Burgess COMMENTARY
My LinkedIn comment:

There is something going on that is very important, and I am not sure I fully understand all its implications. In historic terms 'empire' was a period of globalization, and then there was the period of outsourcing that reshaped supply chains in the last fifty years, and now there is a rethink about globalization that is not just about maximizing profit for me (and my corporation) but perhaps maybe about more global equity. People are talking about Capitalism 2.0 where the advantage of capitalist enterprise is used to deliver impact value as well as money profit. Stuart asks about a want based economy and a needs based one. I concur. There was a time when the Adam Smith based laissez faire capitalist market driven economy was a good way to function, but what was good in 1776 and maybe for the next 200 years is no longer the way to function. Henry Ford recognized that there was a connection between what workers got paid and how many of his cars got sold. This reality now translates into a situation where more corporate profit ends up resulting in less market ... and eventually a bankrupt society. We have been on this path for about 50 years, and the results are starting to show. But Capitalism 2.0 and Globalization 3.0 addresses the dysfunction that we have in our modern economic system. I argue that these ideas will not get traction until there are also smart metrics that reflect everything that really matters. Accountants doing money profit accounting is not enough. There must be rigorous metrics also for impact on people, place and planet as well as the profit for the enterprise. Since the beginning of the industrial revolution the corporate enterprise has been allowed to report profits without taking into account and reporting on the damage done to society and the environment. Why are there PCBs in almost every river in the United States? It is the detritus of an industrial society that allowed the corporate entity to make profit while wrecking in the environment. And this is still the way that accounting is done. I want to see value accounting that is rigorous about an economic activity's impact on people, place, planet and profit. Money profit for the enterprise is part of the equation, but everything else has equal weight. The impact of employees and customers is important. The impact on place ... community ... is important. The impact on planet ... environment ... is important. All of these are quantified using a common unit that is independent of money. After all we ought to understand that the value of money is not constant, but has a tendency to go down over time, sometimes quite dramatically. Most of the leaders of my age group don't seem 'to get' the need for change, nor the possibilities that really do exist, but though many younger people do. I am concerned that advertising and the media will get bought so that over time younger people succumb to the messaging that the established elite can buy. The corporate world are past masters in PR and managing the story. It is important for messaging about a value based economy to be a strong as the messaging about corporate brands, products and profits. Peter Burgess TrueValueMetrics

Will Millennials Drive the Shift from a Consumption-Based to a Values-Based Economy? Image credit: VentureBeat

One of the most frequently discussed topics in the sustainability industry is sustainable consumption. How can we shift people away from frequently buying new “things” and toward re-use and alternatives to ownership such as borrowing or swapping?

There’s no question that we’re a nation “wired” for consumption. The American dream is built upon economic success and acquisition. A 2012 Federal Reserve Report on consumer spending indicated that for 25 years, personal consumption expenditures (PCE) had been the primary economic driver for the U.S. economy, hitting an all-time high in 2007 — making up 70% of GDP. Then, the “Great Recession” hit and consumer spending stalled due to a perfect storm of declining household wealth, job losses, weak consumer confidence, declining home values and tightened credit requirements.

These economic hardships began to force behavior change. Last year, almost a quarter (23%) of our Eco Pulse™ 2012 respondents said they most often “buy used and/or repair items rather than buying new items.”

So was this behavior simply a temporary blip, driven by economic necessity? As the economy improves, have consumers gone back to their old ways? Or are we seeing a fundamental shift in purchase habits? We decided to dig deeper in Eco Pulse™ 2013.

This year, we found that the percentage most often buying used has increased to 26% and that 12% of Americans are actively taking part in the share-it, swap-it, rent-it economy. The primary driver? Saving money. But what’s surprising is that those most often buying used and seeking alternatives to ownership are not just lower-income consumers who can’t afford new. Rather, this behavior was found across all income brackets and seems to be a personal preference driven by fiscal conservatism, regardless of household income.

And while they weren’t more likely to buy used, rather than new, Millennials were significantly more likely to be trying alternatives to ownership. Having seen parents lose homes, struggled to find jobs after college and generally come of age in tough economic times, the Millennials — who comprise the largest age cohort ever — seem to be rethinking the mindless consumption that has driven the American economy since the Baby Boomers bought their first BMWs.

The Millennials — for now at least — are less worried about owning stuff and are experimenting with other models. They embrace change and require online/mobile solutions. They are used to complete access to information and online markets, which makes the collaborative economy a practical reality for them.

They value experiences, relationships, authenticity, and are particularly concerned about the environment. To reach this important age group, marketers must put aside traditional appeals to materialism, excess and glitter. Instead, they must appeal to an entirely different value structure.

Bottom line — Millennials present both an opportunity and a challenge for manufacturers and retailers. They’re questioning old purchasing habits and their behaviors are going to drive the market. It’s time to innovate and rethink distribution and product life-cycle. Millennials will ally with companies that share their values — those that facilitate reuse and alternatives to ownership, and recapture, repurpose and recycle products at the end of their life.

For more insights on American attitudes about sustainability and how to change consumer behaviors, visit Sheltoninsights.com.

Lee Ann S. Head is the vice president of research for Shelton Group and has overseen all of Shelton's custom client and proprietary research since 2001. She spent eleven years in the banking industry, beginning in customer analysis and segmentation… [Read more about Lee Ann Head]