In the following article, Dean Mihov provided his insights on the topic: “Make globalisation good: addressing the challenges of global capitalism and the role of business in society”. The Singapore Summit aims to advance the shared understanding of Global-Asia issues and publishes business insights from leaders on their website. Following the summit, the piece was published both in print and online by Singapore’s The Business Times and Malaysia's national New Straits Times daily newspaper.
Beyond the Buzz for Better Business
by Ilian Mihov, Dean of INSEAD
Blockchain. AI. The internet of things. Sustainability. ESG. Long termism. Diversity and inclusion. This is the buzz influencing today’s business decisions – emerging trends that open opportunity for businesses large and small. These trends hold potential far beyond the bottom line. With strong leadership, these trends can point a profoundly positive new direction for both business and society, in Asia and around the world.
A deeper dive into these trends shows why they are garnering so much attention. In a word, innovation. Innovative technologies, innovative management practices and innovative new approaches can deliver significant value to shareholders. However, this new direction can also deliver much more than that. It can deliver value to communities and chart a course towards more inclusive prosperity.
We have seen what blockchain technology has already done in finance – disrupting the global payment system and opening new investment opportunities. We also see potential positives for society from this new technology. Blockchain can strengthen and stabilize developing markets by making transactions more secure, and it can be used to open access to banking services for previously underserved communities. Blockchain applications are even being explored as solutions to some of the world’s greatest challenges, such as corruption, identity theft and climate change.
Embracing sustainability and ESG are business moves with far reaching positive impacts on business and society. The results of responsible investing and more sustainable operations are felt far beyond the balance sheet. These moves often improve lives and livelihoods for billions of people.
Furniture and home accessory retailer Ikea’s investment in renewable energy, highly efficient operations and sustainable supply chains is good business. This shift cuts costs, provides certainty in times of energy market volatility and ensures the core business can grow into the future. However, this shift does something more. It reduces greenhouse gas emissions, protects forest resources and promotes responsible consumption – all of which are good for the planet and for people.
Growing Evidence, Growing Support
The body of evidence of the benefits of these new business approaches is growing. Recently, a report by McKinsey showed significantly higher average revenues and earnings growth for businesses focusing on long-term value creation. The Business & Sustainable Development Commission provides evidence that pursuit of the UN Sustainable Development Goals opens trillions in economic opportunity, with even more opportunity if businesses strive for gender equality. This year’s Global Innovation Index – published by INSEAD, Cornell University and the World Intellectual Property Organization – reports that that the transition to a green economy could lead to an increase of around 18 million jobs worldwide.
Beyond the economic benefits of today’s business buzz, we see vast potential to deliver value to our increasingly interconnected global society. The potential returns from these innovative approaches are especially high for the world’s fastest growing economies, many of which are in Asia. With the world’s population predicted to top 10 billion by mid-century – and much of the growth slated for Africa and Asia – today’s leadership decisions determine whether or not we tap into this potential.
One example is the Belt and Road Initiative, which is poised to strengthen the connection between China and the rest of the world through one of the largest and most ambitious infrastructure and investment projects ever conceived. One aim of the Belt and Road Initiative is to “promote ecological progress in conducting investment and trade”. Achieving this aim would drive more sustainable business practices in China and its partner countries, while delivering the benefits of sustainability to communities across Asia and the world. However, these benefits will not be realized unless leaders understand the value of considering both business and society – and seek to create value for both.
Our Leadership Opportunity
This is one reason why INSEAD, the business school for the world, is bringing business and society into focus in business education. The world needs agile business leaders who can respond quickly and confidently to rapidly changing market dynamics, while at the same time building vibrant, resilient communities.
Potential rewards from seizing these new and emerging opportunities is immense – trillions of dollars of economic gain and societies able to thrive in the face of increased environmental and social pressure.
Every decision offers the opportunity to move in this direction further and faster, from big strategic decisions to small operational details. Aligning investment strategy with principles of responsible investing reduces risk and increases returns. New business models that focus on tech for good can open new markets and open access to existing markets. Sustainability as a core component of a business model appeals to consumers and positions a company for long-term growth. Diversity and inclusion in staffing fosters innovation while improving corporate culture and brand reputation. Every decision can leverage business as a force for good.
The latest business buzz receives much-deserved attention for its profitability potential. By going beyond the bottom line and examining these trends from a complete business and society perspective, leaders can usher in a new era of inclusive growth in which prosperity benefits all people and the one planet we share.
Rising awareness about the gravity of the most pressing global challenges, fast-paced technological change and the willingness to act now create a unique opportunity for humanity. This is an opportunity unlike any the world has ever seen. It is our opportunity to transform the world and make it a better place for business and society today and for generations to come.