It has been understood for a long time already that continuous improvement of quality of life for the members of the society requires continuous economic growth. The traditional kind of growth is based on the growth of material consumption, supported by the growth in exploitation of natural resources. In the industrial age, growth has been boosted by processing the raw materials through complex value systems, resulting in end products with substantial added value. Technology is a key enabler in this development and also in the better utilization of the raw materials, reducing waste and energy consumption in processing. Reducing waste of all kinds is necessary for the conservation of natural resources.
As the global population is approaching ten billion people, exploitation of natural resources has crossed the line of sustainability. The Club of Rome already pointed out this inevitable predictive conclusion in their report “The Limits to Growth”, published in 1972. Compounding with this problem, the fastest developing nations at the moment are those with the biggest and fastest increasing populations. They are demanding their share of welfare as well. As the result of these two factors the natural resources, especially limited non-renewable resources, need to be distributed in a fairer manner.
Globalization is supported by the information and communication technology revolution, also in the developing economies. The mobile Internet provides them with better access to technology and education, accelerating their industrialization journey. The large size of their home market, combined with lower labor cost, gives them the possibility to pay higher prices for the raw materials. As the result, a balance between demand and supply will be established at a higher price point. This favors the big developing economies, since the mature post-industrial economies are unable to lower their labor cost without major political and social crises. Thus it will also support a fairer distribution of natural resources.
This means a substantial per-capita reduction of material consumption for the established post-industrial economies, causing them to search for new ways of satisfying the demand for better quality of life. They need to become less dependent on the quantity of material goods. A new kind of perception is emerging about welfare and growth, accounting for the immaterial side of quality of life as well. It is about moving away from owning material things stockpiled in your house, towards consuming services and enjoying experiences on demand.
As the developing nations rush through the industrialization, they will eventually be in the same situation. Technology will provide some relief every now and then, but in the end, the price of natural resources will increase to a level that calls for strong measures for conservation, and at the same time enables investments to implement those measures.
At the heart of these measures lies the goal that natural resources should be allocated or distributed for different purposes based on their impact on the long-term sustainability of human life on planet earth. This is a tall order. It requires broad understanding about the systemic properties of life in the global ecosystem. We cannot consider human beings, their societies, and organizations as isolated subsystems from the nature and all other life forms. We are just a small piece in this very complex puzzle, and disturbing its balance may cause unpredictable and irreversible effects, harmful to the goal of sustainable life. We may have crossed the border already.
The concept of fair and sustainable distribution of natural resources is a highly complex problem. In addition to considering it from the demographic viewpoint, we need also to include the time dimension to the equation. It is not at all evident that using up a certain type of non-renewable natural resource for the first economically feasible purpose would be justified from the sustainability viewpoint. It is possible that at a later point in time, a need emerges stronger than anything before, for a purpose much more important than today’s purposes. The availability of a certain non-renewable resource may prove critical for the sustainability of human life at some point in future. Additionally, future generations are not here to bid for their share of the non-renewable natural resources, even on a purely commercial basis. If they were, their demand would probably cause the prices to go much higher than we can ever imagine, making many uses of natural resources today completely infeasible.
The future is in front of us behind a foggy curtain, but it is there. We can’t predict the details over a long term, but we can certainly discover some trends that are like invariants. One of the most important trends is sustainability. It has reached the level of global awareness and it is affecting us at the level of the society, the organizations and businesses therein, and at the level of individual human beings.
Sustainability calls for optimization and accuracy in allocating and distributing natural resources for different purposes. Optimization, to the degree it happens, is the expected result of a rather chaotic system consisting of the combination of politics, markets, and business life. They involve people in their different but simultaneous roles as consumers, citizens, politicians, government authorities, business leaders, and employees of various organizations. As the result of information being available about the global issues, awareness about the importance of sustainability is increasing among all these stakeholders, and consequently is leading to public opinion, consumer behavior, government policies, and markets supporting sustainability.
Accuracy in the distribution and allocation of natural resources means how well we can execute it to meet the goals of the sustainability policies and supporting stakeholders. It is the purpose of economic activity in the society to take care of this, guided by the market and government policies. The need for accuracy can be divided in two aspects.
First, for a given set of existing business models in an ecosystem, the goods and services shall be produced in such a manner that it provides the best match with consumer needs, and at the same time, the best support for current sustainability policies. In short, this calls for operational excellence in multiple dimensions at the same time.
Second, the set of business models shall continuously evolve in order to introduce new and better ways of utilizing natural resources for simultaneously meeting the market demand and sustainability policies. Old and wasteful business models must be demolished. This calls for dynamic capabilities, a different concept from operational excellence, giving the organizations the ability to reinvent their businesses on a continuous basis. Organizations incapable of doing this will perish.
Enterprise architecture is about operational excellence and dynamic capabilities. Thus it supports values that go far beyond the current quartile or fiscal year. The mother of all values is the pursuit of mankind to sustain its existence indefinitely. If corporate values and goals can be shown to result in actions and behaviors supporting this, then they can be considered valuable.
Jaakko Riihinen
Senior Vice President
Products and Technology
QPR Software Plc
fi.linkedin.com/in/jaakkoriihinen/
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