Joe Bell, MBA alum, was named Sr. Director of Global Network Infrastructure at CDK Global in October 2014.
We Are the 5%
Paul Ventura, November 29, 2011
I try to avoid Black Friday and Cyber Monday. Now I'll have to add "Target Thursday" to my to-don't list. It's not that I don't like to buy things. I just don't like to be driven to buy because something is a good deal. I hadn't been giving this much thought until, on Thanksgiving morning, I awoke to a radio story that included a voice saying "There's nothing I need to buy, but I'll go see what's out there." I can relate. That voice sounded like mine a few years ago.
With billions of people unable to meet their basic needs there's something distressing to me about the idea of consuming for the sake of consuming, like a dog chasing its own tail. It's a big dog with a big tale. ShopperTrak has estimated sales during this past Friday at $11.4 billion, up 7% from 2010. Cyber Monday sales came in at $1.25 billion, up from around $1 billion last year. All of this amid increasing talk of responsible or sustainable consumption. Apparently that talk hasn't found its way from the blogosphere to the WalMart parking lot.
That's not for a lack of trying. Patagonia, whose founder Yvon Chouinard has long advocated for limited business growth, placed a full-page ad in Thursday's New York Times, with the heading, "Don't Buy this Jacket." The company explained: "We ask you to buy less and to reflect before you spend a dime on this jacket or anything else."
As the good business folks at Patagonia realize, we are the 5%. That is, as Americans we comprise less than 5% of the world's population but consume 20 to 30% of its resources. We use an estimated 22% of the planet's energy, for instance (while producing 24% of its carbon emissions). According to World Population Balance, for every dollar we spend, a cup of oil is used to produce the item that dollar buys. Don't get me started on the water used; that's for another time. In effect, each American consumes as much energy as 12 Chinese or 31 Indians. And those countries are not far behind. China is rapidly approaching the 20% energy use figure and India is already at the 5% level with over 16% of the world's population. With one out of three people on the planet living in China or India, we should be concerned about the prospect of their consuming resources at the level we do in the U.S.
What might we do, even on just a few days of the year?
A blog item on treehugger.com suggested three options for Black Friday: "1. Buy Nothing; 2. Occupy Main Street and Support Your Local Small-Mart; and 3. Buy American." And the Nature Conservancy announced its own campaign for "Green Gift Monday," to encourage us to purchase only gifts that are not "wasteful." Ironically, when I viewed this announcement on the treehugger.com website (which is advertiser-supported), I was greeted with an ad for AdvanceAutoParts.com encouraging me to "Save 20% now and get a $50 off coupon" on Cyber Monday. I suppose that keeping my car in good running condition is a boon to the environment.
Is there an exit ramp from this spending highway? Ted Howes of Businesses for Social Responsibility (BSR) writes about sustainable consumption in a November 23rd blog entry:
Shopping is not just about consuming products, but consuming experiences – there's community, competition, and excitement in chasing sales. How might we integrate that experience with reduced consumption and increased connection? How might we build the same sense of visceral excitement into experiencing shopping without consuming anything?
The answers to my and Howes's questions might be found in the movement toward collaborative consumption, a fancy name for sharing. At BSR's own annual conference in early November, one of the presenters was Lisa Gansky, author of the 2010 book, The Mesh: Why the Future of Business is Sharing. Gansky's presentation was entitled "Swap! Rent! Share! The Growing Drumbeat of the Share Economy." According to Gansky, "The fact that we need to make and sell more things to make more value just isn't true." A recognized example of a business model using shared access is Zipcar, whose subscribers have access to a variety of cars from a Toyota Prius to a Mini Cooper when they need them. Or simply want to drive one.
Tool libraries in cities like Portland, Oregon, and Columbus, Ohio, are another example. I don't need to buy a coping saw when I only need it for a single job. Having access versus ownership is a new business paradigm reflected here. But ownership can also take on a shared dimension. In Oregon, people are lobbying the state to allow individuals to rent their personal cars for a few hours a day when those vehicles otherwise sit idle. Another example is the company Airbnb, whose peer-to-peer (P2P) service enables individuals to share their homes and apartments for the short-term, using web surfing to facilitate couch surfing.
Staying on top of developments in the area of collaborative consumption, there's the Collaborative Consumption Hub, which tracks thousands of examples of this worldwide trend.
One concern about collaborative consumption, as recognized by even proponents like Brian Chesky, CEO of Airbnb, is being able to trust what you have with strangers.
Rachel Botsman, co-author of What's Mine is Yours (2010), is convinced that "groundswell" collaborative consumption is not just a passing fad but a long-term paradigm shift that hinges on a new facilitation of trust relationships. In a TED presentation, Botsman says that
An extremely powerful dynamic that has huge commercial and cultural implications is at play. Namely, that technology is enabling trust between strangers. We now live in a global village where we can mimic the ties that used to happen face-to-face, but on a scale and in ways that have never been possible before. So what's actually happening is that social networks and real-time technologies are taking us back. We're bartering, trading, swapping, sharing, but they're being reinvented into dynamic and appealing forms. What I find fascinating is that we've actually wired our world to share, whether that's our neighborhood, our school, our office, or our Facebook network.
If Botsman is correct, then it may actually be possible to receive more by giving less. This is a significantly different value proposition -- and value chain -- than that of "producing – marketing – purchasing – consuming." It means "freecycling": taking what we have and allowing others to do more with it.
Why is responsible consumption important to me, especially in my role as the administrator of an MBA in sustainable business? Isn't it a goal of business to increase purchasing? Isn't continuing consumption the engine of economic growth?
Both business people and the public are answering "not necessarily" to these questions.
Speaking at the Knowledge Forum on Socially Conscious Consumerism held at the Ivey School of Business in Ontario in February 2009, Peggy Cunningham took issue with the prevailing model of marketing as being "to create dissatisfaction among consumers, so that they could buy more and keep the economy growing." She holds unsustainable marketing accountable for the rise in irresponsible consumption.
At the same forum, Ron Dembo of ZeroFootprint, brought that rise to life with his contention that "We consume fifty times more [energy] than in our grandparents' generation." He defines socially conscious consuming as about consuming less, more ingeniously (emphasis mine). I'm sure the gasps from MBA professors and students in the audience were audible. But Patagonia seems to get it.
Is collaborative consumption a viable business model? Zipcar thinks so. It just reported its first profit in the third quarter of this year, with net income of $0.7 million. That's based on revenue of $68.1 million, up 24% from last year. Other companies betting on a collaborative model are SandVault and Predator Helmets, two Canadian for–profit companies, which are designing "BikeShare" stations and shareable bike helmets to be used in places like Boston, Washington, D.C. and Melbourne, Australia.
The sharing movement is even finding a foothold in countries like Greece, whose beleaguered economy is the bane of the European Union. But the resilient Greeks are resorting to more bartering. While listening to the same local NPR station that launched my thinking about consumption, I heard the following this morning:
Liana Papanaum, who lost her job as a secretary, has chosen a more communal approach to make ends meet. "For example, I have a young couple near me, they have two small children. So I could say, 'Could you please do the ironing for me, and I will teach English to your...children?'" she says.
It's time we learned something from the other 95%. And from our grandparents.
Published in Sustainable Energy Guide at SustainableIndustries.com, January 2012