Economic sustainability

Definition

Economic sustainability refers to the capacity of an economy to support a defined level of economic production indefinitely. This concept is closely tied to the idea of maintaining resources over time, ensuring that economic activities do not deplete natural resources or harm social systems. Economic sustainability is vital for ensuring that businesses operate efficiently while also contributing positively to society, especially within frameworks like social entrepreneurship, where the goal is to create social value alongside profit.

5 Must Know Facts For Your Next Test

1. Economic sustainability emphasizes balancing short-term economic gains with long-term ecological health and social equity.
2. Social entrepreneurs often embody the principles of economic sustainability by creating ventures that generate profit while also addressing pressing social issues.
3. Investments in green technologies and renewable energy sources are examples of economic sustainability initiatives that can help ensure a stable future.
4. Economic sustainability requires a shift from traditional profit-driven models to inclusive approaches that consider the well-being of communities and ecosystems.
5. Measurement tools such as triple bottom line accounting are often used to evaluate economic sustainability by considering social, environmental, and economic impacts.

Review Questions

• How does economic sustainability influence the practices of social entrepreneurs?
  • Economic sustainability significantly shapes the practices of social entrepreneurs by guiding them to create business models that generate profit while addressing social issues. These entrepreneurs focus on ensuring that their ventures can maintain financial viability over time without depleting resources or harming communities. By prioritizing long-term positive impacts, social entrepreneurs align their goals with economic sustainability principles, which can lead to more innovative solutions to societal problems.
• Discuss the relationship between corporate social responsibility (CSR) and economic sustainability in modern businesses.
  • Corporate social responsibility (CSR) is closely related to economic sustainability, as both concepts aim for long-term viability while considering the broader impact on society and the environment. Businesses that adopt CSR strategies recognize their role in contributing to economic sustainability by minimizing negative environmental effects and fostering positive social outcomes. This alignment helps companies build trust with stakeholders and creates a competitive advantage while ensuring they operate responsibly within the economy.
• Evaluate the challenges faced in achieving economic sustainability within the framework of global sustainable development goals (SDGs).
  • Achieving economic sustainability within the framework of global sustainable development goals (SDGs) presents several challenges, including balancing economic growth with environmental protection and social equity. Conflicting interests among various stakeholders can complicate decision-making processes, leading to resistance against sustainable practices. Additionally, limited resources and varying levels of commitment from different countries hinder progress towards these goals. Addressing these challenges requires collaborative efforts across sectors and a commitment to innovative solutions that align economic objectives with sustainability principles.

Related terms

Social Entrepreneurship: A form of entrepreneurship that seeks to create social value by addressing societal issues through innovative business models and sustainable practices.

Corporate Social Responsibility (CSR):

A business model in which companies integrate social and environmental concerns in their operations and interactions with stakeholders.

Sustainable Development Goals (SDGs): A set of 17 global goals established by the United Nations to address various global challenges, including poverty, inequality, and climate change, promoting a sustainable future.