Muhammad Yunus, the Nobelist who created "micro finance," coined the term Conscious Capitalism. Patricia Aburdene saw it as a "moral transformation" and "today's greatest mega-trend" way back in fall 2005. Social networks such as Orkut have been abuzz with it. And now finally, Conscious Capitalism has arrived. It's here to stay. And it's changing the face of the way business is going to be done.
What is conscious capitalism? According to BBC News' E-cyclopedia, "Conscious capitalism stands for a more moral approach to what is often seen as the dirty business of business. Where once a company would bow only to the demands of its shareholders and customers, under the new order it must take on board its impact on everyone with a direct or indirect interest."
Ever heard the economic term "externalities?" This obscure term means costs that are traditionally external to business activity. Such as, pollution. Disturbance of personal lives of over-worked employees. I've added the word "traditionally," otherwise, the traditional thinking never considered this cost the responsibility of business.
Conscious Capitalism factors these costs in. It makes businesses and executives responsible to more than financial stakeholders. The society itself is seen as a stakeholder. Which is why sometimes this term overlaps "socialism," which it is not.
As of Feb 2007, when this trend is going to press, a frantic search for a new business model that factors in the externalities is on. Micro-finance is one of the answers; but "conscious capitalism" intends to replace good old profitable business with a more responsible for-profit model.
Conscious Capitalism
Dirty Business No More
Trend Themes
1. Conscious Capitalism - Businesses must consider their impact on society and take responsibility for externalities, leading to the rise of a more responsible for-profit model.
2. Moral Transformation - Consumers and investors increasingly prioritize ethical considerations, leading businesses to rethink their values and principles.
3. Socially Responsible Investing - Investors seek to support companies with a positive social and environmental impact, driving businesses to align with sustainability goals.
Industry Implications
1. Finance - Micro-finance and socially responsible investing represent opportunities for finance industry disruption through greater emphasis on responsible lending and investment practices.
2. Consumer Goods - Companies in the consumer goods industry have the potential to disrupt the market and gain a competitive advantage by prioritizing sustainability and ethical practices in their operations.
3. Technology - Technology companies have an opportunity to lead the industry in environmental and ethical responsibility through sustainable practices in manufacturing, operations, and product development.