Tuesday, May 27, 2008

Local Economies

David Korten, board member of The Business Alliance for Local Living Economies, and Yes! Magazine, author of “When Corporations Rule the World”, and “The Great Turning” addressed our economics class at BGI a few weeks ago. Given that I am attending a business school that is dedicated to “changing business for good”, I figured I already know what he was going to talk about. I was both right and wrong. The following is my (truncated) interpretation of his visit (somewhat cheesy image from www.2b1charity.org).

He started by defining and critiquing capitalism as it stands today, a system that favors the possessors of financial capital and, in its current state of execution, threatens us with environmental, social, and even financial decay. It is a system based upon economic thought that places the interest of the Firm ahead of that of the Household. Imagine he seemed to say, what our society would look like if a 180 degree shift in this thinking had taken place one hundred years ago. As it stands, we are taught, and macroeconomic policy is geared toward, the maintenance of low costs (wages affecting households) and high profits (for businesses).
The five tenets of neoclassical economics he identified were:

  1. Economic growth is a measure of progress
  2. Free (unregulated) markets are the ideal arbiter of all choices
  3. Private property rights are absolute
  4. Individual greed maximizes the well-being of society
  5. Governments’ roles are to secure property rights ands enforce contracts
Based upon these tenets, capitalism drives us to monopolistic outcomes, the people that possess the capital, have the ability to create or amass more capital, and the cycle continues. These folks generally have access to the people in policy making circles and work to create systems that support the cycle of wealth accrual. The government is not here to redistribute wealth or provide a social safety net for citizens. This would be socialist; that’s not what we are all about, correct? Does the choice really have to be one or the other?

I am not going to dwell on the problems (too much power in too few places, increasing inequality, environmental degradation, etc.), but relay some of the new ways of thinking about “the economy” he encourages us to take on.

What kind of an economy are we trying to build? Would most people say that the one we have, with climate change, poverty, and basic access to food a severe challenge for the few billion people we share the planet with is the best? What I heard him say was that we are entering a new way of thinking about our economy, a new movement (so to speak) toward a more equitable definition of what we are all striving for. As he reminded us, both Adam Smith and Karl Marx believed that a worker should own their own means or production; that sounds pretty darn close to employee ownership or at the very least, small and locally owned businesses. Where does capitalism mesh with this? The Darwinian model of competition may not be the ultimate level of our thinking when it comes to societies. Nature is a beautiful example of cooperation at an astoundingly complex level. Certainly, there is competition for scarce resources and species coexist in a complex web of feeding and being eaten…all to maintain the overall system that supports everything. What would an economy of small, locally focused businesses dedicated to creating strong communities full of healthy people look like? Would we still have the ability to stay connected virtually, to have the access to far off lands that we want (forget for a moment the energy use ties up in server farms)? Would we even want that?

The last little nugget I took from the 1.5 hours we spent with Dr. Korten was redefining what GDP is. If we are to use it to measure of the well-being of our society, then we are bound to redefine it. Perhaps, as he recommended, we are trying to create happiness, with the least possible costs. Therefore, we are bound to find the measures of happiness (the UN Human Development Index, the Genuine Progress Indicator?) and count up how much money we spent to achieve that level of happiness. Therefore, we’d want to reduce its value.

Of course, we’d have to agree on how to measure Happiness. Does Bhutan have it figured out, Bhutan's Gross National Happiness?

To be clear, I did not interpret his tone to be “doom and gloom”, but one of academic curiosity and a desire to share the knowledge he has accrued over the years and challenge us to think about what it is we are working to create as we march ahead.

I found myself wandering back about five years to my initial involvement with the Responsible Business Association of Greater Boston (a part of BALLE) and connections became apparent that I had missed over the past few years of “big picture” thinking. I believed I needed to understand and try to influence corporations on a global scale, to say to them, “sustainability matters to you because….” This is important, and I am newly re-energized about the power of local impact, and plan to reconnect with the people at the SBN and see how I can help.

Here’s to continual learning.

Thursday, May 08, 2008

BGI Wins CERES Award

It is good to know that the new institute of higher learning I decided to attend has received some fairly high level recognition in the SRI space. BGI was honored as the inaugural winner of the Bavaria Award for Innovation at the CERES conference in Boston.

Portions of the CSRWire press release text follows:

April 29, 2008 - Bainbridge Graduate Institute (BGI) in Washington, the first graduate school in the U.S. to offer an MBA in Sustainable Business, is the winner of the Bavaria Award for Innovation, an award that honors achievements that have the potential to create lasting change.

Washington-based BGI's MBA in Sustainable Business has pioneered the integration of social and environmental responsibility across a full spectrum of the graduate business curriculum. Since its founding in 2002, BGI has trained hundreds of students to successfully lead large corporations, small businesses, and non-profit organizations to compete in the mainstream marketplace while simultaneously including sustainability as a core strategy.

"BGI's innovative approach has proven to be a model for changing the way business schools around the country incorporate sustainability into their programs," said Gifford Pinchot, BGI’s President and Founder. "As faculty return to their home institutions from our monthly residential immersion program, they bring with them a new understanding of how global business can be transformed in the direction of the good, thus prompting more and more requests for BGI's help in designing sustainable MBA programs elsewhere."
I am part of this community and contributing to its growth. What an opportunity, and a challenge. There is much more work to do.

Tuesday, May 06, 2008

Emissions are Rising...

...and depending upon your point of view, we are doomed or we still have hope. The future is not predetermined, right?

This post started with a BGI classmate's post on our community site, leading me to think about it for the past few weeks.

A recent climate related release called The Vulcan Project, in true systems thinking/modeling form, seeks to help us better understand the sources, levels, and behavior of that climate change demon...CO2. Here's a brief overview of what it is from their website:

The Vulcan Project is a NASA/DOE funded effort under the North American Carbon Program (NACP)to quantify North American fossil fuel carbon dioxide (CO2) emissions at space and time scales much finer than has been achieved in the past. The purpose is to aid in quantification of the North American carbon budget, to support inverse estimation of carbon sources and sinks, and to support the demands posed by the launch of the Orbital Carbon Observatory (OCO)scheduled for 2008/2009. The detail and scope of the Vulcan CO2 inventory has also made it a valuable tool for policymakers, demographers and social scientists.
The Vulcan project has achieved the quantification of the United States fossil fuel CO2 emissions at the scale of individual factories, power plants, roadways and neighborhoods. We have built the entire inventory on a common 10 km grid to facilitate atmospheric modeling. Vulcan is available at the hourly timescale for the year 2002. In addition to improvement in space and time resolution, Vulcan is quantified at the level of fuel type, economic sub-sector, and county/state identification.

If you are remotely interested in CO2 emissions tracking efforts you should check out the Youtube illustration (see above).

When I watched the video clip, I was amazed at the magnitude of the cyclical rise and fall of emissions matching the industrial circadian rhythm of our society. It was also interesting to note that east of the Mississippi is shrouded by CO2; the west is not nearly as covered. I am no atmospheric scientist, but I can imagine that the population density and therefore power plant density (especially the coal fired generation assets along the Ohio Valley) of the east contributes to this effect. Considering that many of my classmates live in the Pacific NW, it is interesting to note that the daily plumes there are of far lower magnitudes than in the east, again partially due to population, partially due to fuel mix, and partially due to the fact that they're just a greener bunch of people!
The image below shows where CO2 is being emitted in the continental United States in 10-kilometer grids and combines data from sources including factories, automobiles on highways and power plants. The map offers more than 100 times the detail of previous inventories of carbon dioxide. The image displays metric tons of carbon per year per grid in a logarithmic base-10 scale. (Purdue University image/Kevin Gurney)

Oh yeah, and emissions are rising. I guess it's time to get that bike out of storage.

Sunday, May 04, 2008

Kluster...in Vermont

OK, I am sitting in the lobby of a small engineering and design firm in Williston, VT last week (image from core77). The client is tied up on a phone call, so I start reading the Champlain Business Journal and catch an article on Kluster, titled:

Entrepreneur Launches ‘Kluster’; Ben Kaufman Sets Up Web-Based Platform For Decision Making

After reading this part of the article, I was swimming in sustainable business ideas:
Noticing that most booths at MacWorld showcased products and looked the same, Kaufman and his crew constructed a rough booth with two-by-fours and tarps. The booth featured no products, but rather invited MacWorld attendees to choose and co-create mophie’s next product. “Ours was the only booth at MacWorld without products,” adds Kaufman.

The staff distributed pads of paper and pens and pencils, encouraging booth visitors to “doodle” product concepts. Submissions were hung on the booth for display so ideas could build upon one another.

From among all those submitted, Kaufman says, “In four hours, we had 125 new, absolutely legitimate product concepts.” These were scanned and uploaded to the mophie Website, with site visitors asked to vote for their favorites. Over 40,000 people voted in one day.

“The next day we shrouded the booth,” Kaufman recalls. “We had a roundtable process to discuss the top three concepts. We flew in our modeling team, developed a prototype of the top choice and, on the fourth day, launched a new product – fully developed.”

The Bevy, a protective iPod case and key chain with built-in bottle opener, became mophie’s newest product, but Kaufman was far more excited by the community engagement process that developed it.
This is cool. I especially liked the plywood and tarpaulin booth idea...stands out completely from the polished and oh so high tech designs all around.
Imagine unlocking the power of a few hundred thousand people (the wisdom of crowds) working together virtually to talk about CO2, sustainable agriculture, redesigning our transportation system, building the next green car? Best of all...reduced travel...no need to fly to the trade show to do it.
What could this be for truly helping create the change in society entrepreneurs dream of?
What are the possibilities, and how does one focus on the ones with the most impact?