Tuesday, January 12, 2010

Observations on the Year Behind us & Some Predictions for 2010

We at SLM believe that when we look back, the first decade of the 21st century will be clearly seen as one of the major pivot points in history, bringing with it a deepening and broadening understanding of the connectedness of living and economic systems, as well as the seeds of a dramatic shift in the nature, goals and methodologies of business and the way things are made. As we start a new decade -- one we expect to be characterized by ‘getting to work on the work of change’ -- we are pleased to offer this perspective on some of the key events of 2009 and projections for 2010 from one of our regular contributors and long time community members, Tamara Giltsoff, co-founding partner at Abundancy Partners.

Observation #1: The Slow Death of the Free-Market?

The global economic melt down of ‘08/’09 initiated important conversations that until then were not very present amongst civil society, markets, the media, nor even government. In October 2008, The Washington Post posited “The End of American Capitalism?” On March 7th 2009, Thomas Friedman wrote in The New York Times “What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said – No more!” On March 12, the Financial Times ran a front-page story with the headline “Welch Denounces Corporate Obsessions.” Jack Welch, the former head of General Electric (GE), had described the business emphasis on shareholder value as “misplaced."

In Britain 2009 saw Queen Elizabeth ask, “Why did no one see the crisis coming?” A group of eminent economists wrote to the Queen in talking of “failure of the collective imagination of many bright people” and of the “psychology of denial”. And French President Sarkozy suggested, “A great revolution is waiting for us. The crisis doesn’t only make us free to imagine other models, another future, another world. It obliges us to do so.”

In 2009 it became increasingly clear that the failure of capitalism 1.0 lies in the things that the ‘free market’ leaves untouched and unaccounted for: debt, risk, wellbeing, social justice, ecosystem services, energy/food/water supply and so on.

Our eyes were opened to these failures mid economic crisis. And yet will the world revert back to credit comfort and high-street spend as soon as the engine of growth begins to tick over again? Will it require ‘Economic Collapse #2 before we rebuild and begin the great economic revolution that Sarkozy visions? Or are we somewhere mid paradigm shift, profoundly awakened by what happened to the economy in 2008-09 and moved by an increasing ecological literacy?

2010 Predictions

  • Climate change, the global commons and economics will finally become understood as a connected whole. More and more business and political leaders will come to understand that the benefits of unending economic growth are not compensating for the vast risk of damage they create – from energy security, global warming, ecological destruction, poverty, debt and financial risk.
  • Continued discussion about ‘beyond growth economics’, sparked by civil society and leading figures such as Sarkozy, The Archbishop of Canterbury and Joseph Stiglitz will take place.
  • We will see a rise in media content on new forms of property management of the commons. Economist James Quilligan calls for “co-governance” and “co-production”, writes On The Commons.

Observation #2: The Socialization of Climate Change

Despite the failure to arrive at a meaningful and legally binding agreement on climate change, COP15 gave citizens, brands and leaders a social platform for a global conversation about climate change (and ecosystems) not present since the release of “Inconvenient Truth.” The lead up to and undertaking at COP15 in December provided a new opportunity for citizen engagement and corporate participation. Tck Tck Tck, Avaaz.org, Hopenhagen, 350.org, The Climate Leaders Summit, Governors’ Summit, Youth Climate Leaders etc. shifted world citizens and business leaders from awareness to a lot of divided opinion and on to some level of activation.

The need for this conversation continues to grow. Post-Copenhagen the question remains: what organizing platform or striking leadership will enable this conversation going forward? And how do we create more even more powerful conversation that moves global stakeholders along the curve of engagement to build long-term sustained political action and the continued action around transformation of business and consumer behavior on the ground?

2010 Predictions

  • We expect a growth of social engagement platforms to build participation between brands, business, political leaders and citizens, building movements and driving change.
  • We expect a shift from elitist response to climate change and wellbeing to a more democratic and collective pursuit of lives better lived.
  • We are watching for a deepening emphasis on conversations that focus on driving behavior change.

Observation #3: Beyond CO2

Increased concerns about deforestation, water depletion, soil degradation, peak food, and disappearing bees gave the world some reference to a discussion on climate change that goes beyond just CO2. The complex but ever more exposed truth is that the environmental challenge of our day is not simply one of mitigating levels of CO2 to reduce global warming. The challenge is to understand ‘the commons’ as a whole, realizing that how we manage natural resources and ecosystems in one part of the world is wholly connected to the well being of all of us.

Forest degradation brought about through agricultural expansion and conversion to pasture land, logging, fires etc., account for nearly 20% of global greenhouse gas emissions -- more than the entire global transportation sector and second only to the energy sector. Indonesia alone has lost 72% of its indigenous forest, which has led to biodiversity loss and the disappearance of a massive carbon sink and cloud cover generated by the forests. Not only have we already depleted the amount of forest available to absorb carbon, but in destroying forests we have also destroyed topsoil and biodiversity, further degrading the overall balance of the earth’s ecosystems.
A better understanding of overall impact of ecosystems services is wholly interlinked with tackling climate change and the world is taking note. Perhaps citizens and communities are better able to understand and value ecological systems – be they food, forests water, oil, or minerals – than they are able to place close at heart CO2 levels and a warming planet (invisible, abstract and distant).

2010 Predictions

  • Watch for a stepped up focus on how to account for the fact that the atmosphere has no propertied boundaries as our lands and seas had no legal boundaries centuries ago.
  • We predict a narrowing gap between ‘climate change mitigation’ focused on reducing greenhouse gases and ‘climate change adaptation’ and ‘ecosystem services’.
  • A greater understanding of our individual personal responsibility for the ecosystem – the global commons – that we all share.

Observation #4: Towards a ‘Commons’ Framework

In 2009,Elinor Ostrom became the first woman to win the Nobel Prize for Economics. Though notable, her gender is not the most important aspect of this award. Rather, her Noble Prize represents a renewed and very public discussion on the economic framework required to address climate change and ecosystem collapse. Ostrom’s work emphasizes how humans interact with ecosystems to maintain long-term resources yields. She debunks the ‘Tragedy of The Commons’, which assumes that individuals are ruthlessly selfish and that therefore planetary commons must be privatized to ensure its protection is tied to individual self interest. Her analysis of economic governance shows how privatizing natural resources is not the route to long-term sustainable economies.

2010 Predictions

  • We expect to see the rise of Capitalism 3.0 thinking and an “upgrading of Capitalism’s operating system” posited by Jules Peck (my business partner) and Robert Phillips of Citizen Renaissance.
  • Watch for the emergence of highly publicized new economic thinking (coupled with a philosophical debate) around commons governance.
  • The coming of age of climate policy and debate that incorporates the global commons

Observation #5: The Rise of Collaborative Consumption

In 2009 the U.N. General Assembly passed a resolution declaring 2012 the International Year of Cooperatives – that is, businesses that belong to their workers or the people who use them, according to Shareable.com. A flurry of leading business and marketing authors published or are soon to publish the rise of ‘collaborative’ and ‘cooperative’ consumption where citizen or business communities pool their purchasing for a ‘group buy’, barter, or rent instead of relying on single ownership and limited use. Include John Grant’s book “Co-opportunity” (who is my other business partner), which launches this coming January, and Rachel Botsman’s book “Collaborative Consumption”, later in 2010, amongst many others listed on Shareable’s book list for 2010.

2010 Predictions

  • Watch for new platforms or even currencies to enable communities of interest to generate both business and social value.
  • We expect to see newly decentralized markets driven by a greater appreciation of natural and social capital. (The deconstruction of our highly industrial food system towards a more local relationship with food is an early example.)
  • We anticipate a greater emphasis on communities to address social, economic and environmental challenges.

Observation #6: The Open Source Planet

The Climate Group (TGI) announced the launch of “The Planetary Skin Institute”, in Copenhagen. PSI has been established to research and develop near-to-real-time global monitoring of environmental conditions. The new institute draws on several years of R&D public/private partnership between Cisco and NASA to provide a platform for open collaboration between public, private, academic and NGO sectors.
The Department of Energy (DOE) announced the launch of “Open Energy Info” – a platform to connect the world’s energy data. It builds on The White House’s Open Government Initiative with a linked, open data platform bringing together energy information to provide improved analysis, visualization and real-time access to data. Ethical Economy and Tomorrow’s Company launched “Climate Commons” a global open platform for corporate, citizen and government climate communities to share innovation and progress. And early 2010 will see the launch of Nike and Best Buy’s “Green Xchange” – open innovation platform on sustainable materials development.

2010 Predictions

  • Watch for announcements of wholly unlikely partnerships between competing/non-competing businesses and brands, countries, cities, majors, government departments, citizen communities and leading figures.
  • We expect a growing movement toward planetary understanding, R&D, and social change.

Observation #7 – The Evolution From ‘Technofix’ to ‘Behavior Change’

Climate change demands radical innovation and change. Until recently, solutions have focused on technofixes and scientific target setting, however increasingly, the role of social innovation and behavior change is being recognized as offering the potential for faster, cheaper and potentially bigger change. Plus, ‘behavior change’ mechanisms give citizens a mechanism to participate in the agenda in their everyday lives in ways that make sense for them.

By way of simple example, the simple reframing of choice can have significant impact. Studies show that when a meat-based entrée is being served, and people are offered a vegetarian alternative, about 5 to 10% will request it. Organizers of the 2009 Behavior, Energy and Climate Change Conference which took place in Washington last month tried an experiment:

They made a vegetarian lunch the default option, and gave meat eaters the choice to opt for a meat alternative. St a prior BECC conference, when meat was the default option, attendees chose the meat by an 83% to 17% margin. When the choice was reframed in this simple way, some 80% went for the veggies, not because there were lots of vegetarians in the crowd of about 700 people but because the choice was framed differently.

As the marketing and communications industry searches for a powerful role amid the climate change agenda as well as a way to weave its way out of the dilemma of consumerism, the place for ‘behavior change’ work is becoming apparent. Brands, business and governments interventions as well as business model innovation are required to influence new social and consumption behaviors and beliefs. This is a creative challenge that will call on cross-discipline thinking, social media wizardry and social science leadership.

2010 Predictions and Challenges

  • The ‘Behavior change’ topic will be more widely discussed alongside discussion about scientific analysis and political targets.
  • Social innovation and climate change challenges will be increasingly seen as one.
  • Wholly new business models and service systems, which change the way we do things, will take the place of more simplistic marketing communications initiatives.
  • More brands will begin to engage consumers to make informed choices and make change a benefit versus a sacrifice.
Editor’s note: We appreciate Tamara’s insights, excerpted from her full December 27th blog post, and we look forward to hearing your thoughts on these and other 2009 events and 2010 predictions. As we bid 2009 adieu and look forward to what 2010 has in store, we expect this to be a big year of further growing pains, but also one full of breakthrough efforts that will build on our learning from the past, and hopefully lend much more learning to inform further innovation throughout the coming decade.

We believe there is no more satisfying work than to be part of the sustainable innovation collaboration taking place around the world. Importantly, we each have a role to play in envisioning and creating new businesses and brands that will contribute to a vibrant future for our children and theirs. We look forward to continuing to be a nexus for these discussions and to amplifying your successes along the way.

Happy New Year. And New Decade.

Sustainability Media