Monday, 23 May 2016
MORE PROFIT FROM LESS STUFF?
A roundtable for businesses
First of a couple of meetings, organised by An Economy that Works and the Centre for the Understanding of Sustainable Prosperity
One of the principal themes of the shift to a sustainable economy, at least in the developed world, is ‘dematerialisation,’ – less added value from physical ‘stuff’ and more from human skills. This represents an opportunity for businesses to create new competitive advantage. These two meetings will address what businesses can do to make the most of this. The focus will be primarily on customers rather than production techniques and supply chains: how do businesses create ‘more fun from less stuff’ as well as more profit, and in doing so build their brands? It will cover goods as well as services – the proportion of value added from skills and stuff varies in both.
Confirmed speakers include Mike Barry (M&S), Richard Spencer (BT) and Fiona Ball (Sky). The objective will be to drive real change within companies and the starting point will be the perspectives of the businesses represented in the room. We will conduct brief telephone interviews with participants ahead of the meeting to establish the range of views. The end point will be a series of actions that participants can do together or separately, and a brief to CUSP, Centre for the Understanding of Sustainable Prosperity and An Economy that Works for research needed to support this. The reason for holding two meetings is to increase the action orientation – the second meeting will focus on issues raised at the first.
While dematerialisation is not inevitable, we are taking it as a given for the purposes of the event. At the very least it is one scenario to consider, driven by well recognised trends: rising commodity prices, rising developing world labour costs, consumer attitude changes and possible fiscal and other policy changes. We will set out this ‘story’ in a background briefing paper, but the focus of the discussion will not be on whether or the extent to which it will happen but on what to do about it.
We will therefore present changes to consumption patterns that can be expected as a result of these trends. We will then move on to what scope there is for business to capitalise on this to engage customers, shape taste and build brands. We will also ask what else will help them build competitive advantage.
This will lead to a deeper dive on changing tastes. Tastes have changed in the past, and we will report on what has made demand for particular product categories grow and decline in the past – leading to a discussion of the extent to which business can drive change, and be incentivised to drive change, towards more dematerialised goods in the future. This could result in, say, more demand for dancing classes, higher density housing and public transport, and less for long haul holidays, suburban housing and cars.
Finally, we will look at one particular aspect of this: a shift towards ‘active consumption’ – playing sport, learning musical instruments, cooking, gardening and so on. Consumption of this type has been shown to generate relatively high levels of wellbeing – a higher true added value. The extent to which that additional value can and should be monetised is open however, and we will discuss this.