cycle of impoverishment for developing countries (Acemoglu and Robinson 2006). In a globalized economic scenario, while trade and investment are prescribed as catalysts for wage growth and economic development, the labor force in the developing countries’ informal economies, largely unskilled or semi-skilled, with limited capacities for organizing for their labor rights has depleted power to bargain over trade while confronting local poverty (Stewart and Berry 2000). Such a context sets the frame for a discussion of worker-driven initiatives to tackle “modern slavery.”

What Constitutes Forced Labor, Modern Slavery, and Trafficking? Even before strategies are formulated to achieve these goals and targets, there has to be a consensus

W

1142

in the recognition of what constitutes forced labor, trafficking, and modern slavery. These conditions themselves observable across the globe, in diverse contexts, and in a variety of forms and sectors, would require an enquiry into their antecedents as well as a clear understanding of the form and nature in which these conditions engulf people’s lives. There is international legislation defining “forced labor” and “trafficking.” “Forced labor” was left to the remits of the International Labour Organisation (ILO) at a time when colonial power dynamics and interests characterized international relations (Miers 2003). The consolidation of “human trafficking” and the form this discourse took has been the result of a multitude of international coincidences, where movements on violence against women, the feminization of labor, and migration and concerns over sovereign security led to a narrow criminal approach to tackle exploitation (Kapur 2002; Suchland 2015). The emergence of the nebulous “modern slavery” umbrella term, which has now become part of legislation in a handful of countries, if anything, has perhaps allowed for a shift in frames, from a criminal to one more grounded on questions of political economy and of rights and decent work. The attempt here is to briefly outline some of these key landmarks.

Shift in the Conditions of Work and Responses from Labor From the 1970s, the global reorganization of production processes where enterprises from the Global North moved out to settle into cheaper and more conducive climates of production, specifically in manufacture, instated a global division of labor where labor market flexibility was the cornerstone on which to attract foreign direct investment and trade to guarantee economic growth. This model meant that in contexts where long-held struggles had translated into labor market rigidities, in the sense of secure employment and decent working conditions, capital and production, due to improvements in communication and travel technologies, engaged in a series of processes to keep labor power in check. On

Worker-Driven Initiatives to Tackle Modern Slavery

the one hand, migrant labor brought in under restricted rights regimes were allowed to destabilize local markets and this coupled with the implementation of labor flexibilization and informalization policies restricting access to social security and decent conditions of work cheapened local labor power, and on the other, production shifted to countries with a competitive advantage (meaning cheaper, less organized, and informal) in terms of labor-power. As De Angelis clearly states “this model not only implicitly recognises a vertical hierarchy among regions within an international division of labour, but makes of this hierarchy the framework for capitalist accumulation and cannot envisage an end of this structural hierarchy, only its structural displacement” (De Angelis 2002:137), “transferring risks and insecurity onto workers and their families” (Standing 2011: 1). The unraveling of this model indicates the tensions implicit in SDG 8, where economic growth is posited along with decent employment. As part of Structural Adjustment Programmes, promoted by the International Monetary Fund and the World Bank, temporary phases of “adjustment of labor” with short term unemployment and reduction in wages were prescribed as necessary preconditions to future growth. This was followed by the need for “flexible labor” strategies to be adopted by developing countries to gain comparative advantage in trade and export production, the establishment of export processing zones with minimum labor laws, flexibilities in the global commodity chains, and so on (Bhattacharya 2014). State policies that reduced investments in the social sector and pushed rapid privatization of services increased the precarity of employment. Women and younger people flood the ranks of these new insecure jobs. The evidence provided through reviews of workers in diverse sectors indicates that this condition is not restricted to the Global South. In Europe, the 2008 financial crisis prompted employers in several countries to replace permanent employees with temporary workers, while also increasing job insecurity, less choice for workers, wage freezes and wage cuts, and deterioration of work-life balance (European Foundation 2013).

Worker-Driven Initiatives to Tackle Modern Slavery

Although migration has been an enduring feature of labor processes and recruitment, the international division of labor has also led to shifting global migration patterns. Within the developing countries, export production, urban construction, other consumer demands along with agrarian distress propelled circulation and seasonal migration. Similarly, international migration in health, IT, construction, and domestic work has also been increasing (Pattadath 2018; Rajan 2017). Migration is therefore a normative condition in much of the world of work today. Varied situations stimulate movement of workers from their place of residence to newer spaces in search of livelihood, opportunities for life enhancement, escape from domestic violence and identity-based oppression, displacement due to development-led growth, natural disasters or conflict, and other situations of distress. The conditions under which many of these groups migrate, the lack of access to social security or any other safety nets coupled with particular socio-cultural dynamics and conjugated oppression (Shah and Lerche 2018) lead to everyday forms of precarity and exploitation that only sometimes come to be characterized as “modern slavery.” The emerging global governance around “modern slavery” has had an interesting journey. First conceived as “trafficking in women for prostitution” in the 1990s, women’s rights movements focusing on international and national legal interventions to address violence against women, though achieving important milestones, also emphasized a victim subject that reinforced rather than challenged gender and cultural essentialisms (Kapur 2002). Early campaigns to bring the attention of the international community to this issue deployed sensationalized and racialized stories and testimonies of kidnappings, sexual exploitation, violence, and suffering, setting the dominant paradigm for who was the “ideal victim” of this “sex trafficking.” All this prioritized individual bodily harm over questions of political economy, lending itself to unending debates about women’s agency and consent (Kempadoo and Doezema 1998; Suchland 2015), but also to calls for patriarchal states to intervene, which inevitably led to protectionist and conservative responses within a

1143

narrow criminal approach. The antitrafficking apparatus that followed has largely focused on locating, identifying, and categorizing these individual victims of trafficking, rescuing, and rehabilitating them, often leading to very harmful practices. This is what Bernstein (2010) has called the carceral (feminist) approach to trafficking, which has further created a false dichotomy between the victim, that is, the few whose experiences neatly fit the constraints of this dominant trafficking story and the losers of global capitalist regimes or the global precariat (Standing 2011). The recognition in the 2015 SDGs of the importance of decent work and of eradicating modern slavery, trafficking, and forced labor offered an opportunity to re-politicize these issues and to introduce a critical economic analysis of these practices, or as Kotiswaran (2019) suggests, a development approach to trafficking. The shift from “trafficking” to “modern slavery” could potentially break the dualism between the trafficked victim and the global precariat and see their condition as one and the same. Though this is yet to be realized, the shift to “modern slavery” has so far brought together criminal law interventions with responses addressed at the corporate sector. To date, only a handful of countries have incorporated into law the term “modern slavery.” The 2015 UK Modern Slavery Act coupled the carceral approach to trafficking with managerial social audit processes or voluntary corporate social responsibility codes on global supply chains. Since the late 1980s, the role of corporates has been brought into international governance with a shift in the ILO’s approach too, advocating corporate social responsibility (CSR), voluntary codes of conduct, and “social dialogue.” Some scholars have seen this move as “window dressing,” indicating an approach that includes investors in development without ensuring any accountability from capitalist firms or market intervention from governments (Rai et al. 2019). Audit regimes have proven to be very limiting in addressing exploitation in global supply chains (Le Baron and Lister 2015) and even more so when considering local production regimes.

W

1144

Along with these above approaches focusing on the state and corporates, it is fundamental to consider the role of labor and labor rights in all this. Both in democracies of the developed countries and in developing economies, a process of delegimatization of labor rights has taken place, accompanied by a discourse that speeds its progress. Workers have been attempting to represent their interests, not just to employment and wage security but other rights as well. There have been instances where workers across sectors and countries have engaged in public uprisings, spontaneous protests, as in the case of garment workers in Cambodia and Bangladesh at the bottom of the global garment supply chain, or the wave of strikes by migrant workers in the export factories in China demanding better contracts, social security, and housing (Chhachi 2014; Silver and Zhang 2009). But there have also been more organized transnational efforts aimed at shifting international governance structures too. Developments in the late 1990s reflect these. The ILO’s decent work agenda foregrounds it as part of sustainable development, making it mandatory within global policy initiatives. This inclusion itself has been a culmination of years of struggle and debates emerging from trade unions, NGOs, women’s organizations, as well as emerging labor organizations within the informal sector (Lerche 2007; Rai et al. 2019). The decent work agenda attempts to mandate freedom from forced labor, child labor, and discrimination at work and to achieve the guarantee of rights to form unions and bargain collectively. The ILO also broadened its remit to include informal labor, adopting as early as 2002 a resolution concerning decent work and the informal economy including forms of unregulated and subcontracted work, which are now the normative forms of labor. In 2011, for example, the landmark adoption of Convention 189 on Domestic Workers, one of the most important sectors in the informal economy, sought to set minimum standards of work and provide basic protection to domestic workers (Rai et al. 2019). This is an acknowledgment of the importance of domestic workers both in the developed as much as in the developing nations’ economies. In 2015, the ILO went further, recognizing that to achieve

Worker-Driven Initiatives to Tackle Modern Slavery

the SDGs, emphasis on transitioning from the informal to the formal economy across all sectors was fundamental and it adopted Recommendation 204 to this end.

Worker-Driven Social Responsibility It is in this context where a new “model” to address abuses and exploitation in global supply chain materialized. In 2015, a network of workers’ organizations and consumer groups came together to promote the “worker-driven social responsibility” model, as an effective approach to tackling “modern slavery.” This model emerged from a long-standing movement led by migrant workers in conditions of modern slavery in the tomato industry of Florida in the United States. The movement led to the establishment of a fair food program across the US agricultural sector, involving farmers, retail companies, and the workers themselves. Using the power of consumer demand and reputational risks for retail companies, they agree to pay a fair food premium over and beyond the money they pay for the produce. Farmworkers, upon recruitment, are educated on labor rights and the Code of Conduct and become its monitors across farms. What is interesting of this model is that for once, it recognizes and harnesses the power of labor and workers’ collective organizing in creating the conditions for systematic change to address exploitation, and that it helps in breaking up the division between the “trafficked victim” and the loser of globalization. However, there are limitations as to the replicability of this “model” across all sectors and contexts, as it relies on preestablished workers’ organizations and applies specifically to global supply chains where that chain is clearly identifiable and traceable, especially to big brands and retailers. This worker-driven social responsibility model has been taken as a trigger to investigate workers’ movements and organizing in India in sectors that are not characterized by identifiable global supply chains but where conditions of exploitation or “modern slavery” prevail. The fact that goal 8.7 has legitimated a geopolitical shift in terms of where responsibility to tackle

Worker-Driven Initiatives to Tackle Modern Slavery

forced labor, trafficking and modern slavery lies, from the Global North back to the Global South can further serve to problematize some of the challenges faced in addressing the conditions that lead to these exploitative practices.

Shifting Terminologies, Discourses, and Approaches: Specificities of India Legal interventions with their origins in the legal systems of developed countries relying on criminal law approaches are flawed, with proven little success in the West (Kotiswaran 2019). The Trafficking Protocol and other international treaties have put in place a whole regimen of legal and extra-legal instruments to criminally sanction anyone assisting people to migrate illegally or transporting through coercion, force, or deception into sex work, slavery, or practices similar to slavery. A significant role is given to the state apparatus, especially through their law enforcement arm, and powerful philanthropists prompt other States to adopt this framework. This discourse has served to depoliticize exploitation, absolving states and corporates from responsibility, placing the moral responsibility and blame on a handful of evil criminals or perpetrators (Chuang 2015). Simply exporting this model to other countries without consideration of local specificities that are sensitive to the presence of labor within the informal economy will not lead to positive results. What are needed are creative labor strategies that recognize the role of workers’ organizing, rather than a punitive approach. This is a particular challenge in India, especially in the context of rapid labor reforms which are risking the many gains that the Indian pro-labor movements have achieved over many years. In the specific context of India, caste relations and caste-based exploitation complicate the experiences of labor. While the global discourse on modern slavery seems to be inadequate, theoretical articulations of slavery in India from an anticaste framework provide one grounding to look at exploitative practices (Sanal Mohan 2006, Phule 2017). Existing conditions of debt bondage and

1145

other exploitative labor practices can be understood through historically specific analysis of caste relations. Bonded labor relationships exist due to complex caste practices (Srivastava 2005), but this does not mean that these have remained intact over centuries. Conditions of bonded labor in India today are often characterized by foreign “modern slavery” abolitionists as a reflection of the backwardness of the country and a distinct characteristic of its socio-cultural peculiarity. However, today, it is better described as labor neo-bondage relations (Breman 2010), relations which are less personalized, of shorter duration, more contractual, and monetized (ibid.). This has been the result of the development strategy of the Indian State. The binary understanding of formal and informal labor is also inadequate in the Indian context to understand the complex dynamics of many of these labor formations. On the one hand, there seems to be customary and obligatory labor services performed for the upper-castes but, on the other hand, caste on its own is not a sufficient explanatory variable. Intersections of gender, religion, and local power forces are equally important to understand the overall fate of pro-labor and anticaste movements. This is the conjugated oppression of Shah and Lerche (2018) or the coconstitution of class-based relations and oppression along the lines of race, ethnicity, gender and, in India, caste and tribe, which, as they explain, is entrenching Dalits and Adivasis at the bottom of social and economic hierarchies in India and maintaining them in conditions of neo-bondage, even when migrating outside of their places of origin. Prasad (2015) notes that the ILO’s Forced Labour Convention 29 of 1930 is lacking to frame and understand the dire economic conditions found in the Indian context which go beyond the physical and legal compulsion to engage in forced labor. To understand the socio-political context of these economic compulsions which force communities to engage in exploited labor practices, it is necessary to look closely at conjugated oppression (Shah and Lerche 2018). Over decades, large parts of the economy in developing countries such as India, including manufacturing and services, have shifted to the

W

1146

informal economy seen in the varied forms of contracting and subcontracting, including being part of global supply chains. The informal sector comprises almost 90 per cent of the Indian labor force, a large section of whom are women. Social relations in India, and within the informal economy, are bound by caste, class, tribe, and gender relations which persist in numerous occupations in the Indian modern economy: sanitation and sewage operations, urban waste management, rural agricultural labor, migrant domestic labor, and so on. These types of work are further complicated by intrastate migration patterns. Migration becomes a mode of escape from rural castebased constraints for a vast majority of workers, but today, these constraints are replicated, even if differently, in contexts of migration too. With such complex specificities in India, it is imperative to look at what seems to be working in terms of curbing exploitative conditions of labor. Though much conventional literature suggests a weakening of state-labor relations, there are attempts of organizing informal workers using diverse strategies. Different models of political formation and labor organizing across sectors need to be considered in order to understand practices of resistance and constructions of alternatives in India. Rina Agarwala notes how challenging these new forms of organizing can be in India, a context where informal workers predominate and where the already small share of formally protected workers is diminishing (Agarwala 2013). A sectoral understanding of labor organizing in diverse contexts and their negotiation with the state would unpack the rigid binaries of formal and informal labor organizing. Certain sectors use developmentalism (Roychowdhury 2005), that is, strategies where workers engage with the state through flash strikes. An example of this is the recent victory by the Asanghadita Mekhala Tozhilali Union (AMTU) through their “right to sit” which has pushed continuously for negotiations with the state. The move to amend the relevant labor law by the Kerala government is a case in point here. Urban manufacturing sectors organizing urban migrants in recycling, chemical and other informal manufacture, begin from proving identity cards, securing housing, and informing

Worker-Driven Initiatives to Tackle Modern Slavery

them of their rights. Learning about the success and failures of these different informal organizing strategies of workers in exploitative conditions in India provides a better footing at being able to understand the challenges and opportunities in order to achieve goal 8.7.

Conclusion: Worker-Driven Initiatives to Claim Substantive Gains When the ILO extended its approach to address decent work through social dialogue, it was to advocate corporate social responsibility (CSR) to make corporates in global supply chains accountable. However, this has largely remained at the level of rhetoric as discussed earlier. This has prompted consumer groups and philanthropists to initiate several networks that rely on “workerdriven social responsibility” (WSR). Labor’s potential in tackling modern slavery is now being recognized. The lived experiences of workers encountering deplorable conditions of work within global supply chains in the global economy form the backbone for these efforts. These networks that attempt to bring in workerdriven social responsibility, though located in the Global North, are also drawing on examples from South Asia, such as with the Bangladesh Accord on Fire and Building Safety, a legally-binding agreement between global brands and retailers with Global Unions, including eight Bangladeshi affiliated unions, which came into being after the Rana Plaza building collapse on the 24th of April 2013. However, these WSR rely on preexisting unions and solely on global supply chains which are easily traceable and identifiable. An important advantage of WSR over CSR models is that it relies on the notion of human rights (WSR 2019). In the context of India, however, large sections of workers in the informal economy who are still outside the purview of traditional labor organizing are organizing themselves under citizenship rights rather than workers’ rights. Women construction workers and home-based beedi and tobacco workers in the absence of employer-employee relations, being part of subcontracted supply chains choose to appeal to the state for basic rights

Worker-Driven Initiatives to Tackle Modern Slavery

as citizens which will then give them bargaining power to tackle the chains of subcontractors (Agarwala 2008). Traditional labor organizing or conventional labor politics have also remained at the level of economism and moved away from its emancipatory goal, which has been much critiqued. Labor movements have to widen their reach and locate themselves within the informal economy (Bhattacharya 2014). Not just the conditions of work but the alienation experienced by the laboring groups in the informal economy comprising women, Dalits and Adivasis, in the absence of traditional employer-employee relationships including direct relationships with their employers that are obscured within global supply chains need further analytical attention. In some instances, newer forms of organizations adopt traditional modes of organizing or trade unions to slowly reach out to these new sectors. While employers see further informalization of existing formal labor arrangements as avenues to eke further profit, states steadily reinforce these changing terms of work as fundamental and introduce legislations and Labour Codes with new regimes of monitoring and performance assessments. In India, the terms of reference of the Second National Commission of Labour set-up in 2000 set apace a rationalization of existing laws relating to labor in the organized sector, while suggesting an umbrella legislation for ensuring a minimum level of protection for workers in the unorganized sector (Sundar Shyam 2000). This has evolved into revisions to all labor legislations which were a result of diverse labor movements into what has now been created into 4 Labour Codes on Social Security, Wages, Industrial Disputes and Occupational Health. What the Labour Codes present, worryingly, before workers is a scenario of the state withdrawing rights of workers in the name of rationalization and efficiency of delivery of social security, while creating a regime for industry to be globally competitive, removing all labor rigidity through concessions to industry. There are no legal restraints on employers or contractors to enforce minimum wages. Vague regulatory mechanisms are suggested for workers where the onus of proof of worker identity relies on the workers themselves.

1147

These recent changes in legislation further undermine but make even more necessary the efforts of workers organizing. Worker-driven initiatives are essential to achieve goal 8.7 and eradicate forced labor, trafficking, and modern slavery. That the Indian Labour Codes are seen as necessary to create economic growth reveals the inherent tensions in this global economic model, where labor organizing is seen as detrimental to growth, even when it is crucial to deliver decent work.

References Acemoglu D, Robinson JA (2006) Economic origins of dictatorship and democracy. Cambridge University Press, New York Agarwala R (2008) Reshaping the social contract: emerging relations between the state and informal labour in India. Theory Soc 37:375–408 Agarwala R (2013) Informal labor, formal politics, and dignified discontent in India. Cambridge University Press, Cambridge Bernstein E (2010) Militarized humanitarianism meets carceral feminism: the politics of sex, rights, and freedom in contemporary antitrafficking campaigns. Signs 36 (1):45–71 Bhattacharya S (2014) Is labour still a relevant category for praxis? Critical reflections on some contemporary discourses on work and labour in capitalism, debate. Dev Chang 45(5):941–962 Breman J (2010) Neo-bondage: a fieldwork-based account. Int Labor Work Class Hist 78(Fall 2010):48–62 Chhachi A (2014) Introduction: the ‘labour question’ in contemporary capitalism, debate. Dev Chang 45(5):895–919 Chuang J (2015) The challenges and perils of reframing trafficking as “modern-day slavery”. Anti-Trafficking Rev 5:146–149 De Angelis M (2002) Hayek, Bentham and the global work machine: the emergence of the fractal-paopticon. In: Dinerstein AC, Neary M (eds) The labour debate: an investigation into the theory and reality of capitalist work. Ashgate Publishing Company, Aldershot, Burlington European Foundation for the Improvement of Living and Working Conditions (2013) Impact of the crisis on working conditions in Europe. https://www.eurofound.europa. eu/publications/reports/2013/impact-of-the-crisis-on-wor king-conditions-in-europe. Last accessed 21 Sept 2019 Kapur R (2002) The tragedy of victimization rhetoric: resurrecting the “native” subject in international/postcolonial feminist legal politics. Harv Hum Rights J 15 (1):1–38 Kempadoo K, Doezema J (1998) Global sex workers: rights, resistance and redefinition. Routledge, New York Kotiswaran P (2019) Trafficking. A development approach. UCL working paper series no. 4. Accessed 21 Sept 2019

W

1148 Le Baron G, Lister J (2015) Benchmarking global supply chains: the power of the ‘ethical audit’ regime. Review of International Studies 41(5):905–924 Lerche J (2007) A Global Alliance against Forced Labour? Unfree Labour, Neo-Liberal Globalization and the International Labour Organization. Journal of Agrarian Change 7 (4):425–452 Miers S (2003) Slavery in the twentieth century: the evolution of a global problem. AltaMira Press, Walnut Creek Mohan S (2006) Narrativizing oppression and suffering: theorizing slavery. South Asia Res 26(1):5–40 Pattadath B (2018) Mobility, accessibility, and inclusion: Spatial politics of gendered migrant domestic labour. In: Irudaya RS and Neetha NP (eds) Migration, gender and care economy. Routledge, New Delhi Phule JG (2017) Gulamgiri. Vani Prakashan, New Delhi Prasad KK (2015) Debate: use of the term ‘bonded labour’is a must in the context of India. Anti-Trafficking Rev 29(5):162–169 Rai SM, Brown BD, Ruwanpura KN (2019) SDG 8: decent work and economic growth: a gendered analysis. World Dev 113(2019):368–380 Rajan SI (2017) South Asia migration report 2017: recruitment, remittances and reintegration. Routledge, New Delhi RoyChowdhury S (2005) Labour activism and women in the unorganised sector: garment export industry in Bangalore. Econ Polit Wkly 40:2250–2255 Shah A, Lerche J (2018) Conjugated oppression under contemporary capitalism: class relations, social oppression and agrarian change in India. J Peasant Stud 45(5– 6):927–949 Silver B, Zhang L (2009) China as an emerging epicenter of world labor unrest. In: Hung H-F (ed) China and the transformation of global capitalism. Johns Hopkins University Press, Baltimore, pp 174–187

This encyclopedia includes no entries for X, Y and Z.

Workforce Srivastava RS (2005) Bonded labor in India: its incidence and pattern. http://digitalcommons.ilr.cornell.edu/ forcedlabor/18. Last accessed 23 Sept 2019 Standing G (2011) The Precariat: the new dangerous class. Bloomsbury Academic, London Stewart F, Berry A (2000) Globalization, liberalization and inequality: real causes: expectations and experience. Challenge 43(1):44–92 Suchland J (2015) Economies of violence: transnational feminism, postsocialism, and the politics of sex trafficking. Duke University Press, Durham Sundar Shyam K (2000) Second National Commission on Labour. Econ Polit Wkly 35:2607–2611 Venkatesan M, Luongo G (2019) Introduction to SDG 8 economic growth and decent work for all. In: SDG8–sustainable economic growth and decent work for all, Concise guides to the United Nations sustainable development goals, Emerald publishing limited, UK, pp 1–3 What is WSR? https://wsr-network.org/what-is-wsr/. Last accessed 21 Sept 2019

Workforce ▶ Development of Skills for Technological Change in ASEAN-5

Working/Work Time ▶ Economic Growth, Technological Progress, and Employment