In the summer of 1999, the Harvard Business Review treated the business community to a glimpse of a bold new model for business and industry in the 21st century. The HBR has been filling requests ever since for the article by Amory Lovins, L. Hunter Lovins and Paul Hawken titled "A Road Map for Natural Capitalism." The article described how businesses could profit by employing strategies built around a more productive use of natural resources. The authors explained in a very practical, yet compelling manner how these strategies could go a long way toward solving many current environmental problems.
Business readers and anyone concerned about the changing global economy and its impact on the ecosystem will want more than copies of the HBR article once they realize it was actually a tantalizing synopsis of the authors' new book, "Natural Capitalism: Creating the Next Industrial Revolution" (Little, Brown, 1999). This important book can take its place alongside such touchstone volumes as "Future Shock," "Megatrends " and "The New New." The authors describe in vivid detail how business and industry can gain competitive advantage through a new business model based on doing much more with much less.
The authors set out to prove that changing realities of the information economy and global competitiveness are already transforming industry and commerce in ways unforeseen even a few years ago. The new business model takes into account the values of all forms of "capital" including human, manufactured, financial, and natural. "Natural Capitalism" starts with an elegantly simple premise: economies need no longer be based on the idea that human capital is finite and natural resources are infinitely abundant when the obvious truth of the 21st Century is exactly the opposite.
With mounting confidence, Lovins, Lovins and Hawken predict that the latest industrial revolution will create "a vital economy that uses radically less material and energy." Businesses that recognize the trend toward this new type of industrialism will gain advantage over their less alert competitors. Those that postpone this shift will be left behind and will eventually, make themselves irrelevant in the new economy.
Theirs is not merely a detailed updating of Buckminster Fuller's "small is beautiful" thesis. Rather, the authors describe a step-by-step process of business restructuring that should result in more efficiency at the corporate, national and global level. Such a process, if carried out across several industries simultaneously, would make it much easier for governments to promote social equity and conserve or even restore the natural ecosystems reaching across traditional borders.
This next stage of industrialism, the authors' "natural capitalism," is founded on four core business strategies already being adopted by the most innovative corporations across the globe. The strategies suggest that companies need to:
1) employ technology and design innovations to use resources much more productively. This results, of course, in companies using fewer resources, reducing pollution, and setting the stage to create more jobs;
2) practice "biomimicry" by redesigning industrial systems to be more like biological systems, leading to an elimination of even the concept of waste;
3) shift from an economy based on goods and purchases to an economy based on service and flow. This concept leads to a quantum shift in how manufacturing companies service their clients, especially in terms of inventories, sales strategies, etc; and
4) reinvest in "natural capital" to sustain, restore and expand the resources on which industry, and ultimately all life, and therefore all livelihood, depends.
"Natural Capitalism" is not a "gloom and doom, industry vs. the environment" anti-consumerism rant. Neither do the authors fall into the trap of proposing a Pollyanna hypothesis that begins with "if only we could change our basic cultural values." Lovins, Lovins and Hawken make elegant use of facts and examples from several industrial sectors and actual case histories of large and small companies based in the US and overseas.
Consider the "Hypercar," a synthesis of emerging automobile technologies developed in 1991 by the Rocky Mountain Institute, the think tank founded by Amory and Hunter Lovins. Imagine "a family sedan, sport-utility, or pickup truck that combines Lexus comfort and refinement, Mercedes stiffness, Volvo safety, BMW acceleration, Taurus price, four-to eightfold improved fuel economy (that is, 80 to 200 miles per gallon), a 600 to 800 mile range between refuelings, and ZERO emissions."
If such technological innovations sound like eco-friendly pipe dreams, think again. Today, DaimlerChrysler, Ford, GM, Honda, Toyota, Volkswagen and others are actively competing to bring this revolutionary vehicle to the market within the next few years.
As global a corporate presence as DuPont is already feeling (and no doubt, influencing) a sea change in manufacturing philosophy. The Delaware-based chemical giant is on record in favor of "comprehensive resource productivity". In DuPont's words, "sustainable growth has to be focused on a functionality, not a product. The next major step toward sustainable growth is to improve the value of our products and services per unit of natural resources employed." To that end, DuPont is "down-gauging" its polyester film, making it thinner, stronger and more valuable so that it may sell less material at a higher price.
What the Lovins and Hawken have given us with "Natural Capitalism" is nothing less than an up-to-date business manual for the next century, complete with clear explanations and solid, real world examples. Their thinking finds common ground between business and environmental interests and makes the common sense case for how the two outlooks are merging into a new, practical, eco-friendly approach to making a profit.
Just as business and civic leaders in Atlanta and elsewhere are redefining how sprawling cities should grow, "Natural Capitalism" redefines how businesses and ultimately the entire planet should grow to sustain a prosperous and equitable quality of life for the indefinite future.