Pathways to Sustainable Value Creation in 2020
As companies look forward with an eye to 2020, there is a uniquely powerful opportunity to shape the evolving relationship between business and society. Doing so, however, requires taking an uncomfortable step that even today’s most intrepid strategic planners infrequently take: making predictions as far as ten years into the future. To appreciate the difficulty of the task, one only needs to reflect on the many unexpected twists and turns of recent interactions between business and society. For example, a decade ago, who would have foreseen the worldwide explosion of cellular-telephone adoption, which increased from 738 million in 2000 to over 4.6 billion in 2010?1 Yet this one technological advancement has equipped entrepreneurs in the remotest parts of the globe with instant access to mobile banking, remittance transfers, and tele-health services (while simultaneously boosting the revenues of pioneering telecommunications companies). Equally surprising are the transformations in relationships between companies and nonprofits that were once contentious and are now increasingly collaborative. For example, the nonprofit environmental advocacy organization Greenpeace, once best known for its confrontational approach, now works side-by-side with some of its former corporate adversaries toward the achievement of shared goals. Finally, even the most advanced financial models a decade ago could not have projected that investments in renewable energy technologies such as wind, solar, geothermal, and hydroelectric power would overtake investments in fossil fuel technologies, attracting over $140 billion in new investments in 2008.2
Yet as fraught with uncertainty as forecasting can be, significant costs are associated with planning cycles of only two or three years. Further, some trends are already beginning to take definite shape. In business, these trends—when spotted early—allow companies to change course with sufficient time for them to dodge potentially debilitating oncoming obstacles or to seize opportunities for expansion into new product lines and markets.
For these reasons, this report aims to address the following future-oriented questions:
- What will the next decade look like, and what are the implications for corporate involvement in solving social issues?
- How can corporations position themselves now to maximize their profitability and societal impact?
Chapter 1 of this report tackles the first question.
Despite the difficulty of predicting in detail what the year 2020 will look like, it is already clear that several gamechanging trends—such as the shift in economic activity from the Western to the Eastern Hemisphere and an increased stress on natural resources—will have an acute impact on the context in which large multinational companies compete ten years from now. Another reasonable prediction is that social problems will become increasingly complex and widespread over the next decade. At the same time, societal expectations that companies should take a substantial role in addressing those issues will escalate. The chief axes of uncertainty are how high those expectations will rise and how business will respond. The chapter concludes with four distinct visions of 2020 based on those two key uncertainties.
Chapter 2 turns its attention to the second question,
investigating the steps that companies can take today to mitigate the risks and seize the opportunities for long-term value creation in the changed landscape of 2020. It presents specific recommendations for how individual companies can prepare, offers guidance on whether companies should act independently or seek collaborators, and provides ideas for new models of collaboration to meet the challenges of the next decade.