Companies That Use the New Sustainable Economic Model Are More Successful
Date: May 25th 2020
Author: Peter Palčec
“The coronavirus pandemic has shown the vulnerability of our current economy model. Our economy was already becoming unstable again even before the crisis, according to some analyses. Now the economy is changing. We need to experiment with new economic and political models. Thus, we must not only increase efficiency, but also innovate and look for new solutions. This will drive the new economic business world after the crisis. The business model that was based on the trade-off between sustainability and profit is changing. A lot of companies are already trying to generate profit that also brings about positive effects for society. Sustainability and profit are becoming increasingly connected and this will produce new business paradigms. Companies that are already using the new sustainability model are facing the crisis much better. Analyses show that sustainable companies are outperforming other companies and sustainable management will play a key role in implementing these new economy models,” said René Schmidpeter, a professor at the Cologne Business School and the IEDC Bled School of Management in a webinar titled ‘COVID-19 – A Driver for Sustainable Management?’, which was organised by the IEDC.
He also mentioned that the current business models have been increasingly coming under pressure because of the scarcity of resources and new social pressures. “Even the markets show that sustainability is becoming a new key driver for the economy. If we cannot manage our society in a sustainable way, there will be no economy left. We should not just rebuild our old economic model, but instead start redesigning it and make a more resilient and innovative economy. A lot of opportunities can already be seen emerging out of the crisis. New energy, mobility, housing and educations systems are needed. Incorporating sustainability into business thinking is the new paradigm,” concluded Schmidpeter.
Alenka Hren from SPIRIT Slovenia, a public agency for entrepreneurship, internationalisation, foreign investments and technology, stated that in Slovenia some companies have already transformed their business models. “When we worked with companies in helping them change their business models to more sustainable ones, we came to the conclusion that creating long-term supportive measures for companies that want to transform to a more sustainable models without practical implications is not good enough,” she commented.
However, according to Hren, implementing sustainability measures and values into business models bring a lot of positive effects. “On the other hand, we came to the conclusion that each company is unique and sustainability measures must sometimes be tailored to the specific needs of each company. It is also important that company owners and management realise why they are implementing sustainability models, since changing to such models brings with it a huge transformation of values,” added Hren.
Gertrud Ranzer, chairwoman of the Slovenian-German Chamber of Commerce and Industry, concluded the webinar with the statement that companies will need state help if they are to become more sustainable. “It is already clear that the pandemic is changing the whole supply chain of our economy. Specific companies, such as those in the automotive industries, will need financial and other kinds of help from the state if they are to switch to a more sustainable business model,” said Ranzer.
This article is available also in Slovene.