This article first appeared in Sustainable Industries, September 28, 2010.

The latest drop in consumer confidence will no doubt discourage many businesses. After all, consumer spending comprises 70 percent of U.S. Gross Domestic Product.

If individuals have greater confidence in the future, they buy more stuff. Businesses make more money and hire more employees. That increases consumers’ ability to purchase more things, their confidence rises and the virtuous cycle continues.

Until it stops.

And stop it did two years ago this month after Lehman Brothers collapsed into bankruptcy and sent stock markets and the economy into a tailspin.

With today’s overall economy only modestly improved, we in business today find ourselves at a crossroads. Do we continue down the rutted but familiar road of a materialistic marketplace, hoping the road will soon smooth out? Or do we choose an alternate route to prosperity this time?

The dead end of material consumption

It didn’t take the Great Recession to teach many of us the path of consumption we’ve traveled for more than a century is ultimately a dead end. That’s been apparent for some time; we have only one planet to sustain our pace of natural resource consumption, and we need two or three at the rate we’re going.

Source: Global Footprint Network

What isn’t apparent is whether our experience of the Great Recession will fundamentally change the way we do business. Ask yourself:

• Is your business hunkering down, waiting for the return of the free-wheeling, free-spending consumer?
• Or are you using this period to rethink your business model, what you produce and sell and how you measure success—consistent with a resource- and financially constrained age?

Confronting ‘the materiality paradox’

The last time we suffered a downturn like this was the early 1980s. When we emerged from that recession, Americans went on an unprecedented spending and consumption binge that continued largely unabated until two years ago.

The era gave rise to what sociologist Juliet Schor describes in her excellent new book, “Plenitude,” as “the materiality paradox.” That is, as products became more valued as “symbolic communicators,” they grew more reliant on fashion and novelty, speeding the cycle of consumption.

“People buy more products and turn them over more quickly,” she writes. The paradox is we value goods less today, but we consume more of them to satisfy our natural desire for social meaning and individual expression.

The non-material consumer economy

If past behavior is the best predictor of future behavior, then it’s likely Americans will return to what we do better than anyone: consume. But nowhere is it written that what or how much we consume has to be identical to the last 25 to 30 years. A consumer economy doesn’t have to mean “a-consumer-of-materials economy.”

Much of what individuals and businesses “consume” is far more about experiences than stuff, such as:

• education and training, of all types
• fine arts, crafts
• music, theater, dance and other performing arts
• movies, reading, sports and other entertainment
• travel
• hiking, bicycling, skiing and other recreational activities
• digital gaming and other virtual products

That isn’t to say these and other experiences don’t have associated sustainability issues. The business challenge is to dematerialize the production, promotion and delivery of these experiences as much as possible. But businesses enjoy a head start on sustainability when their core products are experiences instead of goods.

Makers of goods can gain a similar advantage through “cradle-to-cradle” techniques such as upcycling (turning waste material or other used or useless products into new, higher-value goods).

Design for environment and sustainable design practices minimize raw material use and waste. But the jury is still out on whether better, smarter design is the “silver bullet” solution to over-consumption. At some point the prevailing materialistic mindset also has to change.

The road less traveled

The point is: A consumer economy isn’t unsustainable by definition. It depends on what and how much gets consumed. Americans are deeply conditioned to satisfy their desire for happiness and meaning by accumulating possessions. This reflects the persuasive power of professions like mine — branding and marketing — more than some genetic predisposition to shop.

Dislodging materialism as the economic status quo won’t be easy. But if enough businesses choose the road less traveled, the next three decades will look far different from the last three.

Many sustainability leaders in business are already re-conditioning customers to consume less and differently. They respect the material limits of our planet. And they recognize what customers ultimately desire — happiness, security, belonging — isn’t found on store shelves and never goes out of fashion.