FIELD OF ACTION: RESILIENCE
Future Business Models Bank on Creativity and Context
Every crisis follows a phase of adaptation. Not infrequently, crises resulted in the creation of a new mainstream of thinking and thus the basis for a new system. A crisis as profound as the COVID-19 pandemic is followed by an equally profound change in the economic system. In the same way, the climate crisis creates new fundamental conditions and a new morality for economic thinking and action. Both are preparing the ground for a new way of doing business. One that is shaped by glocal structures, the progressive interplay between the real world and digital technology, the awareness of larger contexts – and by creativity that enables and promotes all of it.
Resilience Instead of Efficiency
The economy’s high priests, the clans of advisors in their consulting rigs, have been trimming the entire economy to efficiency for decades. It is no wonder that they are now advising their clients in the crisis to prepare for a “reboot.” However, the realisation of our own vulnerability is leading to a new way of thinking in a growing number of companies: away from efficiency, towards resilience. The ability to adapt to changing environmental conditions is turning into the primary premise for all management. As is the case for the health system, the following also applies to businesses: if run at full capacity, they may be efficient – but not viable in the long run. Consultant-driven management has led to increased efficiency in many companies, with cost cutting and processes on the edge as sources for profit. COVID-19 has put a stop to this efficiency culture, as it only applies to finite games and bottlenecks. Resilient companies, on the other hand, remain agile and adapt in the best possible way, even in crises. Entrepreneurs who want to be successful in the post-COVID-19 economy, i.e., the Next Economy, therefore increasingly rely on principles based on knowledge of complexity. This transformation marks the beginning of a long period of learning in companies. The Next Economy is already leading to a vital, glocal network of businesses actively involved in the development of the environment and society. Technologies lose their futuristic aura and are used as everyday facilitators of these developments.
Regional Value Networks
Much of what already existed in progressive niches pre-pandemic is currently diffusing into the mainstream. New structures are being established, innovations are becoming visible and beginning to take effect. Prototypes are developing into real, holistic propositions and different growth paths which ring in the age of post-growth. New actors such as social businesses, start-ups, cooperatives, cities, NGOs, associations etc. mostly act both real and digital and are positioned glocally. Glocal, that means: the economy is strengthened by many regional networks and more reflectively pursues its connections to the global market.
This is not about retreating into the regional but about expanding regional innovation and economic cycles with supra-regional, perhaps even global connections. Large corporations will also push nearshoring, the relocation of corporate activities to foreign countries nearby, and form more regional value networks – the value network replaces the value chain, which has been trimmed to efficiency and serves profit at the cost of a reduced resilience. In the adaptation phase, on the other hand, the focus is on the latter: it is about crisis-proof, holistic growth. At this point, COVID-19 is only one amplifier of developments that were already in the waiting. The rising environmental awareness and the global protests of the young generations have established a new sustainability paradigm that will unfold its effects over the next few decades. The process of glocalisation is supported by the arrival in real and the digital everyday life: after the crash course in online working, the digital has finally been moved from the future to the present.
Context-Sensitive Business Models
Likewise, companies continue to evolve by expanding their understanding of business models. Besides simply focusing on a market, both new economic principles and society itself provide the framework for opportunities of development. As long as society, people and nature are not considered as part of one’s own enterprise and vice versa, strategies are largely determined by short-sighted financial interests – a luxury still afforded by many management doctrines based on a conventional business administration. Radically modern companies, on the other hand, implicitly include the larger contexts.
The crisis revealed the limits of business models that were conceived without context from traditional business studies. In the Next Economy, permanent adaptation becomes the rule – even in a best-case scenario. The focus on numbers and linear chains is insufficient, as these only represent what is happening in and around the business in an insufficiently complex form. The frequency of disruptions is increasing – making multi-year planning impossible. In the future, economic action will therefore always have to include the contexts of society, people and nature. This has long been noticeable in the strategic everyday life of most businesses. Who does not yet have a strategy in terms of diversity or corporate social responsibility (society)? In addition, the “human factor” (health and nutrition) and the “nature factor” (climate, epidemics) are now increasingly being considered – both are becoming mandatory elements of strategic thinking. For this reason, business models with greater contextual awareness are rapidly emerging in the Next Economy.
The increased contextual awareness in the economy is also evident in the increasingly emerging group culture. New cooperative alliances are springing up – author communities, technology collectives, regional trade structures. Companies that have a social purpose right from the start are also gaining strength: social businesses that aim at a profitable business model with a charitable purpose. The number of such organisations is growing – as is their economic significance. In times of crisis, purpose identification – the company’s orientation towards the well-being of the many – is growing in importance. It provides orientation, motivates and holds together.
Effect Instead of Growth
The growth of numbers is only one growth dimension of many. The traditional economy, which is fixated on maximising growth, has hit rough waters and is coming to a standstill in some areas. In the Next Economy, growth takes on a new quality: freed from purely economic perspectives, a new dimension of economic activity and social added value is evolving. It addresses the whole range of interdependent economic, social and ecological factors from which new added value can be generated. Businesses wanting to prepare for the future must now set the course to unlock the potential of the Next Economy.
As mentioned above in the section on megatrends, creativity is the key cultural technique that helps people – including the economy and society – to create something new out of critical situations. When it comes to a new way of doing business, creativity does not mean a bank’s art collection or a transport company’s design-thinking workshop but rather a more fundamental deconstruction of the familiar. For this to happen in an economy, it must open itself up, expose itself to the Other and the New, enable exchange and friction. This can happen by establishing direct spatial proximities to creative people – which must then also be lived. And it can happen in people’s minds. When people in companies open themselves up to a new way of doing business, they are forced to be creative – and become automatically more creative.
However, the economy must not rely on everyone developing sufficient creative power on their own. Both the economy and society at large need a vibrant local creative scene to inspire and drive this creative capacity forward. The attractiveness of any city is still strongly linked to its cultural life. Its creative industries, regardless of how strong they are, are also directly relevant to its economic development. This will be even truer in the future – even more characterised by adaptation and resilience than in the past decades.
And creativity needs one thing above all: room to manoeuvre. Real creativity arises in free spaces. In addition to alternative financing options such as crowdfunding, a basic income of whatever nature can create such free spaces in everyday life and in people’s minds. However, it is not only mental freedom that is necessary to unleash creativity but also space, places and structures in which creative processes can take place – without being under pressure to directly economise the results, as is the case in creativity workshops, for instance. Creating these spaces determines how creative an individual, a company or an entire city can be.