The economic value should only be worth the value it creates for society.
We are in the verge of the fastest period of innovation ever experienced.
We live the era of innovation in technology that represents the Fourth Industrial Revolution and that is unlocking new market opportunities, fueling growth across the global economy while changing our relationship with the world: our way of being, of working, of having fun, of making decisions, of creating, of producing, of educating, of forming society, in short, our way of life.
By the depth of what it changes in our lives, digital transformation is perhaps one of the most important industrial revolutions among those that humanity has known before, vector of great opportunities for progress and also great challenges, for all citizens, in all countries, and all industries in the planet.
The possibilities of billions of people connected by technology, combined with unprecedented processing power, storage capacity and access to knowledge, are virtually limitless.
The speed of emerging technological advances in areas such as artificial intelligence (AI), robotics, Internet of Things (IoT), autonomous vehicles, additive manufacturing (3D printing), nanotechnology, biotechnology, materials science, storage of energy, quantum computing, deeptech, and others, further multiply this potential.
In this context, many economic players around the world are looking for the next generation of new business models, focused, passionate, stubbornly determined to take advantage of digital technologies to invent the next Amazon, the next Facebook, the next Google, or another current digital giant.
States, too, are head and eyes riveted in this digital gold rush and exacerbate this headlong rush, dominated by the thought of economic progress in which new technologies are the holy grail.
Paradoxically, the more our society engages in this quest for new business models — by thinking it through the prism of digital — the more it moves away from the invention of what could be a renewal of companies’ business models.
So, in this all-digital frenzy, and while sometimes being convinced to the contrary, a succession of business creation is inexorably perpetuated, and the model is, in reality, nothing new. Companies “business model” have basically remained the same.
So many companies are built from the same reference, the same mold, the same model: this model is called "Profit and Loss".
At the heart of the value system of most businesses in the world, inherited from capitalism, this model has over the centuries become a source of formidable value destruction, rampant at a speed made exponential today by digital technologies.
This model, which succeeds itself over time with the aim of creating wealth, has, on the contrary, become the major cause of the blind impoverishment of what is most precious to humans — such as air, such as water — all the while thinking that it is innovating on itself.
Developed to its climax, it not only created irreconcilable inequalities with the right to dignity and a decent life for many human beings, but also indiscriminately precipitated global pollution and the depletion of necessary natural resources to all human life on Earth, up to the critical stage of extreme and close to irreversible situations.
At its peak, there are these hegemonic platforms of e-Commerce, by some erected as a model of entrepreneurial success, often cited as an example of this new digital economy that so many seek to imitate, which send dozens of articles across the world, every second. And most of these items are wrapped in single-use plastic, every second.
Yet, as everyone knows, single-use plastics alone account for almost half of the world's plastic waste. Only 9% of the nine billion tons of plastic produced on Earth has been recycled. The rest ends up in landfills, in nature, or in the sea and the ocean (about 13 million tons each year), causing a real global scourge, harming biodiversity, and therefore, our own health.
Another such business model is not desirable. Unfortunately, they are no exceptions, and worse, they are taken as a role model.
Too many companies are so irresponsible that their model of value creation destroys precious resources, accentuating the handicaps of our societies, financing this one-sided value on a debt to humanity, which no balance sheet recognizes, which no bank will come and claim, and which they will never reimburse.
Everything happens as if all the entrepreneurial ingenuity of which humanity is capable, as if all the intelligence which characterizes human genius, had for the most part been confiscated to serve only one cause: that of more profits for more money, that of more money for more profits, that of even more profits for even more money for even more profits, in a loop, without any other priority, without any other consideration.
Like generations before us, we continue to move in all possible ways in this model without considering a future for humanity, and to transmit it to ourselves as a hereditary disease, in the schools of our Masters, and in the schools of our lives. Meanwhile, amplified by the multipliers of digital technologies, globalization allows the counterproductive effects of these anti-sustainable business models to reach record highs.
Growth for growth — that which does not participate in making the weakest in our societies grow — profit for profit — that which does not benefit those who need it most — in reality, gives the illusion of value, but does not create it. It creates a loss of reference, a loss of meaning, a loss of who we are, of our humanity.
We may think that this subject is on its way forward because of the rise of Corporate Social Responsability and sustainability trends, that has gave birth to new corporate job titles, but it is not. All these new terminologies and concepts actually changes absolutely nothing to the way a company is listed on the stock exchange.
It changes nothing either to the way it is valued by the markets. It changes nothing to the way a company must be run to make profit.
It remains somehow a way of continuing to being stuck in this business model we know, while adding complementary societal prerogatives whose objective of really addressing them are not core to the business and have no life and death effect on the valuation of a company, because all of this remains, in the end, simply peripheral.
While societal pressure is rising in our societies, Corporate Responsability have emerged as a necessary condition to protect firms’ reputations and are still generally treated as a necessary expense because anything more is seen by many as an embezzlement on the backs of the shareholders.
We also may think that it is a “David versus Goliath” type of issue, a conflict between the short term and the long term, a never-ending tension between the shareholders’ value and the stakeholders’ value, but it is not.
The difference between long term and short term does not turn them into opposing paths as often as one would like to believe. We must move beyond trade-offs. Both must become one.
As long as there will be profit, as defined in the business today, and sustainable development, apart from what defines these profits, as long as there will be value for the shareholders, as defined in the business today, and value for stakeholders, apart from what defines this value, we will not be able to build the cement of an economy at the service of the progress of our societies and of humanity.
Yet we still lack an overall framework for guiding these efforts. However, not knowing what to do, does not excuse, and should never again excuse the fact of doing what we already know not to do anymore, from now on.
Steve Jobs said, "you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.". When it comes to value creation for the profit of the greater interest of the humanity, I strongly disagree with him.
There are those things — crucial to humanity and the world — that it is easy to see how the dots are connected. We don't have to wait and see the consequences to be aware of what we are doing right now.
We know that all companies that do not oblige themselves to equal opportunities for career advancement for both men and women, destroy a value dear to the development of humanity, because they participate in creating a society where women and men do not have equal freedom to lead their lives, thus creating the foundations of a world where both are not equal human beings.
We know that all the companies which do not oblige themselves to be administered by a representation inspired by the diversity of the society which supplies the demand which allows them to exist, exclude many human interests, causes and considerations that are essential to the development of our societies, and develop with much greater limits, much greater handicaps, constraining and preventing progress in society.
We know that all the companies which do not oblige themselves to think, organize and implement a supply chain of design of their products and services, taking into account a responsible and ethical use of all the resources necessary for their productions and to their distributions — taking into account the social, societal, environmental and human impact at each stage of their process including the management of the end of life of the products and services they create, while ensuring an impact if not equal to zero, put to the credit and not to the debit of the future of humanity — are causing what weakens human capital, degrading our health, our well-being, and our lives, in the present and for the generations to come.
We know that all the companies which do not oblige themselves to take deliberate care, not only of the physical health, but also and especially of the mental health of their employees, are placed among the causes of a sick, deviant and dangerous society for itself, and actively contribute to the increase in accidents of life, inevitably create a fertile ground for violence in our societies, whether it be domestic, child, moral or sexual.
We know that all companies that do not oblige themselves to recruit employees by giving everyone an equal chance to get a job — and even more, that do not discriminate to favor a few to compensate for glaring injustices that divide society — fuel a system in which extreme inequality grows, extreme poverty perpetuates, and extreme temptations to break the law becomes a survival option.
When it comes to value creation for the profit of the greater interest of the humanity, Steve was wrong: we can and we have to connect the dots looking forward, because we cannot act by only connecting them looking backwards and just trust that the dots will somehow connect by chance in the future by their own.
Inventing a new standard to define economic value is possible. Changing the rule of what matters, to define the value creation of any company by valuing its way of serving society and life in society — rather than serving the growth of growth, and the profit of profits — is possible. This work requires a new kind of cooperation between business and the States.
A cooperation where the company acts in the service of the general interest, and where the States act as an entrepreneur presiding with the intelligence of its citizens over the destiny of the common good.
For an alliance of companies and the States to produce a value that exceeds the sum of what each could bring separately whilst acting in their current sphere of comfort, each must extend its field of action to the sphere of the other. The company must take the initiative to bring the business interests closer to that of society. The state must help build the general framework of a new kind of capitalism that will guide these efforts in search of new profits:
To what extent should company boards make room for diversity to be able to maximize the full potential of positive impacts that the company can bring in the society in which it grows, to be considered profitable?
How ethical and environmentally friendly should a company's products and services be — from how they are made, to how they are managed at their end of life — for a business to be considered profitable?
How good should the morale of a company's employees be, should there be good working conditions, should the management system be responsible, for a company to be considered profitable?
To what extent should a business contribute to the fight against extreme poverty and inequalities in the country where it is established to be considered profitable?
How involved should a business be in providing employment for young people, seniors, vulnerable and disabled people to be considered profitable?
How much should a business invest in the social innovation of the society of which it is a part to be considered a profitable business?
To what extent should we change the rules, change the laws, change our outlook on society to be able to reconcile the economic value of companies with that which is fundamentally useful for the progress of our society?
The two most important things in any company do not appear in its balance sheet: its reputation, and its people. Henry Ford had probably got it right in saying that, especially when it came to the people. It is time.
A new era where the value creation of companies would be that of their positive impacts in the society in which they live is possible. Its humanity. This is the most important thing about a company's balance sheet.
It is not about what some may call social responsibility, sustainable development, or companies with purpose. It is not about philanthropy either. It is about going beyond. It is about changing our conception of what a "business model" should be.
The economic value of a business should only be worth the value it creates for society.
The time has come to write the Universal Declaration on Value Economics Rights.
This is the work of a whole society, of a whole nation, over a whole generation, several perhaps.
It will not solve everything — far from it. But we will certainly stop multiplying the chances of causing our own loss of humanity by creating ambitious opportunities for sustainable social progress, for ourselves, and for those who come after us.
No realistic goal will allow us to achieve such ambition. Realistic goals are just perceptions of what we believe is possible, within the limits of our knowledge and fears.
The challenge and the urgency oblige us to surpass ourselves, to think big, because the definition of the value that businesses seek to create today determines that of the society in which we will live tomorrow.
To this purpose, the "Hamilton Mann Conversation" is a non-profit global collaboration that regroups people with the goal of democratizing knowledge of what digital for good is, to "Learn It All", and contribute to enhance digital citizenship by giving as many people as possible the opportunity to better understand how digital can help make a better future for society.