Technology transfer for sustainable development.

Environmentalism and entrepreneurship in Hong Kong

Introduction

Economic development does not occur in a social vacuum. Although industrialization around the world has significantly raised living standards and material affluence, it has also created new social problems. Environmental deterioration has recently emerged as a serious concern. Mounting evidence indicates that our current patterns of production and consumption are severely testing the resilience of our planet while rapidly exhausting critical natural resources. Acid rain, global warming, ozone depletion, reduced bio-diversity and forecasts of assorted ecological disasters have brought growing calls for a new balance between economic benefits and environmental preservation.

Economic development issues can no longer be separated from those of environmental protection and resource conservation (Kaufman and Ferguson, 1992; World Commission on Environment and Development, 1987). The conventional economics paradigm stresses:

* individualism;

* self-interest;

* rationality, and

* property rights.

Although some environmentalists seek to abandon this paradigm (see Ekins et al., 1992), environmental protection and economic growth can be mutually compatible rather than conflicting objectives (Turner, 1988, p. 5). In fact, Porter (1991, p. 168) argues that "the conflict between environmental protection and economic competitiveness is a false dichotomy. It stems from a narrow view of the sources of prosperity and a static view of competition". Porter is among a growing group of theorists who believe that environmentalism is good business as well as good social economics.

Efficient economic activity has been correlated with low-polluting behaviour while sustainable development relies on sound economic and environmental policies (Schmidheiny, 1992; Silverstein, 1991). Sustainable development requires current market needs, wants and interests to be balanced with long-term social welfare. Consumer and corporate environmentalism can operationalize such a philosophy (Commoner, 1990; Post, 1991). They hold the promise of economic prosperity and a cleaner world (Scott and Rothman, 1991; Silverstein, 1988).

The rise of environmentalism

Better living standards and more leisure time have nurtured increasing international concerns about the natural environment. As ecological issues become prominent on public policy agendas, governments have enacted tougher environmental regulations (Kieschnick, 1992). New Zealand was the first country to legislate sustainability management (James, 1992) and other jurisdictions are following in its footsteps. Industry has also adopted greener business practices in response to ecologically-concerned consumers (Hemphill, 1991; Vandermerwe and Oliff, 1990; Winski, 1991). However, Turner (1988) notes that this environmentalism has been largely confined to the most developed economies.

In less developed countries (LDCs), basic needs like food and shelter as well as the obsession to catch up with more industrialized counterparts have limited the scope for environmental responsibility (see Beckerman, 1992; Pearce et al., 1992). Ecological problems are exacerbated by the discrepancies between the private and social costs of environmental pollution (see Stavins and Whitehead, 1992).

Even among the four Asian dragons - the newly industrialized economies (NIEs) of Hong Kong, South Korea, Singapore and Taiwan - ecological concerns and provisions for sustaining development have received little consideration (Chung, 1992; Levin, 1991; Ng and Ng, 1992). However, Cairncross (1992) suggests that the strongest pressure to "go green" in the near future will not be in the developed countries, but rather in the NIEs as the links between the environment and development become apparent. This implies that environmental impacts will play an increasing role in both private and public sector policy making. Unfortunately, to date, there has been little empirical evidence to support such a perspective.

Research framework and methods

The reported study examined the progress towards, and prospects for, sustainable development policies and practices in Hong Kong. This pillar of free market capitalism is linked, both economically and politically (on an official basis after 1997), to the People's Republic of China (PRC). The huge population (over 1.2 billion people) and rapid industrialization of the PRC have ominous consequences for the global environment. Already, a heavy dependence on coal and CFCs has triggered worldwide concern over its contribution to global warming (Whitcomb, 1992). Martinsons (1993) has noted that "Centuries ago, Napoleon forecast that when China finally awoke, the whole world would tremble. Now, one-quarter of the world's population is in a mode of rapid and non-sustainable development that is stretching environmental resources towards a breaking point. This is a problem for the Chinese, and for our entire planet".

The city-state of Hong Kong has a long record of service as an economic gateway between the PRC and the global market economy. The Open Door Policy in the PRC has enabled Hong Kong to become the eighth largest trading entity in the world (Hong Kong Government Information Services, 1995). Indeed, re-exports from and to China account for most of the territory's trade growth since the mid-1980s. Hong Kong has also been extensively used as a "classroom" by the Chinese to learn about international practices. Thus, it is now reasonable to consider Hong Kong as a significant bell-wether for the potential adoption of sustainable development policies and practices across the PRC.

Environmental activities and attitudes in Hong Kong were initially compared with those in the USA. The USA was chosen as a benchmark because of its reputation for leading-edge practices and substantial body of accessible empirically-based literature. The success of Hong Kong has also been enabled by US government policies. The US experience has significantly influenced business and management developments in the territory. Extensive amounts of both hard and soft technology have been transferred from North America to East Asia. Therefore, it is considered appropriate to use the USA as a reference point for considering environmentalism in Hong Kong.

Media reports, extensive contacts with a cross-section of local organizations and existing empirical findings provided the contextual background for our primary data collection. Hong Kong consumers were interviewed using an instrument which allowed comparisons with US data. Our questions focused on:

* the quality of the Hong Kong environment;

* environmental issues and consumption patterns;

* opinions about green products; and

* socio-economic background information.

The interview format was designed to accommodate varying English-language literacy levels among the predominantly Cantonese-speaking population, to ensure that respondents fully understood the questions, and to enable follow-up queries where appropriate. Interviews with 111 individuals were carried out during 1994. Statistical errors for this stratified sample were minimized by validating the group as representative of the Hong Kong population, in terms of age, education and income distributions. These results provide a basis for discussing the issue of sustainable development in the context of China.

Environmentalism in the USA

Environmentalism has become an integral and well-publicized part of life in the USA over the past decade. Businesses, governments and consumers have all shown increasing awareness of, and concern for, environment issues. For example, the consumer has seen the effects of green marketing (Davis, 1991; Hemphill, 1991), with everything from product and packaging to positioning and promotion being affected. However, informational problems and green product labelling issues remain. Meanwhile, US companies are still estimated to produce five times as much pollution per revenue dollar as the Japanese and twice that of German companies (Bhat, 1993).

One survey of 220 large US firms in 1991 revealed that 90 per cent are organized to address environmental concerns (Environment Today, 1991) while over 700 green products were introduced between 1985 and 1990 (Schorsch, 1990). Over 12 per cent of new product roll-outs in the USA in 1991 were marketed as "green" or "environmentally-friendly". This represented a steady increase from 0.5 per cent in 1985, 4.5 per cent in 1989 and 10.5 per cent in 1990 (Environment Today, 1993). The literature (Freeman, 1990; Klein, 1990; McManus and Carter, 1991) indicated that retailers and manufacturers in the grocery and consumer packaged goods industries were the most prominent corporate environmentalists. Nearly 25 per cent of new household products in the early 1990s were promoted to be ozone-friendly, recyclable, biodegradable or compostable (Fierman, 1991).

Although the US business community spent trillions of dollars on environmental initiatives (Stavins and Whitehead, 1992), a distinction must be drawn between short-term programming changes and more strategic transformations. Command-and-control environmental legislation has led to relatively little investment in new plants or more efficient operations (Weinstock, 1992). Many US firms have made cosmetic changes in advertising and communications, labeling or product content, positioning themselves or their outputs as environmentally friendly. Fewer businesses have made the environment an explicit part of the strategic planning process or undertaken long-term commitments to the environment. Alliances with non-governmental organizations (NGOs) and major investments in new manufacturing technology remain rare. Davis (1992) notes that an inadequate integration of ethical considerations has compromised many green marketing efforts.

Legislation and government guidelines

The US Environmental Protection Agency (EPA) has enacted numerous laws and regulations over the past three decades. These have set technology- and performance-based standards for pollution control and environmental clean-up. Business and government are estimated to be spending $100 billion per year to comply with EPA requirements (Stavins and Whitehead, 1992). However, there has been an absence of US legislation and few government guidelines to promote, enforce or control green marketing practices.

The Federal Trade Commission (FTC) has a mandate to protect consumer interests, but its efforts have been criticized by both producers and consumers. For over two decades, this regulatory body relied on the Consumer Protection Act of 1970 when considering advertising or packaging claims which might be untrue, deceptive or misleading. More recently, it came under increasing pressure from environmental groups and marketers to establish national guidelines on green marketing. In 1991, the FTC held public hearings to consider a set of green business guidelines which were proposed by a coalition of industry groups.

Before the Commission enacted its guidelines in July 1992, a State Attorneys-General task force had provided advertising recommendations which helped many businesses formulate green marketing strategies. Since the late 1980s, various state and local governments have enacted environmentally-compatible regulations and guidelines for their purchasing agents. This has created a significant market for recycled products among government agencies. For many businesses, they augment the consumer market for environmentally-friendly goods.

The US public and the environment

The first significant efforts to educate the US public about the dangers of pollution were made in 1970. However, these "Earth Day" activities attracted little mainstream interest. Environmental activists had by then achieved some important legislative results, such as the enactments of the Environmental Protection, Clean Air and Clean Water Acts. However, few Americans were concerned about the environment and the activists were commonly viewed as a fringe group. A decade later Earth Day was revived and achieved considerable success. It was among the biggest media events of 1980. US public support for environmental protection has subsequently grown. Research shows …