"Social issues" have often come within quotation marks in the corporate world, and are left to the communications person to deal with, but business can no longer afford to ignore these issues and must proactively respond to major social and environmental trends that are reshaping markets, if they wish to survive and thrive in a global economy. This stark reminder has come out in a latest report published this month by the United Nations Environment Programme (UNEP), World Business Council for Sustainable Development (WBCSD), and the World Resources Institute (WRI). The report points out that caring for the environment in fact, makes good business sense and creates new economic opportunities.

Backed with facts and figures, the it outlines 19 powerful trends that are reshaping global markets and changing the roles and strategies of corporations. Tomorrow's Markets: Global trends and their implications for business is the first publication that links global economic, environmental, and social indicators to market development in order to help businesses better respond to future challenges. The report reflects the rising interest in using market solutions to address some of the world's most pressing problems.

Tomorrow’s consumer markets and labour will be concentrated in the fast growing, emerging markets where small and large enterprises will find profitable opportunities to help meet healh, education and nutrition needs. And only those businesses with survive in these markets, which partner with the government and civil society to serve basic needs, enhance human skills, and increase economic capacity, help remedy inequities and conserve the environment.

Since the world economy depends on a base of natural resources that is being severely degraded, reducing consumption and waste creates new opportunities for businesses to grow through the innovation of less wasteful process and with life-enhancing goods and services.

Population dynamics , the report points out will emerge as a major force that will reshape corporate strategies. The growing population of young people in developing countries represent major new labour and consumer markets for business, particularly as traditional developed country markets will shrink with declining populations and become characterized by an increasing population of elderly. Companies must gear up to build developing country markets by supplying people with products and services that meet basic needs, are affordable, accessible and are culturally appealing.

Growing income disparities between geographic regions despite the rise in global wealth in another factor, which will critically impact future corporate strategies. The richest 1% of the world’s population receives as much income as the entire bottom 57% i.e less than 50 million richest people in the world receive as much income as 2,700 million poor.

If business is to find new markets for its goods, then it must work towards narrowing this income gap between citizens in high and low-income countries. The expanding middle and lower income consumers represent potential markets and developing affordable goods and services for those markets can drive innovation, new business models and corporate growth.

Nutrition presents a similar picture. World food supplies have grown faster than population, yet millions are malnourished and go hungry to bed. What does this mean for business? Food production, its transport and distribution offers a major economic opportunity.

Health care has emerged as another exciting business opportunity, as despite the rise in global life expectancy, infectious diseases conquered long ago in the industrialized world continues to kill millions in the developed nations. The health of employees, customers, shareholders and other stakeholders are a direct concern of enterprises as it effects productivity. Improving health care facilities in developed countries making it accessible to the poor and needy, producing preventive medicine is a strategic opportunity for private corporations in pharmaceuticals, health services and infrastructure.

Spread of education will produce skilled workers needed by the companies to produce goods and services for the world population. By partnering with the government, the private sector can step in to provide quality education in a country like India. Private sector skills are needed to focus education on imparting marketable skills not just for the home market but for global enterprises as well.

The development of renewable and recyclable goods will present an interesting business opportunity, as global consumption will jump dramatically, creating tremendous pressure on resources. The development of zero emission vehicles and electronic paper are some of the development that already pointing in that direction.

Growing demand for energy will increase the price of fossil fuels and this pressure in turn will result in the emergence of alternative fuels and energy efficient equipment. The menace of pollution will spark off from fossil fuel-based materials to raw materials created from bio degradable and renewable sources.

The global ecosystem is seen as a natural capital that cannot be replaced. Nearly 26,000 plant species, more than 1,100 mammals and 1,200 birds, 700 freshwater fishes and hundreds of reptiles and amphibians are threatened with extinction. Competitive advantage will be with those companies, which manage this natural capital portfolio wisely. These companies will constantly innovate to produce environment friendly products and services. Those who do not innovate to meet these global challenges will have to face the onslaught of regulatory pressures, social activism and increasing consumer preferences for environment friendly products.

 

* The author is the corporate communications manager of PricewaterhouseCoopers. The views expressed in this article are his own.