Evolve

So many things are changing and business as usual is no longer a good guide to future direction. We must evolve what we do to the new conditions and situations in which we find ourselves.

Although probably obvious, successful adaptation requires change. Change unsettles people, unsettles business and unsettles governments, even if that change is positive, or necessary. The reason that change disrupts is because if it is assumed that the way we have done things in the past was the right way, (i.e. business as usual), then when things do go wrong, the correct action would be to go back and do what we previously did, and ‘she’ll be 'right’.  The problem is of course that the assumption of business as usual is not correct.

BUSINESS AND ECONOMY

A modern proverb runs ‘if we do what we have always done, we will get what we have always got’, and it is useful to examine what it is we actually have got in our economy: in contrast to many of our competitors we have an economy ‘in the doldrums’ with flat-lining per capita productivity growth. Domestically we have high social inequity and low social well-being. Even without climate change, these things in themselves are a motivation to do things differently in the future. 

Our economy is a commodity economy, this means that we sell things overseas that people need, e.g. milk, meat, timber, fish…etc. Unfortunately, often we do not add very much value to those exports: an example might be that by exporting logs rather than high quality furniture, we give away money that would come to us for the furniture, we give away to other countries the potential jobs to make the furniture.

 

We then try to make-up for those losses by selling even more logs, increasing environmental load and damage. With milk and meat, we are producing ‘premium’ products, but by definition a commodity economy rips resources out of the environment and returns that value to the shareholders as money. Unfortunately the costs to the environment are ‘externalities’ which means that the costs of these activities are borne not by the shareholders, but by all of us as a degrading environment.

 

These issues are magnified for us because we are a small economy. Our business model is very conservative, there is relatively little capital, and this supports the do as we have always done mindset.

Fortunately, there are answers which do not require us to decapitate our economy, nor abandon sunk investment. However, these answers require that our economy evolves, and quickly, over the next 20-30 years. The late Sir Paul Callaghan, a visionary Kiwi outlined some of those answers in the general. Typically, they involve leaning less heavily on the environment whilst using technology to add value. To be useful however, an answer needs to be in the particular, rather than the general. For each individual industry or business, the suite of answers will be different.  

 

If you are a business and this conversation is of interest to you, please contact us.