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TRANSCRIPT
Radical is the new Normal
Rod Oram’s presentation to the
World Business Capability Congress
Auckland, December 5th, 2012
Fast-forwarding the world’s economic transformation, sustainably
Kiwiki on Facebook / Twitter @RodOramNZ
[email protected] / +64 21 444 839
Agenda
• World
• Radical
• New Zealand
• Paradox
• Revolution
• Complexity
Then…. …Now
• 2007-09
• Sudden liquidity crisis
• Big, quick fix
• Pump in lots of money
• Lots of political will
• Lots of public support
• Worked fast
• Markets re-assured
• Moved on to current phase
• 2009-20??
• Long-running structural crisis
• Big, slow fix
• Restructure economies
• Lack of political will
• Lack of public support
• Will work slowly
• Markets fearful
• Very, very stuck
Saving Europe is simple
• All it would take is:
• French reform
• German extravagance
• Italian maturity
• …as The Economist opined May 12
World Economic Forum: Global risks
• To ensure human needs are met, we need radical new technologies
• We need to develop and deploy them on a scale and at a speed like never before
• …and with much greater complexity and risk
• …and with a need for public understanding and support
• …and ways to respond far better when things go wrong
• This is a fundamental shift in risk and risk management
WEF: Risk map
WEF: seeds of dystopia • …e.g. is The Occupy Movement an anomaly?
• Or a harbinger of social unrest?
• ...the latter, it concluded
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Rio 2012 – Two views • “The fact that we have a consensus outcome document at all,
and the 283 statements within it, is truly testament to the abilities and goodwill of everyone who attended.”
• Environment Minister Amy Adams, Aug 6, 2012
• At the Environmental Defence Society conference “Growing Green”
• What the text actually contained:
• The 283 paragraphs cruelly exposed governments’ lack of ambition & commitment
• 99 times – “we support”
• 50 times – “we encourage”
• 5 times - “we will”
• 3 times – “we must”
• “The longest suicide note in history”
• Kumi Naidoo, Greenpeace International’s executive director
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The rise of civil society… • …birth of a new democracy:
• People-led • Not politician-led
• Locally-driven • Not centrally controlled
• Interactive • Not authoritarian
• Creative • Not restrictive
• Networked • Not hierarchical
• Learning • Not stagnating
Rise of civil society • At Rio:
• More than 700 formal commitments by organizations and companies were registered
• They pledged more than US$500bn to sustainable development actions, many were addressed specifically to fighting climate change.
• Examples
• The 1,800 largest companies listed on the London Stock Exchange committed to disclose their greenhouse gas emissions
• Mayors from 58 megacities, meeting as part of the C40 Cities Climate Leadership Group, agreed to actions which could reduce greenhouse gas emissions by over a billion tons by 2030
Voluntary action
• US Natural Resource Defense Council’s Cloud of Commitments
• http://www.cloudofcommitments.org
Business action
• World Business Council for Sustainable Development…member commitments
• http://www.wbcsd.org/rio-20/membercommitments.aspx
Natural Capital • Many global corporates committed to it at the UN’s 2012 sustainability
summit in Rio
• www.naturalcapitalproject.org
Agenda
• World
• Radical
• New Zealand
• Paradox
• Revolution
• Complexity
People, planet • Vision 2050 • A very challenging roadmap
for corporate development by World Business Council for Sustainable Development
• …NZ version just released
w • q
Cradle to Cradle • One product gives rise to the next
• …waste, by-products and recycling of one, become materials for the next
• …emulating nature’s cycles
Re-conceiving…biomimicry • Imitating nature
• …the technology discipline pioneered by Janine Benyus
• www.biomimicry.net
• Fans, propellers like nautilus shells
• Wire ropes as strong as spider webs…
• …made in cold biochemical processes
• Prof Neil Gershenfeld, MIT…TED talk http://bit.ly/MI7Eur
…when information meets atoms
The next 10 years • Finance and capital conditions
• Finance more expensive and less available • Market and regulatory constraints
• Less benign economic conditions
• Higher economic volatility; Increased risk
• Low carbon-economy • New disciplines & technology • Far greater resource efficiency • Technology change accelerating
• Public losing trust in business
• Scepticism over Anglo-Saxon model • More government intervention
• Social and demographic change
• New responses to retirement, pensions • New business & government solutions • E.g. more flexible working practices
“The Shape of Business” Confederation of
British Industry
www.cbi.org.uk
New management disciplines
• Relationships: from transactions to partnerships • …particularly highly strategic ones
• Innovation: from incremental to radical
• To meet new needs…in new ways • Open innovation and other forms of collaboration • New opportunities for NZ companies to partner with global ones
• Management: from tactical to strategic
• Need to collect, interpret and act on real-time data • Everything we do today is a piece of our big picture
• Sustainability: from fringe to mainstream
• Measuring and managing environmental flows through our businesses • Push down the road to true sustainability
Agenda
• World
• Radical
• New Zealand
• Paradox
• Revolution
• Complexity
…but we suffer from slowth • We’re still recovering slowly …
…helped by rebuild of Christchurch
• Growth in year to June 2012 was 2.0%... ..could peak at 3% next year …dominated by Christchurch
• But will then sink back to its long-run slow growth average of around 2%
• Why can’t we grow faster, longer by earning a bigger living in the world economy?
Government Strategy Mk III
• “Business Growth Agenda”
• 6 ingredients of business growth
Agenda
• World
• Radical
• New Zealand
• Paradox
• Revolution
• Complexity
Paradox
Abundance Scarcity
Poverty
Cows Scientists
Poverty
Tourists Engagement
Poverty
Sustainability
Weak Strong
Re-invention
Scarcity Abundance
Wealth
Lacto-pharmaceuticals Milk powder
Wealth
Travellers Tourists
Wealth
Sustainability
Strong Weak
NZ Vision 2050
• …by a group of young leaders…
• …under the NZ Business Council for Sustainable Development…
• …which morphed into Business NZ’s Sustainable Business Council
• Download at:
• http://bit.ly/PxiG1B
• NZ site coming soon at:
• http://www.vision2050nz.co.nz
• Vision 2050 Global report at:
• http://bit.ly/Ox0HsK
Agenda
• World
• Radical
• New Zealand
• Paradox
• Revolution
• Complexity
The green imperative…NZ’s opportunities • Authoritative analysis from Pure Advantage
• …business research group led by Tindall, Fyfe, Morrison, Ross, Mills and other NZ business leaders
• Building business buy-in on seven initiatives in existing sectors:
• Housing
• Geothermal
• Biofuels
• Waste to energy
• Smart grid
• Agriculture
• Biodiversity
• Available at www.pureadvantage.org
LanzaTech…clean tech leader • Commercialisation agreement with:
• Chinese Academy of Sciences
• Baosteel; next pilot plant in China
• Makes biofuel from industrial waste gases • Turns greenhouse gas liability into profit
• World pioneer of the science
• Auckland-based; NZ Steel pilot plant
• Big venture capital backing
• US$100m of capital so far • NZ: Stephen Tindall
• US: Vinod Khosla
• Chinese and Malaysian investors too
Urban New Zealand • As a nation, we largely define ourselves by our rural and wild parts
• …and we believe rural business underpins the national economy
• Yet, we’re one of the most urbanised populations in the world
• …87% of us live in towns and cities
• …most people earn livings far removed from the rural economy
• Our urban places are in trouble….
• …their built environments are increasingly unsustainable
• …their economies anemic, inward looking
• Christchurch pre-earthquake had a lot of marginal businesses, buildings
• Auckland mainly serves only its own population
• Wellington’s tourism & events strategy earns little; public sector shrinking
• Dunedin is slipping away
• …and every smaller town has its own story to tell, positives & negatives
• Challenge:
• Reinvent, reinvigorate our urban communities and economies
Yes…
• Radical?
• No
• Zero energy?
• No
• Growth?
• No
• Sustainable?
• No
• 21st Century city?
• No
…but
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…instead, how about creating global centres of excellence in: - Dairy nutrigenomics - Earthquake prediction, rescue & recovery - 21st century city systems - Antarctic research
Agenda
• World
• Radical
• New Zealand
• Paradox
• Revolution
• Complexity
Explosive growth in technology
• Paradigm shift rate…
• …the overall rate of technical progress
• …is doubling every decade
• …and impact is doubling too
• 20th century: – about 25 years of progress at today’s rate
• 21st century: – progress equal to previous 200 centuries
• So, 21st century will see 1,000x as much progress as 20th century
• In the next 10 years, we’ll see 80x the technological advancement of past 100 years
www.ted.com/talks/matt_ridley_when_ideas_have_sex.html
Poverty
Simplicity Complexity
Poverty
LGA, RMA, EEZ Society
Wealth
Complexity Simplicity
Wealth
Society.....................LGA, RMA, EEZ
Our future…and the ultimate complexity
• NZ Land: 270,000 sq km
• Australia’s 28x NZ
• NZ Oceans: 5.8m sq km
• 5th largest in the world • Australia’s 1.4x NZ’s
• Huge responsibility:
• …to nurture
• …to use responsibly
• …to sustain us
• …we get $184bn of ecosystem services for free
• We need new values, systems,
learning, collaboration:
• …to be sustainable
• …to offer hope to the world
“You’ll have no future…
…if you don’t make one for yourself”
…Johnny Rotten: