By Anum Yoon
During the Industrial Revolution, and for some time after it, the focus of many businesses was growth and development. Rapid expansion took place without regard to long-term stability, fair practices or sustainability. Being the biggest and best was most important; the rest was in the details.
Lately, there’s been a cultural shift, especially in the business world. The model of growing fast and wiping out whatever stands in the way is becoming dated. Today’s focus? Sustainability. Below are a few of the trends that are creating the next wave of sustainable business models.
One answer, proposed by the MIT Media Laboratory’s Human Dynamics Lab, is superlinear scaling. This theory – also referred to as social-tie density – states that increases in population density in urban settings allows more face-to-face interaction for residents.
According to Alex “Sandy” Pentland, director of the Human Dynamics Laboratory at MIT: “When you pack people together, something special happens … This is the sort of thing that Adam Smith wanted to explain. He explained it through specialization: People were able to narrow what they did to get better at it and because they were nearby, they could trade with each other.”
Put simply, the more interactions individuals have on a daily basis – face-to-face, digitally or otherwise – the more productive they’re able to become. This enables a new focus and push for sustainable business practices as more individuals become conscious of their impact on the world and take the time to choose the right company to service their needs.
With the rise of digital technology, social networking, telecommuting and other practices, connections can form regardless of locations. These connections allow for easy communication and the sharing of ideas, similar to the effects of superlinear scaling. In fact, at many newer, more innovative companies, the percentage of employees that telecommute in one way or another ranges from 30 to 45 percent.
When employees are able to connect at any time, from any location, they are able to communicate with ease and to focus on factors other than the standard “getting to the office and checking off today’s to-do list.” This means that business practices come to the forefront and that sustainability becomes more important than it was in the past. The rise in social technology has a direct impact on sustainable business models.
Today, more businesses are looking for ways to use their influence to start conversations and actions relating to value, purpose and class – all important aspects of sustainability. When management and top leaders at big companies – like Nike and Starbucks – begin to look at the bigger picture, change is more likely to take effect. This starts with enlightenment and a focus on change.
Today, the idea of a sharing economy is rising. Websites like Airbnb, that allows homeowners to rent out rooms or their homes on their own, or Pley, that allows parents to rent out otherwise expensive Lego sets for their children to build, then return, are on the rise. The idea that objects can be borrowed at a lower cost and in a more practical manner is growing.
This change in thought and business practices creates a direct path toward sustainability. Use what you need, when you need it, then allow someone else to do the same. This trend thrives because of the increase in digital technology and connectivity, and is an important driver in the movement toward sustainable business models.
Today’s focus on business sustainability, coupled with emerging technological and social trends that have not been possible in the past, means that real change is happening. It’s exciting to consider what the future holds as these trends continue to take hold and grow in a global manner.
Image credit: Life of Pix under Creative Commons license
Anum Yoon is a writer who is passionate about personal finance and sustainability. She often looks for ways she can incorporate money management with environmental awareness. You can read her updates on Current on Currency.