Profitability is essential for businesses big and small, but what is capitalism and the free market without any governance to make sure things are fair? More than that, how does an unregulated free market have consequences for your business? The actuality is that capitalism has skewed further away from being ethical and fair and has, as a result, become a system where large corporations profit off of the little guys.
It’s time for businesses to recognize their economic responsibility. In order to keep capitalism free and uplift businesses and society, it’s up to companies to exercise an ethical approach to viability and profitability.
The Current Movement and Trend
Spurred by the pandemic, the world, and the US in particular, has seen a mass exodus from expensive metropolitan areas to smaller towns and villages. Thanks to technology and the power of collaboration connectivity, people are moving our of areas like Silicon Valley and New York City back to their home towns and less expensive areas.
Because of this movement, remote work has afforded employees better quality of life and more money back into their pockets, but what does this mean for businesses that are hungry to return to the office? As companies implement plans to get employees safely back into the office, there must be acknowledgement of another solution. For the sake of employees’ wellbeing and for the economic health of companies, businesses must exercise flexibility.
On one side of the coin, companies are grappling with how to get employees to return to their city-based offices when so many people have moved to smaller towns. On the other hand, this movement has brought opportunity for businesses to hire talent, regardless of their location.
For example, at Zoho we reconsidered our plans to build our Austin, Texas campus and instead are opening smaller offices in rural locations throughout Canada, Texas, and Mexico. We call our economic approach sustainable capitalism, and we believe other businesses should be thinking about too.
Sustainable capitalism is an economic system based on profit by means of private ownership, however, sustainable capitalism takes on a much larger human approach to economics. While most businesses thrive within capitalism, there’s become a need to add more of a human approach.
Sustainable capitalism is rooted in uplifting society and practicing sustainability to protect the environment. It’s a means where businesses create local assets, create the know how, create the capabilities, and create resilience. That is durable capital.
Sustainable capitalism is multi-faceted and includes supporting local economies. Businesses can do this by recruiting talent from local hubs adding to rural revival, along with creating incubation programs that focus on training local talent. By hiring local and investing in talent, sustainable capitalism ideology helps companies profit in the long run, rather than focusing on the short term.
Additionally, partnering with local organizations or even funding local schools are key parts of sustainable capitalism. Sustainable capitalism’s economics focus on improving and empowering local regions and being a part of the community. Environmentally, when opening an office in a smaller region, it’s critical to build using construction techniques that are sustainable. This means using local materials and supporting local businesses, as well as including sustainable practices. At Zoho, we’ve tried to implement this ideology by farming.
What was supposed to be our Austin campus has now been transformed into a farm where employees can reconnect with nature and grow vegetables and fruits for their family and friends.
The Benefits of Sustainable Capitalism
Companies may wonder what the other benefits of sustainable capitalism are besides running business more ethically.
- Cost Savings and Improved Quality of Life: From a profitability stand point, the economic philosophy saves businesses money by eliminating costs of having offices in costly cities, while improving the quality of life for employees by doing away with sluggish commutes and high cost housing markets.
- Environmental Sustainability: By building locally, using sustainable means of building, and focusing on a sustainability plan, as business grows, companies will reduce their carbon footprint—a much-needed effort in juxtaposition to the many companies that pollute the environment through factory pollutants, import/export air pollution damage, etc.
- Sustaining local economies: Along with hiring local and nurturing talent that may not have access to the same educational opportunities as those in larger cities, businesses that implement sustainable capitalism help local economies become part of the technological revolution.
- Harnessing global connectivity: Technology facilitates social good and allows you to create opportunities for people that do not have it. Additionally, cloud-based collaboration connectivity is a new reality driven by the pandemic, and it can greatly help businesses scale.
In the last year, technology has proven that businesses can scale completely remote and connectivity is key, but it’s also revealed that the traditional way is not always the best way. The same goes for the way of capitalism. The world has changed drastically in just a few months and continues to on a daily basis. From people migrating out of cities, global warming, economic challenges, and more, it’s time that companies address these issues and implement an economic stance that not only supports their business, but supports society and the planet.
It’s up to business owners to forage a new path: one that includes growth and success within their company, while empowering their community and people for the better.
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