Through my work for Virgin Unite, I have been urging business leaders to take a different approach to business: to end the pursuit of profit for profit’s sake and make the driving force of our companies that of doing social and environmental good.
While many have clearly been intrigued by this approach, which we call Capitalism 24902, some argue that this isn’t possible—that profit is the only possible motivator.
Nothing could be further from the truth: this is not a trade-off, but rather the most reliable way to build a company that will thrive in the long term. An area in which we are starting to see this idea in play is in the water industry, where changing conditions are sparking innovation.
Demand for fresh water has risen sixfold over the past century as the world’s population has quadrupled. The UN estimates that by 2025 more than two-thirds of the world’s population will be experiencing shortages. Companies that can supply clean water, or conserve or recycle water from existing resources will be vital to their communities.
With this in mind, at our entrepreneurship centre in South Africa we are mentoring some young business leaders who hope to tackle local water shortages. In South Africa, Teko Motlhab recently set up the water consultancy Tshomo Consulting, which specializes in supplying water and waste treatment solutions and technologies. But his company doesn’t just provide clean drinking water, helping to prevent the spread of disease; it also creates jobs by helping local workers to train in plant operations.
Virgin is active in this sector in the Caribbean through a Virgin Green Fund investment in Seven Seas Water Corp., a desalination business that provides clean water to large-scale customers that don’t have the money to spend on building a facility and do not want to take on the burden of operating one themselves.
Until recently, many argued that it was unlikely desalination would ever be cheap and efficient enough to become a reliable method of producing fresh water for a large population. Innovation and advances in technology mean this is no longer the case, and while the cost of desalination continues to decrease, the cost of pumping water from distant sources and deep underground continually increases with the price of oil. In fact, desalination plants’ energy use has dropped more than 50% in the last 20 years.
Seven Seas’ investments in efficient desalination have shown that it and similar companies are now in a position to take business from older competitors that rely on wasteful processing methods.
Entrepreneurship involves luck, in that you do have to be in the right place at the right time, but you also have to capitalize on an opportunity when it comes your way. Recently, Seven Seas deployed its mobile seawater reverse osmosis units to help the Virgin Islands Water and power authority to meet emergency water demands caused by malfunctioning equipment on the island of St Thomas.
The situation was critical: the system had failed, and with Thanksgiving and Christmas approaching, high season for tourists meant increased demand. Within 28 days, Seven Seas was producing an additional 750,000 gallons of potable water per day; after 45 days, 2 million gallons per day. Today, Seven Seas Water is one of the largest independent water suppliers in the Caribbean, and every year it provides this water more efficiently.
These are just two examples of businesses that are doing good and seeing profits. We simply must conserve our planet’s limited resources, and our businesses need to nurture and benefit their communities and local environments to be sustainable in the long term. From developing alternative fuels to reducing water consumption through finding new ways to recycle waste, the great wealth creation opportunities of our lifetime are found in protecting our natural resources and reducing carbon emissions.
The pursuit of profits does not often work as a motivator, but we have found that working on challenging, community-enhancing projects is great for a team and attracts some of the most engaged and creative people in the field. Because Capitalism 24902 isn’t just an alternative way of doing business or a new way to motivate your team: it’s the only way.
By NYT Syndicate
Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. He maintains a blog at www.virgin.com/richard-branson/blog. You can follow him on Twitter at twitter.com/richardbranson
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