This market shortage will likely be exacerbated by a compounding effect in which deficits from prior years stack on top of one another as companies fight to offset both current and historical emissions. Forward-looking companies are already trying to secure the resources they will need before sustainability scarcity becomes the norm. For example, Apple, Tesla, and Volkswagen have acted to ensure access to future supplies of critical metals through long-term contracts with producers.
Meanwhile, other companies are taking steps to address the looming shortage of recycled plastics. By identifying and anticipating critical bottlenecks, forward-looking companies can take the moves necessary to alleviate constraints and turn them to competitive advantage. Faced with sustainability scarcity, companies will need to develop a portfolio of strategic and tactical responses to mitigate risk and capitalize on opportunities. Depending on the specific resources in question, these responses should include:.
While such moves can make business models more durable, they will only create competitive advantage and value by being fully baked into business strategy and business model innovation. Our research to date finds that less than one-fifth of companies pursuing sustainability outcomes have done so in ways that reinforce advantage and value creation. It may sound crass to seek profit and advantage in sustainability, but reconciling these apparently opposing forces will leverage the power and innovative potential of the corporate economy to accelerate and scale the sustainability agenda.
They are not achieving the maximum satisfaction possible from their limited resources productive inefficiency. Take a brief look at one or a few of the following news articles.
When you click on the link they should appear in a new browser window. If each company was able to continue producing the same amount of output after laying off thousands of workers then they must have been productively inefficient before the layoffs.
I realize that this may be a bit controversial. If you have questions let's discuss them on our discussion forum. When you click on the link it should appear in a new browser window. Keep in mind the GOAL: reducing scarcity and achieving the maximum satisfaction possible from our limited resources. If these companies can still produce the same amount of output with thousands fewer employees, by laying them off they become available to work somewhere else producing MORE for society.
BUT, will they find another job? These articles indicate that in today's economy they probably will:. Would it be better for society to have them stay at companies where they are not needed or to be unemployed collecting unemployment compensation or welfare? I would consider the possibility that it would it be BETTER for society to have them be unemployed collecting unemployment compensation or welfare. Not all layoffs are good for society. See: lay-offs. If businesses use resources where they are best suited then MORE can be produced from the same amount of resources.
Let's say I own a company which employs secretaries and truck drivers. Normally the secretaries type letters and the truck drivers drive trucks. One day I decide to try something new. I had the secretaries drive the trucks and the truck drivers type letters. Hopefully you were thinking "they went up. Therefore, to be productively efficient and achieve the maximum satisfaction possible from our existing resources we must use resources where they are best suited. Doctors should work in the hospitals and engineers should build the bridges.
This would be productively efficient. More bridges will be built and more lives saved. It would be productively inefficient i. Fewer bridges would be built and fewer lives saved.
This would be productively inefficient - a waste of existing resources. Illinois has resources weather, machinery, soil, etc. So it makes sense for Illinois to grow corn and for Alabama to grow cotton since this way we get more corn and more cotton from the same amount of resources. This is productively efficient. But there is just one problem. In Illinois we have a lot to eat corn but no clothes cotton.
And in Alabama they have cotton clothing, but they are staving. So what do we do? We exchange or trade. We in Illinois sell corn to those in Alabama and they sell cotton to us. If we didn't trade then we would have to grow both corn and cotton and Alabama would have do the same.
North Dakota has resources suited to growing potatoes cold climate, good soil, etc. Honduras, in Central America, has resources suited to growing sugar, or sugar cane hot wet climate, poorer soils, etc. So it is productively efficient to grow potatoes in North Dakota and to grow sugar in Honduras. Costs are lower, and more importantly, more can be grown with the existing resources. Why, then, do they grow sugar sugar beets in North Dakota? The sugar that we get from sugar beets is very expensive.
Why do we grow sugar beets in North Dakota when we can get cheap, high quality, sugar from Honduras? The answer has to do with trade. There is free trade between Illinois and Alabama. Free trade means that the government does not try to restrict trade with taxes or other barriers. Therefore, Alabama and Illinois can use their resources where they are best suited and achieve productive efficiency, i.
But there are trade restrictions on sugar between the US and Honduras. This, then, encourages the farmers to be productively inefficient. Free trade, then, is a necessary condition to achieve productive efficiency since it allows resources to be used where they are best suited - regardless of the state, or the country.
Economists have a slightly different view of discrimination. They would ask, "How does discrimination affect the quantity of boats and everything else that are produced with the resources available? By using the technology that minimizes costs, it minimizes the amount of resources used, since it is the resources that make up the costs of production.
For example, in the US farmers use tractors to plow their fields, whereas in the country of Kenya in East Africa most field are plowed by hand. It could be argued that both farmers ARE being productively efficient. In Kenya, tractors, fuel, repairs, etc. Why don't US farmers use "modern" technology and plow their fields with helicopters and laser beams sort of like the Jetsons? The answer is easy, it would be too costly.
There are cheaper, and more productively efficient, ways to get the job done. The second way to use our existing resources to maximize society's satisfaction is allocative efficiency.
It would be a waste of our limited resources to produce a lot of things that we don't want and few of the things that we do want. It would be a waste of our limited supply of steel to produce billions of horseshoes that nobody wants and only a few cars that people do want.
This would be allocatively inefficient. People want more gasoline and very little kerosene. Therefore to use our resources wisely, we should use our crude oil to produce more gasoline and less kerosene. As consumer tastes have moved away from small cars to large Sport Utility Vehicles, an allocatively efficient society would use its resources to produce more SUVs and fewer small cars. This results in surpluses and shortages. Whenever we produce too much surplus or too little shortage we are allocatively inefficient.
We are NOT using our resources in a way that would achieve the maximum satisfaction possible. US and European farmers used to produce mountains of grain that they couldn't sell.
Pizza Hut doesn't produce piles of pizza that they cannot sell. Homebuilders do not build hundreds of homes that they cannot sell. Why did US grow more grain than they knew they could sell? The answer is - the government. The US government would buy the surplus grain form the farmers. This encouraged them to plant even more. The allocative inefficiency here is not the mountains of grain that nobody wants, but rather the loss of the resources farmers used to grow that grain.
Labor, land, energy, chemicals, machinery, etc. This is allocative inefficiency and it reduces the satisfaction that society receives from its resources. NOTE: changes in government policy have reduced the amount of excess grain being produced. Prior to when communism in Eastern Europe collapsed, Poland and other countries had severe shortages of consumer products resulting in long lines queues. This is a good example of allocative inefficiency.
Severe shortages reduces society's satisfaction. There is a shortage of Super Bowl tickets. Hundreds of thousands of fans want to attend the game but only about 80, seats are available. This is allocative inefficiency. Build a bigger stadium? Play a 2 out of 3 or 4 out of 7 series?
OR - why not simply raise the price? Or, if you really want to incorporate this practice into your life, you can create a gratitude journal. Remember to include even the simplest things that you might take for granted, like the comfortable mattress you sleep on or breathing clean air. An abundance mindset allows you to see more in your life: more options, more choices, and more resources.
One fascinating Harvard study found that when we focus on one particular thing very intently, other possibilities that are right in front of us can go completely unnoticed.
Start training your mind to loosen its focus and create an expanded awareness. This is a BETA experience. You may opt-out by clicking here. More From Forbes. Nov 13, , am EST. Nov 12, , pm EST. Nov 12, , am EST. Nov 11, , pm EST. Nov 11, , am EST. Edit Story. Jul 12, , pm EDT.
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