From the 'me' economy to the 'we' economy
From the 'me' economy to the 'we' economy
Mounting concerns about economic growth rates, employment security and living standards motivate numerous economists to advocate that consumers spend more of their hard-earned cash to keep their economies growing.
What is lost in this traditional focus on encouraging individual consumption — the "me" economy — is a recognition of how rapidly technologies, market transformations and different values are changing consumer experiences to create a more interdependent "we" economy.
As global companies evaluate and seek to implement the U.N. Sustainable Development Goals, and raise the bar for their own corporate sustainability goals and practices, they are increasingly confronting the challenge of adapting to a number of fundamental changes.
Four factors are advancing the transition to the "We" economy:
1. Immediate 'known' risks are joined by highly consequential near and longer-term disruptions
Risks that we face now — large-scale migrations, unemployment, terrorism and inter-state conflicts, and national governance failures — never fully may be resolved. But they will be joined, and in some cases overtaken, by more disruptive risks that have begun to appear — water and food shortages, extreme weather and climate related-events and more profound social instability, according to the World Economic Forum’s 2016 Global Risks Report.
2. Innovations in technology and management revolutionize knowledge generation and apply it to a social purpose
Hailing a vehicle from fleets of self-driving cars, asking consumers whether renewable energy sources should provide the electricity to their home, and providing mobile phones to migrant workers to report illegal work practices and other human-rights abuses are just a few of the practices already underway.
3. Businesses reinvent themselves so products and services can connect to consumers in new and different ways
Consumer products companies, such as Unilever, are increasing their efforts to cross-link their business purpose with consumer engagement and social outcomes as evidenced by their campaign to promote hand washing to both sell soap and protect public health. Ford Motor Company invites consumers to "Build Your Own" F-150 truck, of which there are now 150,000 variations.
4. Business and consumers, increasingly connected through the Internet of Things, redefine goods and services
General Electric has announced that it is becoming a Top 10 software company in addition to an industrial engineering giant. Reviewing the changing demographic and cultural characteristics of its customers, Kaiser Permanente is facilitating online ordering of medications around the world for its more mobile senior patients and introducing more diverse language requirements for its health care staff.
These four transition factors have led to a re-scrambling of the economic playing field to attract new and more innovative partners, recruit and retain critical sources of talent, and expand efforts to understand customers’ values and voices.
Major challenges ahead
Three major challenges stand in the way of the transition from the Me to the We economy. First, a massive effort will be needed to train or re-train workers to serve the Internet-based We Economy. While the Internet has created about 2.6 jobs for every position that it has displaced, they are not often in the same location or provide the similar wage rates where job losses have occurred. Social confidence and stability rest on resolving this disparity.
Second, in view of the already numerous incidents of individual and state-sponsored hacking, major issues of personal privacy, identity protection and the establishment of data protection protocols need to be addressed to build confidence in the "we" economy.
Lastly, as changing consumer values de-emphasize the role of traditional brands ("We make your clothes even cleaner") in favor of brands that also address societal needs ("The food we eat impacts the planet we care about"), more realistic commodity pricing strategies need to be adopted so that consumer purchases reflect the truer costs of pollution and other externalities (such as overconsumption of water). Economic policy is a lagging indicator in meeting all three challenges.
The evolution from the "me" to the "we" economy, driven by technological innovation and evolving consumer expectations, will affect all major market sectors. Consumers will be able to collaborate in person and online to influence the performance of global supply chains in everything from the amount of water used in making a cell phone to inserting smart tags in our garbage to know where it goes.
As developed nations seek to rebuild their middle class, and emerging markets aim to grow theirs, the traditional advice to individual consumers to "spend more" to advance their economies will need to be rethought and revised.