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Yearly Archives: 2009

Sustainable Development

By Jami Miedema

The world’s consumption patterns continue to be a major issue today as population growth climbs and resources become scarce. Often, when referring to consumption levels, the topic of sustainable development arises, and it forces us to think about the well-being of future generations. The World Business Council for Sustainable Development (WBCSD) was created for just that reason: to advance the concept of sustainable development in the social, economic, and environmental spheres, and therefore, ensure the welfare of generations to come. They define sustainable development as, “forms of progress that meet the needs of the present without compromising the ability of future generations to meet their needs.” In their publication, Sustainable Consumption: Facts and trends from a business perspective, the WBCSD looks at consumption trends and offers ways for both consumers and businesses to make sustainability a priority. We will focus on the business portion, which examines three ways through which businesses can approach sustainable consumption: innovation, choice influencing, and choice editing.

Innovation is the avenue for developing efficient products and services by creating goods that are socially valuable while reducing their environmental impact. According to WBCSD, business innovation promotes sustainability through eco-efficiency, product design, supply chain management, and business model innovation. Eco-efficiency refers to actions that add value but support ecological health. Some examples given are re-use and recycling, reducing water consumption during manufacturing, and using videoconferencing instead of travel. Product design innovation can deliver the best quality good or service to a consumer for the best price. The instance the report used was Proctor & Gamble’s dishwashing detergent. After a thorough analysis, the company found that 90% of a load’s carbon emissions were emitted while using their product and not during the manufacturing stage. By re-designing their detergent to work at lower water temperatures, they helped their consumers save money and reduced the environmental impact of their product. Businesses also encourage sustainability by enforcing “green” practices throughout the supply chain and by building business models around the aspects of the business that are most eco-efficient.

Next, choice influencing is the way a company attempts to guide consumers to choose behaviors that promote sustainable consumption. Companies can influence consumers through marketing and advertising, and many are choosing to form relationships with the media and other opinion-formers. Through these marketing outlets, consumers can find access to affordable and sustainable products. Marketing also helps businesses further their reputation as sustainable and responsible firms, and therefore, leverages their influence on society.

The last approach, choice editing, allows firms to have direct control over consumer consumption. Businesses can manage supply chain inputs to control the end product, or they can discontinue a product or service altogether. Editing gives them the authority to ensure consumers are using only the most sustainable products available.

This article only touches on one of the many aspects of creating sustainable development. For more information about the roles that society, regulators, businesses, and consumers play in advancing sustainable consumption practices, please read the WBCSD’s publication: Sustainable Consumption: Facts and trends from a business perspective.

Source: Sustainable Consumption: Facts and trends from a business perspective, The World Business Council for Sustainable Development, 2008.

Inside the Wall: Nothing Changes

By Todd Smithee

On a recent family vacation, my family visited some Mayan ruins, consisting of a 30-acre walled site containing a series of very impressive structures.  Several of these structures were designed as sun calendars to help farmers time the planting of their crops. One of the other tourists asked the guide who lived inside the walled compound and who lived outside the wall.  The tour guide explained that people who lived within the walls got to do so because of their engineering and astronomical knowledge. Anybody could farm and be replaced.  Their special knowledge, however, provided the engineers and astronomers with a special power the civilization could not live without – how to build calendars that would help people grow food.  The tour guide went on to tell us how the Mayan rulers would tie boards around the heads of their infants while their skulls were soft, giving them a distinguished royal or magically shaped head.

You might wonder what I mean by naming this article “Nothing Changes.”  Think about it: what took place a thousand years ago mirrors what is happening today.

  1. The walled site – While few of us live in physically walled or gated communities, we do separate ourselves both financially and socially.  We do this in the same way the Mayans did, through knowledge.  You can be assured that those with valuable, specialized knowledge will do far better in any economy, even a difficult one like we are presently experiencing, than those with skills that can be easily replaced (or outsourced).
  1. The shaped heads – I like to think of this as an early form of brand marketing.  The uniquely cone-headed children of the rulers were easily identified by their appearance, which separated them from the rest of the people and helped their families maintain power.  While we don’t exactly deliberately warp our skulls to do it, we work hard to differentiate ourselves from others competing for the same jobs or deals.  Our websites, education, dress, and resumes are all designed to distinguish us from those we compete with to “live inside the wall.”  And working on my resume or website sure beats tying boards around my head!

We pulled our kids out of school for a week for this vacation, and I am glad we did it.  They got the opportunity to see how people lived a thousand years ago, while also getting a lesson about how having unique skills and knowledge can win you the privilege of living “inside the wall.”

Recruiting Work

By Dean Whittaker

Since the Ronald Reagan and Margret Thatcher days, we have been moving toward a shift in risk from the employer to the employee. Neo-libertarian free trade and globalization have become our mantras, with the accompanying cultural change. Free trade looked like a way to generate more demand and thereby create more jobs than it destroyed. This creative destruction was viewed to be a good thing, leading to an increase in the quality of life and better living for all. It wasn’t until our banks ran amuck that we realized the emperor had no clothes.  Unfortunately, like the introduction of new technology, free-trade and globalization have created a class of displaced and contingent workers who are now part of the Free Agent Nation, as described by Thomas Friedman, or The Creative Class put forth by Richard Florida. In a recent book, Nice Work if You Can Get It, Andrew Ross explains why we are all veritable sweatshop workers now.

Ah, yes. Contingent workers – that’s all of us. People tend to stay put, but work goes to where it can be done most efficiently and at the lowest cost. Capital moves to where it can receive the highest return on investment for the least risk. Risk then shifts to the employees, and wealth becomes increasingly concentrated in the hands of a few.  If you’re on the wrong side of the economic divide, “free trade” may not necessarily be free.

Globally networked companies have taken the work they need to do and contracted it out at the speed of light to the cheapest possible contingent workers.  The amount of work that needs doing has contracted in the face of a stalled economy. Once consumers became consumed by their consumption, the work and therefore the jobs that this demand had created left the marketplace.  Governments are attempting to replace some of this work through public projects.

Economic development organizations can do more for their regions by thinking differently about what they can offer. What if, instead of attempting to recruit companies, economic development entities focused on recruiting work? If you think about it, economic prosperity is determined by where work gets sourced and who performs it. While recruiting companies may be a little more straightforward than getting work sourced in a particular geographic area, the latter may be far more important.

How does an economic development entity go about recruiting work? First of all, figure out who has work that needs to be done. Next, understand your competitive advantage and what work your workforce is capable of performing (or could do with some additional education and training). Then you would need to figure out how work gets sourced, who the decision-makers are, and how they go about making this all-important decision. Lastly, you need to create an effective strategy to solicit the work.

In these uncertain times, an economic development paradigm-shift from recruiting companies to recruiting work will be difficult to make.  Overcoming the political and social resistance to change is a daunting task.  The risk for many organizations will be too great. However, those who take on this challenge will find it to be as rewarding as it is difficult. What about you and your organization…are you already there? Can you make the world of work less contingent for your region’s workforce, and thereby strengthen your region as a whole?

Riding the Cycle of the Biofuel Industry

By Vidhan Rana

Until a few years ago, ethanol, biofuel or bio-diesel were the words that came to mind when one talked about the alternative energy industry. Today, however, solar and wind seem to be the buzzwords. While the number of new wind farms and photovoltaic cell manufacturing plants has increased over the last few years, new biofuel plants have dwindled. However, the biofuels industry is poised for a comeback.

While new bio-fuels project announcements peaked in 2006 at 201 projects, they totaled a mere 66 in 2008. The chart below shows the number of new project and expansion announcements in the United States between 2003 and 2008 in the biofuel industry. In total, there were 604 bio-fuel related projects in the United States in those six years. Approximate net investment stood at around $50 billion, or $84 million per project.

The above chart does not mean that the biofuel industry is in a decline. Opening a new bio-fuel plant can be an expensive business. With the economic downturn and the lack of credit both hitting producers around the same time, new projects were hard to undertake. There was also some overcapacity in the market due to the high volume of activity in 2006 and 2007. In addition, low gasoline prices meant that some forms of biofuel could not compete with gasoline economically. The situation became so dire that a number of major ethanol producers filed for bankruptcy in 2008 and 2009.

However, the Energy Information Administration, a part of the US Department of Energy, expects biofuel demand to increase over the next 10 years. In fact, the Department of Energy projection shows the demand for oil-based fuel (gasoline, diesel and jet-fuel) declining over the next 10 years. The chart below shows the demand pattern of oil since 1970 (numbers after 2008 are projections).

As the economy comes out of the current recession, demand for biofuels is expected to go up again. New government regulation to increase fuel standards and the Obama Administration’s push for energy efficiency will also boost the demand for biofuels. Last year 7% of the gasoline Americans pumped into their tanks came from plant-based fuel. According the to the Energy Information Administration, that number is likely to double over the next decade as mandates for more biofuels are implemented.

Another trend that is likely to impact the biofuel market is the mandates that say that all fuels cannot be made from corn, the most popular raw material for ethanol. Governments all around the world are concerned that if too much corn is used for ethanol production it may increase the prices of corn-based food products. As a result, companies are increasingly looking to convert municipal and industrial waste, wood pallets and a number of different materials into biofuels. Whittaker Associates identified over 50 up-and-coming start-ups that are banking on the projected increased demand for biofuels and are making major investments in the industry.

As demand for biofuels rises, new plants will be built and existing plants will be expanded.

Tech Trends (Part 2)

By Jim Bruckbauer

Last month I shared some notes on Keith Brophy’s Tech Trends lecture, which he gave in Grand Rapids, MI. He described innovative new technologies that are just around the corner and how we can potentially use these technologies.

This month I’d like to share a couple of programs and technology tools I have been using lately that have helped make me a more productive and informed professional.

Twitter.com
Twitter is a social networking service that allows a user to post text of up to 140 characters, which is in turn posted on the user’s profile page as well as to other users who have subscribed to see those posts. The intention of the site is to be a communication tool between loved ones or associates.
Of course some of us are skeptical about how this can be useful and not a waste of time and energy. If someone is posting their every activity, why do I want to know that information? Perhaps you don’t want to know when your best friend flushes the toilet.

But businesses are using this tool for productive communication. You may simply post relevant news articles, new product announcements, events, or links to those who may wish to follow your company. This is just one example of the productive uses businesses have created for this platform.
This web-based program has a search feature, so you may want to search your location to see what people are saying about your community. Go ahead, try it.

Google Reader
Many informational websites constantly publish articles, and it can be difficult to keep track of all your favorite sites. Google Reader is a tool that allows the user to be “fed” any new text articles that appear on a website. You simply subscribe to a website as a “Reader” and any updates from that website will be collected where you can read them at your leisure. From there, you can organize information from multiple sites and share it with people. I’ve just begun to explore this amazing tool.

I receive updates from the Financial Times, the Economist, Lifehacker (which I’ll touch on in a minute), Wired Magazine, Frommer’s, and my local news.

Taking the time to explore other Google tools may be beneficial; we like to use Google Docs, Google Chat, Google Maps and others.

Lifehacker.com
Lifehacker is a website devoted to sharing information about software and tools that help you save time and become more productive. It features articles, tips, and suggestions on how to optimize aspects of your life through technology. Not only does it focus on making your work day more productive, but it also touches on tips and tools for personal finance, grocery shopping, and design, and it even discusses how to take better pictures.

Check this site out periodically, or if you’re like me, subscribe to receive feeds so you can intelligently speak and know about the latest and greatest technology tools.

Xobni
If you’re using Outlook as your mail server, I would check out Xobni (spell it backwords). It’s a program you can install from xobni.com that helps a you search and organize your inbox. Once the program is installed, a toolbar appears next to each email you receive. The toolbar will show information about the person to whom you are sending (or receiving) emails. Xobini collects information about the person from several social networking sites and shows a mini-profile of the person. It will also sort and calculate information about the trends in emails that have been sent to and from the person.

This tool is very useful for sorting and organizing your email, which, as most of us are aware, is becoming a large portion of our lives.

These are just a few tools that I’ve found helpful lately. They may not be for everyone, but I thought I would share them with you in hopes that you could at least give them a shot.

What are some tools that have been helpful for you? I’d love to hear about them, as well as your experience with any of the tools mentioned above. James@whittakerassociates.com