It is time for Indian businesses to innovate, make world-class products and create meaning in the marketplace.
The 2019 Cannes Lions Awards had twenty-eight categories. Social responsibility was not one of them. However, themes such as ‘authenticity’, ‘humanizing’ and ‘empathy’ resonated across the festival and the awards ceremony. Social responsibility was once a category but not anymore. This signifies how ‘impact’ or ‘sustainability’ have become core to how businesses operate. For a business to become a ‘brand’, it must demonstrate impact in the most authentic way. There has been a paradigm shift, from corporate responsibility to sustainable business for a sustainable future.
There are many factors at work that are contributing to this development, the primary ones being the demographic shifts that are accompanying economic growth across the world. Global population is expected to grow to nearly ten billion by 2050—that’s two billion more people than today. Seventy-five percent of this population will live in major cities and almost half will be part of the middle-class. With 400,000 people joining the middle- class each day, living standards and earning power are strong. But, along with earning power comes more demand for almost everything—from energy to housing to cars to products. This surge in demand is already confronting the reality of less – fewer natural resources, less space, less waste — because there’s simply not enough raw materials or money available to do things the way they have always been done.
If we don’t get ‘innovative’, and most importantly ‘sensitive’ to the reality of less, humanity really doesn’t have much of a future. It is time for businesses to create meaning in the marketplace. And for a very good reason – the survival of the planet and its inhabitants.
Thanks to the chatter of the information age, consumers are also becoming increasingly aware of this reality and are basing their purchase decisions on a brand’s societal contributions and ‘impact’. The Deloitte Global Millennial Survey 2019 found that millennials have high expectations from brands – 87% think that business success should be measured by more than financial performance, while a whopping 64% believe that the current crop of companies are focused on their own agenda rather than contributing to society. These patrons of businesses of tomorrow apparently do not have high levels of trust in the businesses of today. There’s no way forward for businesses to thrive but to lead, innovate, tackle societal challenges and do good business.
This is a huge business opportunity in itself. The “Ambitions Beyond Growth – Economic and Social Survey of Asia-Pacific Region” by UN ESCAP 2019 reveals that achieving the Sustainable Development Goals by 2030 would require an annual additional investment of US$1.5 trillion for Asia-Pacific developing countries alone – equivalent to five per cent of their combined GDP in 2018, or about four percent of the annual average GDP for the period 2016-2030. But this cannot be accomplished by doing business the way it has been done so far. Businesses must get better at making better products but with less negative impact on the environment.
This can only happen if there is a conscious integration of ‘cause’ into the business model. The good news is that this is beginning to happen around the world.
General Motors is a great example. The company is taking advantage of automation technologies to radically transform how it makes car parts. It was in the news recently as it reimagined and redesigned a seat bracket prototype – which formerly required eight pieces – down to a single part that is twenty percent stronger and forty percent lighter by adopting innovative manufacturing processes. Building on such innovation, GM hopes to improve fuel efficiency and reduce mechanical complexity to produce better, longer-lasting cars in a sustainable manner. GM worked within current constraints to innovate, never losing sight of long-term business feasibility. The outcome, however, can benefit everyone.
United By Blue or UBB is a company best known for selling environmentally-responsible clothing. Their products are made of organic cotton and packaged in banana-fiber paper using sustainable tools. Besides making sustainable products, the company is leading an interesting initiative that is tied to their sales and marketing efforts. Built as a social enterprise, UBB’s mission is to rid the world’s waterways of trash. With each product that is being sold, the company pledges to remove one pound of trash from oceans, rivers or lakes. It also invites consumers to participate in this effort and has made it into a ‘Blue Movement’ that is growing with the sale of every UBB product.
Closer to India – a market obsessed with GDP growth-based economics and celebrating the rise of billionaires – there is an urgent need to reorient our focus and examine the prevailing norms of business and economic success. Nowhere is the challenge of sustainability as daunting as in India, the country slated to have the highest number of billionaires by 2023, while its major cities are expected to run out of ground water by 2020. What good is GDP growth then? What good is GDP growth now if 200,000 people are dying every year for lack of water?
It is time Indian businesses do more. Innovate, make world-class products and create sustainable business models by integrating cause into every business opportunity. This is where the future of Indian business lies. In presenting local solutions to local problems and building these into viable enterprises, thereby creating meaning in the marketplace.