Open Innovation

From the Gilded Age of Capitalism to a Golden One – Part 2 of 3

What does a path from the gilded version of capitalism we just left behind to a golden one look like?

By Rob Schuham, co-founder of Undercurrent

Continuation from introduction in Part 1:

So what does a path from the gilded version of capitalism we just left behind to a golden one look like? How do we take these new skill-sets and ways of working and turn them into muscle memory? Is there a chance we can even habituate them? Can we aim the collective towards solving other existential threats, or find opportunities inside the problems that translate to mutual prosperity? Let’s look at a potential path, including “watch-outs,” that moves us to a world we all want to see. From this introduction, we’ll explore the following over the next two weeks:”

Phase 1: Wartime Efforts

Phase 2: Existential Collaboration

The above two phases are covered in this article. The below phases will be covered in Chapter 3.

Phase 3: Circularity and Regeneration

Phase 4: Governance and Policy

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Phase 1: Wartime Efforts

As previously stated, many companies are stepping up to help manufacture much needed medical equipment and Personal Protection Equipment (PPE). Others are working on testing kits, vaccines and treatments. And the companies that are participating are working at an extraordinary pace. Partnerships are being formed, typical large company bureaucratic bottlenecks are being blown open, innovation is accelerating, moonshots are launching, and in general, we are seeing capitalism in its finest hour for many companies in this wartime moment.

Further, private-public partnerships are being formed in a matter of days vs. years. “We are all in this together” has taken an entirely new meaning, one not seen since World War II. Collaboration, rapid prototyping, team-building, transparency, decentralized decision-making, self-organizing and other cultural features that have been evolving over the last few decades within large corporations, are now being exercised outside the walls and campuses. When you begin interoperating with cultures that are different than yours, it necessitates an enormous amount of flexibility and adaptability. It’s also a race against time. In fact, time is the collective’s competition. Thus, a lack of cooperation as a go-forward option dissipates quickly.

As of this writing, there are hundreds of vaccine candidates under development, with several in trial. Pfizer for example announced that it would help develop and distribute BioNTech SE’s COVID-19 vaccine candidate, planed for clinical trials later this month. Also in April, the World Health Organization partnered with Facebook, Microsoft, Twitter, WeChat, TikTok, Pinterest, Slack and Giphyand for a hackathon to promote the development of software to take on challenges related to the coronavirus pandemic. Further, Ford teamed up with GE Healthcare to produce 1,500 ventilators by the end of April and 12,000 by the end of May. And Ford engineers, collaborating with 3M, also quickly designed a streamlined powered air purifying respirator (PAPR) to safeguard doctors, nurses, and first responders.

Over the next several months, and possibly the next year, the notion of working with your competitor vs. against, could become socialized and accepted. Worst case, we learn how to cooperate in times of crisis. Best case, we like it so much that we find ways of working together to experience mutual thriving. This leads to the next phase.

Phase 2: Existential Collaboration

It’s amazing what happens when internal drivers and fears around marketplace competitiveness become trivial as compared to non-trivial shared existential fears and drivers around our very own survival.

What ensues is a re-casting of the story and narrative of your “why?”. It’s not about an expression of your values and vision that’s commercialized through your company in order to build wealth at the expense of your competition. Instead, it’s your vision (or a new one) that’s manifested through a connected group of humans inside yours and other companies.

In Phase 1, we came together as a country and a planet to overcome obstacles and solve a global health crisis. We learned how to band together, move through ideological differences and see what can actually happen when we all put our minds (and hearts) together to solve massive problems. The challenge now is to leverage this momentum and find ways to solve other problems collectively that could present the world’s largest opportunity in history.

Think about pooling intellectual property and capacity, innovation capabilities, manufacturing scale, academics, science, data and resources to solve such existential challenges as:

  • Massively scaling renewables and migrating away from fossil fuels
  • Zero waste to landfill
  • Scaling up regenerative agriculture
  • Removing plastics from our oceans and waterways
  • Eliminating virgin plastic all together and developing non-polluting, non-toxic replacements
  • Removing toxins and pollutants in general from all over the planet
  • Helping to change harmful health habits (and our food supply) to dramatically reduce obesity, diabetes, cancer, heart disease and others
  • Eliminating the harmful human-programming effects of social media, including helping to restore democracy in the process
  • Invent protocols, or change over harmful industries in order to reduce depression, anxiety, suicide, addiction and other mental health maladies
  • Reinvent and re-imagine our medical system
  • Eliminate human trafficking and the motives
  • Dramatically reducing inequality
  • Reversing the loss of biodiversity
  • Hardening grid systems against cyber and terrorist attacks
  • Drastically improving access to healthcare, education and nutrition

All of the above can’t be done at massive scale without radical collaboration and radical coordination. The question is how can we create new systems that incentivize and motivate the corporate and small business worlds to do so?

Importantly, many financial upsides to address the many challenges we face have already been identified. For example, a report by the Business & Sustainable Development Commission identifies in excess of $12T in business opportunity being unlocked should we aggressively pursue solving the 17 UN Global Goals.

To go one step further, Leah Lazer, Catlyne Haddaoui and Jake Wellman of the World Resources Institute identified research that found that investing in 16 low-carbon measures in cities (which contribute to over 40% of total global fossil fuel energy emissions) could cut global urban emissions by 90% by 2050 and has a net present value of almost $24 trillion, equivalent to nearly one-third of the global GDP in 2018. This means that between now and 2050, the total benefits of these investments will exceed their total costs by almost $24 trillion. Most of these returns are the result of cost savings from decreased energy use and improved energy efficiency, as well as decreasing the use of materials like cement and steel. For example, investments in making the vehicle fleet more electric and fuel-efficient would pay for themselves in as little as eight years because they would lower the cost of powering those vehicles. Retrofits to make buildings more energy-efficient would save money on heating and cooling bills long into the future.

However, all these figures underestimate the true scale of the returns, because they do not include the wider socioeconomic and environmental benefits that arise from, for example, a healthier and more productive population, reduced traffic congestion or robust ecosystem services. Moreover, all investments would unlock significant emission reductions, and collectively form part of an attractive bundle of low-carbon investments.

Finally, ESG (Environment, Social, Governance) companies who see their role in society as a key value — who also tend to have more collaborative cultures — demonstrated higher performance pre-Covid. The top ESG companies in the world were outperforming the S&P prior to the pandemic, and according to Benjamin Allen of Parnassus Investments, some of the largest ESG funds are mostly beating the S&P as of this writing.

In this Existential Collaboration phase we identified the massive societal and economic benefits to intra-, and inter-, category collaboration and cooperation. We have also identified the skillsets and building blocks to getting here.

Next onto the building blocks…

The below critical phases will be covered in Chapter 3 next week.

Phase 3: Circularity and Regeneration

Phase 4: Governance and Policy

Special thanks to Hunter Lovins and Bud Caddell for critical feedback and edits.