Sustainable institutional entrepreneurship in practice: Insights from SMEs in the clean energy sector in Tuscany (Italy)

Purpose: The purpose of this paper is to illustrate how sustainable entrepreneurs (SEs) address the regulative, normative and cultural-cognitive institutional pillars when operating in conservative contexts. It aims to study in depth the use of sustainable innovation (SI) as a means of increasing legitimacy within the institutions, thus triggering an institutional change. Design/methodology/approach: The paper opted for an exploratory study on the Tuscan geothermal heat pumps market, which presents a promising but still largely unexploited sustainability potential despite its low institutional support, using the open-ended approach of grounded theory. The data include interviews and archive data, such as newspapers, magazines. Findings: The paper provides empirical insights on how sustainable institutional entrepreneurs (SIEs) have developed innovative business models based on direct relationship with the final customers and strategic partnerships as a means of increasing legitimacy within the normative and cultural-cognitive institutions, and subsequently in the regulative institutions, through: innovative value propositions aimed at changing industry norms and social beliefs; increasing the private benefit of innovative sustainable business models in order to trigger imitation dynamics; inter-sector strategic partnerships sharing the same sustainability objectives; the inclusion of the relevant actors in relation to the social norms and cultural-cognitive barriers in a value proposition. On the basis of these findings a model has been developed. Research limitations/implications: The study enriches the sustainable entrepreneurship research stream by providing empirical evidence on how SEs foster changes in the three institutional pillars with SI. It also contributes to the institutional entrepreneurship research by extending the results of previous studies regarding institutional tactics. Practical implications: The paper could help SIEs prioritizing changes in value propositions and strategic partnerships to create market-based coalitions, as a means of institutional legitimization for SI. Originality/value: The study illustrates the relationship between the sustainable institutional entrepreneurial practices and each institutional pillar, including the cultural-cognitive institutions, which have been neglected in previous research. This allows formulating five key propositions that guide SEs in succeeding as both sustainable and institutional entrepreneurs.