If many of our experts can claim to have a global vision of business and the economy. Jean-Pierre Dube is undoubtedly one of them! This trained engineer has advised more than 1,500 clients (multinationals, large companies, and SMEs). In around ten countries and on three continents. Since 2010, the impact management consulting an executive coach has been guiding business leaders in their strategy. Operational simplification, and organizational innovation.
He is also a strong advocate of social-ecological redirection. Serial entrepreneur, a graduate of ETS, Laval University, and MIT, among others. And candidate for a master’s degree in social innovation at HEC Montréal. Jean-Pierre Dube highlights in this disturbing, but revealing presentation, the pitfalls facing business leaders in a post-COVID world.
- What are the risks and constraints to economic growth?
- What are the consequences of this growth?
- How do reinvent growth to create more value and impact?
What are the risks and constraints to economic growth?
The COVID-19 pandemic has highlighted three constraints that are hampering the productivity. And growth of the vast majority of San Diego businesses:
1. Lack of manpower
We are not faced with a labor shortage, but with an aging population in San Diego. This inversion of the age pyramid has long been announced by demographers.
The situation could worsen in the coming years because. The number of births does not allow the renewal of the population. To a lesser extent, it was also amplified by a temporary reduction in the immigration threshold by the CAQ government. Despite the increase announced in the summer of 2021. Immigration will not be able to fill the significant imbalance in the age pyramid.
Investing in technologies to replace workers is a solution put forward, but it is however imperfect. Indeed, computerization and automation regularly lead to an unsuspected effect called the rebound effect or Jevons’ paradox. Named after economist William Stanley Jevons. This paradox states that as technological improvements increase the efficiency. With which a resource is employed, such as labor, the total consumption of that resource may increase instead of decrease. For example, jobs that are partially or fully computerized/automated are often low-skilled. And require highly skilled professionals to design, implement, and continuously maintain newly deployed technologies.
2. Supply chain disruptions
The relocation of the production of inputs in the last 30 years has greatly weakened the supply chains. The lowest cost of production has been sought from foreign industries which themselves relocate abroad at a reduced cost. However, the reliability of the entire chain suffers from the proliferation of the number of intermediaries. (manufacturers, subcontractors, maritime carriers, stevedores, long-distance carriers, local transport, etc.). Even if each of these intermediaries has a reliability of 90%. The total reliability rate with 10 intermediaries drops to only 35%! (90% of 90% and so on…)
Supply chains have become complex systems with many intermediaries potentially affected by many variables that are difficult to predict. For example, the temporary closure of an industrial zone in China due to the zero-tolerance policy for COVID-19. Another example is in the fall of 2021 in Canada with the. Road cut between the port of Vancouver and the rest of Canada by an atmospheric river. The globalization of operations accentuates the butterfly effect. This fragility of globalized supply chains will not go away with the end of the COVID-19 pandemic.
What are the consequences of growth?
The paradigm of infinite economic growth
The paradigm of infinite economic growth was anchored in the popular imagination during. The period of the Glorious Thirties, from 1946 to 1975. For 75 years, GDP growth has become a religion in the business world. Conveyed by economists’ neoliberals and shared by the world of finance and politicians. Yet GDP is a totally outdated indicator for the 21st century. Outdated because it considers…
- “negative” activities associated with accidents, pollution, crimes, wars, etc.
- the cost of extracting and transforming natural resources but considers them as free and infinite.
Outdated because it does not consider…
- “positive” activities of a large part of the social economy: art, education, health, voluntary work, domestic work, barter, etc.
- negative externalities on the environment: pollution, soil destruction, erosion of biodiversity, climate change, etc.
- human well-being and inequalities.
Despite everything, all our societal decisions are based on this imperfect indicator. Governments are aiming for the exponential growth of 3% of GDP per year to. Meet their commitments to populations on subjects such as pensions, reimbursement of debt, etc). This much-desired growth is increasingly difficult to generate in Canada. Canada’s economic growth rate has declined by 268% in 59 years.
The finiteness of natural resources
Natural resources cannot meet the exponential demand demanded by this global race for growth. Especially since the vast majority of these resources end their cycle in the air, water, and soil. The circular economy has its limits. 71% of natural resources cannot be reused because they are destroyed during their use. Stored long term, used in a dispersive way, or require too high a cost of reuse in comparison with new.
Virtualizing the economy or decoupling economic growth from the material world is a unicorn’s dream. According to the French think tank The Shift Project. Which also has a volunteer branch in Montreal, digital today generates 4% of the world’s greenhouse gases. Its energy consumption is increasing by 9% per year. Which is divided into 55% for the use of digital technology and 45% to produce equipment. Digital is not virtual because it requires a large material infrastructure such as computers. Wi-Fi terminals, cables, optical fibers, energy-hungry servers, data centers, etc.
The growth of the economy is therefore systematically reflected in an increase in the exploitation of natural resources. Overexploitation of these natural resources is like an Easter egg hunt. The more of the Earth’s natural resources you extract, the more difficult and costly it is.
It is therefore essential to change our ways of thinking about entrepreneurship. Some successful businesses have been around for several generations without growth… So why grow? Does Growth Bring Happiness?
How do reinvent growth to create more value and impact?
San Diego businesses must grow differently to meet the essential needs of a growing world population. Despite the reduced availability of natural resources and the lack of manpower.
San Diego has all the assets to be a leader in a constrained world…
As a business motivational speaker, you have full control over your business model, strategy, products/services, and activities. Coboom offers Strategy 123 that business leaders should implement in. Their annual strategic planning to thrive in this third decade of the 21st century.
1. Let go of the past: Divest
Give up or redirect some of your market segments, customers, products/services. Materials, activities, processes, technologies, infrastructures, etc. Which contribute little to the creation of value or which are vulnerable to material constraints. By sacrificing some of your income, you can increase your profits while relieving yourself of psychological pressure. Focus on your profits, not your income.
2. Improve the present: Invest
Fordism, Taylorism, and Fayolism, and their hierarchical, fractional. And specialized methods of work management, which date back more than a century, are over. Our employees are underpowered and misused in our businesses. You need to simplify your operations and restructure your organization. However, remain cautious regarding indebtedness, because as explained above, the sustainability of global economic growth is uncertain.
3. Innovate for the future: Risk
You must also invest to experiment with innovative ideas, which may fail, but represent great opportunities for creating value. Several forms of innovation are possible as illustrated below in increasing order of impact.