Here’s a post I did primarily for Volans:
I began to feel seriously uneasy about the economy some 18 months ago, warning colleagues at SustainAbility and elsewhere that I thought we were not only headed towards a recession, but towards something more like the early 1970s or 1980s, more protracted, stickier. All the evidence suggests that recession is not only here, but that it is gathering pace and is likely to drag in many sectors and economies that have to date managed to keep their distance from the vortex.
Over time, I have alternated between finding this a cause for concern and for excitement. On the first front, I have been saying in public for a while now that I think we may be seeing the last days of a golden age for a certain sort of corporate citizenship. Having lived and worked through the recessions of the 70s and 80s, I recall the way in which major companies squeezed back on their spending and staff in areas like safety, health and environment. A real trial if your business model depended on that spending and those people, of course, but over time the societal pressures on business continued to build and the removal of at least some of the earlier corproate defensive structures meant that over time the pressures drove even deeper into the heart of the beast.
My current sense is that this latest recession has at least as much rubbish to clean out of the system as those earlier ones, so though things tend to be a bit faster paced these days the net effect is that the undertow will extend through into 2010, at least. Again, more than a nuisance if your business model depends on corporate citizenship thinking, spending and people.
But, at the same time, and this is where the optimism creeps in, I think we are in the process of seeing an historic shift in this space, which I have tried to capture over the years with the Waves analysis I began in 1994. Wave 4, which has been building for a while, is now well under way, and over time is likely to focus increasingly on disruptive innovation and scalable entrepreneurial solutions to sustainability challenges.
As corporate citizenship and CSR expenditures are squeezed, I think we will see a shake-out in this field, a trail by ordeal. One possible consequence, and it’s one which I think Volans Ventures will be particularly well-positioned to respond to, is likely to be a refocusing of corporate budgets into areas where the greatest social and/or environmental return can be achieved (and demonstrated) per unit of spending.
This is something that that the ‘power of unreasonable people’ almost guarantees, though this is not without its downside risks – and the demonstration component still needs a good deal of further work. At the same time, too, it may be that some companies will decide to do more of this sort of thing internally, by developing their own entrepreneurial ventures, as we predict in The Social Intrapreneur. That said, the social intrapreneurs we spoke during the course of that study were united in wanting more contacts – not less – with leading social entrepreneurs.
Overall, since I studied economics in the 1960s have been a firm believer in the redemptive power, over time, of the processes of creative destruction. This is a subject I pursued in The Chrysalis Economy (Wiley, 2001) and more recently I refreshed my thinking on this side of economics by reading Thomas McCraw’s stunning biography of one of the most interesting and infuential economists of all time, Prophet of Innovation: Joseph Schumpeter and Creative Destruction.