Collaboration is the key to economic growth

September 10, 2009

aron-cramer— Aron Cramer is president and CEO of BSR, a global business network and consultancy focused on sustainability. The views expressed are his own. —

As the World Economic Forum’s “Summer Davos” meeting in Dalian, China, gets underway, it is a bit chilling to think back to how the financial crisis was unfolding in real time during last year’s event.

As the 1,000 leaders gathering for this year’s event spend three days debating how to restore economic growth and social stability, the need to focus on a long-term transition to a more sustainable economy is clearer than ever.

Doing this will require unprecedented cooperation among businesses and consumers. The companies that build new business models and innovative products and services will win in the reset world, and shape an economy that avoids disruptions like the one that erupted last fall.

At this year’s meeting, I am chairing two workshops, where we will explore how to build new models of production and consumption that hold the potential to create not only a return to growth, but to a more sustainable model of growth.

Arising from an interlocking set of crises, three immense challenges stand before us. We must:

1. Return to economic growth while deleveraging massive debt.
2. Transition to a low-carbon economy that uses natural resources more efficiently.
3. Create new social contracts both inside and between nations.

These simultaneous challenges present a turning point for the world comparable in scale to the one we faced in the aftermath of World War II.

The good news is that the “reset world” currently under construction contains a multitude of opportunities just waiting to be captured by innovative companies ready to collaborate.

We are already starting to see a new wave of collaboration that will be the foundation of renewed economic growth. GE and Google are teaming up to build smart energy systems that radically reduce the reliance of consumers and business on carbon-based fuel. Nike is pioneering a collaborative R&D model called “Green Xchange,” which will create an open-source model for product development focused specifically on environmentally friendly products.

It’s heartening to see that this collaboration now includes the entire business “value chain”—which extends from a product’s development to its distribution and use—where companies are exploring ways products can be developed more efficiently, from design to assembly to distribution.

One of the meetings I’ll be running this week is a workshop with 50 CEOs and experts who are designing new production models that will deliver economic growth for the post-crisis era. The redesign of value chains, while somewhat invisible to the general public, is crucial to our economic future. Virtually all products, from a simple T-shirt to Boeing’s new 787 Dreamliner, rely on a dense web of companies focusing on a single step in the production process.

Tomorrow’s solutions won’t be built behind the towering ramparts of single companies. Instead, they rely on collaboration across the spectrum, ranging from design firms like IDEO to well-known brands like Pepsi, and from logistics providers like Jordan’s Aramex International to retail giants like Wal-Mart.

The ultimate challenge all companies face is creating products that meet a global class of consumers without requiring several planets’ worth of water, fuel, and other natural resources. This means products must satisfy the needs of 600 million Indian villagers as well as they do for the 500 million citizens of the European Union. This means greater coordination of transportation, just as sea carriers like Maersk have done by partnering with their clients to use slow (and therefore more fuel-efficient) shipping to get products from Asian factories to American ports. This means innovative packaging to reduce, if not eliminate, waste. And this means developing new ways to communicate with consumers so that they can better understand the social and environmental implications of their consumption habits—and find ways to save money in the bargain.

At this year’s Summer Davos—a year after the onset of the Great Recession—we know not only what the challenge is, but also what the answers look like.

This week’s event is dedicated to companies the World Economic Forum has designated as “New Champions.” There is little doubt that many of these companies will come from Brazil, China, India, the Middle East, and elsewhere in the developing world. But new champions will be determined more by mindset than by geography. Companies that keep their eyes on long-term trends, that meet people’s needs within environmental limits, and that look at innovative collaboration will shape the future. Companies that don’t will find that the financial crisis was only the beginning of their problems.

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Dear Editor,Your article on World Economic Forum and related economic growth are very knowledge oriented.When compared to previous decades,now a days,many countries have started doing the new ,real economic thoughts to their action oriented schedules.Due to new,real and progressive thinking,major under developed countries are turning to developing nations.Why,because collaboration and co-ordination on trade,education,tourism,exchanges of goods and services,and knowledge sharing for better economic and social growth.We knew very well that,historically said about China.India,South Africa and Brazil branded as old,traditional set up.Now, everything is changing at jet speed.As per your reporters,and coverages of latest extra ordinary better co-operation and co-ordination by China and India with Australia,Iran,Japan and with famous western countries are created,produced and showing fantastic results on many sectors.Your one sentences can be agreed by all economic thinkers-A year after the Great Recession,we know not only what the challenge is but also what the answers look like.I think that all recent developing,big nations will participate and will raise new queries for long pending issues in forth coming World Economic Forum.Your subject can be very useful to Economics school of thoughts.Lastly , I want to finish my comments —–Together We Can and Together We Will.This slogan will be practicable at this economic juncture.

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