Tag Archives: prosperity

What’s Consumer and Business Responsibility Got to Do with Economic Prosperity & Sustainability?

7 Jun

The past few weeks I have been wrapped up in some circle of life issues involving my aunt and mother, so writing has taken a back seat.  During this time,  I have been observing the dissolution and redistribution of my 91-year-old aunts’ household and supported the challenge of deciding which belongings should go temporarily with my 86-year-old mother to assisted living.   My current role as a duly appointed member of the ”sandwich generation” is fulfilled too when my teenage daughter asks to go on yet another trip to the mall to view the latest fashions.  All these events have brought to mind the material possessions that we accumulate over the course of our lives, the ingrained value we place on “things” and how they somehow give us more pleasure or worth.

Ironically, last week I also had the chance to participate in a number of one on one and group discussions revolving around the role(s) that we as consumers have in managing resources, waste generation and sustainable development.  I weighed in on the responsibility that consumers have in the 21st century supply chain (related to conflict minerals), just as I had mentioned in a keynote speech to the European Petrochemical Association this March.  Other participants reflected on how individuals bear a high degree of responsibility for the explosive growth in electronic and other consumer product waste.

What is abundantly clear is that we (as consumers) are all accountable for our own individuals actions in deciding what we buy, how much, how long we keep and maintain what we do have, and what we replace it with.  From cell phones, to cars, to clothes and home products, Western society has lost the passion for “thrift”.  I believe, like my parents generation did, that thrift is one of the key principles that built this great nation, but it has seemed to have gotten shoved aside in the name of consumerism and  growth,  which by the way is different than prosperity.  Of course Keynesian economists will take me to the woodshed about the meaning of  thrift in growing an economy. According to an article by the CATO Institute, ” The paradox of thrift refers to how–in the Keynesian model of the economy–an increase in saving reduces production and employment. This supposedly occurs because a decrease in spending leads to a decrease in employment, which leads to a further decrease in spending, which leads to a further decrease in employment, which leads to a yet further decrease in spending, and so on. Thus, if people try to increase their saving, there will supposedly be a decrease in spending, and a fall in employment and production.”

Prosperity versus Growth?

“Economic growth is supposed to deliver prosperity. Higher incomes should mean better choices, richer lives, an improved quality of life for us all. That at least is the conventional wisdom. But things haven’t always turned out that way.” 

So states Professor Tim Jackson (Director of the Research group on Lifestyles, Values and Environment (RESOLVE) at the University of Surrey) in a very important and compelling work, Prosperity without Growth.  The research was commissioned in 2009 by the U.K. Sustainable Development Commission and puts in focus the rather serious nature of what “progress” really is in society and the norms on which its measured.

Courtesy Christian Science Monitor

The economic slump of the last three years has also sharpened this debate over whether more is better, whether growth in consumer goods and spending really supports a sustainable economy and whether the environment and human rights are placed in harm’s way in the name of economic growth.  As Jackson notes, “The profit motive stimulates a continual search by producers for newer, better or cheaper products and services. This process of ‘creative destruction’, according to the economist Joseph Schumpeter, is what drives economic growth forwards.”   The past several years have prompted a series of key questions that I’ll throw out here for thought:

  1. Has quantity in life trumped quality in life?
  2. Does producing more and having more truly lead to a prosperous economy and long-term sustainability?
  3. Does producing more and having more truly lead to a prosperous economy and long-term sustainability? Can we still flourish?
  4.  Does having more truly make us happier, lead more productive lives and allows us as a society to be the better social animals that we are wired to be?

All tough questions, and way more to ponder in the limits of this one post for sure.  But Professor Jackson’s commission report and follow-up book on the subject mirrored what was reflected the conversations that participated in last week.   Jackson himself admits that “Prosperity has undeniable material dimensions.  It’s perverse to talk about things going well where there is inadequate food and shelter (as is the case for billions in the developing world). But it is also plain to see that the simple equation of quantity with quality, of more with better, is false in general.”

I’ve no doubt that economic growth is vital for stimulating an economy that appears to be headed toward a dreaded “double dip” recession.  However, what is critical for policy makers, economists, the financial community and electorate to grapple with is what types of investments are best to lead us out of this morass and into a future that is stable and prosperous.  Jackson, among others has argued that “targeting that investment carefully towards energy security, low-carbon infrastructures and ecological protection offers multiple benefits [in other words a more sustainable, green economy]. These benefits include:

• freeing up resources for household spending and productive investment by reducing energy and material costs

• reducing our reliance on imports and our exposure to the fragile geopolitics of energy supply

• providing a much-needed boost to employment in the expanding ‘environmental industries’ sector

• making progress towards demanding global carbon reduction targets

• protecting valuable ecological assets and improving the quality of our living environment for generations to come.”

Producers vs. Consumers- Who Holds the Key?

So am I arguing in favor of a reaching a “steady state economy” with no growth?  To be honest, I’m not sure at this point.  There have been debates over this concept for generations, and I am no economist.  Jackson himself admits that no clear model exists for achieving economic stability without at least some measure of consumptive growth.  While goods producers have control over what they make, where they source their goods to make the things we buy, the “making” side of the economy is but one side of the debate that is in play here.  There is also the “using” side of the debate that drives deep in the social fabric and psyche of the consuming public. We as consumers can shape the debate around and effects that can have on the products that are made, mass-produced, sold and consumed.   This is perhaps the toughest nut to crack, because it’s the consumer that drives the demand that in turn drives production, which then drives consumption of resources, which of course determines the stresses on the environment.  You see, we hold the key…as the old Pogo cartoon says, “We have met the enemy and it’s us”.

In a recent article in the Guardian Sustainable Business Blog, Tim Jackson again weighs in on the strong psychological attachment that humans by nature have to material things and their feelings about the environment.  “People do indeed hold deeply felt motivations to protect the environment. Occasionally they can even save money by doing so. But powerful psychological forces still hold them in thrall. The creeping evolution of social norms and the sheer force of habit conspire to lock us into expanding material aspirations.”

You see, letting go of things that make us feel good is hard.  But the instant gratification that comes with these choices has undoubtedly led us all down a slippery slope, which only we can muster the power to crawl back up.  But only if we make sound, greener choices that recognize a balance between consumption, thrift and ecological limits.

These questions and issues, among others will be reflected upon to some degree this week at Sustainable Brands ’11 in Monterey CA.  I’ll be there also with over 750 other sustainability, corporate social responsibility, consumer marketing/ branding and industry professionals to learn, communicate and exchange ideas.  Look for my occasional tweets (@DRMeyer1) and observations as the event rolls along.

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‘Rebound’- Linking Bad Backs, the Gulf Spill, and the Economy Through Sustainability

15 Jun

So, it’s official.  I have a “bad” back.  A very competent neurosurgeon told me the other day that “you have structural issues”.  Indeed I do.  This all started after I went hiking with my family in late 2009 and experienced a burning pain in my legs, followed by numbness and teeth-gnashing lower back pain.  A series of tests ruled out circulatory problems (thank goodness) and other internal stuff.  “How bad is it, Doc?” I asked.  Well, an MRI revealed a bulging disc, mild spinal stenosis and a synovial cyst.  I guess I am not a spring chicken anymore, after all.

The center that I went to get this great news had a great name too-Rebound– and it got me to thinking.  In mulling over the state of our economy and the ongoing oil spill disaster in the Gulf of Mexico, I suggest that those situations are representative of “structural issues” that require therapy of sorts.   The economy appears to slowly be on the “rebound”, while the prognosis for the other (the Gulf spill) will still require more study to determine the full extent of the damage.  Common among these two situations and my back is a call for change, to think more sustainably.  In other words, considering the economy and the environment as linked systems requires a deeper, holistic, de-siloed way of thinking.

By taking a triple bottom line perspective, the “people, planet and profit” elements that constitute sustainability will be better served and long term value realized.  This post is about hope, about renewal and rejuvenation- please read on.

People

The spine is not only the foundation for our entire physical structure but also house the nerves that radiate to each organ and every minute part of the body.  Spinal nerves especially control the functional processes of all our bodily tissues and structures.   My back problems are not so bad that surgery will be involved.  But the experience will require making some adjustments in my exercise routine, losing weight (again!) and stretching more.

The key to back health is in strengthening the “core” muscles- and having the “mojo” necessary to keep on plan and stay motivated, even when things look really, really bad.   If I follow my plan, I expect to “rebound” from my injuries stronger than before.

Profit

In the case of the economy, I have just completed reading “The Great Reset” by Dr. Richard Florida, Professor of Public Policy at George Mason University.  In The Great Reset (http://bit.ly/cDbWWG), Dr. Florida explores the parallels of the current Great Recession to the Long Depression of the 1870’s and the Great Depression of the late 1920’s and 1930’s.  Florida argues that ‘these periods of “creative destruction” have been some of the most fertile, in terms of innovation, invention and energetic risk-taking in history, and this is what sets the stage for full-scale recovery.’  Florida argues that great crises are opportunities to remake or “rebound” our economy and society and generate whole new epochs of even greater economic growth and prosperity.  Among these new forces and energies will be:

  • new consumption patterns
  • new forms of infrastructure that speed the movement of people, goods and ideas
  • ‘mega-regions’ that will drive the development of new industries, jobs and a locally based way of life.

    Image Credit: ProgressOhio

I am also am reading Plentitude, by former Harvard University economist and current Boston College sociology professor Juliet Schor.  Dr. Schors book (http://bit.ly/cnbG8n) argues that society needs to make some big changes from the “business as usual” model of economics.  In a world economy traditionally valued based on gross domestic product (GDP), Dr.  Schor explores the economics and sociology of ecological scarcity (food, water) and rising costs of goods and services (energy, transport).  In addition, she explores the factors that have led to the scarcity in incomes, jobs, and credit.  Plenitude puts sustainability at its core.  The book presents a vision that suggests finding  new sources of wealth, implementing green technologies, and strengthening locally based economies, all of which can lead to a more economically secure, ecologically sensitive and sustainable world.

Both books offer promise that a redirected focus on community-based, environmentally-centric and technological efficiency and innovation can (and must) be the “rebound” catalysts that drive economic prosperity.

Planet

The current, devastating Deepwater Horizon oil spill and ecological crisis in the Gulf of Mexico presents a great set of uncertainties and human-induced risks not realized before in terms of scope and magnitude.  My earlier posts on the Gulf spill spoke to the issue of risk management and contingency planning and how such scenarios can be managed better (Risky Business: Why Better Risk Management Can Protect Lives & the Environment- Part 1 http://bit.ly/aRDeJj).   But this discussion focuses on ecological damage and on resiliency of natural environments.

The 1979, spill from Mexico’s Ixtoc 1 offshore well in the Gulf of Campeche is proof that the environment has a “stunning capacity to heal itself from manmade insults” (http://bit.ly/djoDkO).   This huge spill surprised marine biologists and ecologists in terms of the speedy recovery of the heavily impacted Bay of Campeche ecosystem spreading into south Texas.  However, there are major differences in the depth and location of the Ixtoc and Deepwater Horizon spills, and other natural phenomena that aided in the Ixtoc spill recovery rate.  These differences may not bode well for the Louisiana coast.  Case in point- the Exxon Valdez spill in 1989.  Studies in the mid 2000’s showed that 15 years after the Exxon Valdez oil spill, “some fish and wildlife species injured by the spill have not fully recovered” (http://bit.ly/d2VEaZ).   Researchers noted some uncertainty of what role oil plays in the inability of some populations to bounce back.

Ecosystems are dynamic and ever-changing.  This changing dynamic flow continues its natural cycles and fluctuations at the same time that it continues to recovery from impacts of spilled oil.  As time passes, separating natural changes from oil spill related impacts becomes harder to distinguish.  So time will tell, and after the well is finally plugged (and it will be plugged) and the last drop of oil spills, the long term ecological “rebound” will begin.

Like the distressed economy and like the gulf coast mess, my back will “rebound” to a healthy point that is hopefully sustainable.  Mark my words.  It’s said that “good health is not an event, it’s a lifestyle”.  This holds true whether we are talking about our bodies, the economy or our planet.

What Really Matters in Business Happens at the Edges- Take the Lean and Green Challenge!

28 Mar

Is the economic downtown turning a corner? Well, yes it is…just which corner it’s turning no one really knows…yet. In the meantime, most companies are sitting tight, private capital is hanging on the sidelines, and the “green” natives are getting restless. So it was with great interest that this week an article was published in the MIT Sloan Management Review which echoed the sentiment that I have carried forward with my clients for years. Recalling Michael Douglas’ “Wall Street” character’s statement that “Greed is Good”, MIT Sloan’s basic message is… “Green is Good.

MIT presents two ways of thinking:

Old Thinking: Companies have long mistakenly thought that adopting environmentally friendly processes adds costs.

New Thinking: Green practices like recycling, reusing and reducing waste can cut costs because they make a company more efficient.

Using an example set by Subaru of Indiana, there are many proofs to the axiom that prevention of pollution and continually improving efficiencies …one idea that focuses on environmental improvement, and the other on business economics, works even in lean times. Subaru found that:

1.Profits come by increasing efficiency and reducing waste—but they don’t always come immediately.

2.Management’s leadership is vital in setting goals and getting departments to cooperate.

3.The front line workers have to be engaged to spot opportunities to reduce, reuse, recycle, and find other ways to create efficiencies.

4.Sustainability initiatives achieve maximum benefit from involvement of their supply chain.

5.All waste by-products are potentially new products

6.Green initiatives foster creativity and can enhance competitive advantage.

Let’s all be honest…that last point…competitive advantage is what really motivates business. So company sustainability initiatives cannot and should not be viewed through strictly an environmental lens, but through the balanced “sweet” spot of the Triple Bottom Line.

To paraphrase Guy Kawasaki in his book, Rules for Revolutionaries, what really matters happens at the edges. The action is not in the centers or areas of sameness. Organizations must challenge conventions and change the way products and processes are thought of and delivered.

So take the Lean and Green challenge…do what Subaru has done and get to work innovating and creating.