Entrepreneurship for sustainable development: co-evolutionary evidence from the tourism sector Open Access

Entrepreneurship is considered crucial in stimulating economic growth (Vuorio et al., 2018), but at a cost to the environment and society (Patriotta and Siegel, 2019; Schaltegger and Wagner, 2011). Recently there has been a shift in this paradigm and a potential positive relationship between entrepreneurship and sustainability is being recognised. This view sees entrepreneurship as a lever for sustainable change and development (Argade et al., 2021) and has prompted the emergence of the concept of sustainable entrepreneurship (SE), understood as a particular kind of entrepreneur and firm that aims to achieve competitive advantage and profitability by contributing to solving, rather than causing socio-economic and environmental problems (Schaltegger et al., 2016; Terán-Yépez et al., 2020). This is particularly important considering that achievement of the UN's sustainable development goals (SDGs) is becoming increasingly urgent if the 2030 Agenda is to be met (UN General Assembly, 2015). Significantly, the most recent OECD reporting on achieving the targets (2022) highlights that only 25% of the targets for 12 of the 17 SDGs have been met to date. SE undoubtedly has a role to play in achieving the SDGs (Apostolopoulos et al., 2018; Schaltegger et al., 2018; UN General Assembly, 2020).

Given the current relevance of the topic, increasing research efforts have been devoted to investigating SE, highlighting the main research themes, factors, processes and outcomes (Anand et al., 2021). Many studies focus on the internal and external factors influencing SE (e.g. Griffiths et al., 2009; Shahid, 2023) and the SE concept and its prominent roles in sustainable development have been investigated within specific regions, such as the Middle East and North Africa (MENA) (e.g. Aljuwaiber, 2021), and sectors, such as agribusiness (e.g. Lang et al., 2022) and energy (e.g. Haldar and Tripathi, 2023).

At the same time, recent reviews of SE research highlight opportunities for a range of future research. Terán-Yépez et al. (2020) report that more research is needed into how SE is implemented in different economic sectors, while Anand et al. (2021) highlight the need for more attention on the relationships between SE and other actors. Moreover, several internal and external factors influencing SE have been analysed separately, pointing to the need to consider how they interact (e.g. Muñoz and Cohen, 2018; Mupfasoni et al., 2018). Thus, there is a need to understand the complex socio-economic and ecological dynamics underlying SE and how they can be appropriately managed to promote sustainable development.

In response, this study seeks to understand these dynamics in the context of the tourism sector, which has been widely studied by academics and practitioners in recent decades, given its role in sustainable development (Bramwell et al., 2017). Tourism can help to address many social and environmental issues, such as degradation, marginalised social groups and unemployment, particularly of women (Zolfani et al., 2015). Moreover, tourism organisations are strongly influenced by various internal and external factors at multiple levels; these interdependences have made tourism one of the largest industries worldwide, characterised by many (80% of the sector) small and micro enterprises (UNWTO, 2022). Thus, the tourism sector is a suitable context to understand better the link between SE and sustainable development, which to date remains poorly investigated (Sørensen and Grindsted, 2021). To fill this gap, this investigation aims to understand the reciprocal influences of SE's internal and external factors (Andrade-Valbuena et al., 2022), providing a more nuanced SE conceptualisation that takes a holistic and dynamic view of sustainability. To do so, the study uses multi-level empirical research (Crnogaj et al., 2014; Muñoz and Cohen, 2018; Wahga et al., 2017) to investigate the following research questions.

The research focuses on the Castelli Romani tourism destination (Italy), conducting 23 semi-structured interviews, 12 with entrepreneurs and 11 with other actors that include representatives of local institutions (i.e. local policymakers), the local destination management organisation (DMO), entrepreneurs' associations, residents and tourists. A co-evolutionary lens is used to analyse the findings from the interviews, which enables conceptualising SE as the result of effective co-evolutionary interactions between micro (entrepreneurs and their firm), meso (where tourism firms are based), and macro (the wider socio-economic and natural system) levels. Consequently, SE can be conceived as an effective co-evolutionary process recognised as virtuous by entrepreneurs and stakeholders, internal and external to the firm, according to the holistic and dynamic view of sustainability proposed by Norgaard (1994).

The study contributes theoretically by refining the conceptualisation of SE. It also sheds light on the co-evolutionary lens as a useful perspective for holistically and dynamically studying SE and its contribution to sustainable development through multi-level empirical research. In doing so, this research proposes a model that shows how interactions between SE's internal and external level factors may co-evolve towards sustainable development. Finally, the study has practical implications for entrepreneurs and policymakers by identifying 20 specific factors and 15 related actions that enable sustainable development in the tourism sector by addressing four specific SDGs: 8 “Decent work and economic growth”, 11 “Sustainable cities and communities”, 12 “Responsible consumption and production” and 17 “Partnerships for the goals”.

Accordingly, this research is aligned with the new vision of the Journal of Small Business and Enterprise Development (JSBED) to provide theory-driven real-world entrepreneurship evidence (Murphy, 2022), thus, offering to its reader high-impact entrepreneurship research, and contributing to the future of the field.

Entrepreneurship and sustainability are crucial aspects of our (present and) future (Johnson and Schaltegger, 2020; Lüdeke-Freund, 2020). Although initially viewed as unrelated domains, the relationship between them has gained significant attention in recent years (Argade et al., 2021), leading to the birth of a new field called “sustainable entrepreneurship” (SE) (Anand et al., 2021). The evolution from entrepreneurship to SE can be seen as a response to the changing global landscape and growing awareness amongst entrepreneurs of environmental and social challenges. Sustainable entrepreneurs have begun to integrate sustainability principles into their business models, putting in place responsible practices and pursuing triple-bottom-line (economic, environmental and social) outcomes (Belz and Binder, 2017; Markman et al., 2016). Thus, SE has emerged in the last decade as a new research field closely linked to the sustainable development concept, consistent with the Brundtland Report (WCED-World Commission on Environment and Development, 1987), which emphasises the well-being of future generations and recommends considering society, economy and the natural environment from a holistic and dynamic perspective. Doing so sheds light on the limits of approaching analysis of these three dimensions of sustainability separately. Similarly, SE is considered a particular kind of entrepreneurship, characterised by organisations that seek competitive advantage and profitability in balance with economic prosperity, social justice and environmental responsibility, that is, by contributing to sustainable development (Belz and Binder, 2017; Schaltegger and Wagner, 2011). It is worth noting here that not all entrepreneurs and their firms regard themselves explicitly as SE although still making decisions and acting according to sustainability principles (Jolink and Niesten, 2015; Shepherd and Patzelt, 2011).

Like SE itself, the SE research field is multifaceted and focuses on a range of issues. One such issue is the identification of the internal and external factors capable of influencing SE. Internal factors range from the entrepreneurial level (e.g. age, education, personal knowledge, values) to the organisational level (e.g. business dimension, resources, organisational structure) (Kraus et al., 2018; Mupfasoni et al., 2018; Sarma et al., 2022). Cucari et al. (2020) provide evidence of the importance of entrepreneurial orientation and network embeddedness for designing and implementing a business model able to create both social and economic value, while Nunez and Musteen (2020) shed light on the importance of knowledge related both to the natural environment and local communities, as well as to economic activity, for discovering and exploiting business opportunities that support sustainable development.

In contrast, the external factors influencing SE are institutional (e.g. regulatory frameworks and environmental standards), technological, industrial (e.g. market transactions, industrial sector life cycle) (Griffiths et al., 2009; Kraus et al., 2018), societal and ecological (e.g. the need to address natural resources depletion, climate change and unemployment) (Jabeen et al., 2017; Sarango-Lalangui et al., 2018). This has prompted researchers to begin exploring SE within both specific regions and single countries. For example, Aljuwaiber (2021) identifies financial issues, together with ambiguous and poorly established legal frameworks, as the main critical factors related to SE in the MENA region. Similarly, Wahga et al. (2017) explore 22 SMEs from Pakistan's leatherworking industry to shed light on how place-specific pressures drive SE even in the absence of formal institutional mechanisms, such as lack of support from national institutions and poor enforcement of environmental regulations. Thus, it clearly emerges that SE is shaped by place-specific factors, which are difficult to replicate outside certain local contexts, reinforcing the strong relationship between sustainability and local development (Paniccia and Baiocco, 2020).

Yet, despite increased research interest in SE and its influencing factors, few studies examine these holistically (Muñoz and Cohen, 2018; Wahga et al., 2017). There have been calls for research that jointly considers the internal and external factors affecting SE (e.g. Nunez and Musteen, 2020), as well as for studies that investigate the close link between SE and local contexts (Anand et al., 2021; Rosário et al., 2022). These studies argue that SE needs to be observed and managed holistically to effectively contribute to sustainable development (Muñoz and Cohen, 2018; Patriotta and Siegel, 2019; Schaltegger et al., 2016). This study aims to respond to these calls by examining the interaction between the internal and external influencing factors of SE and how these operate in a specific context, that is the tourism sector.

Tourism is widely regarded as a multidimensional phenomenon, involving various actors (e.g. tourism firms, institutions, local communities and tourists) at different levels (micro, meso, macro), with widespread implications for sustainable development (Bramwell et al., 2017; Mellon and Bramwell, 2016). That “Tourism [is] a factor of sustainable development” (UNWTO, 1999, Art. 3) is emphasised by the Agenda 2030 for Sustainable Development (UN General Assembly, 2015).

In fact, tourism entrepreneurs and their firms are closely linked with the place where they are based – that is, the tourism destination – from which they draw inspiration, as well as natural and cultural resources to take advantage of business opportunities and to shape their identity (Barbieri, 2013; Freytag and Hjalager, 2021; Paniccia and Leoni, 2019). Prior research on tourism entrepreneurship has emphasised the importance of small and micro tourism firms in finding innovative solutions to deal with sustainability challenges, benefiting not only firms but also local contexts (Coles et al., 2016; Cucari et al., 2019; Paniccia and Baiocco, 2020; Weiermair et al., 2010), and contributing to the sustainable development of destinations (Sørensen and Grindsted, 2021). Some studies highlight that small and micro tourism firms usually engage in informal and relation-based networks with business partners, tourists, employees and communities, motivated by the need to develop the destination sustainably (Kallmuenzer et al., 2019). Other studies shed light on the crucial role played by the knowledge of tourism entrepreneurs and employees in developing new business models with sustainability at their core (Freytag and Hjalager, 2021). The role of policy is the subject of some studies, which acknowledge that it can both encourage tourism entrepreneurial initiatives (Paniccia and Leoni, 2019) and limit them through tax regimes or restrictions (Sigala, 2020). Some studies point to the potential for new tourism service providers to offer innovative solutions that both improve the tourist experience and the quality of life for local communities (Gretzel et al., 2015; Romão et al., 2018).

Thus, research suggests that the tourism sector depends heavily on entrepreneurship and can survive in the long term only if it is both sustainable and entrepreneurial (Andrade-Valbuena et al., 2018). Indeed, research increasingly links tourism, sustainability and entrepreneurship. For example, Butkouskaya et al. (2020), in addressing the importance of SE for the tourism sector, examine difficulties for tourism students – according to their gender – in creating new firms. Fu et al. (2019) and Lordkipanidze et al. (2005) find that SE in tourism is a means of obtaining competitive advantage by implementing new technologies, and Ali (2018) sheds light on how limited education and financial resources, as well as a policy vacuum, limit the potential to exploit business opportunities for socio-economic development and growth.

However, few studies explore both the different factors affecting SE in tourism and its contribution to sustainable development (Andrade-Valbuena et al., 2022). We aim to fill this gap by adopting a co-evolutionary lens to consider the relationship between entrepreneurs and their firms and the external environment. The co-evolutionary approach sees this relationship as circular, with reciprocal influences, and stresses the dialectic and dynamic character of the interdependences between them and their related factors.

A co-evolutionary lens is widely used in economic and management studies (e.g. Abatecola et al., 2020; Breslin, 2011; Hodgson, 2013) to examine and understand the firm—environment relationship. According to this view, firms and their environment adapt to each other in a dialectical relationship (Abatecola et al., 2016). Thus, co-evolution is a multilevel concept that occurs within and among firms, in their location, and in society as a whole (Breslin, 2011). This co-evolutionary approach implies that all these actors are required to adapt effectively, that is, the firm‒environment relationship is characterised by interdependence and reciprocal feedback (Weick, 1995). Accordingly, the firm‒environment adaptation can be understood as a joint dynamic outcome between firms' managerial intentionality and environmental pressures (Hrebiniak and Joyce, 1985).

Recently, co-evolution has made its way into tourism studies as a perspective from which to grasp the key interdependencies among the natural, socio-cultural, and economic resources of firms and their external environment, as well as their dynamics over time (Brouder and Eriksson, 2013; Cucari et al., 2019; Paniccia and Baiocco, 2020). Thus, applying a co-evolutionary lens to tourism allows identification of the factors that can promote co-evolutionary adaptations between tourism firms and their environment, which are understood as co-evolving entities since the evolution of the firm is influenced by the evolution of the environment, and vice versa (e.g. Leoni and Cristofaro, 2021; Paniccia and Leoni, 2019). In other words, there is a dialectical and circular relationship between tourism firms, institutions, local communities and tourists that co-determines the tourist offering. It enhances the natural and cultural identities of a destination with positive effects in terms of life quality (Bramwell et al., 2017; Ma and Hassink, 2013) and, in turn, positively influences sustainability, especially in the current post-pandemic context (e.g. Li et al., 2022; Zutshi et al., 2022). Thus, co-evolution in tourism encapsulates the interactions that take place at multiple levels, namely micro (tourism entrepreneurs and their firm), meso (the destination where tourism firms are based) and macro (the wider socio-economic and natural system).

In his seminal and highly influential work, Development Betrayed, Norgaard (1994) argues that sustainability simultaneously involves society and nature in a co-evolutionary process recognised as virtuous by humans. This concept is innovative in stressing that sustainability needs to be mutually recognised by a multiplicity of interdependent actors, at different interconnected levels, that shape the paths towards sustainable development. We adopt this co-evolutionary perspective as a suitable interpretative lens to analyse the complex dynamics of the multidimensionality of SE for sustainable development in the tourism sector.

To answer our research questions, a qualitative approach was chosen to describe, interpret, contextualise and gain insight into specific phenomena (Azungah, 2018; Yin, 2018). Qualitative data are particularly useful in understanding causal and complex mechanisms (Mills et al., 2010), especially when researchers deal with phenomena that are not well understood and not often investigated (Edmondson and McManus, 2007), such as SE and its adoption in the tourism field.

The empirical research considers the Castelli Romani tourism destination, located a few kilometres southeast of Rome (in Italy), comprising 16 geographically proximate municipalities and covering a territorial area of approximately 437 square kilometres (see Figure 1). Castelli Romani was chosen for the following main reasons: (1) its remarkable cultural and natural heritage, which makes it an important tourist destination ^[1] and are particularly relevant to issues of sustainable development; (2) the number of firms (n. 2,353) related to the tourism sector and its supply chain (Istat, 2022), as well as the number of municipalities comprising the area (n. 16), reflecting the multidimensional nature of the tourism phenomenon; and (3) the geographical proximity of the area and the authors, which made it possible to accurately collect information and therefore enhances the reliability and validity of the results.

Data was collected via semi-structured interviews to gather rich and detailed information from relevant informants (Aguinis and Solarino, 2019). The authors chose semi-structured interviews as they provide a guided but flexible conversation between researchers and participants (Qu and Dumay, 2011). Over a period of 10 weeks between January and July 2022, 23 semi-structured interviews were carried out; 12 interviews with entrepreneurs and 11 interviews with representatives of local institutions (i.e. local policymakers), the local destination management organisations (DMO), entrepreneurs' associations, residents and tourists. Entrepreneurs were selected by identifying tourism firms' typologies recognised as sustainable according to prior studies (Barbieri, 2013; Coles et al., 2016; Paniccia and Leoni, 2019). These consisted of entrepreneurs of agritourism, historic residences and Alberghi diffusi.

The data collection process was conducted by two authors with experience using this methodology and direct access to informants. The authors followed an interview protocol (Castillo-Montoya, 2016) consisting of three parts: firstly, the authors explained to participants the purpose of the study; secondly, the authors asked respondents both simple questions (such as their specific job role) and more study-specific questions; thirdly, participants were prompted to give examples and additional comments. The interviews were in-person and online, recorded (through mobile phones or laptops), transcribed and translated from Italian into English. Table 1 reports the main information for each specific interview.

Furthermore, the interviewees were asked to explain the changes that occurred over time in the destination by describing from their point of view the role played and the responsibilities taken by different actors to promote sustainable development. Additionally, the interviewees were asked to provide examples of cooperation strategies between the different actors within the destination. The narrative approach was applied to frame the phenomenon's dynamic and multifaceted nature; accordingly, the interviews were treated as a narrative production site (Lichrou et al., 2010). Here, the narrative is “the textual actualization of a story at a specific time and context”, where a story is understood as “a piece of fiction that narrates a chain of related events or happenings that involve certain characters” (Eriksson and Kovalainen, 2008, pp. 2011–212). Thus, interviews revolved around a temporal context, considering memories, current situations and predictions for the future.

The interviews were analysed through constant comparison, by which the insights that emerged from each interview were compared with those from other interviews to identify commonalities and differences in opinions, attitudes and perspectives (Boeije, 2002; Eisenhardt and Graebner, 2007). To enhance the reliability of the research, all the interviews were transcribed (MacLean et al., 2004), and transcripts were analysed using a deductive thematic analysis, in which an initial codebook was used to develop themes (Braun and Clarke, 2006). Based on the research questions and the theoretical background, the main themes used were internal and external factors. Two authors read the interview transcripts multiple times, transforming them into codes, then grouping the codes into sub-categories, sub-categories into categories and, finally, categories into the two main themes (Nowell et al., 2017; Saldana, 2008; Spiggle, 1994). In this way, authors were able to extrapolate a final framework capable of visually summarising the results of the study. See Figure 2 for details on this process.

Furthermore, following Ibrahim and El-Maksoud (2022), the interview transcripts were triangulated with data from: (1) historical documents; (2) information from the websites of the Castelli Romani DMO and its 16 municipalities; (3) information from other local, regional and national websites (e.g. Istat, Lazio Region, local tourism associations); and (4) researchers' direct observations. This enhances the accuracy of the case study findings.

Findings are reported according to the two main themes of the thematic analysis: internal and external factors. Following the results of the thematic processes, in each theme, the specific categories are addressed, namely the different levels (i.e. entrepreneur, firm, local and global contexts).

Two aspects emerge from the interviews with entrepreneurs: (1) capabilities of sensing and exploiting opportunities, namely their capacity to identify business opportunities in the tourism sector by effectively using cultural and natural resources in the destination; and (2) personal motivation, namely their intention to help society by contributing to the socio‒economic and environmental development of the area.

Several interviewees also highlighted that the values and behaviours of most entrepreneurs in the selected destination are focused on sustainability issues and contribute to social cohesion and equitable resource distribution, triggering positive community change.

Moreover, in almost all cases, entrepreneurs' mindsets and personal networks have helped embrace new technologies and related practices. For example, entrepreneurs involved younger staff members to embrace a greater level of technological skills. The interviews also revealed that personal networks favour knowledge sharing about new practices and how to apply for public technology incentives.

In addition, entrepreneurs' personal networks also led to the creation of several associations (e.g. Castelli Romani hospitality Association, Winemakers Association in Grottaferrata and Association of the New Castelli Romani) in the area. The main aims of these associations are to create a point of reference for local entrepreneurs and to promote sustainable development of the destination by enhancing its identity and heritage. In reaching these aims, these associations closely interact with local communities and other stakeholders, strongly believing in the importance of knowledge-sharing.

Most of the interviewed entrepreneurs do not have a university degree, and in the past have been more oriented towards employing personnel with vocational education. Recently they have started collaborating with universities, for example, taking students for internships which, in some cases, have led to stable jobs. This has allowed entrepreneurs to bring knowledge into the business that – in most cases – they do not possess.

According to the interviewees, the characteristics of entrepreneurs influence the characteristics of their firms. In particular, the entrepreneurs' values and behaviours affect the firms' physical structure (e.g. by adopting environment-friendly materials) and organisational processes (e.g. by adopting renewable sources, providing e-mountain bikes and giving waste disposal information to guests). For example, one historic residence in the area, which has been a hotel for years, has revised its business model by adding agritourism and holiday lettings, and by hosting a hotel management school, a humanities-focused high school and a kindergarten.

However, these firms are all micro or small, highlighting two main critical issues: (1) the lack of human resources and (2) the lack of financial resources. In fact, these firms usually have one to three employees and a tight budget. This means they can only afford to do a small amount of training for employees and devote only a limited budget to long-term sustainability projects and innovations. Almost all entrepreneurs interviewed consider international, national and regional programs that support access to finance essential to supporting their sustainable development efforts, despite the numerous bureaucratic challenges to access them.

Since ancient times, Roman emperors and nobles chose to build their villas to experience otium (i.e. free time) in the Castelli Romani for its position (very close to Rome), climate (mild) and magnificent natural landscapes. In the eighteenth century, many travellers wrote about their visits to the area, emphasising the perfect combination of spectacular natural and cultural heritage. Goethe, for example, on 23 October 1787, wrote: “I spent this month in the countryside, […] in the hills behind Rome, one of the most beautiful places on earth where everything contributes to creating an authentic place for recreation”.

Local institutions have increasingly exploited these natural and cultural resources. For example, there are many food and wine products and related festivals and events organised in the different municipalities, contributing to strengthening the sense of community among residents and between residents and tourists. However, this can also bring conflict with entrepreneurs.

The establishment of various public associations and organisations (e.g. Castelli Romani Park, DMO Castelli Romani) is another expression of the increasing involvement of local institutions in the sustainable development of the area. The DMO Castelli Romani is a prominent body for tourism in the area.

However, entrepreneurs do not feel actively involved in the decision-making processes of local institutions or the DMO, which they consider as mainly operating in a top-down fashion. Consequently, according to most of the interviewed entrepreneurs, local policies are not always effective in addressing their needs. A similar sentiment is shared by local communities.

Moreover, residents and tourists highlight that livability is a concern due to poor infrastructure (especially in terms of public transport), resulting in accessibility barriers. This issue is something that even Goethe noticed – in a letter from Velletri municipality, in 1787, he wrote “It is certainly inexplicable […] the difficulty and inconvenience of getting to these regions”.

Furthermore, some economic and technological local public investments did not fully produce the expected results, negatively affecting the possibility for the Castelli Romani destination – and the tourism firms in the area – to be better known and reached by local communities and tourists. This, in turn, has inevitable negative consequences on SE and related sustainable development.

Thus, the interviews reveal a lack of systemic management by the various actors operating in the area, as well as inadequate consideration of their related specific characteristics and needs. This is mainly due to a lack of knowledge-sharing processes between the various actors, which limit the possibility to (1) increase the knowledge (also of the local community) related to Castelli Romani heritage, (2) create coordinated tourism initiatives and (3) develop entrepreneurial skills.

In most cases, entrepreneurs have decided to open their firms inside pre-existing historic buildings to showcase that cultural heritage. Other firms have instead exploited the natural heritage; thus, accommodation establishments excluding hotels (e.g. agritourism) grew by 91%, from 163 in 2014 to 311 in 2021 (Istat, 2022). This allows entrepreneurs to offer authentic accommodation contexts, addressing the growing tourist demand for experiences characterised by human contact, immersion in nature, culture, tradition and the everyday life of local communities.

Furthermore, in the face of the ever-growing complexity of socio-economic and ecological challenges and following recent technological trends, some entrepreneurs have started to rethink their roles and services, attempting to be more innovative. This has resulted in the introduction of e-commerce services to sell ready meals and organic products, more flexible booking systems (e.g. self-check-in and check-out) and long-stay offerings for remote working. In addition, virtual experiences – such as online wine-tasting sessions and cooking classes – have been proposed.

At the same time, entrepreneurial needs are not adequately satisfied by regional and national policies, especially during the COVID-19 pandemic. Entrepreneurs stressed that public subsidies were insufficient and often arrived late, with directives changing daily, making it practically impossible to follow them. Nevertheless, it should be noted that COVID-19 renewed tourist demand for nearby experiences, uncrowded places, outdoor life, smart working and so on, providing new business opportunities to firms in the area.

We have applied a co-evolutionary lens to categorise different factors emerging from the interviews. Internal factors related to entrepreneurs and their firms are grouped at the “micro” level, while external factors related to local and global contexts are grouped at the “meso” and “macro” levels, respectively.

As shown in Figure 3, and according to the characteristics of co-evolutionary relationships, individual entrepreneur factors and firm factors (micro-level) mutually affect each other and, in turn, affect and are affected by the factors belonging to the local (meso-level) and global (macro-level) contexts. In other words, the different actors at the three levels and related factors – according to the co-evolutionary lens – do not act in isolation, rather their interactions (i.e. mutual relationship) determine positive or negative effects on sustainable development. This latter, in turn, exerts its effects on each of the three levels and the respective actors and factors. Hence, it is possible to conceptualise SE as the result of effective co-evolutionary interactions between micro (tourism entrepreneurs and their firms), meso (the destination where tourism firms are based) and macro (the general environment) levels. In other words, entrepreneurs in the tourism industry can make decisions and take actions that effectively promote sustainable development only if sustainability-oriented local and global contexts support them, and vice versa.

In particular, the different factors identified in the three levels may act as enablers or inhibitors of SE. Among the 11 factors entrepreneurs and their firms (micro-level) relate to local and global contexts, eight enablers and three inhibitors emerged from the data collection. This aligns with previous studies (e.g. Hall and Wagner, 2012; Mintrom and Thomas, 2018; Mupfasoni et al., 2018), demonstrating how entrepreneurs are the key engine of sustainable development. In fact, while local and global contexts can encourage entrepreneurs and businesses to move towards sustainability, their ability is restricted and only entrepreneurs can bring sustainable actions into reality.

This is even more the case in the tourism industry (Papaluca et al., 2020), where entrepreneurs with awareness and commitment to sustainable development help to create new and innovative firms (Paniccia and Leoni, 2019), increasing employment and enhancing identity and heritage through the efficient use of resources, thus ameliorating life quality (Belias et al., 2022; Figueroa-Domecq et al., 2022; Sardianou et al., 2016). At the same time, it is also true that entrepreneurial sustainable-oriented mindsets, motivations and values need to be counterbalanced by knowledge and education, especially at the university level (Ashari et al., 2021; Deale, 2016). Most current tourism entrepreneurs did not receive a university education but consider it crucial for the development of the (sustainable) entrepreneurs of tomorrow. Moreover, the evidence provided by this study is consistent with Khattak (2020) and Kliuchnikava (2022), who emphasise that small size and lack of financial and human resources may hamper tourism entrepreneurs from sustainable practices.

Concerning the local context (meso level), many more factors inhibit SE than support it (i.e. four inhibitors out of five total factors). Concerning the global context (macro level), among the four identified factors, two act as enablers and two as inhibitors. Here we see how both local and regional/national policymakers need entrepreneur and resident/citizen support (Liang et al., 2021). In fact, as emphasised by Murphy (2022), policymakers know that entrepreneurship plays a crucial role in revitalising communities and stimulating economic development, with repercussions for the sustainable development of society as a whole. This suggests a need for local and regional/national policies to be designed in concert with entrepreneurs to help them and their firms achieve sustainable development goals (Ahmed and McQuaid, 2005; Grigore and Dragan, 2020; Musson, 2012). Doing so enhances livability – and thus life quality – for residents/citizens (Frigenti et al., 2022; Martínez-Bravo et al., 2021). In other words, sustainable development is possible if the various actors (at micro, meso and macro level) adopt an integrated approach in which they share priorities for what should be developed and sustained (Hillebrand, 2022), that is, share a common sustainable development strategy (Bachinger et al., 2022).

In summary, entrepreneurs and their firms (micro level) – with their enablers/inhibitors and their dynamics – influence the environment (at both meso and macro level) – with related enablers/inhibitors and their dynamics – towards sustainable development; and vice versa. Thus, SE can be conceived as an effective co-evolutionary process recognised as virtuous by entrepreneurs and stakeholders, both internal and external to the firm.

The findings of this study have several theoretical and practical implications. In terms of theoretical implications, the study informs and advances the field of entrepreneurship in general and SE in tourism, in particular. It also advances the co-evolutionary tourism literature by demonstrating that co-evolution is a useful perspective for holistically and dynamically studying SE through multi-level empirical research (Crnogaj et al., 2014; Muñoz and Cohen, 2018; Patriotta and Siegel, 2019). Adopting a co-evolutionary lens allows considering jointly internal and external factors affecting SE, advancing prior research on the topic in which those factors were considered separately (e.g. Kraus et al., 2018; Nunez and Musteen, 2020; Sarma et al., 2022) and providing a more nuanced and synthesised understanding of how these factors interact in the context of the complex socio-economic and ecological dynamics underlying SE. Concerning external factors, this investigation enriches previous literature mainly focused on institutional and industrial factors (e.g. Kraus et al., 2018; Terán-Yépez et al., 2020) by considering technological, societal and ecological factors (such as natural resources). These contributions provide a refined conceptualisation of SE, as advocated by Thananusak (2019) and Terán-Yépez et al. (2020), suggesting that SE results from effective co-evolutionary processes recognised as virtuous by entrepreneurs and stakeholders, both internal and external to the firm. When so conceived, it supports the achievement of competitive advantage and profitability by balancing economic prosperity, social justice and environmental responsibility, thus contributing to sustainable development (Belz and Binder, 2017; Schaltegger and Wagner, 2011).

Moreover, this study reinforces the link between entrepreneurship, sustainability and tourism, as advocated by Sørensen and Grindsted (2021). In particular, the model proposed by this investigation extends previous studies and answers multiple calls to examine SE in the tourism sector. It attempts to fill the gaps noted in the literature review of Andrade-Valbuena et al. (2022), which raised crucial questions about the role played by the institutional environment and tourism policies in promoting SE, by identifying the factors (both internal and external) and their reciprocal influences that can influence SE in tourism. The proposed model not only answers these two questions but also identifies which factors act as enablers and which as inhibitors of SE in tourism. By doing so, our findings are in contrast to some previous research. For example, while Ali (2018) affirms that Ghanaian entrepreneurs feel they can expand without entrepreneurial education, Italian tourism entrepreneurs recognise the crucial role that entrepreneurship-related courses may play in supporting the competitiveness of their firms and, thus, the sustainable development of the area in which their firms are based. These results answer calls to investigate SE in local contexts (Anand et al., 2021; Rosário et al., 2022) and sectors (Terán-Yépez et al., 2020). Moreover, the findings of this case study are consistent with those of Komppula (2014), Paniccia and Baiocco (2020) and Weiermair et al. (2010), in showing that tourism entrepreneurs play a key role in sustainable development (Agapito et al., 2022; Zhang et al., 2022). Our findings highlight that entrepreneurs' attachment to place is as crucial as their commitment to their firms (Koh and Hatten, 2002; Ryan et al., 2012).

Lastly, this article expands previous co-evolutionary tourism studies (e.g. Cristofaro et al., 2020; Paniccia and Leoni, 2019) by considering multiple actors simultaneously, thus, providing a more comprehensive overview of sustainable development. In other words, effective sustainable development can be reached only when all actors involved (entrepreneurs, citizens, policymakers, tourists, etc.) align their actions and decision towards sustainability principles, co-evolving together towards a better (present and) future.

The practical implications of our study are in demonstrating that a co-evolutionary framework can help entrepreneurs and policymakers. This investigation provides specific actions – according to the different levels – that can be taken to promote virtuous co-evolutionary adaptations, allowing entrepreneurs and policymakers to achieve sustainable development in general and four specific SDGs in particular: 8 “Decent work and economic growth”; 11 “Sustainable cities and communities”; 12 “Responsible consumption and production”; and 17 “Partnerships for the goals”. The 15 suggested actions – see Table 2 for details – mainly refer to the following aspects: (1) training courses, (2) investments in technologies, (3) creation of innovative business models, (4) exploitation of cultural and natural resources, (5) communities' involvement and (6) multi-level partnership.

However, it is worth noting that the proposed actions may vary among contexts, industries and countries. This is because the identified factors, and whether they act as an enabler or an inhibitor, may change according to their specific setting. That is, actions must be adapted to the specific reality/context to make them effective. For example, SE will be affected differently, and therefore with different effects on sustainable development, in European or MENA countries because of the diverse policies, technological trends, culture and resources that characterise them. In other words, what can be an enabler in Europe could be an inhibitor in MENA and this means that entrepreneurs and policymakers have to tailor their actions accordingly.

This study provides evidence of how SE contributes to sustainable development by identifying the factors acting as enablers or inhibitors of SE in the tourism sector and how they interact. In particular, the paper demonstrates that entrepreneurs play a crucial role in sustainable development, but they cannot act in isolation. In fact, according to the co-evolutionary approach, they influence and are influenced by 20 internal and external factors. Our findings have implications for scholars, entrepreneurs and policymakers. They can inform and assist them in prioritising a target set of actions that may foster SE and related development activities.

However, the study also presents some limitations that offer avenues for future research. Because our proposed framework is derived from a single case study it is not generalisable. Future research may consider applying our framework to other contexts to explore whether other relevant factors should be added. Future studies could also test the framework to see if and how the identified enablers and inhibitors change according to different contexts. Another limitation of the study concerns the qualitative and interpretive approach adopted. Future research could include mixed methods, including quantitative tools.

Funding: This research is an outcome of a larger project, titled “Small and Smart Villages Governance: Development and Validation of a Model from one of the Borghi più Belli d’Italia” funded by the Italian Ministry of University and Research under PRIN 2022 - 2022FZJ4L7.

Table A1