Business Prosperity: The Journey Towards a Living Economy
The beginning of the 21st century bears the mark of change: changing, as we go along, the way we conceptualize making business and changing cultures, with business innovations for sustainability. Faced with the scarcity imperative and rising price volatility, businesses are turning to their supply chains to increase efficiency of scarce resources i.e. energy use, water consumption, and cut down their costs.
Forward looking companies, however, are proactive rather than reactive. They see opportunities for innovations within their industry before the need arises, and change starts with shifting towards a new way of thinking: how to re-design a product/service to best address market demand, how to re-shape customer experience and how to re-imagine one's industry. This seems to be in fact a transition period for businesses, an exciting time to explore innovative practices that European companies are applying in order to become attuned to 21st century challenges and be prosperous.
Restructuring our modern culture in a way that inspires human wellbeing and happiness, enforces ecological sustainability and at the same time creates a viable economic future, is the basis for a Living Economy. In the business sphere, this can be translated into transforming the current business culture to one honoring Living Economy values, working in partnerships with civil society, maximizing resource efficiency and diminishing the strain on natural resources, whilst generating a positive financial return on investment.
Functioning in accordance with Living Economy values is not only a possible future, but one that could lead business and the whole of society into prosperity and well-being; emerging successfully out of the current economic, social and ecological crisis.
Incremental improvements in mitigating losses in natural and social capital are only targeting the symptoms; getting at the root of the problem implies radical and sometimes transformative innovations.
What business people really need is a paradigm shift in the way they think of making their profits – being reactive to current challenges is not enough. Proactive thinkers have the talent to inspire and motivate people around them towards a higher goal, i.e. giving their industry a make-over, changing their business model, disrupting the market through innovation etc. In doing so, system-thinking is crucial, because it forces people out of their comfort zone and it allows the mind to be open to unforeseen possibilities and to question outdated practices.
AN INNOVATION-DRIVEN ECONOMY
In a Living Economy companies engage in multiple sustainable initiatives. Our model for business innovation in a Living Economy is not restricting businesses from taking on other initiatives than those presented here, but it does pinpoint to the premises of walking the path towards true prosperity and human progress.
Reducing and reusing, as well as recycling resources i.e. water usage, energy efficiency, physical materials in manufacturing or sharing resources, are all part of this process. Gradual improvements in business operations and processes could lead to cutting costs and improving value chain efficiency; however, the state of the world is shifting towards one where resources are scarcer, customers become more apprehensive to their needs and business competitiveness is redefined in terms of effective solutions to environmental and social challenges. In this context, minimizing one’s footprint by using the first two methods in the model is praiseworthy but not enough to deliver the true potential of what our society could benefit from and not a leading differentiator factor. Therefore, their path towards the new Living Economy model takes considerably longer.
The paradigm shift in structuring our economic activities is one that allows the redesign i.e. cradle-to-cradle model, and the remodelling or transformation of our business practices i.e. disrupting their industries; that way, employees can look beyond the financial imperative, towards a long-term prosperity where people’s wellbeing and happiness are paramount in creating a true return on investment.
Transitioning to the new model for business innovation posited by Living Economy requires changing mindsets and building up a business culture akin to real human progress. Those features are met among progressive companies, who commit to the goal of changing the status-quo by taking leadership in sustainability initiatives, which is a true business differentiator.