Is today’s global society finally ‘maxing’ itself out from an economic point of view? As Milton Friedman put it back in the ‘70’s, “the social responsibility of business is to increase profits”. Is that the right message for today’s business? I think not and here’s why.
As we have all witnessed for the past 5 plus years increasing profits for many businesses has been a tough ask. In fact for an entire multitude of companies, it seems that even before that point the maximising of profits in a legal way had been reached and so, for the banking community in particular there had to be more nefarious ways to ensure that the shareholders were kept happy.
To all intents and purposes, the last economic crisis around 2008 was successfully arrested by a group of western central banks working together to ensure that bond holders and a number of others were protected at all costs. As a result, the cycle was incomplete, in that asset prices weren’t written down enough or off. This failed to let growth flow through, as each of the previous successive cycles had done.
It is said that, ‘necessity is the mother of invention’ and if we take a step back -a pretty big one I must admit, we can see that mankind’s inventiveness has been running amok given the constraints of ensuring that the wealthy must retain their wealth at all costs, regardless of the increasing numbers of and contributions from philanthropists. Technology has invaded the west’s psyche, from the ‘i’ everything to a retailer knowing who you are and where you live as soon as you walk in their store by automatic check up of your regular Wifi access. The system is bursting with data, if only we knew what to do with it.
We only need to look at the business areas where tech has not yet invaded to see where the next opportunities lie. Much of that has been the mainstay of the State, but now Government’s are ceding control of some of its estate- education, ageing & healthcare will be open markets for the tech revolution to swallow. However, herein lies a particularly thorny problem for the avaricious capitalists- how can they alter their business model so that it at least appears as though they are paying heed to helping solve societies woes while not making too much profit?
This is one of the beauties of the ‘Social Enterprise’ or ‘Impact’ model. Here, the aim is to align all interests within the network of relationships the business needs to work and co –exist on an on-going or sustainable basis, including how it relates to this planet. One of the main reasons why this resonates with so many people is that we all can see the truth, when it stares us straight in the face. It’s just that so far, we haven’t thought enough about how to create fairer businesses or for many, there hasn’t been the need for that to happen.
Up till now, society has accommodated business models which have been good enough; in part because the increased profit margin could be seen to be a benefit in itself, as per Mr Friedman’s views from the 1970’s.
However, today there is so much data being generated by all sorts of technological monitors and systems that this data could be used to more clearly identify what impact a business is creating by, what it produces, how its workers benefit, from where the supplies have come to make the product and what benefits are there to the consumer. This is true also of intellectual products as it is of physical ones.
We are at or very near to a tipping point where we now have the data to create a more just and harmonised society, one in which we all need to show what our contribution is worth. Of course, that’s going to cause a ruccus in many ways, so we’ll still need the central banks to do their part, while we make our way through the treacherous waters of greed, ties to nationality and various other troubles, but the opportunity is ours to grasp!
Perhaps Google’s corporate motto of “Don’t be evil” can be improved by other businesses to be along the lines of “Be fair, just and make an acceptable and sustainable return”.