Capitalism at the Crossroads

note: this post is in English because there are just too many thoughts running through my head that I have to get them all out quick!

In time for my previous goal set of reading at least 1 book a month, I have finally reading Capitalism at the Crossroads by Stuart L. Hart... many many thanks to Shirley and Rina, without whom I would never have ended up with the book in Taiwan (in brief, the book belongs to Shirley, who lent it to Rina at a conference but forgot to get it back when she was in Singapore, which Rina brought to Guangzhou but forgot to pass it to Li Zhen who was going to Rotterdam, which Rina passed to me to bring to Taiwan because Shirley might drop by sometime to visit family before starting work but didn't in the end cos she found a job too soon.. phew! :p)

anyway, I say finally also because I had previously started on the book in Singapore last year but never continued it when I got to Taiwan... so it's been a long journey with this book, and thankfully that journey is now complete! :)


I have to say this book is a must read, especially for those interested in innovation, sustainability and business models... I won't go into the details (because you deserve to discover them on your own) but here's a brief about the contents, followed by some of my thoughts...

The book's main proposition is that in today's world, Multi-National Companies (MNCs) are the entities best equipped to deal with the world's sustainability problems, because they have the resources, the technology and the scale to create products/ services that meet the triple bottom line of: Economic impact, Social Impact and Environmental Impact..

While most companies today already know that sustainability or CSR initiatives don't have to come at the expense of profits and market share, the book emphasizes the huge potential for MNCs to positively impact the community, address environmental issues AND strengthen their own long term corporate sustainability by looking towards the Base of Pyramid (BoP) , the 4 to 5 billion people at the base of the economic pyramid, people considered too poor to do business with... The author argues that the BoP is the pristine consumer base where
1) most other competitors have not penetrated
2) people there do not have pre-conceived notions about using certain products
3) people in rural communities often get bullied by suppliers, who charge more because these villages have little say...

To illustrate the potential based on these 3 points, the average household in the city would probably be used to using fluorescent lightbulbs and would not be inclined to switch to LED lighting which costs more upfront but lasts way longer and is more environmentally friendly... if an MNC is able to create, through R&D, a simplified and cheaper version of LED lighting designed FOR the poor (perhaps powered by solar panels), the poor family in a rural village could possibly welcome it as an alternative to consistently spending money on matches and candles bought from shops which do not enjoy enough economies of scale to bring prices down..

The book offers many other case studies of MNCs that have succeeded as well as failed in trying to reach the BoP... it also highlights the pitfalls that MNCs can fall into, especially if MNCs only view this simply as a means of marketing their products without integrating and engaging the locals in order to build new business models, co-invent products and services and design new channel distribution models which move from within the community, and which in the process help improve overall living conditions in those very communities...

All in all, the book offers many exciting ideas and perspectives different from most of what is taught in school, simply because what has been expounded mostly so far is an economic model focused on those at the top of the economic pyramid, where infrastructure, education and means of marketing and communication already exist to facilitate the introduction of new products and technology...

You can find out more about the BoP Protocol at http://www.bop-protocol.org

While I haven't mentioned very much about technology and innovation, it is a very crucial aspect for companies to drive sustainability from within... It was very interesting to see case studies highlighting concepts such as "Cradle to Cradle" (designing the product till the end of its lifecycle, possibly where it's construction materials are designed to be recycled after its use to generate other products) as well as "Creative Destruction" (innovating new technology which destroys the need for existing technology which the company depends on now, thus opening up a whole new market space)

Personally, the role of technology struck a chord in me... Having come from an engineering background (and from a stream where I did learn about product design), I kept wondering...

What if our students actually were exposed to this concept right from within our education?

If technopreneurship is such a relevant topic still, why do we not learn about such ideas within our courses of product design, of Engineers & Society, of Engineering Innovation and Design and so on?

Why are we still so unaware of some of the research projects (within Singapore and around the world) which are addressing such sustainability ideas?

If it's a requirement for engineering students to take some modules from Business, Science or Humanities, and this requirement stems from the need for more broad-based thinking, why do we not marry sustainability, management and engineering to create modules which spark ideas and guide thoughts about the impact an engineer (in an entry-level position, within a large corporation etc) can bring through technology?

And just as it was mentioned in the book that MNCs also have the largest resistance in cultivating such revolutionary innovation in both technology and business models management (due to size, structures, habits etc.), I wonder what's the solution to the seemingly ever-present situation where education in our institutes lags one or a few steps behind addressing the challenges and problems the world faces right now...