Competitive companies transforming society

Our concept of competitiveness is changing as societies around the world undergo radical transformation, existing inequalities become more marked and the need to redefine the role of business in a social context becomes more pressing. These factors combined, make us strive towards a more human and humane economy; one which is centred around social needs and which provides space not only for professional development, but also for creativity and personal growth.

It is a thesis which is supported by many in the field. For example, Paul Krugman, highlights the close correlation between the level of social cohesion in a society and its ability to be competitive. He tells us, "There is solid evidence that high inequality is a drag on growth, and that income redistribution can be good for the economy. Although there’s no evidence that making the rich richer enriches the nation as a whole, there is strong evidence of benefits from making the poor, less poor."

Joseph Stiglitz offers a similar view when he points out that it is the very essence of a company to both generate quality employment, and, to be committed to the business plan through innovative means of co-operation. For instance, he highlights that, "Capitalism cannot work if private companies are not involved in providing social gain.  In fact, these firms provide the basis of social inclusion; firstly, through employment and secondly, by drafting frameworks for improving competitiveness and reducing social inequality."

Michael Porter goes a step further when he envisages a world where social achievements act as a mechanism for improving competitiveness. He defines this clearly when he puts forward the idea that, "The aim of a company must be redefined so that it creates shared value with society at large, rather than just increase profit. This would lead to the next wave of innovation and growth in productivity worldwide."

Yet, these calls for a new kind of business competitiveness clash with a very harsh reality. We find ourselves in challenging times, where we must navigate through rough waters. What has been dubbed the VUCA phenomenon (Volatility, Uncertainty, Complexity and Ambiguity), is in fact an indicator of constant turbulence in markets and politics; patterns and the magnitude of change are no longer predictable, and it is becoming increasingly difficult to predict the future since looking to the past can no longer explain things. There is also a growing interconnectedness between causes and factors. In short, as the world is changing, new models for business management need to be created.

As we go forward, the impact of social trends on business will become stronger than ever. There are existing social elements which will have an impact on future business models, including, but not exclusive to, the following: The need for reinventing capitalism and acting effectively against social inequality; promoting growth as a source of wealth creation and not merely as dogma; the role of employment as an element in social inclusion and personal development; promoting mechanisms within the community to counter the accelerating individualism we now see in society; and finally, the creation of competitive ‘eco-systems’ where government, companies, NGOs, Educational Centres, Organisations, and other players, all work together.

These factors, along with the growing intrinsic competitiveness we are witnessing in all markets, are obliging companies to transform their business model, their mechanisms for generating value, and, the way in which they involve collaborators, be they individuals or organisations. All of these, are key to improving productivity and the capacity to compete.

We are constantly hearing about the virtue of one business model versus another. Some people position themselves in favour of a collaborative economy; others insist that the social economy is the only way forward in, what is now, a new playing field. There are others who claim that the companies, who have mechanisms for the co-creation of value between company and society, are the ones who will come out on top, whilst others are in favour of the traditional business model as the best means of wealth generation, job creation and the production of goods and services.

In my opinion, the right combination of elements of each of these models, and of others too numerous to mention, is what would allow companies to develop models in order to strengthen competitiveness. If we take for granted that it is requisite that companies generate wealth, attention must then be paid to a number of areas when going about this. Firstly, companies must devise projects which are attractive to professionals. Secondly, when competing internationally, they must adapt to the social realities of the geographical area within which they operate, and they must boost their capacity to work online and in conjunction with the entire socio-business ecosystem. Thirdly, they must incorporate a social vision into their business strategy which leads to value creation both economically and socially, and throughout the whole process, people must be placed at the centre of a shared, intergenerational project which strives for a fairer redistribution of wealth.

To me, the task ahead of us is a fascinating one. We must approach it with a strong awareness of the company’s identity, so that we create a more motivating vision of the future where social objectives, collective solidarity, diversity, and a clear commitment to the creativity of individuals would combine to enrich the business as a whole. Nothing will be possible, if we don’t do it with passion and a desire for transcendence.

 

Sabin Azua

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