NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Q. You want to see a form of commerce that uplifts the entire human race and respects both the environment and the world’s cultures. So how should globalization develop over the next 25 years? What role does government play in this evolution?

I take the contrarian view that business?more than either government or civil society?is uniquely equipped at this point in history to lead us toward a sustainable world in the years ahead. I argue that corporations are the only entities in the world today with the technology, resources, capacity, and global reach required. Properly focused, the profit motive can accelerate (not inhibit) the transformation toward global sustainability, with non-profits, governments, and multilateral agencies all playing crucial roles as collaborators. I see three steps along the path to such an inclusive and sustainable commerce.

First, greening has been an important step because it eliminated the myth that a trade-off exists between a firm’s financial and societal performance. Driven by the realization that pollution is waste and dialogue with stakeholders is superior to court battles, greening opened the door for companies to take a proactive stance toward social and environmental issues. Indeed, over the past decade, pollution prevention and product stewardship have succeeded in reducing waste, emissions, and impact, while simultaneously reducing cost, risk, and stakeholder resistance. The incremental gains associated with greening, however, have been clearly inadequate: They only slow the rate of destruction rather than fundamentally changing course.

Moving beyond greening, therefore, is a critical second step, both to a sustainable world and to a sustainable enterprise. Driven by an accelerating rate of technological change and the growing realization that something fundamental must change if we are to accommodate a population of 8 billion to 10 billion human beings on the planet, beyond greening provides the motivation for companies to think in terms of reorientation rather than just adjustment. Leapfrogging to inherently clean technologies through disruptive business models at the base of the pyramid enables companies to confront directly the two biggest problems facing humanity: poverty and global-scale environmental degradation. These also provide the basis for the repositioning and growth that will be needed for companies to thrive in the future.

However, strategies for the base of the pyramid and clean technology, if narrowly construed, still position companies as outsiders, alien to both the cultures and the ecosystems within which they do business. The third step is, therefore, to become indigenous. By hearing the true voices of those who have previously been bypassed by globalization, and by learning to codevelop technologies, products, and services with nature and local people, MNCs can become native to the places where they operate. This requires a healthy dose of humility and respect, as well as a greater appreciation for the many and varied ways that people choose to live. Through bottom-up innovation on a human scale, MNCs effectively become part of the local landscape. In so doing, the corporate sector becomes a primary driving force for global sustainability. And in the process, visionary companies realize opportunities of untold proportion.