NOTE: THIS ARTICLE WAS PUBLISHED WITH THE INFORMING SCIENCE INSTITUTE.
Aim/Purpose..............................................................................................................................................................................................
Since the valuation of a born-global speculative start-up (BGSS) has been a guessing game and there is no framework in the literature from ethical fashion smart wearable (EFSW) venture valuation perspective, this research explores to create a holistic model using multi-stage valuation method to valuate BGSS at its inception and investigates how ethical is ethical fashion?
Background................................................................................................................................................................................................
The concept of ‘Born-Global’ firm was introduced into business theory during 1988. Nowadays, ventures start with a global vision from their inception to introduce products and services in overseas markets. Speculative investment has been a common practice to start-up expedition. Investors gamble on speculative start-ups. The inception phase of any start-up is the embryonic phase and is, therefore, more speculative than successive phases for additional investments. BGSS at its inception possess no operating history. Today fashion industry is one of the largest industries globally, growing leaps and bounds with valuation at 3 trillion U.S. dollars. The emerging smart fashion wearable market projected to cross US$ 30 billion during 2017. Fashion exists not only in garments but also other wearable such as the bracelet, watches, jewelry, and other accessories. Ethical fashion is all about betterment for the people and community at large. This paper identifies the relevant actors and their impact on the ethical aspects and status of the fashion industry.
Methodology...............................................................................................................................................................................................
The methodology used in this research both qualitative and quantitative approach. Since ethical fashion is a social phenomenon, the qualitative approach is appropriate to deal with various perspective analysis of ethical fashion using case study on four ethical fashion smart wearable ventures. The quantitative method calibrates the valuation of a BGSS at the inception stage using a noble pragmatic multi-stage valuation method because it provides the incentive to focus on achieving the best risk/cost ratio.
Contribution..............................................................................................................................................................................................
This research bestows valuable insight using a noble multi-stage valuation method that has been proven successful based on author´s extensive practice to value BGSS at its inception contributing new knowledge to the literature. The application of informing system to frame the discussion on the inter-disciplinary domain of ethical fashion smart wearable creates awareness for fashion industry stakeholders and academic researchers.
Findings....................................................................................................................................................................................................
The analysis shows that BGSS is a contemporary phenomenon since so many smart fashions wearable companies have gone through thought provoking and compelling stories to became successful in a highly competitive smart fashion wearable industry. BGSS concept is a brand-new perspective in the EFSW academic research. The findings of this research provide information to various stakeholders of the fashion industry and benefit to a global community at large with a more nuanced understanding of the changes and challenges of the emerging EFSW industry and the way to measure the valuation of a venture at its inception.
Recommendations for Practitioners.........................................................................................................................................................
This paper reveals nuance understanding for the practitioners in the BGSS valuation at its inception. Since all the traditional valuation methods have their drawbacks when applied to the inception stage of BGSS, this study recommends using multi-stage valuation method because it provides incentive for the best risk/cost ratio. Fashion brands (designers and other stakeholders) should abide by the ethical criteria to make a difference in the global community at large by reducing degradation of the environmental conditions. For the future of ethical fashion, ethical choices must be an available alternative to customers. Fashion companies need to embark upon design to not only be ethical but also stylish, therefore need to create trust by adopting transparency and integrity throughout the value chain. Fashion brand should take advantage of ethical fashion criteria to provide assurance to consumers with socio-cultural aspects in mind, to promote their fashion collections effectively.
Recommendation for Researchers...............................................................................................................................................................
More research work needs to be accomplished to have a clear analysis of the ethical fashion perspective to cover environmental, socio-cultural, fair trade, human rights, animal rights and other aspects. It is important to study the various stages of BGSS valuation from growth stage to initial public offering stage and beyond to bridge the gap between academic research and practitioners using the multi-stage valuation method.
Impact on Society..........................................................................................................................................................................................
Since ethical fashion is of great significance for the contemporary society, raising awareness among various cultural communities globally to promote avantgarde ways regarding ethical fashion criteria, specifically to curb the degradation of the environment, stopping the cruelty on animals and protecting the human rights among consumers is paramount.
Future Research............................................................................................................................................................................................
This study will bridge the gap between practice and academic research, scholars should embark upon creating a total addressable market (TAM) theory and empirical analysis studies because the total addressable market is the key and practical determinant of BGSS success. Ethical fashion academic research should be pursued beyond sustainability on smart wearable.