New Year, New Reality, New Plan

The COVID-19 pandemic has brought the world into turmoil forcing a drastically altering of the worldwide economy. For years the world has run on a linear business model that has depleted our natural resources, polluted the environment, and created a volatile economy. To wrestle with the problem businesses have begun Evolving Circular Business Models in the hopes of creating Sustainable Businesses With A Circular Economy.

The greed of capitalism with the obsession of generating profit over providing products and services for the existence of a sustainable lifestyle needs to stop to achieve an improved new reality. Over 20,000 multinationals are operating in emerging economies with many struggling to gain a foothold. The World Bank with its 2010 Ease of Doing Business Index concluded; “The only way that companies can prosper in these markets is to cut costs relentlessly and accept profit margins close to zero.”

The obstacle for large corporations to penetrate emerging markets is that their fundamental profit formulas and operating models basically appeals to the highest income tiers. Most emerging markets aren’t big enough to generate sufficient returns with the general population. Simply producing cheaper versions of their high-end products does not fit the need and costs of the majority of the population.

 This dilemma also exists in many developed economies with many struggling to survive and not being able to purchase the over-abundant of high-end products or services provided. With the pandemic causing massive unemployment, there are even more unable to afford the necessities for living. A paradigm shift is needed towards producing for the high-end market to one that sustainably provides the needs for all.

Start-up companies, especially those in emerging markets, are a good example of reinventing the business model to accommodate current local requirements while creating a sustainable operation. Instead of spending thousands on surveys and studies, they actually do the research themselves and get a true representation of what the market needs. Then, instead of modifying current products, they actually produce something new that is affordable and fits the needs of the population.

For example, in India Godrej designed and built the chotuKool, a portable compact and customizable fridge, meeting the needs of the many small rural and semi-urban families in India.  It operates either on 230V AC or 12V DC so it operates even with unreliable wall current. Since the majority of India is nomadic it is small enough to move easily with enough room to keep leftovers and immediate essential foods cool.

Building A Better Economy would involve everyone working together for the benefit of all without competing to over-run others. Corporations should be accountable for the recycling of their products, packaging and waste to help better manage the environment. The current economic model is It’s All About The Money.  Less emphasis should be placed on generating profits and more on the creation of a system in which everyone has enough and no-one has too much. This year be part of the movement that transforms the economy to one that is beneficial to all and sustainable.