Date of Publication: October 15, 1999

Author: Stuart L Hart, Mark B Milstein

Summary:

The authors discuss the different strategies required to achieve sustainable development in each economy. To compete in the consumer economy, managers must focus on reducing the life-cycle (“cradle to grave”) impacts – that is, the “ecological footprint” of their firms’ activities – by reinventing their products and processes. The combination of large footprint and technological maturity widens the gap between price and life-cycle cost, producing the technological and environmental forces that drive creative destruction. Because it is unlikely that senior managers will commit resources without a clear understanding of how sustainability-driven creative destruction can improve a firm’s economic payoff, the authors offer ideas for sustainability metrics tied to the three economies discussed and show how they relate to key business and financial payoffs. Managers who treat sustainable development as an opportunity will drive the creative destruction process and build the foundation to compete in the twenty-first century.

Link to Full Reading:

https://sloanreview.mit.edu/article/global-sustainability-and-the-creative-destruction-of-industries/