Archive for July, 2008
What might sustainable, local firms do with $49 mil?
In my vision of sustainable communities, I picture a thriving economy built around locally owned, independent businesses that embrace the triple bottom line: people, planet and profits. So it is that I have little patience for economic development practices prevalent in Oregon and around the country that emphasize national business recruitment over local business development.
I believe we should be doing much more to take care of the businesses that are already here putting down roots, hiring local residents, keeping their profits local and multiplying as they circulate in the local economy and being run by owners who are active in their communities — because they live here, too.
Editors at The Oregonian lost an opportunity to underscore that point in an editorial on Saturday about last week’s announcement of the Hynix semiconductor plant closure in Eugene. The decision puts 1,100 people out of work, many of them paid well above the average Eugene wage. Hynix, like any number of tech companies wooed by Oregon officials in the past several decades, was given large state and local tax credit incentives to locate in Eugene some 13 years ago.
Although the Hynix plant closure is an opportunity to question the wisdom of showering national or international businesses with tax breaks to locate in Oregon, The Oregonian editors say forget about it:
It’s not productive to second-guess the state’s wooing of Hynix and its use of tax incentives, as some in the Legislature have begun to do. A 2003 study by University of Oregon economics students Melinda Rowan and Jennifer Witt found that the $49 million in tax breaks and road enhancements used to lure Hynix resulted in a positive impact in taxes, wages and system development charges of more than $275 million over the first five years of its operation. Had the state not offered its incentives, Hynix wouldn’t have built its plant, employed 1,100 people and paid taxes.
Their argument against re-examining the Hynix recruitment strategy is hardly convincing. The editors conclude Hynix would not have come here without the $49 million incentive package, so the positive impact in taxes, wages and whatever system development charges would not have been realized. But that’s assuming the $49 million in incentives were not spent at all.
What might have happened had the state and city pledged that same $49 million in 1995 for support of locally owned, independent businesses? Hynix received the equivalent of $44,500 for each of its current 1,100 employees from state and local government. What might 1,100 locally owned, independent businesses in the Eugene area been able to do with $44,500 each? Or what might 110 of the best locally owned, independent businesses in Eugene been able to do with $445,000 each?
We’ll never know the answer, but I’m not aware of any state or local economic development group even asking those questions. Businesses based and owned in Oregon are getting the short end of the economic development stick. They can only dream of government officials coming to them and saying, “We believe in you and want you to thrive in Oregon. Here’s a half-million dollar package to help you grow your business.”
Can you imagine what a select group of Oregon’s most innovative, most environmentally and socially committed business owners and their employees could and would do to reward the citizens of this state for making a meaningful public investment in their businesses? Not all of them would succeed, of course, but I’m certain enough would to add at least the equivalent of 1,100 quality jobs.
And most important of all, those successful locally owned, independent and sustainable businesses would keep repaying Oregon’s investment long after the 13-year life span of Hynix in Eugene.
Tags: economic development, Eugene, Hynix, local business, locally owned independent business, Sustainability, sustainable communities, The Oregonian
Posted in Business & Economics, Oregon, Politics, Sustainability | No Comments »
Greening junk mail? Start with junk being marketed
A group calling itself the Green Marketing Coalition is trying to produce best-practices guidelines for the direct mail business. That would be the “junk mail” business to most of us. “So far the coalition’s guidelines are long on earnestness and short on truly new ideas,” the New York Times concludes. The paper quotes one head of a nonprofit dedicated to protecting forests:
“It’s hard to argue against any well-intentioned effort to use more recycled paper, but the idea of greening junk mail is still a bit like putting lipstick on a pig.”
Ouch. I suppose the direct mail business earned that swipe. I hate junk mail as much as the next person. But not all direct mail is junk. It’s the rare individual who never responds to a single direct mailer. A generally acceptable response rate to a mailer is about 2%. That means most mailers are not junk to 2% of us. Believe it or not, that’s usually enough of a response for businesses or other organizations, including nonprofits, to keep stuffing our mail boxes.
The Green Marketing Coalition, which got its start in Seattle, is made up of both direct marketing businesses and their corporate clients. Their guidelines are aimed at reducing the environmental impact of direct mail. It’s easy to scoff at their efforts, like the nonprofit executive director quoted here. Many believe direct mail is fundamentally unsustainable, given its waste of paper and the energy used in the production, distribution and disposal of materials that so frequently get ignored by its target audience.
But direct mail continues to be used because it can be, and often is, an effective marketing tool. We probably all know admirable environmental nonprofits that are among the legions of direct mail marketers. As a former co-owner of a marketing agency that offered direct marketing among its services, I would urge organizations to move completely to electronic mail as soon as possible. Although most of us hate junk email as much as junk paper mail, at least it’s more eco-friendly.
One reason companies don’t resort to email exclusively is the anti-SPAM laws that restrict the use of commercial email to opt-in subscribers only. Traditional postal mail has no such restrictions. It’s easy to buy a postal mail list and send away. The environmentally responsible thing to do is use postal mail only when there is no alternative, such as when you’re just starting to create an opt-in email list or your target audience doesn’t have email access. Those are not problems for most major companies or organizations today.
If direct marketers really wanted to make a difference, they wouldn’t promote products or services that are not sustainably made or delivered. Period. The junk goods and services purchased as a result of successful direct mail do far greater environmental harm than junk mail itself.
I don’t think you’ll be hearing that conversation among members of the Green Marketing Coalition anytime soon.
Tags: direct mail, direct marketers, environmental impact, Green Marketing Coalition, junk mail, Sustainability, unsustainable
Posted in Business & Economics, Communications, Consumerism, Marketing, Sustainability | No Comments »
Putting sustainability values ahead of market signals
At the risk of over-simplifying, I see most businesses falling into one of two camps when deciding whether and how to “go green.” I’ll call one the market camp and the other the values camp.
The market camp consists of businesses whose green decisions are driven by whether there is market opportunity or customer demand for green(er) products or services. These businesses tend to be product focused. In other words, if green can sell, then they’ll produce it. Otherwise, forget it. They can’t stay in business producing things few customers want.
Businesses in the values camp decide to go green because they believe it is the right thing to do environmentally and socially. They tend to be operations focused. In other words, green operations are capable of only producing green products and services. If they find themselves to be ahead of mainstream marketplace demand, so be it. Financial success can’t come at the expense of environmental or social damage.
So how might businesses in these two camps react to results of a national survey on green issues recently conducted by an ad agency in Knoxville, Tenn.?
Among other things, the survey found that many people remain confused about what “green” is and the “green market” is far from mature.
(H)alf (49%) of respondents said a company’s environmental record is important in their purchasing decisions. But that number dropped to 21% when consumers were asked if this had actually driven them to choose one product over another. And only 7% could name the product they purchased.
Not only that, the study found that about 26% of Americans (mostly affluent, white, middle-aged males) fall into a demographic called the “Never Greens.” These are skeptics who either “don’t care or are not interested” in sustainable or green products.
The market camp, which represents the majority of businesses, will probably look at this data as reason to become more conservative in deciding whether or how fast to go green. When so few buying decisions appear to be made on the basis of a company’s environmental record and such a large percentage of Americans couldn’t care less about green products, where’s the market or financial incentive to produce green?
I’d wager the values camp will remain undaunted by these findings. They will continue business as usual because the option of not being green doesn’t exist for them. They will focus on the minority of potential customers who today make buying decisions based on the environmental practices of a company and the sustainability of their products and services. And they will do what they can to educate others about the importance of sustainable consumption habits.
So do you and your organization fall into one of these camps, or someplace in between? For me, a perfect world consists only of the values camp, although as a business owner and marketer I certainly understand the importance of listening to the market. Unfortunately, the market has failed to send adequate signals to businesses to behave and produce sustainably. As a result, we’ve depended far too long on fossil fuels, depleted far too much of the earth’s resources and produced far too many good and services for a minority of affluent humans who already have too much.
As the survey reveals, most people aren’t guided by sustainability principles in their buying habits. Businesses in the values camp don’t take that as a signal to relax. They see it as a reason to re-double their commitment to sustainability. And that gives me hope.
Tags: buying habits, go green, green issues, green market, Sustainability, The Never Greens
Posted in Business & Economics, Consumerism, Marketing, Sustainability | No Comments »
European group produces sustainable marketing guide
When it comes to sustainability, Europe is ahead of the US on many fronts. Marketing seems to be one of them. I am always on the lookout for fellow marketers who are giving serious thought to sustainability, and my research often points back to Europe.
One example is this guide on sustainable marketing produced and published recently by CSR Europe. The focus of this first guide is on how to minimize environmental impacts through the influence of marketing. A subsequent booklet will be produced that looks at marketing’s role relative to social issues such as human rights, equality and diversity.
The first guide offers a sustainable marketing toolkit that its authors say “has been created to show you how you can integrate the principles of sustainable marketing into your day job quickly and simply.” There are indeed some useful suggestions and tools, but I’m not so sure about the quick and simple part, as I’ll get into in a moment.
The toolkit contains an example of a decision tree a marketer might use when evaluating the marketing of a particular item. Here are some of the questions that would help you assess the potential environmental impacts of the item:
- Is this item useful or desirable?
- Would you want and/or value this item?
- Is it durable? Will it last for a long time?
- Is it made from recycled materials or sourced from sustainable sources?
- Have you included information on the item to tell the customer what it is made from or how to dispose of it after use?
- Do you know where your product was made and how it was transported?
- Has packaging been minimized?
- Is the packaging reusable or easily recyclable?
- Is the item itself reusable, refillable or recyclable?
I’m certain most marketers don’t want to ask questions like these because so few products today stand up to this level of scrutiny. But if all businesses were to face these questions head on and attempt to answer in the affirmative, imagine the revolutionary effects on the global economy. We might be looking at a world in which businesses would only make and promote products that are:
- useful, long-lasting and reusable or recyclable
- made from sustainable sources
- transported short distances and/or using renewable fuels
- clear in how they should be disposed of after use
Sounds nearly ideal. And a long ways off. Here’s where the toolkit’s promise of helping you integrate sustainability into your marketing “quickly and simply” may be a stretch. The authors don’t delve into what to do when faced with an employer or client that answers “no” to all or most of the questions above. And we know that most businesses would. This creates a not-so-simple dilemma for the marketer: Can I or do I want to use my influence to move my employer or client toward sustainable business practices? If not, do I just continue my role in supporting “business as usual”? Or do I part ways with my employer or client?
Every marketer has to answer these tough questions for him or herself. But as CSR Europe’s guide makes plain:
We only have one planet and the Earth’s resources are finite…The further we stretch these scarce resources, the more uncomfortable life will become for those in the developed world and the harder it will become for those in some developing countries to survive at all. In short, the situation is unsustainable.
Tags: CSR Europe, Europe, guide, recyclable, renewable fuels, Sustainability, sustainable marketing, toolkit
Posted in Business & Economics, Communications, Marketing, Sustainability | No Comments »