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Real Needs at the Peak of the Economic Pyramid

Synopsis

Read or download the full Thematic Research Highlights Report [pdf].

The complete version of the white paper explores the "progress gap" between GDP growth and life satisfaction, and the social contract between companies and their stakeholders. Specifically, the paper looks at a company's human capital management, their ability to understand changing customer values and needs, and how they interpret their broader social contract with the community.

chart showing the growth of the UK GDP from 1973 to 2002, as compared to zero growth in life satisfaction

Background

Due to an emerging culture of post-consumerism and possibly post-materialism, "Society is undergoing a fundamental shift from 'material want' to 'meaning want,' with ever larger numbers of people reasonably secure in terms of living standards, but feeling they lack significance in their lives."1 The "conscious consumer" market is already a $250 billion dollar market, growing at double digits. Changing consumer values are mirrored by changing employee expectations. This is relevant for many companies, because as much as 80% of a company's worth is tied to human capital compared to the reverse 50 years ago when a majority of a company's value came from buildings, plant, land and inventory.

Conclusions

Despite fifty years of economic growth in developed countries, the gap between economic prosperity and personal well-being has widened. Companies—through the work they do, the products they sell, and the way they treat their staff—have opportunities to address the real needs of their employees, customers and communities and, in so doing, create enduring value.

Sample Investment Ideas

  • Industrial sector: green buildings, ecosystem restoration, climate change mitigation, products to manage energy consumption and reduce environmental impact, demand-side efficiency, hybrid technology, renewables (wind, solar, bio-fuels, hydrogen).
  • Financials sector: community banks, housing lending/affordable mortgage products, educational loans, health insurance and savings products, sustainable banking (across asset management, project finance), philanthropic financial services.
  • Consumer sector: leisure, food safety, organic/fair trade, sustainable agriculture, energy efficiency in the home, shifting demographics, conscious consumerism and post materialism, loyalty and products with enhanced social utility.
  • Healthcare sector: healthy lifestyles, alternative medicine, preventative healthcare (genetic testing), life-saving drugs and devices.
  • Tech, Telecom & Software Sector: functionality over features, clean and green design, technologies or products that can knit closer ties across communities (on-line and real world), online services/remote education, open source, control of content, wireless connectivity, mobile and networked solutions, harnessing the power of online communities and collaboration.
  1. Easterbrook, Gregg. "The Progress Paradox : How Life Gets Better While People Feel Worse," Random House, New York, 2004, p. 30.