A Functional Service Economy
Green Business. Natural Capitalism. Eco-efficiency. An Eco-economy. These are terms used to describe the desired (and often purely conceptual) transformation of the private sector, from one of often flagrant resource use and disposal into a sustainable and ecologically concerned industry.
?The eco-efficiency imperative is based on the idea that companies must come to terms with the new realities of population growth, increased evidence of global warming, ozone depletion, loss of fertile soils and forests. These new realities will change the markets (customers' attitudes) and lead to tougher government regulation. This will change the bottom-line of each company now and increasingly in the future. Costs related to pollution will become staggering. Customers will ask for green products and they will even select companies on their proven ability to produce green products. Instead of waiting for government action and lobbying to get the right kind of action, companies must seek value creation through minimizing resource input. According to its proponents, eco-efficiency leads to economic and ecological efficiency. (Schot 1997).
But what does green business really look like outside of the conceptual realm of sustainable development? Are there clear examples of profitable businesses that generate more revenue through environmental stewardship?
In order to work within the bounds of capitalism and stewardship, green businesses need to address the irony threatening our world. Our country and world survives through consumption, but this consumptive lifestyle destroys the earth?s resources.
Eco-efficiency, in order to be sustainable, applicable, and successful in consumers? daily lives needs to answer the question: What does the consumer want? People do not necessarily want to own durable products ? they want to use the products, or enjoy the service that it provides: ?What we want is transportation from our car, cold beer from the refrigerator, and news or entertainment from our television? (Hawken 1993). Businesses can use this concept as an approach to sustainability by selling a service instead of a product.
The service industry answers the call of capitalism in that people are still purchasing and selling. But the industry deviates from the traditional consumer-driven practices because the consumer only uses the service of a product, but does not attain ownership of the product. This shift from product consumption to the selling of service addresses and answers the challenge that human welfare is best served by improving the quality and flow of desired services delivered, rather than by merely increasing the total dollar flow?(Hawkins and Lovins 1999). The environmental benefit of an industrial service economy lies in the fact that it is ?regenerative rather than depletive, one whose products ?work within cradle to cradle lifecycles rather than cradle to grave cycles?? (Brown).
Services Instead of...