New business models can make an important contribution to the transition to green growth. While some new business models involve large firms, others are small start-up firms that seek to exploit technological or commercial opportunities that have been neglected or not yet explored by more established firms. New firms tend to engage in more radical innovation than existing firms, and scaling up new business models can therefore help reduce environmental pollution, optimise the use of natural resources, increase productivity and energy efficiency, and provide a new source of economic growth. Although the market for green goods and services is growing, the development of new business models is affected by a range of barriers, many of which can be addressed by well-designed policies.
