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Towards a market with smaller, sustainable companies that create value for society


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The Conversation

Ricardo Mateo Dueñas

Senior Associate Professor area of at of Continuous Improvement Systems research design

Creativity and innovation are enhanced when there is a strong motivation to promote them and sufficient resources are available. In this sense, the capitalist model promotes the economic development and the attention to the needs of society, based on the motivation for wealth.

Milton Friedman, award Nobel Prize winner Economics in 1976, promoted the free market, or capitalism, as the most efficient means of satisfying the needs of others. Furthermore, he considered it to be the basis of freedom staff and political freedom, as it avoids any discrimination based on race, language, gender, religion or political ideas. However, the capitalist market is based on a strong skill between the many companies offering the same product or service to society.

The accumulation of money among the few sounds morbid, selfish and devoid of any social logic. The permission given by society to companies to accumulate wealth for their shareholders is based on the existence of a strong skill in the markets. Those who launch the best products succeed and get rich, but there must be many companies competing.

Unfortunately, for several decades now, skill has been shrinking because economies of scale, price control and investments in technology predispose to corporate concentration and absorption of competitors.

Sustainability and business ethics

The origin of the lack of sustainability of our planet lies in the behaviour of companies and individuals, who generate enormous amounts of pollution. On the one hand, there are the companies that design products and services with certain characteristics and requirements. On the other hand, there are the people, who are conditioned by the characteristics and requirements of the products and services they use.

We can say, therefore, that it is the companies that are originally responsible for the enormous amount of pollution and damage to our habitat and environment. This is where the problem and the solution lie.

However, capitalism, as a partial solution to the problem of creativity and innovation, forgot that the dynamics between power and money end up destroying entrepreneurial initiatives (reducing the skill), impoverishing people (increasing inequality and affecting their health) and polluting the planet (eliminating waste at zero cost). This status of a few very rich and many poor and sick people is unsustainable over time.

I recall two experiences that can help us understand the difference between polluting while being small or big. The first is that of a mayor, the second that of a powerful business sector.

The mayor claimed to be a defender of the environment but, at the same time, promoted the felling of forests for economic reasons and dumped polluting waste in the bush to save the cost of treating it agreement according to the law.

On the other hand, a tobacco business had not enough power to cancel but enough power to slow down the transition to a sustainable and healthy leisure model . One must operate as a poacher, the other has the power to slow down the transition. Both want to save the costs of sustainability.

Sustainability and institutions

Europe has shown a strong interest in defending social coexistence, sustainability and the role of countries in redistributing wealth and ensuring decent standards of living. However, this is wholly insufficient to change the sustainability of life on the planet.

There is a power greater than that of states operating globally in hundreds of countries: the investor groups that control the boards of major corporations and the powerful lobbies that pressure politicians. Their unbridled greed for wealth has imposed new rules that are undermining the health of the planet.

The goal should be to get companies to design and develop products and services that are environmentally, socially and economically sustainable thanks to laws that are more powerful than they are.

design and sustainability

Changing the criteria by which companies design and develop their products and services now seems to be a top priority. Any product offered on the market must meet sustainable criteria.

Firstly, on the design of the product, which should consider that its use by customers is sustainable, including the management of its waste, energy consumption, durability and repairability or recyclability.

Secondly, in the way they are produced and sold (long logistics chains, carbon footprint, pollution, etc.) to improve sustainability.

Finally, there is the management of the product when it has outlived its usefulness, which should consider how it will be disposed of or recycled. Regulated by law, they must reduce the amount of natural resources they require, as well as the pollution they generate, and do so at design of the product.

The main criteria of design are the satisfaction of real customer needs and care for the planet, which best guarantees the environmental, social and economic sustainability of our systems(ISO 14040).

Creating value for society

Before the predominant criterion of creating shareholder value, we must promote review designs to improve the customer experience while combating pollution.

In conclusion, it is necessary to reduce the size of large companies in order to prevent them from conditioning the deliberations and decisions of states. Moreover, if business is small and there is a lot of skill it will refocus attention on the customer.

Finally, companies should be obliged by law to design and develop new products and services that are environmentally, socially and economically sustainable.