‘With 3 billion new middle-class consumers expected to be added to the global economy by 2030, conservation, recovery, and reuse are the only logical—and profitable—responses to rising resource volatility[i].’ The confluence of the sustainability imperative and eroding industry boundaries will mean that business, in the broad sense, will not so much be about what you do, but how you do it. Digital destroys boundaries; emerging technologies and the intelligent era will accelerate this, and the shift to sustainable business models could consolidate this shift and remake industries in the process. COVID is fuel to this fire.
A combination of changing consumer tastes and awareness with sustainability is forecast to cause ‘…consumer industries (to) change more in the next 10 years than in the last 40 – and at an ever-accelerating pace of transformation[ii].’ Indeed, by 2050, many 'fundamental assumptions' about the business world will change according to UNDP administrator Achim Steiner[iii], meaning ‘…you can virtually throw away every scenario about your business and your future markets, your supply chains out of the window.’ To an even greater degree than with digital transformation or the upcoming intelligent era, sustainability will demand an organisational as opposed to departmental response.
It is plausible that tomorrow’s digital assistants and automated algorithms will compel brands to compete against each other electronically, and within this space, such A.I systems could completely block out brands that don’t meet the individual consumers’ criteria. This could be along a range of existing and emerging inputs, from environmental impact to social sustainability – all of which could be ranked increasingly in real-time. Consumers are set to effortlessly interrogate a wider range of data than ever before, those brands not matching such criteria may find their future advertising doesn’t even register with the virtual assistant.
Critically, 78 percent of executives see the link between sustainability and innovation, believing that a corporate commitment to the former is a path to the latter[iv]. The link with the current platformisation of services and goods is important; the sharing economy could feasibly morph into, or collide with, other interesting concepts, such as the IoT and the circular economy.
Executives need to recognise that all future business models will be part of greater networks, all of which need to be rooted in sustainability and resilience. Sustainability efforts need to be given teeth, and aligned with overall (and digital) strategy. The success stories of tomorrow will be determined by executives who know how and when to pivot wisely, and know what to pivot toward.
[i] Source: Digitalist Magazine (SAP), 2018 https://www.digitalistmag.com/digital-supply-networks/2018/06/04/circular-economy-reshaping-the-industrial-ecosystem-06170272 [ii] Source: World Economic Forum, 2017 https://www.weforum.org/agenda/2017/08/disruption-in-consumer-industries-turning-the-operating-model-inside-out/ [iii] Source: CNBC, 2018 https://www.cnbc.com/2018/10/16/fundamental-assumptions-about-business-are-set-to-change-un-official.html [iv] Source: GreenBiz, 2018 https://www.greenbiz.com/article/how-interface-realized-carpet-business-usual-wasnt-sustainable