Msc Thesis, Natali Dimitrova by Natali Dimitrova

Qualitative research of companies within East Londonâ&#x20AC;&#x2122;s Tech City through the use of expert interviews

NATALI DIMITROVA ID: 12045526 Dissertation supervisor: RONKE SHODERU

A dissertation submitted to the graduate faculty in partial fulfilment of the requirements for the degree of MSc Sustainable Business, Energy and Finance LONDON METROPOLITAN UNIVERSITY 2014

“We cannot predict the details of our future economy. But we do know the trends driving its development – like the rolling IT revolution, climate change, public trust, food security. These factors shape markets and disrupt business models. Businesses need to address the risk that is presented. But crucially, there’s a huge business opportunity there for the taking” Jonathan Porritt, Founding Director Forum for the Future

Melissa Figer, digital Fig.1. Ryoji Ikeda,The Data visualisation

ACKNOWLEDGEMENTS A very special thank you to all my friends and family who were always there for me and morally supported me while clarifying the topic, researching and writing my dissertation. A particular acknowledgement and special gratitude are due to my supervisor Ronke Shoderu, senior lecturer in the Faculty of Business and Law in London Metropolitan University, who guided me all the way through the thesis and gave me insightful comments and suggestions. I also wish to record my gratitude and appreciation for the help and support received from all owners and managers of small enterprises interviewed for the research.

ABSTRACT The aim of this research was to examine sustainable development through the prism of digital innovation and evaluate whether a digital economy can promote sustainable future from a business perspective. The study was conducted using both primary (expert interviews in Tech City, London) and secondary qualitative research. The emergent themes analysis revealed that start-ups and small enterprises are better at melding “the sustainable” and “the digital” and that an entrepreneurial environment is more beneficial to implementing sustainable strategies. Small organisations simultaneously have the 'hard' of technology and the 'soft' of attitudes and knowledge available which makes them better suited to promote a sustainable culture of technological innovation that is agile and responsive. The concluding part of the thesis aims to contribute to the discussion on the topic of sustainable development in a digital age. On the basis of a systems thinking approach it provides recommendations on how to harness the power of the digital revolution to promote and advance sustainable development goals. A number of questions yet remain open and have been suggested as additional research areas.

TABLE OF CONTENTS

ACKNOWLEDGEMENTS ................................................................................................................................ 3 ABSTRACT............................................................................................................................................................. 4 TABLE OF CONTENTS .................................................................................................................................... 5 LIST OF FIGURES............................................................................................................................................... 7 ABBREVIATIONS ............................................................................................................................................... 8 I.

INTRODUCTION ....................................................................................................................................... 9 1.1.

INTRODUCTION ............................................................................................................................... 9

1.2.

RESEARCH AIMS AND OBJECTIVES ....................................................................................... 11

1.3.

RESEARCH RATIONALE .............................................................................................................. 12

1.4.

DISSERTATION OUTLINE .......................................................................................................... 13

II. LITERATURE REVIEW .......................................................................................................................... 14 2.1. SUSTAINABLE DEVELOPMENT (SD)........................................................................................... 14 2.1.1. CONCEPTUAL DEVELOPMENT ............................................................................................. 14 2.1.2. ISSUES ................................................................................................................................................ 17 2.1.3. DIFFERENTIATIONS................................................................................................................... 19 2.1.4. BUSINESS AND POLICY PERSPECTIVE .............................................................................. 22 2.2. DIGITAL INNOVATION .................................................................................................................... 25 2.2.1. INNOVATION: CONCEPTUAL FRAMEWORK .................................................................. 25 2.2.2. SOCIAL INNOVATION ............................................................................................................... 27 2.2.3. TECHNOLOGICAL DEVELOPMENT .................................................................................... 28 2.2.4. DIGITAL SOCIAL INNOVATION............................................................................................ 30 2.3. SYSTEMS THINKING .......................................................................................................................... 31 III.

METHODOLOGY ................................................................................................................................ 34

3.1. OVERALL APPROACH........................................................................................................................ 34 3.2. DATA COLLECTION ........................................................................................................................... 34 3.2.1.

Research design and data collection.......................................................................................... 34

3.2.2.

Interviews protocol construction .............................................................................................. 36

3.3. DATA ANALYSIS ................................................................................................................................... 37 3.3.1.

Dependability and trustworthiness............................................................................................ 37

3.3.2.

Methods and techniques of expert interviews analysis .......................................................... 37

3.4. LIMITATIONS, QUALITY AND ETHICS ISSUES ....................................................................... 39 IV.

RESEARCH FINDINGS ...................................................................................................................... 40

4.1. BACKGROUND ..................................................................................................................................... 40 4.2. EXPERT SELECTION CRITERIA .................................................................................................... 41 4.3. INTERVIEWS ANALYSIS.................................................................................................................... 43 (i)

Sustainability...................................................................................................................................... 44

(ii)

Entrepreneurship ............................................................................................................................. 47

(iii)

The “human” element ..................................................................................................................... 48

(iv)

Technology uses ............................................................................................................................... 49

4.4. STUDY FINDINGS ................................................................................................................................ 51 4.5. SUMMARY................................................................................................................................................ 58 V. DISCUSSION, RECOMMENDATIONS AND CONCLUSION .................................................... 60 5.1. DISCUSSION ........................................................................................................................................... 60 Building the case for sustainable development in a digital world.......................................................... 61 5.2. LIMITATIONS AND RECOMMENDATIONS FOR FUTURE RESEARCH ........................ 66 5.3. CONCLUSION ........................................................................................................................................ 67 BIBLIOGRAPHY ................................................................................................................................................ 69 VI.

Appendices ................................................................................................................................................ 80

7.1.

Appendix A: Interview Protocol and Corresponding material ..................................................... 80

7.1.1.

Consent Form .............................................................................................................................. 80

7.1.2.

Semi-structures Interview Questionnaire ................................................................................. 82

7.1.3.

An example of email.................................................................................................................... 85

7.2.

Appendix B: Interview Transcripts ................................................................................................... 86

LIST OF FIGURES Figure 1: Ryoji Ikeda, data visualisation………………………………………………………...……2 Figure 2: The three sustainability pillars………………………………………………………….…15 Figure 3: Daly’s Triangle……………………………………………………………………….…...17 Figure 4: Meadow’s framework………………………………………………………………….….19 Figure 5: Sustainability operationalised through systems thinking…………………………….……..30 Figure 6: Basic systems concept………………………………………………………………..……31 Figure 7: Causal Loop Diagram: Qualitative system dynamic………………………………………..32 Figure 8: Jason Hawkes, Tech City………………………………………………………………,…40

ABBREVIATIONS APP

Application

BERA

British Educational Research Association

CSR

Corporate Social Responsibility

GDP

Global Domestic Product

HTML

HyperText Markup Language

ICLEI

United Nations and Local Governments for Sustainability

ICT

Information and Communication Technology

IPCC

Intergovernmental Panel on Climate Change

MDG

Millennium Development Goals

R&D

Research & Development

Sustainable Development

SDG

Sustainable Development Goals

SME

Small and Medium Enterprises

SVC

Shared Value Creation

TBL/3P

Triple Bottom Line

UNDP

United Nations Development Programme

UNEP

United Nations Environment Programme

WCED

World Commission on Environment and Development

I. 1.1.

INTRODUCTION INTRODUCTION

Global economic activity (GDP) has been progressively growing for the past 100 years â&#x20AC;&#x201C; it has increased by a factor of 40 since the start of the Industrial Revolution (IPCC, 2001). Indeed, technological breakthroughs have been the key to achieving economic growth. However, natural resources are consumed at disturbing and ever increasing rates.

Our current economic models,

established on the need for never-ending growth, have failed to take into consideration the restrictions of a finite planet which cannot sustain a population expected to reach 9.3 billion by 2050 (United Nations, 2011), Amidst the repercussions of the economic crisis and the politics of austerity we are witnessing the struggles of the public domain, prospects of a jobless growth, and the severe economic effects of a failing banking system (Quigginm, 2013). Structural challenges, the need for institution building as well as incorporating long-term thinking into political agendas call for the construction of a new sustainable economic model that will create viable social infrastructure, employment opportunities and build social capital (NESTA, CABE, 00:/, 2011). A return to the 2008 business-as-usual state is highly unlikely to achieve this. The debate on how we can achieve synergetic balance between economic health, environmental responsibility, social justice and cultural vitality while addressing the need for intergenerational equity is becoming louder, yet actions taken to address the aforementioned issues are not increasing with the same pace. The ineffective management of complex and highly interconnected systems has led to crises in all sectors of society - finance, economics, community, environment, ethics and many more. The UK urban riots in August 2011, Arab Spring and The Occupy movement all highlight two issues of importance â&#x20AC;&#x201C; an economic and social decline that is reflected in easily inflamed public discontent and the increasing use of digital technology as means to organise civil actions and thus spur social change. A unique phenomenon is taking place alongside the aforementioned two - digital media has become an integral part of our everyday activities. The digital state - the collaboration of content, big data, social networks, cloud computing and mobile apps (Pont, 2013) - is accelerating the pace with which businesses, the government, and the wider public are interacting, changing and developing. The way humanity is working, living, and playing.

The aim of this dissertation is to explore the following questions: Can the ever increasing pace of change and the pervasiveness of technology that has caused the crises we are experiencing be turned into an opportunity - can the evolution of technology also contribute to a solution to the problems we are facing? Can digital technology, and particularly digital social innovation, also be ushering us in a new age of civic engagement built on the principles of sustainable development? If the answer is yes - how, where and when can digital technology innovation be harnessed by businesses to achieve sustainable development? Ultimately - how can digital technology in a business environment be better utilised to achieve a sustainable future?

1.2.

RESEARCH AIMS AND OBJECTIVES

The main research question is: Whether and how can digital innovation be harnessed by businesses to achieve sustainable development? The sub-questions to be considered are: -

Definition of sustainable development and business responsibility

Definition of innovation, respectively social and digital, as well as the overlay of the two - digital social innovation

Is digital technology used by small enterprises reinforcing sustainability? Examining the extent, types and ways in which digital technologies are used within small enterprises. Do they lead to digital social innovation? If yes â&#x20AC;&#x201C; has it been imbedded within businesses strategy by design (through sustainability policies) or has it occurred naturally?

Is digital innovation contributing to sustainable business practices and hence, either directly or indirectly, to sustainable development? How can the synergies between sustainability and the digital be reinforced?

The following thesis is to be viewed from the prism of sustainable development and is to rely on emergent themes analysis as its main methodological approach.

1.3.

RESEARCH RATIONALE

Digitalisation and the Internet are redefining the nature of our social, cultural, political and economic lives. In 2009 the “point of no return” was crossed - there were more digitally connected devices than there were people on our planet (Pont, 2013). “The digital state” had already had profound impact on our everyday lives, within the business environment, and from a policy perspective. Digital media has raised our awareness and enabled increasing international media coverage on riots, conflicts and war zones, on social inequalities, injustice and various socio-political issues (Hoffman, 2004), on problems that require immediate attention. Yet, thus far, insufficient action has been taken in that regards. The contradiction of the sustainable growth 1 notion, the application of sustainable development concepts into a digitalised business environment and the increasing influence of social innovation in a globalised world, both in terms of social media and social business models, are topics of increasing interest both in practical and theoretical, academic fields. The thesis aims to explore the role that digital technologies have played, are currently playing, and can continue to play in promoting and advancing sustainable development. From my point of a former digital non-believer the thesis will also attempt to refocus my thinking and the thinking of the reader in terms of “how to embrace technology and use it as means of achieving sustainable development” (Bhattacharyya, 2002). The study questions whether embracing digital innovation can provide solutions for a sustainable development - one where the concepts of economy, environment, and society are not contradicting themselves but act in synergy.

The clash between the need for never-ending economic growth within the restrictions of the limited natural resources we have available, the quest for unlimited growth on a finite planet (Meadows, 2004)

1.4.

DISSERTATION OUTLINE

The research presented in this study has been conducted through the following stages. The introductory part of the thesis provides the reader with information on the research aims and objectives, the research rationale as well as background information on sustainable development and digital innovation. The second part is the literature review. It examines a range of academic and practitioner literature related to sustainability, business responsibility, CSR, digital technologies, social and digital innovation. As a starting point the aim is to define and clarify the boundaries between the concepts involved in the thesis, establish the conceptual and historical development of sustainable development and digital technology and unveil the linkages and ways in which sustainable and digital innovation overlap. The ensuing part of the literature review covers the theoretical framework with a special emphasis on systems theory. The third part is an overview of the research methodology â&#x20AC;&#x201C; the overall approach that is to be adopted, methods and techniques of data collection and data analysis as well as quality and ethics issues to be considered. The fourth part is the research findings. It aims to reveal in what ways digital innovation advances and reinforces sustainable development and social innovation, especially as concerns small enterprises. For the purpose 8 expert interviews with managing directors from small enterprises located in Accelerator London, a business incubator in Londonâ&#x20AC;&#x2122;s Tech City, were conducted. The research background and the selection criteria for expert interviewsâ&#x20AC;&#x2122; are followed by the analysis of the interviews and study findings. The latter is dedicated to emergent themes, trends and issues analysis. The chapter concludes with a summary of the findings. The concluding part of the study summarises the dissertation, explores the factors influencing sustainable development in an increasingly digital world and partially builds on the case for sustainability within a digitalised world as well as points to areas of further research.

II.

LITERATURE REVIEW

2.1. SUSTAINABLE DEVELOPMENT (SD) 2.1.1. CONCEPTUAL DEVELOPMENT A multitude of simplifications of the term sustainability exist – restricted only to corporate social responsibility (Franklin, 2008), understood as “environmentally desirable” (John Pezzey, 2002) or simply as greening the concept of economic growth (Nurse, 2006). Solow, a growth theorist, claims that it is “essentially a vague concept” and that the combination of “genuine and deeply felt and very complex” that applies to sustainable development has turned it into a “buzzword” (Solow, 1993). Additional limitations to the sustainability paradigm is the predominant understanding of development exclusively as economic growth (Drexhage & Murphy, 2010) and the compartmentalisation of sustainability simply as an environmental issue that has persisted for the past 20 years (Drexhage & Murphy, 2010). Differences between definitions of sustainable development are associated with alternative assumptions regarding the stability and resourcefulness of the natural world, the potential for future technological innovation and humanity's ethical responsibilities towards other species, future generations, and less privileged members of current generations. Many definitions of SD are restricted to scientific or economic criteria, but these are seen to be inadequate. A complete definition of sustainable development should include social, cultural and ethical components (Blewitt, 2008). Yet, will the concept’s complexity aid improved policy and business decision making, or result in greater complication and confusion? Inferior understanding of reality which yields superior policy only arises by accident, a more complete understanding of reality can usually be translated into superior policies and is hence desirable (Bruyninckx, Happaerts, & Brande, 2012). Businesses, governments and environmental groups may all be in favour of sustainability, but if they cannot agree on what it means, it is of little use as a guide to policy making (Bruyninckx, Happaerts, & Brande, 2012). Hence, the thesis will mainly seek differentiation by definition than simply creating value through greater clarity. With the aim to simultaneously achieve greater clarity and simplify the differentiation process sustainability is to be equated with sustainable development within the thesis despite criticism in that regards (Dower).

The concept of sustainable development (SD) 2 became widely prominent in environment and development policy when it was legalised by the Brundtland Report (WCED, 1987). The definition provided by the former reads "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". Despite numerous subsequent elaborations the theoretical status of SD remains problematic and Brundtland’s definition remains popular until today (Bergier, 2010). Despite the inherent complexity of the term it has been established as a basic objective of several international agreements since 1987 among which United Nations Environment Programme, the Rio Declaration; Agenda 21; Kyoto Protocol3 (United Nations, 1998) and its Doha amendments (Baker, 2005). The third summit on sustainable development held in June 2012, Rio +20 Earth Summit, resulted in the nonbinding document, "The Future We Want" which laid the foundation of Sustainable Development Goals (SDGs) 4 (Environmental Audit Committee, 2013) which, as Jeffrey Sachs, the director of the Earth Institute, has stated: “Just as the MDGs5 opened new pathways to disease control and poverty reduction, the SDGs have the potential to open up a new era of technological and organisational breakthroughs.” (Sachs, 2013). UN has played a major role in 40 decades of global environmental governance and international sustainable development cooperation with the attention shifting from pollution control, searching for ways to “reconcile social, economic and ecological goals”, sustainable development rising to the forefront in global environmental politics (Baker, 2005) to uncovering technological breakthroughs to usher us into a new era of sustainability (Lacy, Cooper, Hayward, & Neuberger, 2010).

UK’s shared framework for sustainable development provides the following definition to be used throughout the thesis:

That was further developed by the ensuing United Nations Conference on Sustainable Development held in 1993 and the World Summit for Sustainable Development in Johannesburg, 2002 3 As part of United Nations’ Framework Convention on Climate Change the Kyoto Protocol was finalised in 1997 and went into force in 2005 after years of negotiation. It recognises the principle of “common but differentiated responsibilities” through which developed countries could be held responsible for the high levels of GHG emissions in the atmosphere as a result of more than 150 years of industrial activity. The debate on Global Climate Change sparked from the former has been greatly polarised with one side, mainly businesses and governments considering adopting the treaty as “ruinously expensive”, while the other side, environmentalist, have claimed that it “can address the problem at no economic cost, maybe even save money by saving energy”. 4 SDGs aim to end extreme poverty by 2030, tackle the transition to low-carbon energy by 2050; protect critically endangered biodiversity; improve farm yields with reduced environmental costs; reshape cities to be much more energy-efficient and resilient to rising temperatures and sea levels. 5 SDGs aimed to replace and improve the Millennium Development Goals which are eight international development goals established during the UN Millennium Summit in 2000. 189 countries (all UN member states) have committed to achieve them. The goals are as follows: (i)to eradicate extreme poverty and hunger, (ii) to achieve universal primary education, (iii) to promote gender equality and empowering women, (iv) to reduce child mortality rates, (v) to improve maternal health, (vi) to combat HIV/AIDS, malaria, and other diseases, (vii) to ensure environmental sustainability and (ix) to develop a global partnership for development.

“

The goal of sustainable development is to enable all people throughout the world to satisfy their basic

needs and enjoy a better quality of life without compromising the quality of life of future generations” (DEFRA, 2005). By laying an emphasis on the principle of sustainable communities - meeting the diverse needs of all people in existing and future communities, promoting personal well-being, social cohesion and inclusion, and creating equal opportunities for all (DEFRA, 2005) the definition complies with Blewitt’s view of SD mentioned above (Blewitt, 2008) and thus provides a solid groundwork to be used within the thesis. To adopt a systems thinking approach it will be complemented by the definition of applied sustainability: “The need to ensure a better quality of life for all, now and into the future, in a just and equitable manner, whilst living within the limits of supporting ecosystems” (Agyeman, D. Bullar, & Evans, 2003) Applied sustainability, or applied ecology, is the application of science and innovation to meet human needs while indefinitely preserving the life support systems of the planet. By prioritising justice and equity, while maintaining the importance of the environment and the global life support system, it provides an improved definition of sustainable development especially relevant in the transdisciplinary approach adopted throughout the thesis.

Fig.2. The three sustainability pillars (Ali, 2012)

2.1.2. ISSUES For a broader understanding of the sustainability concept a brief overview of the three main sustainability pillars and related issues follows below. Environmental issues, and especially environmental degradation, have often been considered central to the sustainable development debate (Nurse, 2006). Two of the key global environmental concerns are climate change and biodiversity preservation (Baker, Susan, 2005). The former Gardner considers a “perfect moral storm” in the global, intergenerational and theoretical dimensions (Gardner, 2006) leading to moral corruption and our inability to act on it6. “We cannot go really deep without reaching an ethical issue” (Gardner, 2006). Stern and Schelling consider global warming a political problem and claim that the benefits of early climate change mitigation outweigh the costs – if actions are not taken now economic growth will be affected7 (Schelling, 1998) (Stern, 2004). Food and water scarcity, deteriorating health conditions and increased inequalities have been the human costs of climate change (Stern, 2004) while biodiversity loss, a sign of planetary health and one of the major consequences of global warming, has resulted in the emergence of new diseases, damages to forests and marine resources8 (Baker, Susan, 2005). However, while sustainable development aims for growth that is environmentally sound compartmentalisation of sustainability simply as an environmental issue (Drexhage & Murphy, 2010) can substantially impede our understanding of the complexity of SD. “The various global ‘crises’ that have seized public concern….are not separate crises: an environmental crisis, a development crisis, an energy crisis - they are all one.” (WCED, 1987). The second pillar, economic sustainability seeks the balance between the costs and benefits of economic activity, within the confines of the carrying capacity of the environment (Munro & Lammers, 1987). It covers the topics of increasing globalisation, urban regeneration and modernisation, increased population, transport usage, consumerism and ethical trade, corporate responsibility 9 and others (Pezzey & Toman, 2002). Herman Daly, a prominent American ecological economist who introduced

First we don’t have the tools to handle problems with long-term implications and the convergence of a number of factors threatens our ability to behave ethically and make it difficult to act. Refer to Gardner, Climate Change: A Perfect Moral Storm 7

According to the Stern Review “climate change will reduce welfare by an amount equivalent to a reduction in consumption per head of between 5 and 20%” (Stern, 2004). 8 The ecological framework further encompasses energy and water conservation, pollution and resource waste, regulation of carbon emissions, promoting sustainable agriculture (Nurse, 2006). 9 Ensuring that organisations are "built to last" (Soderbaum, 2008). Business responsibility and CSR are to be further covered within the thesis.

the Impossibility Theorem of sustainable growth10 defines it as a vehicle for achieving ultimate ends an economy succeeds to the extent that it manages to conserve and restore the environment (the ultimate means) and to enable us to achieve well-being (ultimate ends) (see fig.1) (Daly, 1997).

Fig.3. Daly's Triangle

Broadly defined social sustainability, and especially social justice, means equity in resource distribution (Pezzey & Toman, 2002). The growth of world inequalities - the economies of the North outgrowing those of the South - has widened the gap between the worldâ&#x20AC;&#x2122;s rich and poor11 as well as exacerbated environmental pressure caused by developed and developing countries (Baker, Susan, 2005). Social sustainability further addresses the major issue of inter-generational and intra-generational equity - the idea that an â&#x20AC;&#x153;intergenerational social contractâ&#x20AC;? will provide future generations with social welfare that is not less than that of the current generation (Turner, 2004). The social aspect incorporates providing sanitation and safe drinking water, securing peace, seeking equality and social justice, protecting human rights, health and wellbeing (Forum for the Future, 1999). The maintenance of political and community values, community development and enforcing cultural diversity can be allocated to cultural sustainability that has been proposed as a separate pillar by the Rio +20 Earth Summit this year (Environmental Audit Committee, 2013).

The theorem states that it is impossible for the world economy to grow its way out of poverty and environmental degradation. In other words, sustainable growth is impossible 11 Consider the fact that a baby born in United States represents 280 times the impact on Earth as one born in Chad, Rwanda or Nepal (Baker, Susan, 2005) or that the wealthiest 20% of the world accounts for 77% of total private consumption.

2.1.3. DIFFERENTIATIONS There are also various frameworks of the sustainability concept. Most two-fold and four-fold distinctions are developed along the axis Cornucopian/ Neo-Malthusianism (or technological optimism/ pessimism), which is based on the distinction between cowboy/ spaceship economies by Boulding (Hardin, 1993). Below is a sample of the most prevalent ones. i.

Technological Optimism/ Pessimism (No-Growth/ Intervention)

One of the most prominent two-fold distinctions arose with the Limits to Growth debate of the early 1970s (Meadows D. , 2004), (see fig. 3). The pessimist distinction questions the effects of uncontrolled physical growth and asks whether technological innovation can provide economically viable solutions to environmental problems indefinitely into the future - while optimists would promote growth and innovation, pessimists would limit them. In the Limits to Growth debate, pessimists favoured interventionist no-growth policies, while optimists sought to liberalise markets and promote growth (Meadows D. , 2004). ii.

Weak / Strong Sustainability (Ecological Economists/ Environmental Economists)

In 1974 Solow proposes the Hartwick rule, which states that in order to maintain consumption over time rents from non-renewable resource depletion should be reinvested in non-exhaustible assets (Common & Perrings, 1992). The concept employs the so called weak sustainability concept12 - it presumes that natural and produced capitals are substitutable. On the other side, strong sustainability states that “economic progress should not be made at the expense of intergenerational equity and that “resources should not be exploited to the extent that their regenerative ability is compromised” (Nurse, 2006). The extreme view of the former is stationary state sustainability – or the views of deep ecologists which is covered further in the chapter. iii.

North/ South ( Rich/ Poor)

The argument here is that the North's concern for sustainability is typically environmental, seeking to protect standards of living that have already been attained, while the South's is developmental, focusing on poverty alleviation, improving education and health, and socio-economic development (Mayers, 2009).

It is a concept by neoclassical theory that claims that natural (ecosystem services 12) and produced (built) capital (infrastructure, labour and knowledge) are similar in character and can be substituted. (Dietz, 2007) It presumes that natural resources are abundant and inexhaustible and that environment and ecosystem services can be priced.

Fig. 4. Meadow's Framework (Meadows D. , 2004)

“I see the triangle as saying there’s no way human ends can be realised without healthy, functioning natural and economic systems” (Meadows D. , 2004)

TECHNOLOGY CRITICISM Under the influence of Rachel Carson's 1962 book Silent Spring which catalysed the environmental movement Norwegian Arne Næss developed the concept of technology criticism (also known as deep ecology) in 1973 (Dregson, 1995). The notion that “every living creature has an intrinsic value that is not quantifiable” firmly stands against techno-industrial society and still has its supporters 13 (Elkington, 2012).

Deep ecology claims that growth is inextricably connected to capitalism and metrics such as resource efficiency are not useful to the sustainability agenda. Computers bring on acceleration, and “acceleration in a world largely led by economic growth brings on damaged landscapes, extinct species, extreme poverty and lack of equity” (Confino, 2013). Instead of increasing and extending democracy it is widening inequality and growing disparities by adding another aspect to it – the digital divide and concentrating power in the hand of tiny elite (Confino, 2013). The

other

side

the

criticism

towards

technology

the

“loss of faith in technology as "the driving force of progress" (Smith M. R., 1994). The arguments of the notion are the declining innovation rates and the comparatively slow rate of progress as compared to early and mid-20th century (Cowen, 2011). The nuclear arms race during the Cold War, the Chernobyl Disaster, and the increased salience of environmental concerns are a few of the causes that brought the disassociation of science and progress (Bostrom, 2006). In Britain the mismanagement of the BSE outbreak (“mad cow disease”) eroded public confidence in Government science policy which further incited public opposition to the introduction of genetically modified crops. Broad efforts are underway to rebuild public confidence, to secure science’s “license to operate” and to change the “social contract” between science and society (Bostrom, 2006).

Prominent contemporaries are George Sessions, who covered the topic in Deep Ecology for the Twenty-first Century (1995) as well as Doug Tompkins, founder of North Face and Esprit and his wife – Kris Tompkins, the former CEO of the outdoor clothing and equipment company Patagonia, one of the companies considered world’s most prominent sustainability champion ( (Elkington, 2012)

2.1.4. BUSINESS AND POLICY PERSPECTIVE SUSTAINABILITY MEASUREMENT Can sustainability be measured? What should a sustainability index aim to achieve – confirm the sustainability of economic development, seek social optimality by increasing and optimizing welfare for current and future generations or place value on environmental assets? There is a wide range of sustainability indices used nowadays – a January 2014 review of the Compendium of Sustainable Development Indicator Initiatives, a database to date to keep track of SD indicator efforts, showed 895 entries (IISD). Even though sustainability indices have the potential to usher sustainability into action, their effectiveness to influence policies and business practices often remains limited. Governments have expressed their commitment to the goals of sustainable development by adding the dimensions of economic welfare, environmental quality and social coherence to the indices they currently use to measure their sustainability progress (Böhringer & Jochem, 2006). Indicators applicable to policy creation and in a business environment ultimately dependant on its bottom line need to be based on the index most often used within economic theory – GDP. However “GDP counts what does not count and does not count what counts” - it does not accurately account for welfare (Bergier, 2010). Sustainability indices are created to be transparent and precise, they cannot meet basic scientific requirements (weighting, aggregation and normalization), do not encompass sustainability in its entirety, face lack of available data or fail to comply with scientific aggregation 14 and are largely misleading when it comes to their actual application for the creation of strategic and operational policies (Böhringer & Jochem, 2006). There is still no common way of calculating and estimating economic growth, which accounts for the impact of economic growth on natural, social or human capital (Neumayer, 1998). Standard economic policies still aim for growth, thus “divorcing the short term from the long term” (Sachs, 2013). There is “no clear understanding of, let alone consensus around, what constitutes a sustainability objective or standard” (Pezzey & Toman, 2002).

Except for LPI, which, however, has its own flaw in the fact that it presumes that species can be substitutable.

CORPORATE SOCIAL RESPONSIBILITY Sustainability is also widely debated among environmental policy researchers and non-governmental organisations and appears within numerous corporate mission statements and environmental charters15, commonly as a Corporate Social Responsibility (CSR) policy. CSR16 incorporates the underlying concepts of corporate citizenship, fair business, responsible business (Blowfield & Murray, 2011). A classical definition of CSR would be the triple bottom line concept (TBL, 3P)17 of profit, planet, people according to which a sustainable business is one that can withstand external and internal shocks, creates economic value whilst contributing and acting in harmony with its societal and ecological environment (United Nations General Assembly, 1987), (Blowfield & Murray, 2011).

The CSR concept has become the dominant approach to public-sector full-cost accounting with the ratification of the United Nations and Local Governments for Sustainability (ICLEI) with a number of organisations already having formal TBL chapters18. Yet, the TBL concept that came to the forefront of public opinion in 1960s, has been widely contested during the last 50 years (Blowfield & Murray, 2011).

CSR becomes a hot topic in the 1980s, with environmental disasters such as the Bhopal pesticide factory and the Exxon Valdez oil spill pressuring corporations to become transparent and accountable in their operations. Large clothing companies such as Nike and Gap came under attack for use of child labour, food companies have been accused of growing obesity rates and even digital companies such as Google were reprimanded for their behaviour in China (The Economist, 2008) as well as for unethical tax behaviour in the UK (Houlder, 2013).

The evaluation criteria incorporating the concept of CSR or dealing with parts of it (e.g. the Electronic Industry Code of Conduct (EICC), SA-8000 used by Social Accountability International (SAI)), organizations providing assessment (e.g., Oekom-Research) and even guidance standards (e.g., ISO 26000 - Guidance on Social Responsibility) and BIP 2041:2004 (Implementing Effective Corporate Social Responsibility and Corporate Governance. A Framework) from BSI). Notable is also the Business Charter for Sustainable Development (ICC 2000) consisting of 16 principles that provide a basic framework of reference for action by businesses and recognised as a complement to environmental management systems (ICC Working Party for Sustainable Development , 2000). However, there is no single agreed to definition of CSR. (OMNEX, 2009). 16 The concept can be summarised in that it should ensure adherence to the law, ethical standards and international social norms which include responsibility for the impact of their activities, regardless of legality, on the environment, consumers, employees, communities, stakeholders and all other relevant members of the public sphere. Hence, â&#x20AC;&#x153;CSR is the deliberate inclusion of public (societal) interest into corporate decision-makingâ&#x20AC;? (OMNEX, 2009). 17 Abbreviated as TBL or 3 BL - Profit, People, Planet. It has become a largely utilised approach following the ratification of the United Nations and ICLEI (International Council for Local Environmental Initiatives) standard for urban and community accounting in 2007 (UNEP, 2011). 18 Among which Dow Jones Sustainability Indexes, the Global Reporting Initiative, Novo Nordisk and SustainAbility (Elkington, 2012)

Some authors criticise CSR in that it diverts a company from its primary objective of profitability (Friedman, 1970), others that it’s only a superficial term19 (Henderson, 2001; Porter & Kramer, 2011) and a third group purports that it aids and further reinforces the role of the government intervention (Henderson, 2001). In 2005 the Economist also runs a series of features that dismiss CSR (The Economist , 2004, 2005) only to profess 3 years later that corporate responsibility20 can no longer be disregarded by company executives (The Economist, 2008). Others view it favourably (Clegg, 2011; Ellis, 2010; Visser, 2012). Clegg’s CSR 2.021 is seen as consisting of value creation, good governance, societal contribution and environmental integrity, all of the above complemented by ethical standards – transparency in its manners of conduct with staff, shareholders, the press and the public, good employee relations, fair trade 22 with suppliers, distributors and partner organisations and good community relations, which implies good supply chain traceability (Clegg, 2011). The thesis will mainly rely on Michael Porter’s concept of shared value creation which encourages both businesses and the social sector to approach societal issues from a value perspective. The concept emphasises the connections between societal and economic progress which has the potential to “unlock the next wave of business innovation and growth” thus bring in “greater benefits for society”. He outlines three (3) ways for companies to create shared value opportunities: (i)

By reconceiving products and markets

(ii)

By redefining productivity in the value chain

(iii)

By enabling local cluster development (Porter & Kramer, 2011)

David Henderson, as one of the biggest critics of the term, claims it to be "lofty", to place "unrealistic expectations" and to be broken from traditional corporate value-setting (Henderson, 2001). 20 The Economist uses the concept of corporate responsibility rather than CSR, due to what it consider the “restrictive”, “social” part of the CSR concept (The Economist, 2008). 21 As compared to CSR 1.0 as public relations, philanthropy and the incremental improvement of CSR as based on the five principles of creativity, scalability, responsiveness, glocality and circularity (Visser, 2010). 22 Not to be mistaken with certification provided by the Fairtrade foundation. Yet, the principles of the Fairtrade foundation - namely better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing worldare closely related to what sustainable business in Clegg’s view stands for (Fairtrade Foundation).

2.2. DIGITAL INNOVATION 2.2.1. INNOVATION: CONCEPTUAL FRAMEWORK Innovation is the “introduction of something new” (Byrd & Brown, 2002). An expansion of the innovation concept is provided by Johnson: “The great driver of scientific and technological innovation in the last 600 years has been the increase in our ability to reach out and exchange ideas with other people, and to borrow other people’s hunches and combine them with our hunches and turn them into something new” (Johnson, 2011). He describes the concept of networked knowledge, combinatorial creativity and a remix culture now significantly enabled by digital technology – “gathering information, synthesizing it and drawing insights and eventually germinating ideas” (Johnson, 2011). The concepts above lay the principles of the open-source movement - “the open source code is not revolutionary; it has its core in creativity dating back centuries ago” (Johnson, 2011; Michellini, 2012). Innovation can be manifested in several ways. Sustaining innovations are incremental. Disruptive Innovation or disruptive technology, as defined by Christenson in “The Innovator’s Dilemma” (2000) is an innovation that helps create a new market and eventually disrupts an existing market and value network displacing earlier technologies. Innovations in technology are a classic example of the former – they transform entire markets or value networks (Christensen, 2000). Frugal innovation, also known as inclusive innovation, or reducing the complexity and cost of a good and its production, is a type of disruptive innovations often used to deliver product to the bottom-of-the-pyramid consumers (Kelland, 2012). In 2004 William Lazonick coins a new term, “indigenous innovation” – the development of a collective type of learning within the organization (Lazonick, 2004), a type of learning currently largely enabled by digital technologies. In the 1950s the economist Joseph Schumpeter adopts the term creative destruction from Karl Marx’s The Communist Manifesto to describe processes of transformation brought about by disruptive innovations which cannibalise the value of established companies. The only way for companies to avoid “being done-in by these disruptive innovations” is to embrace the innovations themselves and use them to transform their own fundamentals, including their business models and their culture (Reinert & Reinert, 2006). Creative destruction is often considered the key to achieving sustainable future and global sustainability - the “catalyst for creative destruction that offers unprecedented opportunities” (Reinert & Reinert, 2006). Drucker states that "entrepreneurial innovation will have to become the very heart and core of management - businesses worldwide recognise that early on and nurtured innovation as the ultimate

source of competitive advantage and have made promoting and managing innovation a priority (Drucker, 1970). Several attempts at creating an Innovation Creation Model have ensued after Drucker’s established the importance of innovation in a business context. Byrd and Brown introduce an “Innovation Equation model” where “Innovation = Creativity + RiskTaking” (Byrd & Brown, 2002) where the idea of “self-actualisation”, the last level of Maslow’s hierarchy of needs (Urwiler & Frolick), is “achieved through creative risk-taking”.

The Innovation Equation So then she said: What is creativity? And I responded: To create is to form that Which was not there yesterday, but tomorrow’s child. And then, he said: So what is risk taking? And I said: To take a risk is once unspoken, Now spoken-as in the night, we steal away like fairies On a trip with unknown travellers The combination of the two, creativity and risk taking, explodes that which has not been into the universe Innovation is thy name! J. Bird (Byrd & Brown, 2002)

Chris Conley, an innovation consultancy co-founder, establishes a model to understanding either the success or failure factors behind organisation’s activities by creating Innovation Equation: Vision + Invention = Innovation, which largely emphasises generating value for people (Paradis & McGaw, 2007). Despite their inherent differences what both paradigms establish is the importance of the human capital – the social element.

2.2.2. SOCIAL INNOVATION Many authors claim that social innovations, the blending of economic and social values which creates societal welfare (Santos, 2009), benefits the environment and takes care of the bottom line, is the key to human and societal development (Ellis, 2010; Goldsmith, 2010; Michellini, 2012; Mouleart, 2013; Mulgan, 2007, Santos, 2009). The notion implies a renewed concept of innovation – “social experimentation through power relationships which construct social innovation networks” (Drewe, Klein, & Hulsbergen, 2008). The notion is defined as creating “social value and change that drives social development and renewal in society” (Ellis, 2010) and “meeting a social need” by “organisations whose primary purposes are social23” (Mulgan, 2007). Laura Michelini’s broader definition includes the digital aspect – her view is that social innovation can be distinguished into (i) social business models, including social enterprises, (ii) social products and (iii) social communication strategies (Michellini, 2012). The search for answers to address complex developmental issues and find sustainability solutions has driven social innovation from a marginalised concept two centuries ago to being ubiquitous nowadays. 19th century saw earlier models of guilds being restructured from industry factories into cooperatives and trade unions, the spread of collective insurance against sickness and poverty as well as new traditionally based university models redesigned to answer the needs of modern industrial societies. It was during the time of industrialisation and urbanisation in the 19th century that accompanied the rise of social enterprises and innovation – that additionally included mutual self-help, microcredits, building societies, reading clubs as well as model towns and schools (Ellis, 2010; Mulgan, 2007). In Britain social innovation has been initiated not only by the civil society (new models of childcare Barnardos), the housing sector (Peabody), through community development (the Edwardian settlements) and social care (Rowntree) all of which were pioneered during the 19 th and 20th century, but also by social movements (civil rights movement in the 1960s) and by governmental organizations, welfare states, schooling systems and networks of adult education colleges built post 1945) (Mulgan, 2007).

According to Mulgan such organisations must have social purpose, be scalable, replicable and can include processes of innovation 23 that are either solely social in nature or have social dimension of much broader processes of economic change (Mulgan, 2007).

2.2.3. TECHNOLOGICAL DEVELOPMENT Technological revolutions are among the most important and consequential events that happen to humanity – they “reshape not only our material worlds but also our culture and our very human nature”. Yet their long-term impacts remain largely unpredictable (Bostrom, 2006). The Agricultural revolution came about in Mesopotamia eleven thousand years ago and ended the hunter-gatherer era. It led to increased populations and accelerated cultural and technological development. The invention of the Gutenberg’s printing press in 1448 fuelled the Renaissance, the Reformation and the scientific revolution and resulted in unprecedented increase in mass literacy (Bostrom, 2006). The Manhattan project during World War II, which led to the atomic bomb, was largely based on the scientific discovery of nuclear fission of heavy particles (Bostrom, 2006). In 1957 the competition for geopolitical rivalry marked the beginning of the space exploration era with the launch of Sputnik 1 into space. A year later the Defence Advanced Research Projects Agency, created to advance U.S. military technology, began developing a communication system to survive nuclear bombardment by the USSR. All of this led to ARPANET which was to later become the Internet (Bostrom, 2006). By the late 1990s the rapid development of the Internet brought about another change in the business environment, namely, the arrival of the 'digital economy'. The age of Internet began in the mid-1990s when on 9th August 1995, Netscape, a 16-month-old Silicon Valley start-up, went public24 (Lashinsky, 2005). A network that was until then primarily used by universities and research labs was transformed into a platform with a vastly expanded reach and connectivity allowing anyone with internet access to access diverse content, do transactions and communicate with people all around the world - a platform for innovation (Lashinsky, 2005). The speed and wide scope of Internet use since 1982 became a force for change in the global business environment, creating new business economies (Lambert, 2002; Rayport & Jaworski, 2001). It offered enterprises the ability of direct contact and electronic transactions with a global client base, often resulting in dramatic cost decreases and severely impacting the ways in which enterprises achieve competitive advantages. These global economic changes resulted in one of the most turbulent business environments in history (Lashinsky, 2005).

The shares initially priced at $28 a share, rose to as much as high as $75 on the day and closed trade for almost 2 hours (Lashinsky, 2005)

Technology has also had considerable impact in bringing about political or social change (Qualman, 2013). Digital technology innovation is claimed to be consistent in many ways with personal and social values and can be utilised as a way to improve participation and collaboration (West, 2011). Digital and social media has been considered “the biggest shift since the Industrial revolution” (Qualman, 2013). Since its inception Social media has been used as a means of organising civil actions and its increasing role in social change. As compared to the radio and TV which have respectively taken 38 and 13 years to reach 50 million users, it has taken only 9 months for Facebook to reach 100 million. Arab Spring was triggered by a single tweet and effectively utilised social media as a platform to spread information to promote insurgent agendas and organise collective actions (Lindsay, 2013). Digital activism during Arab Uprisings in 2011 confirmed the significant role of the impending social revolution and, more importantly, its ability to restore human rights, “create identities and spur action” (Faris, 2013). August 2011 UK urban riots which exposed the vulnerability of the state and the rising power of communities (LSE Public Policy Group, 2011). Occupy Wall Street, the movement has spread worldwide through the use of social media – through blogging platforms such as Tumblr, social media sites like Twitter and Facebook – is another testament to the amplifying and exposing power of social media to be used as a platform for change (Hgak, 2011). It even raised the question whether “Social Innovation equals social change? (Kanalley, 2011). In the late 1990s The Cluetrain Manifesto predicted the evolution of social business by stating that “markets will become conversations” (Locke, 2000). The term social business has come to also represents companies that are transparent, open and taking part in conversations – the biggest impact to be left by social media is in the social contract that businesses will establish with customers and employees (Solis & Li, 2013). The impact of social media on businesses is more than evident – Netflix suffered substantial losses 25 when it announced that it’s changing its pricing structure. Burberry is creating Burberry World, digital end-to-end solution in an attempt to connect customers, suppliers and vendors to the brand, KLM, one of the world’s largest airlines is effectively using Twitter to generate customer loyalty (Benioff, 2012). However, the Internet and the new information-based economy have brought long-term consequences and concerns - among which cyber security, virtual addictions, digital accessibility and literacy and rising new inequalities such as the growing digital divide which affects the majority of world population – 2013 estimate numbers indicate that 61% of world population still does not use the Internet (ITU, 2013). Indeed, does “social Innovation equal social change? (Kanalley, 2011). 25

The company lost 800,000 customers and two-thirds of its market value (Benioff, 2012)

2.2.4. DIGITAL SOCIAL INNOVATION The sustainability movement has been receptive to innovations in technology. The digital revolution and civic consumption have given rise to digital social innovation as a means of achieving sustainable development thus resulting in the social economy, an economy integrating the culture of Web 2.0 with civic purpose (NESTA, CABE, 00:/, 2011). Digital Social Innovation, the melding of digital and social innovation, ranges from the open data movement, big data26 as an innovation enabler, the spread of petitions on climate change and human rights, hyperlocal 27 media, networks of sensors and the Internet of Things to nanotech, artificial intelligence28 and synthetic biology (Young Foundation, 2006). It enables users and communities to collaborate through digital platforms to produce solutions for a wide range of social needs that have failed to be met by existing solutions and at a scale that was unimaginable before the rise of Internetenabled collective platforms (Nesta, 2012). From Brazil’s technological incubators that have been used to promote the solidarity economy (Mouleart, 2013) to Social Silicon Valleys created when intelligence and investment are devoted to innovation in technology (Young Foundation, 2006) and digitally empowering communities to overcome the usage digital divide (Young Foundation , 2010) the digital economy is becoming intertwined with the traditional economic creating changing the way business is being conducted in the digital state (Pont, 2013).

API’s, semantic web, databases, unstructured/structured/semi-structured data, visualisation, machine learning, data mining, analytics, natural language processing, sentiment analysis, data science, decision science, operational research, optimisation and lastly but least, algorithms (Bainbridge & Roco, 2007). See Apple’s Siri and Microsoft’s Cortana. 27 Information oriented around a well-defined community with its primary focus directed toward the concerns of its residents 28 Intelligence exhibited by machines or software, and the branch of computer science that develops machines and software with intelligence (Bainbridge & Roco, 2007)

2.3. SYSTEMS THINKING Authors have long begun to explore the potential of explanatory frameworks based on cultural theory, systems theory, complexity and plurality (Bergier, 2010; CaĂąas, Carff, & Hill, 2005) which are especially relevant in the following cross-disciplinary thesis. The review of the literature has shown that systems thinking has been both applied in the field of sustainability and in computer science and can indeed serve as the bridge between the two (Bertalanffy, 1968; Sterman, 2002). The thesis will hence view sustainability, digital innovation, and the crossing of the two, as systems thinking concepts â&#x20AC;&#x201C; instead of treating problems in isolation or ignoring the networks of feedback that bind us to one another and to nature we recognise that we live in complex systems and through systems thinking we can better understand and broadly view the interaction between different elements, the coevolution of structure and the dynamics that generate the complexity of our surroundings (Bergier, 2010; Sterman, 2002). Systems approaches within sustainability have arisen from work in ecology, particularly the concept of resilience in populations and ecosystems. In his seminal work, Holling (Holling, 1973) defined resilience, as opposed to stability, as the ability to persist by absorbing changes to key variables and parameters. Alternative understanding of SD established on systems thinking, system dynamics, adaptive management and non-linear systems are based on the assumption that human and natural systems are profoundly linked hence no issue is ever purely human or environmental (Sterman, All models are wrong: reflections on becoming a systems scientist , 2002).

Figure 4 provides a visualisation of

sustainability operationalized through systems thinking (Bergier, 2010).

Fig. 5. Sustainability operationalised through systems thinking (Bergier, 2010)

Truly complex systems can show even more interesting types of behaviour: computation, life and intelligence (Belt & Dietz, 2004). The power to add, change, evolve, or self-organise system structure through social production, crowdsourcing, peer production, web 2.0, or content generation is inherent within computational systems. The terms "systems theory" and "cybernetics", a term used within computer science which directly applies the concepts of cybernetics to the control of devices and the analysis of information, have been widely used as synonyms – first appearing in Wiener's Cybernetics in 1948 and von Bertalanffy's General Systems Theory in 1968 (Bertalanffy, 1968; Wiener, 1948). One of the most important tenets of the systems thinking concept is that “structure determines behaviour” (Bergier, 2010). Following a systems approach, we can define problems in a “dynamic way as behaviour in both space and time”. Models or systems tools are used to examine structures that might generate such behaviour. These mental models that shape real structures make sense of our surrounding world and prompt us to take action. If we are not aware of them we would not be able to identify our drivers. Systems thinking allows open space discussion of mental models through visual icons, verbal expressions and diagrams such as problem maps, (see fig.6, fig.7). Also, a systems perspective broadens a discussion by “placing events in a wider context both in space and in time” (Bergier, 2010), thus outlining patterns that are not evident at the immediate scale of the event.

Fig. 6. Basic systems concept (Bergier, 2010)

Conceptual modelling was developed in response to the failure of quantitative systems analysis to cope with sustainable development (Bergier, 2010). Our default human assumptions and bias is that chains of causation are linear, while systems thinking enables the understanding of circular patterns of causation. Causal loop diagrams provide an example of a qualitative systems tool where the modelling process starts by identifying variables and causal links between them, continues with identifying reinforcing or balancing feedback loops and chains of causal connections (Bergier, 2010). System dynamics, originally developed at the MIT Sloan School, is a way to map the behaviour of complex systems over time, taking into account both feedback loops and delays (Kruschwitz, 2012). In the business world, decades of group modelling experience have established a tradition of successful diagnosis and coordinated implementation of solutions to complex problems through business dynamics, industrial dynamics, industrial symbiosis etc. (Forrester, 1961, Sterman, 2000, Vennix, 1996). Resilience studies and mediated modelling are systems thinking applied with a policy view (Kruschwitz, 2012).

Fig. 7. Causal Loop Diagram: Qualitative system dynamic (effects of changes in municipal wastewater management (Arbor, 2010)

III.

METHODOLOGY

3.1. OVERALL APPROACH I have designed the present thesis as a theoretical-empirical qualitative study. The dissertation utilises qualitative research as opposed to quantitative since the aim is to explore “patterns of behaviour rather than predictions, forecasts or prognosis”, to determine causality, rather than correlation. While statistical analysis is performed on the basis of a priori assumptions within the work the focus is on the process (learning) as opposed to the product model or the results (Myrtveit, 2002). The research investigates the correlation between sustainable development and digital innovation through the use of both primary and secondary qualitative data. Collection of primary data through expert interviews was deemed necessary to support and complement secondary research findings. Bent Flyvbjerg writes: “Good social science is problem-driven and not methodology-driven in the sense that it employs those methods that for a given problematic best help answer the research questions at hand” (Flyvbjerg, B., 2006). Hence, an inductive approach – thematic analysis - has been used to analyse the data. Through observation and seeking patterns the thesis will arrive at broader generalisations. The bottom up approach is to be conducted through the process of coding 29 in emergent themes analysis. A multi-level approach has been selected to provide rich and detailed insight into the macro, meso and micro-levels of political economy, structuring factors and individual behaviours and actions respectively.

3.2. DATA COLLECTION 3.2.1. Research design and data collection

Secondary Research, the main research strategy and design, is to be supplemented by primary research so as to strengthen the validity of the question examined. Primary research is to be conducted through 8 individual semi-structured interviews with CEOs and managing directors, referred to as experts, from Accelerator London, London Metropolitan University’s business incubator. 29

Naming or identifying a label given to a specific segment of concept

The primary research was conducted will small enterprises, including micro enterprises based on the definition of the Department of Trade and Industry: a micro firm is on that has 0 - 9 employees, while a small firm: 0 - 49 employees, hence it includes micro and on section 248 of the Companies Act of 1985 which states that a company is "small" if it satisfies at least two of the following criteria: 

a turnover of not more than £2.8 million;



a balance sheet total of not more than £1.4 million;



not more than 50 employees (DTI)

Due to the relatively small size of the companies examined the interviews will be conducted solely with the founders or co-founders of the companies so as to yield better data in terms of quality and depth (Merriam, 2002). Since no rules for sample size in qualitative inquiry exist (Yin, 2008) additional interviews have been selected to the “point of redundancy”30, not representativeness, as is the case with quantitative studies. Additionally, since 4 to 8 case studies are considered optimal (Carson, Gilmore, Perry, & Gronhaug, 2001) the sample size within the thesis has been selected as 8 semi-structured expert interviews. As Robson (2013) states - the interview approach allows individual’s views and feelings to emerge, whilst providing the interviewer some control. The interviews will consist of problem and solution interview questions (Yin, 2008). Emphasis will be on problem and solution interview questions that will enable problem discovery, root-cause analysis and understanding. The original interview questions will be modified in the process of data collection to produce the extent and quality of rich qualitative data required and to inform the development of interview questions for the later stages of the research process (Yin, 2008).

The point is achieved when the analysis is not significantly enriched by admitting an extra case into the sample. Since every additional case provides less new insights then the previous one (as is the case with the theory of diminishing marginal returns in microeconomics) the aim is to diversify the selection (Lincoln Y., Guba E., 1985)

3.2.2. Interviews protocol construction

The unit of analysis, or unit of observation, is a small company31 working within the premises of a business incubator - Accelerator London. Semi-structured interviews were chosen considering the limitations in relation to time and appropriateness. This allows for freedom to delve into areas of concern further, yet has still kept the discussion focused. The interviews consisted of a core schedule that assisted the development of themes and patterns. Moderate modification of the questions was made along the process where considered necessary. The interview process consisted of 8 participants who are self-selected with each interview lasting up to 30 minutes and held on the premises of Accelerator London, a business incubator located in Shoreditch, London. All interviews have been audio-taped with the permission of the participants and then fully transcribed. To achieve greater clarity and precision edited transcriptions have been chosen over verbatim, hence "ums," "ahs", false starts, repeated words, or stutter has been deleted. Where possible grammar was corrected and spoken English has been edited into written English. Full explanation of the study was provided to the volunteering participants and confidentiality of the information gathered has been guaranteed in accordance with BERA guidance (BERA, 2011). Participation was optional and the option to withdraw at any given time was given – none of the participants withdrew. All of the above – an information sheet, consent form, semi-structured interview question (initial and its last iteration), an example of an email and the transcribed interviews have been attached as appendices. The interview questions were based on the research aims and objectives. The companies’ selection was random and largely based on the accessibility of participants and on the company’s business model. The requirement for the latter was that digital technologies had to be an integral part of their business model. Due to the location of the incubator (Tech City) practically all of the companies located within it could be defined as such

Method of Data Collection

Number of participants

Type of analysis

Expert Interviews

Eight (8)

Emergent Themes

Within the study a micro firm is regarded as one that has 0 - 9 employees, while a small firm: 0 - 49 employees (DTI)

3.3. DATA ANALYSIS 3.3.1. Dependability and trustworthiness Since in qualitative research there is no expectation of replication as is the case in quantitative research trustworthiness and dependability will be sought after instead of validity and reliability (Yin, 2008). One of the approaches to address the above in this thesis has been expert review. Experts have been provided with the opportunity to critique important aspects of the study thus ensuring expert validation at the end of the study. Credibility criterion and persistent observation have also been used to establish a match between the answers of the experts and the realities seen enabling me to identify the elements in the situation that are most relevant to the aims and research objectives (Carson, Gilmore, Perry, & Gronhaug, 2001). 3.3.2. Methods and techniques of expert interviews analysis Data analysis is a process of making meaning which involves a continuous interplay between data collection and data analysis; hence it is not possible to identify a single way of accomplishing qualitative research. Through the inductive approach, which uses empirical data, an analysis of the role of digital innovation in sustainability will be constructed through iterations and analysing consecutive data (Zaborek, 2009). The data is to be analysed immediately following the first interview so as to begin identifying themes and patterns and to facilitate subsequent data collection (Strauss & Corbin, 1994), (Stake, 1995). Thus, by working on a case by case basis so as to uncover themes the initial interview to be examined will serve as a comparison base for all other cases. Open coding, a process where â&#x20AC;&#x153;you work intensively with your data, line by line, identifying themes and categories that seem of interestâ&#x20AC;? as well as the traditional social sciences approach which allows the codes (themes/categories) to emerge during the data analysis will be both used (Creswell, 2005). Once the data from this research is examined through the open coding process, the categories for emerging themes in the data will be identified. To achieve this six step data analysis process suggested by Creswell will be used, however, not necessarily following the steps in a static, linear order. It will be conducted as follows:

Step 1: Organize and prepare the data for analysis. During the step all secondary and primary data is reviewed Step 2: Read through the data. The aim of this step is to get a general sense of the information, issues and emerging themes Step 3: Begin detailed analysis with the coding process. The material is organised into segments and the categories are labelled and separated into themes Step 4: Use the coding process to generate categories for analysis Description codes are generated, which highlight the major emerging themes, all the data is gathered and a general case study framework that will be used as the base for analysis is constructed. Step 5: Advance how the description of the themes will be represented in the qualitative narrative. Emergent themes will be summarised into narrative passages. Step 6: Interpret the meaning of the data (Creswell, 2005) According to Creswell the researcher’s views and background are an important part of the meaning making process hence the objectivity of the interview’s analysis can only be partial. Interpretation was used to find the linkages between digital innovation and sustainability as well as the repeating patterns within each interview. Cross interview analysis and cross-case search for patterns was used to supplement emerging themes as additional analysis methods. The aim was to identify, accentuate and analyse themes, differences and similarities across interviews and business cases. The latter has been supplemented by within interview analysis, when in-depth exploration of a single interview was needed to provide deeper understanding of the attributes and patterns of digital social innovation and the linkages between sustainability and digital technology present. Additionally, an attempt at analysing interviewees' words as responses to interviewers' elicits was to avoid quoting 'out of context' (Creswell, 2005; Yin, 2008). “Emergent” design suggests a process that is not predetermined so as to allow the researcher to extract the most meaning while ruling out alternative explanations. Hence the qualitative research design will evolve until data collection ends (Creswell, 2005).

3.4. LIMITATIONS, QUALITY AND ETHICS ISSUES

The examined concepts have differing meaning based on context. So as to overcome those weaknesses the conceptual and operational definitions used in the thesis are predominantly based on UK terminology and have been presented to the interviewees prior to the interview. Ethical concerns have been taken into consideration in the development of the interview questionnaire and the interview schedule. Both confidentiality and anonymity of participants’ personal details were assured and are non-traceable in the research. Full explanation of the research has been provided to those involved. All respondent participants have been notified of their right to withdraw at any stage or not to complete particular items if inappropriate or not applicable. The development and implementation of procedures and guidelines assisted with consistency and effectiveness which avoided considerable bias and enabled the assurance of validity and reliability through systematic collection of evidence and data. All data will be held securely. Yet, even though the interview questions were iterated, and improved with each subsequent interview and through the help of expert reviews certain biases and limitations have been faced: -

Location bias

All participants are residents of a business incubator based in Tech City, London, United Kingdom. That creates bias as refers to the location – areas, city, country-wise. -

Participation bias

An interview request was sent via email to 15 companies, randomly picked among the residents of Accelerator London. Out of the 8 companies that agreed to take part, all had male managing directors as well as a ‘sustainable’ angle to their business activities. -

The interviewer effect

The selection of one-on-one interview might have adversely affected interviewees’ - the presence of the researcher, could have prompted particular participants’ answers.

IV.

RESEARCH FINDINGS

4.1. BACKGROUND SMEs represent more than 90% of global business and account for approximately 50% of Gross Domestic Product of all countries and 63% of employment (ACCA, 2011). Yet, SMEs have generally been marginalised in the polemics concerning sustainability and business responsibility and have been slow to implement CSR strategies, to a large degree because they do not feel the pressure of shareholders typical in large-scale organisations. Currently, in the EU, only 29% of SMEs have introduced measures to save energy or raw materials (compared with 46% of large enterprises) and only 4% have a comprehensive energy efficiency system such as EMAS or ISO14001 as compared with 19% of large enterprises) (Calogirou, Parsen, & S., 2010). The success of an organisation is largely driven by their adoption of digital technologies and their ability to adopt it to transform to a differing economic and social environment (Locke, 2000). Social is flattening internal hierarchies, rewriting the possibilities of global collaboration inside and outside of organisational boundaries and allowing engagement with consumers as individuals (source). Taking into consideration SMEs importance in the world economy and their impact on the social and environmental aspects it is imperative that it is made easier for them to focus on sustainability, to innovate and realise that imbedding social and environmental practices in their business models would open up new markets, increase business opportunities, trigger innovation and increase their potential for efficiency savings (Calogirou, Parsen, & S., 2010). The interviews that were conducted aimed to reveal the ways in which small enterprises embrace digital technology and in what ways do they promote sustainability. Ultimately, the primary research aimed to examine where do both processes overlap and whether how can they reinforce each other. The initial interview questionnaire (see Appendix A-7.1.2) was predominantly composed of questions on digital technologies so as to be relevant for the businesses in Tech City. Postdigital innovation, or the five postdigital sources that are expected to lead to breakthrough innovations and thus transform the competitive business landscape (Gandhi & Briggs, 2013), namely analytics, mobile, social business, cloud, and cyber security, have been analysed. Alongside the interview process the questionnaire was substantially modified so as to provide more comprehensive view of the sustainability aspect, especially as refers to social and environmental sustainability.

4.2. EXPERT SELECTION CRITERIA “London is on top of its game….It has New York’s urban diversity, LA’s concentration of media, film, TV and creative industries and Washington DC’s proximity of government, all in one place.” Joanna Shields, CEO Tech City Investment Organisation

Fig. 8. Jason Hawkes, Tech City

The interviews were conducted within East London’s Tech City - a technology cluster located in Central and East London, United Kingdom. The cluster, created with the vision to be comparable to Silicon Valley, Northern California, United States, has a high concentration of digitally-driven companies and is considered an inter-disciplinary creative community (Ranger, 2014). At the time of writing (2014) the Tech City Map (Tech City Map), a project which claims to provide a compendium of East London's technology and creative ecosystem, lists 1,382 companies within the cluster. The interviews were conducted with a random sample of experts, managing directors of companies located within the premises of London Metropolitan University’s business incubator located in Shoreditch, Tech City - Accelerator London. The businesses and the location were selected for the following reasons: 1) Small enterprises Small enterprises lack the managerial, organisational and hierarchical structure of larger corporations – they are not scaled-down versions of large organisations. That results in lower bureaucracy levels, informality and provides freedom and power to innovate, adopt new technologies and, presumably, eases the implementation of sustainability practices. Agility, multi-tasking and flexibility are also typical for small and micro enterprises.

Small enterprises are additionally resource-constrained, it terms of financial resources, time, human capital. They are often in a high-risk business environment. A fast-paced, unstable and highly volatile context is an interesting research topic from a sustainability point of view â&#x20AC;&#x201C; a view that adopts a long-term systems thinking approach. 2) Digitally-driven enterprises The companies located in the technology cluster, Tech City, are largely digitally-driven. Thus, they are a good fit for a research which examines the impact of digital technology on people, businesses and culture, the relation between sustainability and technology as well as the use of digital technology to achieve sustainability objectives or promote sustainability. 3) Better accessibility As an employee of Accelerator London I had better access to potential interviewees.

A drawback to the selection of interviews is the fact that it will be difficult to contrast demographic groups or seek variations in context between interviews - most of the interviews were conducted with white, male participants on the premises of Accelerator London. The analysis is to be separated into categories with concepts as subcategories. They are to be composed mainly on the basis of the last questionnaire iteration - through â&#x20AC;&#x153;on-going tinkeringâ&#x20AC;? and adaptation the last version of the interview questionnaire provides us with richer understanding of the research topic. The themes analysis has been complemented by additional information provided by the interviewees, such as articles, podcasts, business presentations and resumes.

4.3. INTERVIEWS ANALYSIS Studies have proven that small enterprises have inherently more entrepreneurial nature (ACCA, 2011; Calogirou, Parsen, & S., 2010). The primary research and the interviews’ analysis unveiled that companies use the digital as a “simple, less complex, less expensive” tool and a way to survive economically – whereas their internal motivations, personal values and beliefs drive the sustainability nature of their enterprises. The research revealed that: (i)

An entrepreneurial, small enterprise environment is more beneficial to implementing sustainable strategies

(ii)

Start-ups and small enterprises are intrinsically better at melding “the sustainable” and “the digital”

Small enterprise are typically more adaptable, agile and quick to respond to changes in their environment and hence – more likely to innovative and to be early adopters of change. The lack of a deep hierarchical structure and low bureaucracy levels largely enabled the former. The obstacles the companies have faced are lack of financial resources, no track record, difficult access to the “right” talent and time constraints. The results of the interviews are based on four (4) main categories and eight (8) subcategories that emerged from the data analysis.

(i)

Sustainability

All small companies interviewed had a sustainable angle as part of their business strategy. Most of them had a ‘social theme’ to their business strategy (4 companies) or were entirely driven by a social purpose (1 company), whereas the rest either had an “environmental angle” (1 company) or a cultural element – e.g. aesthetics (1 company). While a company specialising in providing solutions to transportation management, is “trying to reduce congestion and environmental impact”, another was “changing the way people change” and a large percentage were improving accessibility. -

Collaboration: adopting the principles of the sharing economy

The sharing economy and collaborative consumption largely driven by technology, environmental concerns, community and the global recession also bring social and environmental benefits (Botsman & Rogers, 2010). According to participants “sharing the economic benefit” as is in the case of a company that provided a platform for truck sharing, thus reducing congestion, accidents and economics costs, has brought financial benefits and increase in well-being. Studies confirm that “online sharing is a good predictor of offline sharing” as well as that “online interactions with people have made them more open to the idea of sharing” (Botsman & Rogers, 2010). -

Reducing inefficiencies creates social and environmental benefits

Technology is “simple, less complex, less expensive”, “much easier, much cheaper” and often regarded as increasing efficiencies. “When you are small you tend to do the right things in the right order” – increased efficiencies are largely enabled by technologies, as claimed by one of the companies. A second company claimed that “it’s about reducing carbon impacts and as cities get more congested you will not build 20% more roads but you will have to manage road usage much better “. “Transport is a very inefficient - trucks go wrong 30% of the time”, “transport represents a quarter of the worlds’ carbon emissions and congestion is multi-billion pound in terms of costs just in London”

Hence, adopting a different approach to an existing problem and a largely inefficient industry creates a considerable environmental impact. -

Improving accessibility

A large percentage of the companies interviewed were focused on improving differing types of accessibility. Access to information by changing the “structure of information” (Forum for the Future, 2013) was the case of a company providing “access to information and then using that knowledge to re-interpret that data” through the use of digital tools, access to marketing programs for small enterprises was done by a second company: “we try to make something that was very expensive accessible to a broader public” while wider access to education for children with learning disabilities and special education needs was provided by a third one. Improving access and wider inclusion have proven to be a recurring theme and a driving force behind the social agenda of the companies interviewed.

Business responsibility There is an on-going debate on whether imbedding a sustainability policy can increase a company’s profitability and credibility. Yet, building the business case for sustainability in the case of a small enterprise can be even more difficult – they view it as a disadvantage (as compared to competitor companies in developing countries), stated the difficulty they would experience tracking the supplier’s side and that the investments needed for sustainable manufacturing would often be unbearable. The latter is reinforced due to the pressure the recession has had on consumers who are seen as unlikely to pay more for eco-products. Whereas a few of the companies would consider themselves a social business none of them categorise themselves as social enterprises.

The companies would claim to have “strong social agenda”, “huge human impact”to be about “social inclusion” and “socially–responsible”. However, their business responsibility was not structured in a formal way within a policy, strategy or through any sustainability targets. Personal values played a considerable role in shaping the social strategy within a small enterprise:

“I would like to do about more around social responsibility”, “I come from an environmental background”, “I come from a background where I used to work for 6 years for a charity”. -

Lack of motivation

The companies’ managing directors have expressed their desire to implement sustainability practices, but most of them were largely driven by their personal motivations and beliefs as opposed to envisioning potential cost savings. -

Lack of understanding and data availability

One of the companies’ managers claimed that: “It is very hard for us to measure our environmental impact”… “we don’t actually have a proper understanding of our impact of using the Cloud… like the increase in our footprint” He also mentioned that: “There are a lot of studies that have been done about use in the Cloud and how many CO2, what is the CO2 impact of Cloud-based searches” There is an increasing interest, desire for change and curiosity as concerns social and environmental issues even within resource-intensive industries, such as construction: “There’s the opportunity to use more recycled sands. We looked at whether we can mould surface textures into glass.”; “We’ve looked at different materials like aluminium, casted aluminium. Again, there’s the argument whether aluminium whether environmentally friendly or not.” Yet, the interview participants did not feel that there are policy and business incentives to conduct a socially-responsible business. -

Resource constraints

For a small company lack of resources in terms of money, time or human capital can be a considerable challenge when implementing a sustainability strategy:

“Since you are a small business there is always the “resource challenge” for your business and “how you prioritise things and decide on the things that will make your business a success”. Most of the business owners, even the ones that had a strong “social agenda”, mentioned resource constraints when providing reasons on why they have not implemented any sustainability programs yet: “The environmental aspect is not strong on our agenda. It is just getting things done on time and getting them through, it’s “running to stand still”. What was evident was that the sustainability practices within the companies mostly, if not exclusively, stemmed from the enterprise’s business strategy – the companies have unintentionally been created with a sustainable angle from their onset – be that because they saw a business niche, driven by personal values or even both.

(ii)

Entrepreneurship

Common and beneficial both for “the sustainable” and “the digital” is the internally entrepreneurial nature of small enterprises that allows them to “embrace change”, to accept failure, to experiment and provides them with the tools to act rapidly thus successfully adapting to an accelerating business environment. -

Adaptability, agility and speed

The “status quo bias” (Kahneman, 2012) is largely non-existent in small enterprises. Since the former cognitive bias often affects human decision-making and perceives a change from the status quo is often perceived as a loss (Kahneman, 2012) small enterprises are at an advantage in that respect. Such is the case with a company that has managed to transform its business ecosystem eight (8) times faster as compared to larger organisations (according to estimates provided by the co-founder of the company): “We have reengineered our entire company for 4 months”. -

Early technology adopters

Flexibility, to a considerable extent enabled by technologies, was mentioned as a significant advantage for small enterprises as compared to larger organisations:

“The way that we have overcome that is instead of going down the app route we have extended to HTML5 and we are using a web browser that uses generic tool devices innovating just be tweaking it a bit”; “Since we are a technology business, our customers recognise that bigger businesses cannot supply the type of technology which we are able to deliver by virtue of the fact that they are not nimble enough”. -

Innovation

What most of the examples listed about and many others exemplify is that digital innovation for development does not necessarily have to be inventing new technologies but about using existent technologies in innovative ways. As is the case with a company which delivers a type of frugal innovation, with a platform that is “changing the way people change” or with a company with the mission statement “Passion for innovation”, smaller companies are inclined to innovate because innovation provides them with a competitive advantage over larger organisations which are often seen as “not nimble enough”. Some the managers the small enterprises have moved from bigger to smaller organisations to be able to deliver innovation: “Across my innovation career across L’Oreal, Johnson & Johnson and Unilever I was looking for ways to deliver more destructive innovation”.

(iii)

The “human” element

People have natural inclination to refer to people, not processes, to refer to stories, not to data. When respondents diverted from the questionnaire they mostly diverted in the direction of people, feelings and subjective perceptions. As the interviewer I had to constantly refer to digital technologies but often mentioning “in the context of digital technologies” was perceived as artificially added to the conversation. As one of the managers has stated - while big companies have “the track record” to prove that they are capable of delivering products, services or systems “the biggest innovation assets within small enterprise are the people”. Human capital plays a major role within a smaller organisation. The social aspect was stated as much more important than the technological during the interviews. Most of the managers interviewed have claimed that people are the most important asset they have.

Additionally, as the founder of one of the companies has stated, one of the most important benefits and opportunities provided by the introduction of Internet was the possibility to “produce insight about people” as opposed to cooperation or collective intelligence. However, when referring to social responsibility one of the company’s managers stated: “From my perspective it (social responsibility) is not about collaboration but about the social effects of poverty… corporate social responsibility is more about improving the social aspects of the community”. Hence, both the lingo of sustainability and the digital need refining towards being more people-oriented, people-friendly and accessible.

(iv) -

Technology uses

Types of technologies used

The companies included within the study relied on a mix of technologies. As all of them stated technology is a tool and a way to achieve an end. It’s about the principles which it is supporting that are important, the way in which it is utilised and the person using it that is of importance as opposed to the technology itself. Big data and data visualisation were mentioned by one of the companies as their next development frontier. Developing business and policy-formulation tools which “recognise the complex, interconnected nature of ecological and socio-economic systems, including visualisation methods and appropriate metrics” (Fiksel, 2006 ) is a way to translate complexity into an understandable language accessible to a wider audience. -

Bridging the divide between the digital and people

Some companies viewed the bridging of the connection between technology and people both as a challenge and as one of their greatest opportunities – as was the case of the integration of natural language processing32 into one of the companies): “The biggest challenge is not the technology; it’s getting people to use the technology”. 32

Natural language processing (NLP) is a field of computer science, artificial intelligence, and linguistics concerned with the interactions between computers and human (natural) languages. As such, NLP is related to the area of human–computer interaction. Many challenges in NLP involve natural language understanding -- that is, enabling computers to derive meaning from human or natural language input.

As stated by one of the businesses the biggest challenge was not considered a technological one but rather behavioural change and increasing engagement: â&#x20AC;&#x153;The software makes sense only when a large number of people use itâ&#x20AC;?.

4.4. STUDY FINDINGS Advanced organizations view the social dimension not as a technology movement but instead one of culture and philosophy (Solis & Li, 2013). This thesis viewed it from both angles – namely the digital and the sustainable. A multitude of trends ranging from the rise of people-powered data, virtual reality, impact investment, and crowdsourcing are confirming that society and technology are acting and developing at the macro, meso and micro level. What has been made explicit both through the secondary research and the interview analysis was that people, or the social aspect, act as the unifying element between “the sustainable” and “the digital”. The dissertation aimed to bring in the macro, meso and micro level into the analysis. The latter two levels were predominantly explored through the interview analysis, since “emergent themes provide rich and detailed insight into the micro and meso levels of intersubjective experience” (SPRG, 2012) while the former – through the secondary literature review. The macro approach viewed the crossing of sustainability and digital innovation in a politicaleconomic context and focuses on the interactions between the state, markets and society. Digital and sustainability multidimensionality make it logical to pursue multi-level and multi-actor view. The meso-level’s approach was to investigate “actions in context” – more specifically, norms and engagement with social practices that are shaped or constrained by digital technological contexts. The micro-level approach focused on the individual level – on the range of habitual and intentional behaviours that affect social and environmental processes and systems in digital contexts (SPRG, 2012). The amount of global digital information created and shared, be that documents, pictures or tweets, grew 9 times in 5 years to nearly 2 zettabytes33 in 2011 (IDC, 2011). Media, data uploading and mobile sharing is growing fast, yet, is at its initial stage. Short term sharing (e.g. Snapchat) has grown more than 2 times in just 2 months. More than 100 hours of video are uploaded on YouTube per minute as compared to almost nothing 6 years ago (YouTube) (IDC, 2011). Technological accelerators of change are fundamentally driving new expressions of responsibility, democracy, transparency, self-organisation and cooperation. In seeking efficiency technology is widening access, making organisations leaner, increasing profitability, productivity and competitiveness. Also, digital innovation for sustainable development can work in two ways – first, by inventing new technologies and second, as is in most of the cases, by using existent technologies in innovative ways.

1 zettabyte = 1 trillion gigabytes

Analytics insights supports human decision making through the use of advanced statistical models and visualisation techniques to ignite “descriptive, predictive, and prescriptive decision and action” (Deloitte , 2013). The rhythm, dynamics and economics of investment are being transformed by the Cloud. The latter is introducing new or adjacent business models for sectors beyond high-tech, media, and entertainment. Subscription services have an acquisition model that is elastic both cost and capacity-wise. Cyber security and privacy are part of a constant conversation – guiding innovation in emerging spaces in advance of regulatory concerns, while also dealing with relentless and growing threats (Deloitte , 2013). Digital technologies are disrupting industries and driving innovation in sectors, settings and disciplines where the market and state are not as effective - and this is where the greatest scope for contributing to social change and sustainable development exists (Nesta, 2013). What are the trends, themes and issues behind the overlapping of “the digital” and “the sustainable”?

4.4.1. TRENDS (i)

Collaboration

In economics the “network effect” means that the value of a product or service depends on the number of others using it. Due to the high numbers and density of connections between users in web-based networks they provide great opportunities for the emergence of new forms of large-scale collaboration thus creating a new breed of collective intelligence (Sestini, 2012) as is the case with a platform used by one of the companies to reduce congestions. The coordination, the most difficult and complex part, however, cannot be based on a theoretical model but should rather emerge naturally (Sestini, 2012). Collaborative consumption is “rooted in the technology and behaviours of online social networks” – and it has reached an “inflection point” when the collaborative principles and shared behaviours can be applied to physical areas of our everyday lives - co-working spaces, borrowing, lending money, art creation (co-creation), co-sharing (Botsman & Rogers, 2010). Such is the case of one of the companies that creates a community both online and offline thus reinforcing the element of sharing. Collaborative consumption refers to our “social self”, the part of us that seeks connection and belonging (Brewer & Gardner, 1996). Big consumer brands such as Nike are shifting towards collaborative communities. Nikeplus, a non-media social hub and in many ways a cultural commons, co-created with Apple, fosters online interaction complemented by offline meetings - thus bridging the offline and online world. Mass collaborations such as mapping are also massively developing. “Digital Social Innovation in Europe” which creates living maps of organisation using digital social innovation and thus spotting trends, examining ways to create better policies, support the growth available for the initiative and enables the collaboration between organisations. Thus far 105 organisations in the UK have placed themselves on the map with a total of 260 organisations worldwide (DSI). Google’s Solve for X project is a “forum to encourage and amplify technology-based moonshot thinking and collaboration” to explore radical ideas and enforce collaboration. Similar is the thinking behind the Open Data Challenge Series launched by Nesta. The charity is exploring whether an inducement prize method to use open data can inspire innovations into diverse issue - crime, energy or even education.

(ii)

Communication

The drive to bond is intrinsically human - people like to form relationships with each other. Hence, social media has developed to be perceived as a “conversation open to everyone”. It is a “whole new level of innovative approaches and opinions that the community can tap into” (Digital organisers;, 2013). The rise of online communities proves that - technology forges connections and satisfies the basic human desire for communication and sharing. Online connectivity facilitates offline sharing and social activities. There are also many correlations between online and offline personae. Notwithstanding security measures it has been proven that “social media has broken down trust barriers” - the online interactions people have opens them to the idea of sharing with strangers offline (Gorenflo, 2010). Social ecology, which claims that individuals exist within social, cultural and environmental relations and are shaped by their concepts, can be a framework for “leveraging virtual contexts” to promote positive change in real-world behaviour. The digital tools and platforms satisfies an intrinsic human need to connect – to ask, share, create and contribute to communities that share one’s values. The “creative” class, as referred to by Florida, needs to live ‘a real life in a real place’, but in an inclusive community, with extensive bridging social class….a new type of community ‘having the potential to combine innovation and economic growth with authentic community and a better way of life’ (Florida, 2004). Creating open communities and associations that “provide an alternatives to individualism and anonymity” (Bergier, 2010) and satisfy the need for communication will keep growing and impacting our lives and more importantly, businesses (Nesta, 2013). With respect to businesses an IBM study claims that 85 % of users say social networks influence their purchasing decisions - customers are an organisations’ most important asset.

(iii)

Transparency & Accountability

“One of the embarrassing news anywhere in the world—“a child working on a piece of clothing with your company's brand on it, say—can be captured on camera and published everywhere in an instant, thanks to the Internet” (The Economist, 2008). Digital technology is providing society with “new lenses” - there is “unprecedented transparency in a time of tremendous global uncertainty” (Meeker & Wu, 2013). In 2012 increased percentage of social media users were complaining about brands and services at least once a month - 50 % more than in 2011 – has had a positive impact on business transparency. That has been exemplified by the growing numbers of open budgets, open governments, open source technologies, MOOCs and more (Nielsen, 2012) and open source innovative platforms – such as one of the companies interviewed, Google Solve for X or InnoCentive. In a video message to the global EITI conference Beyond Transparency held in Sydney on May 2013 David Cameron has stated: “Transparency is a top priority and ‘Open business is good business”. The Open Government Partnership was introduced in the UK in 2011 (Open Government Partnership , 2013), while a potential in increasing transparency in local government can be seen in new start-ups such as Captricity – a start-up that simplifies the transfer of paper data into digital format (Captricity). Transparency and good governance have also been driven up the global agenda - during the G8 in 2013, through EITI and its Transparency Initiative (EITI, 2013). Their role in civil society empowerment, capacity building, and poverty reduction, largely enabled by the digital revolution, have been an important side of the sustainable development movement (Elkington, 2012).

(iv)

Improving Access & Participation

Organisations are exploring ways to use digital technology to connect people to causes and take action. Digital technology has the power to transform volunteering as well as charitable giving. One of the companies interviewed is “imbedding its technology within a national volunteering database” to create a national volunteering service for professional volunteers. Also, some elements of the digital revolution have the principle of increased participation imbedded in them. This is particularly evident in the case of the rise of social media. As exemplified by social movements such as the UK urban riots, Arab Spring or Occupy Wall Street digital platforms have increased participation and transformed activism into action with much deeper and wider impact. From open networks, open data, open knowledge and open hardware, the open source movement is empowering consumers and improving access to data about our social, ecological and economic environments, while the Internet of Things is “a demonstration of the democratisation of technology and data” (Ilett, 2013 ). (v)

Dematerialisation

Data or cloud services dematerialise entire sectors, which leads to decreased pollution levels in terms of materials, transport, energy and increase in efficiency. The former can be exemplified by the increase in electronic media such as e-books or videoconferencing replacing physical travel (Forum for the Future, 2013). Dematerialisation strategies can be introduced at different stages of the product life-cycle (Bergier, 2010) and can create new business niches (Cloud.IQ, Carbon Voyage, Ibimidi). As one of the founders of the companies interviewed has stated when referring to environmental value creation: “If we take the example of our record being produced – less contamination, less manufactured pollution, less material, less people coming and going to work, everything is becoming more efficient, and therefore you would imagine that this brings good to the environment”. Yet, a big technological challenge as claimed by some of the other small businesses interviewed is that virtual space poses restrictions just as a physical space would. Digital data still requires additional physical space – one of the companies has claimed that “the sheer volume of data” has forced their company to use “offsite storage”.

4.4.2. ISSUES Technological developments have had major impact on human society by creating both problems and opportunities. Internet’s bottom up evolutionary development, lack of protection and regulations have allowed for the creation of “innovation applications and unprecedented possibilities” (European Commission, 2010). The spread of the digital has led to an increasing dependency which has bred deep potential vulnerabilities – technical such as security and resilience, legal - privacy and trust, or personal – addictions, accessibility, digital mobility and literacy issues (European Commission, 2010). Yet, reversing the direction of the movement is neither feasible nor desirable (Bostrom, 2006). Cyber security and Internet privacy are an increasing issue within small enterprises – most cyber-attacks are targeted at SMEs. However, surveys among small businesses have revealed that small businesses are plainly aware of cyber threats – 60% of small businesses don’t use anti-virus technology and 66% fail to secure online banking machines (Symantec, 2010). Digital technologies are also underexploited. The former raises the question of an increasing digital divide, limited accessibility and inclusiveness. The need to improve connectivity and decrease the digital divide is evident “One-fifth of all households in developing countries are now hooked up to the internet - up from 13 per cent just three years ago” (United Nations, 2013). Bioethics and technology‐related fields of applied ethics such as computer ethics and especially nanoethics are currently posing more questions than can be answered (Bostrom, 2006). A concern that has arisen during the primary research was technological singularity or the progress of artificial intelligence (Kurzweil, 2006). Ethical issues related to human enhancement technology – what is known as “NBIC” convergence, the integration of the neuro-bio-information and cognitive sciences, have come to the fore. They are expected to transform not only human society, but also human nature (Bainbridge & Roco, 2007). Hence, the issues that need to be addressed are not only effective regulatory governance of globally networked socioeconomic systems, but also introducing and considering social and psychological elements within the debate (European Commission, 2010).

4.5. SUMMARY A “status quo bias” (Kahneman, 2012) is largely non-existent in small enterprises. Hence, they are more likely to be innovative, flexible and quicker in either delivering the type of innovation typically not seen within larger organisation, exploiting technology in innovative ways or being early adopters of technology. All small businesses interviewed had a highly entrepreneurial nature which has enabled them to “embrace change”, accept failure and experiment. It has also provided them with the tools to act rapidly thus successfully adapting to an accelerating business environment. All companies had a ‘sustainable angle’ as part of their business agenda. Most of them had a ‘social theme’ or were entirely driven by a social purpose. The ones that did not had an environmental or a cultural element within their business strategy. However, only a few of the companies would classify themselves as a social business, while none - as a social enterprise. The companies would claim to have “strong social agenda”, “huge human impact”, to incorporate “social inclusion” or be “socially–responsible”, however, their business responsibility was not structured in a formal way within a policy, strategy or through any social, environmental or ethical targets.

The official reasons stated behind their decision not to have developed any form of

sustainability agenda have been lack of time, motivation, awareness or data availability. Building the business case for formally implementing sustainability in the case of small enterprise can pose difficulties. Most business managers view it as “divorced from financial business objectives”, stated the difficulty they would experience tracking the supplier’s side and that the investments needed for sustainable manufacturing do not outweigh the benefits. The latter is reinforced due to the pressure the recession has had on consumers who are seen as unlikely to pay more for eco-products. Their arguments have raised the question whether small enterprises need to formalise sustainability within their business strategy. Large numbere of the companies interviewed were already focused on improving differing aspects of sustainability such as types of accessibility. Improving access and wider inclusion has proven to be a recurring theme and a driving force behind the social agenda of the company interviewed – either by changing the “structure of information” (Forum for the Future, 2013) or providing access to previously marginalised part of the population.

The companies included in the study relied on a mix of technologies but all of them recognised that the principles technology is supporting are more important than the actual tools. Increased efficiencies have also been largely enabled by cheap, accessible and flexible technologies. Human capital has a major impact and an important role to play within smaller organisations - “our biggest innovation assets are people”. When referring to the biggest technological challenge they have faced the answers were always that it was not considered a technological one but rather inducing behavioural change. Bridging the divide between technology and people is seen both as a challenge and an opportunity in a small enterprise. Fostering engagement through tools such as big data and visualisation, translating complexity into an understandable language accessible to a wider audience and promoting behavioural change by “drawing insight about people” through technologies were seen as big opportunities. The small organisations that have been interviewed simultaneously had the advantage of quick implementation, rapidity in response, greater awareness of technology and a nature that is intrinsically sustainable. Hence, they are seen as an ideal breeding ground for sustainability through the use of digital tools. .

DISCUSSION, RECOMMENDATIONS AND CONCLUSION

This final chapter expands the discussion on the thesis topic, explains the limitations that affected the process of this research and provides recommendations for future research. It further brings all the findings made in this paper together and draws a compact, brief conclusion.

5.1. DISCUSSION The Internet has enabled setting up and running a business - “more and more people are shifting online to survive”. In the UK alone “99.9% of all businesses – and of these no less than 95.4% are micro businesses employing fewer than ten employees” (Lord Young, 2012). Technological development presents new and innovative approaches to running a business, including “driving business solutions to meet social and economic needs” and supporting “ethical and environmentally friendly consumerism” (Lord Young, 2012). Hart and Milstein claim that visionary companies can redefine and redesign their industries toward sustainability – and when big corporation are “incapable of driving the process of creative destruction” entrepreneurs and new market entrants will do. Innovators and entrepreneurs will view sustainable development as one of the biggest business opportunities and they are to achieve it through what they dub as sustainability-driven creative destruction. (Hart & Milstein, 1999). Radical technology change driven by SMEs could act as huge stimulus for economic activity (Drexhage & Murphy, 2010) but “growth” needs to be viewed in an integrated perspective”, in a systems approach perspective. As Jason Jay, the director of the MIT Sloan Initiative for Sustainable Business and Society, claims: “technology and innovation, coupled with a voluntary “limits to growth” — as demonstrated by companies such as Patagonia — are high leverage points (Meadows D. , 2004) in making this change and creating a more sustainable world” (Kruschwitz, 2012). As the late Meadows states when referring to highest order leverage point, the place “within a complex system…where a small shift in one thing can produce big changes in everything”. is the “power to transcend paradigms” or “to stay flexible, to realise that no paradigm is true” (Meadows, 1999) . Digital technology is a medium, a tool – what it can achieve is only determined by the ones that are using it. The question to be asked is: “What would, should and can companies and individuals aim to achieve through the use of digital technologies?”

Building the case for sustainable development in a digital world A decade ago CEOs were sceptical that the ‘sustainability’ agenda could benefit their business or the bottom line the landscape has changed. Now, the United Nations Global Compact-Accenture 2010 CEO study has shown that 93% of CEOs believe sustainability will be critical to the future success of their companies. 80% believe a tipping point will be reached within the next 15 years (2025), where sustainability will be embedded in the core business strategies of most companies, and 54% believe this point could occur within the next decade (Lacy, Cooper, Hayward, & Neuberger, 2010). We are living on the verge between the analogue and the digital, “every business is now a digital business” (Millman, 2014). Digital representations are simply an approximation of analogue events in the form of digital media, “electronic media that works on digital codes”. Digitalisation, digital systems increasing information intensity and connectedness of physical resources thus creating information that is easy to store, manipulate and share virtually, is largely changing the performance, value and cost of resources (McDonald & Rowsell-Jones, 2012). The thesis has revealed is that “start-ups and small enterprises are intrinsically better at melding “the sustainable” and “the digital” and that an entrepreneurial environment is intrinsically better for implementing sustainable strategies. Indeed it is also easier to create a sustainable company “from scratch” as opposed to implementing a CSR strategy within an established corporation. The systems thinking method supports that there is not one model, system or solution – but there are principles to be followed, there are “leverage points” within a system that can enable behavioural changes and paradigm shifts. The two trends, of sustainable development becoming an integral part of business and digitalisation becoming ubiquitous, albeit their differing nature, are occurring simultaneously and shaping businesses. What are the ways in which they can act synergistically - by reinforcing and collaborating with each other? What are the lessons to be learned from small enterprises? Below are four simplified principles which intend to build on the case for imbedding sustainability within a digitalised world. They are based on a systems thinking approach, on the interviews’ analysis findings and complemented by recommendations for management and policy tools.

(i)

Encourage Start Up Thinking

According to Clayton Christenson big companies have developed “out of small, nimble and innovative teams to carve their market leadership position through execution and differentiation”. However, their size has inevitably slowed the pace at which they deliver innovation (Christensen, 2000). Exceptions like Apple, Intuit and Facebook prove that the innovator’s dilemma can be avoided, yet it still remains a major issue for larger organisation. The entrepreneurial nature of small enterprises which “embraces failure, uncertainty and ambiguity”, promotes innovation through pivots, iterations and “tinkering” and leads to increased creativity, agility and the ability to respond to market changes can serve as a guidance for bigger organisation. In small organisations technology enables the “time reduction between pivots” which leads to more experimentation, more iterations and increased chances of success for businesses – before they “run out of money (Haymes, 2013). A similar attitude can be effective in looking for solution to sustainable development - as opposed to making big shifts small-scale alterations and experimentation with ideas, business models and methods can be better suited to find sustainability niche and solutions (Solis & Li, 2013). “Often, tweaking something that already exists and making it simpler or better is a fast route to success. Until around 1800, shoes were made without differentiation for the left or right foot, it took a bright spark to realise that there could be a better design than the one that had lasted centuries.” (Smith L. , 2013) According to Loudon companies committed to innovation can take greater advantage of new markets as well as maintain and grow their existing business during downward cycles. (Loudon, 2001). Replacing products with services, or dematerialisation, constitutes a far-reaching innovation, which enables and increases efficiencies and brings in a “novel way of supplying the function to the end users” (Bergier, 2010). Inclusive innovation, defined as developing products, services or systems that are accessible to the poorer socio-economic groups (Wladawsky-Berger, Irving, 2012) , on the other side, can serve the bottom of the pyramid through low-cost or resource constrained innovation” (Innovation for Inclusive Growth , 2010). There is an increase in the number of accelerators, incubators and innovation labs on a global scale, and especially in the UK. Incubating businesses during their first stages of their existence can be a tool to foster entrepreneurship, increase survival rates and incubate sustainable innovation (Young Foundation, 2006).

(ii)

Communication openly, collaborate increasingly

Effectively communicating sustainable development successes, policies, and learning is a pivotal moment in behaviour change and translating strategy into action. Behavioural change, engagement and pushing a corporate culture in a new direction are an important element of driving a sustainability agenda and achieving a company’s financial or social targets. The beginning that would benefit sustainable development is when it is taken out of the environment “box” thus considering wider social, economic, and geopolitical agendas. A communications vehicle that has “effective access points” will help initiate and maintain the implementation of sustainable development (Drexhage & Murphy, 2010). Gamification, applying the principles of games within non-game contexts can be an interactive platform to engage customers, employees and various stakeholders. As is in the case of one of the companies interviewed, a similar approach increases participation, engagement and thus provides access by “including the previously marginalised”. The field of data visualisation, defined as the “the next frontier” for one of the businesses and for similar innovative platforms, can serve as the intersection between the digital and the sustainable. Breaking barriers and distilling the complexities of the sustainability movement into simplicity is now largely enabled by technology. Hellicar & Lewis, a studio delivering projects within education, health and performance contexts through the combination of art, technology and design create interactive experiences in the real world thus making “feedback loops between people, places and technology”. Instead of focusing on the features technology is providing, the focus has to be on engagement by creating “interactions that are joyful” to the people using them (Hellicar & Lewis, 2013). The interviews and examples previously given signify that collaboration, sharing practices, adopting open-source technologies, and open and transparent communication can increase the engagement among stakeholders and thus result in a higher-level “playing field” for SMEs, larger organisations, academia and governmental bodies, not only in economic, but also in socio-ecological and ethical terms. Implementing holacracy, a system of organizational governance with flattened hierarchy and selforganizing teams, can additionally increase accountability, transparency and efficiencies and encourage stakeholder initiative, satisfaction and contribution to the overall company goal (Parr Rud, 2009).

(iii)

Change your metrics, change your attitude

“New metrics will need to measure and report on the interconnectedness of various agendas—such as trade, finance, environment, and food. Fundamentally shifting how we develop and evaluate the health of economies, using a “Sustainable Economy” as a framework” (United Nations General Assembly, 1987). Diverse groups, frameworks, policies and experts claim that it is increasingly important to implement metrics to assess life-cycle assessment and design as well as set targets such as carbon and energy commitments (Elkington, 2012). However, often businesses “treat the need to become sustainable as a corporate social responsibility, divorced from business objectives” (Nidumolu, Prahalad, & Rangaswami, 2009). As was explored within the thesis sustainable development is a complex system, not a single concept, target or a model to be followed. As stated during the United Nations General assembly, “it is time to implement and see if all the years of analysis and design will bear fruit (United Nations General Assembly, 1987). Trust is “needed to promote meaningful long-term exchanges and partnerships”, to foster accountability and promote openness (Elkington, 2012). Accountability based on measuring the impact of actions and not only on what actions have been taken can be the backbone of a reformed, sustainable and performance-based development system. For example pollution has system impacts within the biosphere; hence the solution to treating it needs to be designed to have similar effects (Elkington, 2012). The systems thinking approach is largely imbedded with open innovation processes, computer-based simulations (Meadows, 2004) and especially within scenarios. Digital technologies are unparalleled in their ability to simplify and optimise complex data into usable information. My personal training in Shell scenarios (Shell International BV, 2011) during my master’s degree has largely persuaded me that scenarios can be an important element of strategy development. Imbedding scenarios within the business agendas of SMEs or larger organisations can be powerful strategic decision making tool - they can raise awareness, assess the risks involved and the opportunities present.

(iv)

Partnerships

There is a need for political leaders to work with the private sector to encourage innovation in different policy areas (West, 2011). Collaborations between the government, business and civil society can provide a powerful tool to scale-up potentially successful approaches to sustainability. Public funding can leverage sustainable private investments, while private sector incentives can further stimulate participation, collaboration and wider involvement in the policy-making process. Vuk Jeremic, the president of the UN General Assembly, claims that information and communication technologies (ICT) can further contribute to the eight anti-poverty targets known as the Millennium Development Goals and a sustainable development agenda to follow after 2015. What he points out as the solution is “public-private partnership who help expand broadband infrastructure in the developing world, provide local content and develop regionally-appropriate software applications” (United Nations, 2013). The MDGs have been successful because they “gathered together public-health experts, industry leaders and government officials to create a new public-health ecosystem”. Similar collaboration of can accelerate progress in different types of areas related to ecological and socio-economic systems. (Sachs, 2013). An integrated dialogue among businesses, the government and the academia which recognises the complexity of our socio-economic and ecological surrounding that based on a cooperative approach and developing policy-formulation tools also includes visualisation methods and appropriate metrics (Fiksel, 2006 ). Mediated Modelling is an approach used within system dynamics that enhances the use of computer models as tools to provide guidance to policy and management decisions. By bringing together diverse interests to raise the shared level of understanding and foster a broad and deep consensus, it provides a structured process based on system dynamics thinking in which community members, government officials, industry representatives, and other stakeholders work together to produce a coherent, simple but elegant simulation model and thus arrive at sound decisions about society and the environment (Belt & Dietz, 2004).

5.2. LIMITATIONS AND RECOMMENDATIONS FOR FUTURE RESEARCH The findings gave answers to most of the questions posed, some of which were already proven by other researchers in different contexts and/or settings. However, while the field of sustainable digital innovation practice is growing rapidly, there is little knowledge around what best practices looks like, who the digital social innovators are and what strategic approaches can best support its growth. Also, in an attempt to generalise the findings of this research, one must be careful due to a number of factors that were involved and might seriously affect the generalisability of the data displayed in this paper. Due to the shortage of resources and narrowly limited time allocated to execution of this research only 8 interviews were conducted. The interviewer effect, participation and location bias, the size of the companies as well as the limited sample could have created certain bias in terms of generalisability. Therefore, it is highly recommended to repeat this research in a wider time frame, wider geographical areas as well as to reach a larger proportion of the population. Furthermore, qualitative research was preferred over quantitative since the aim of the thesis was to explore â&#x20AC;&#x153;causality over correlationâ&#x20AC;? (Myrtveit, 2002). However, time series, cross section data and statistical relationships can be used both in the model construction phase and in the validation phase using complementary methods that complement each other can improve decision making. Additional areas to be explored include sustainable entrepreneurship, social business incubation and innovation, new forms of intergenerational policies and ethics in digitalising world, sustainable productservice-system innovations in a digital age.

5.3. CONCLUSION “There is no alternative to sustainable development” (Nidumolu, Prahalad, & Rangaswami, 2009). With increasing digitalisation of the world around us the pressing need to apply the principles of sustainable development through digital innovation is undeniable. Digital technology and social innovation have an important role to play in meeting the interconnected challenges of poverty alleviation, social justice and environmental and economic sustainability - today and in the future. The aim of this dissertation was to focus on a limited sample of companies located within Tech City and explore whether and how digital technologies employed with the enterprise promote sustainable development. The research revealed that small enterprises are inherently better suited to promote a culture of sustainability and can effectively meld the technological and sustainable aspects within their business strategy. The study additionally revealed that digital technology can deliver on a social level and thus add value to individual’s lives through shared value creation, wider access, transparency, openness, participation. However, digital technology is an enabler and it is the interactions that it is supporting and accelerating that can provide solutions to sustainable development. Hence, while it can empower, it can also constrain through a widening digital divide, limited digital accessibility, virtual addictions, restricted digital mobility or security threats. Adopting the entrepreneurial principles driving small enterprises, such as agility, innovativeness, experimentation and “embracing failure, uncertainty and ambiguity” around a digitally driven business strategy while being driven by true personal values, a purpose or a mission statement can simultaneously provide competitive advantages and contribute to environmental and social value creation. It is increasingly hard to live a purely analogous life – technology is ubiquitous, digital information is more than we can process or consume. Yet, it is still developing. Hence, there is the rare chance to create the rules and set the standards within a system that is just being formed. It is an opportunity and a responsibility to choose the normative models to achieve desired social outcomes (Bostrom, 2006) and shape a scenario framework that would enable “…better quality of life for all, now and into the future, in a just and equitable manner, whilst living within the limits of supporting ecosystems” (Agyeman, D. Bullar, & Evans, 2003). “The future is not simplicity, but complexity, better understood” (Robertson, 2013). There are still questions to be answered, yet when referring to systems dynamic, Sterman states:

“It’s by asking those ‘‘why’’ questions that we come to understand that we are all embedded in systems, some natural, like the global climate, and some of our own making, like our schools, businesses, communities, and economies. It’s by asking those ‘why’ questions that we gain insight into how we are both shaped by and shape the world, where we can act most effectively, where we can make a difference—and what we are striving for.” (Sterman, All models are wrong: reflections on becoming a systems scientist , 2002).

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VI. Appendices 7.1.

Appendix A: Interview Protocol and Corresponding material

7.1.1. Consent Form

I………………………………………agree to participate in Natali Dimitrova’s research study. The purpose and nature of the study has been explained to me in writing. I am participating voluntarily. I give permission for my interview with Natali Dimitrova to be tape-recorded. I understand that I can withdraw from the study, without repercussions, at any time, whether before it starts or while I am participating. I understand that I can withdraw permission to use the data within two weeks of the interview, in which case the material will be deleted. I understand that anonymity will be ensured in the write-up by disguising my identity. I understand that disguised extracts from my interview may be quoted in the thesis and any subsequent publications if I give permission below:

Please tick one box: I agree to quotation/publication of extracts from my interview I do not agree to quotation/publication of extracts from my interview

Signed…………………………………….

Date……………….

Information sheet Purpose of the Study As part of the requirements for a master degree at London Metropolitan University I have to carry out a research study. The study concerns the role of technological innovation employed by SMEs in promoting sustainable development. What will the study involve? The study will involve a semi-structured interview, consisting of 1 central question and 7 sub-questions. The interviews will be conducted with 1 representative (preferably a business owner) from 12 companies located on the premises of Accelerator London. The interviews will be tape recorded and will take up to 30 minutes. Why have you been asked to take part? You have been asked to take part in the study since you are representative of one of the 12 companies that have been chosen to participate in the study. Do you have to take part? No. Participation in the research project is voluntary. By signing this consent form you agree to participate in the study. You can withdraw before the study commences (even if you have agreed to participate), discontinue after data collection has started or withdraw within two weeks of participation and ask to have your data destroyed. Will your participation in the study be kept confidential? Yes. Your interview transcript will be kept confidential. Only quotes that support statements within the thesis will be included as parts of it. What will happen to the information which you give? The information you have given will be kept confidential from third parties (including employees and employers). What will happen to the results? The results will be presented in the thesis. They will be seen by my supervisor, a second marker and the external examiner. The thesis may be read by future students on the course. The study may be published in a research journal. What are the possible disadvantages of taking part? I donâ&#x20AC;&#x2122;t envisage any negative consequences for you in taking part. Any further queries? If you need any further information contact me: Natali Dimitrova, 0798 462 3443, nataliedimitrova@gmail.com.

If you agree to take part in the study, please sign the consent form overleaf (refer to previous page)

7.1.2. Semi-structures Interview Questionnaire 2.1. Initial version We are currently in a state of an Internet based digital revolution, when every business is claimed to be a digital business. Four forces are shaping the internet: stakeholder conflicts, changing infrastructure and socio-technical context, governance and regulation, and user focus. The dissertation aims to answer how does digital technology used by SMEs contributes with better solutions to sustainable development. The main aim of the interviews is to explore to what extent, in what ways and which types of digital technologies are incorporated within SME businesses, which of them lead to digital innovation and, how, either directly or indirectly can digital innovation contribute to social, environmental and economic sustainability. Four major IT trends are each gathering speed while interacting with and amplifying each other: (1) Mobile devices (2) Cloud computing (3) Social networks (4) Big data and analytics. 1.

Which out of (1), (2), (3), (4) hold the biggest potential for your company? In what ways?

How does your company engage with (1), (2), (3), (4) (For example, what kind of social networks do you use in your business?)

How has digital technology benefited your company?

What is the greatest digital technology challenge that your company has faced up until now? How did you overcome it?

What are the advantages and disadvantages in being an SME when it comes to technological innovation (small scale innovations are more easily implemented, greater flexibility, disruptive technologies â&#x20AC;&#x201C; as compared to sustaining technologies used by corporations and government)? Do you think that your company keeps up with the advances of digital technologies?

How has digital technology been deployed to improve participation and collaboration within your business?

What opportunities does your company see for economic and societal value creation through digital technologies?

Which are the emerging digital innovations that you believe will shape the future of business and particularly, your business, in the next 5 years?

2.2. Last iteration We are currently in a state of an Internet based digital revolution, when every business is claimed to be a digital business. Four forces are shaping the internet: stakeholder conflicts, changing infrastructure and socio-technical context, governance and regulation, and user focus. The dissertation aims to answer how does digital technology used by SMEs contributes with better solutions to sustainable development. The main aim of the interviews is to explore to what extent, in what ways and which types of digital technologies are incorporated within SME businesses, which of them lead to digital innovation and, how, either directly or indirectly, can digital innovation contribute to social, environmental and economic sustainability. 1. 2.

Can you introduce yourself? Can you give a brief introduction of the company you are representing?

Four major IT trends are each gathering speed while interacting with and amplifying each other: (1) Mobile devices (2) Cloud computing (3) Social networks (4) Big data and analytics (5) Cyber 3.

How does your company currently engage with (1), (2), (3), (4), (5)? Can you provide examples?

Which out of (1), (2), (3), (4), (5) holds the biggest potential for your company? (For example, what type of social networks do you use within your business?)

What is the greatest digital technology challenge that your company has faced up until now? Have you managed to overcome it? If yes â&#x20AC;&#x201C; how?

What are the advantages and disadvantages in being a small enterprise when it comes to technological innovation? Can you provide examples?

Do you have a sustainability policy? Do you plan on imbedding one? If not â&#x20AC;&#x201C; why?

How does you company currently address: i. ii.

Social responsibility issues? Environmental responsibility issues?

What future opportunities do you see within your business for: i. ii.

Social value creation? Environmental value creation?

through digital technologies? 10. Which are the emerging digital innovations that you believe will shape the future of business and particularly, your industry, in the short, medium and long term?

Definitions DIGITAL TECHNOLOGIES: The use of digital resources to effectively find, analyse, create, communicate, and use information in a digital context. This encompasses the use of web 2.0 tools, digital media tools, programming tools and software applications. DIGITAL INNOVATION: Innovation through the layered modular architecture (a type of product architecture born out of digitalisation) that extends the modular architecture of physical products by incorporating four loosely coupled layers of devices, networks, services, and contents created by digital technology. DIGITAL SOCIAL INNOVATION: A type of social and collaborative innovation in which final users and communities collaborate through digital platforms to produce solutions for a wide range of social needs that have failed to be met by existing solutions and at a scale that was unimaginable before the rise of Internet-enabled collective platforms (ex. Google Solve for <x>, a forum to encourage and amplify technology-based moonshot thinking and collaboration). TECHNOLOGICAL INNOVATION: A new idea or a new method that solves a well-known problem, or achieves a meaningful advantage, that was not known or not feasible, without this idea or method. The technological innovation solves a well-known and "painful" problem. It should present exposure of the developer to a meaningful technological risk. SUSTAINABILITY (ENVIRONMENTAL, SOCIAL, ECONOMIC): “Meeting the needs of the present without compromising the ability of future generations to meet their needs. Encompasses, e.g. keeping population densities below the carrying capacity of a region, facilitating the renewal of renewable resources, conserving and establishing priorities for the use of non-renewable resources, and keeping environmental impact below the level required to allow affected systems to recover and continue to evolve”. Environmental sustainability can be viewed as balancing the 'three pillars' of economic and social development with environmental protection. BUSINESS SUSTAINABILITY: Managing the triple bottom line – financial, social and environmental risks, obligations and opportunities. These three impacts are also referred to as profits, people and planet. For industrial development to be sustainable, it must address important issues at the macro level, such as: economic efficiency (innovation, prosperity and productivity), social equity (poverty, community, health and wellness, human rights) and environmental accountability (climate change, land use, biodiversity).

7.1.3. An example of an email

7.2.

Appendix B: Interview Transcripts

The interviews transcripts have not been included in the following version of the thesis due to confidentiality agreement signed by the managers of small enterprises and the researcher.