Innovation in business, and for the mining industry is not so much about technology as it is about improving the business. No longer does this mean simply improving the business’s bottom line? Shared value understands that business exists within in an ecosystem.
Shared value, like other business disciplines is “good business”. Strategy is good business, so is marketing or inventory management. Each focuses attention on an aspect of the company's performance, then brings academic discipline and rigorous research that enables the company to do good business better.
Shared value must be more than a passing phrase or the latest buzz word for sustainability or Corporate Social Responsibility. Instead, it must become a new business discipline with the same level of research and rigor. Companies must learn how to redefine their business around unsolved customer problems and promote good business because they will be hard pressed to strengthen their competitive advantage without it.
Shared value is an evolution in how companies respect their role in society. It encompasses social license to operate and corporate social responsibility by tying these activities to core business activities. It recognizes the company’s role in solving complex social challenges because it does not exist in isolation but in an ecosystem. The business’s survival is dependent on the survival of this ecosystem.
What is a Business Ecosystem
According to Investopedia, a business ecosystem is the network of organizations — including suppliers, distributors, customers, competitors, government agencies, and so on — involved in the delivery of a specific product or service through both competition and cooperation.
Each entity in the ecosystem affects and is affected by the others, creating a constantly evolving relationship in which each entity must be flexible and adaptable in order to survive, as in a biological ecosystem. The business ecosystem must expand to include the natural and social environment it exists in, if the business wishes to be truly sustainable.
Advances in technology and increasing globalization have changed the way we do business and the idea of a business ecosystem helps companies understand how to thrive in this rapidly changing environment.
Some of the advantages of approaching business as an ecosystem include:
- driving new collaborations to address rising social and environmental challenges
- harnessing creativity and innovation to lower the cost of production or allow members to reach new customers
- accelerating the learning process to effectively collaborate and share insights, skills, expertise, and knowledge
- creating new ways to address fundamental human needs and desires
Increasingly, forward-thinking operations managers are looking to optimize performance across value webs that span and connect whole ecosystems of suppliers and collaborators. One of the best ways to do this is to use technology that further breaks down business siloes and makes managing and having visibility on related aspects of the business.
How do you regulate an ecosystem?
Healthy economies and societies rely on smart regulation. It is essential to the effective functioning of economies and to societies being well served by competitive markets. But many current regulatory structures and philosophies are the products of the 20th-century industrial economy. Today’s economy is increasingly shaped by ecosystem-driven innovation that often cuts across, and sometimes altogether outpaces, preexisting regulatory regimes.
Regulators, whose job has traditionally been to protect the public from harm, exploitation, or insufficient competition in reasonably stable markets, now face another growing danger: that their own application of old rules to new realities might suppress innovations of great potential value to the public. The dilemma for regulators is clear: find ways to strike a new balance. Create policies and solutions that protect the public’s interests and are also dynamic enough to keep pace with innovation. Easier said than done.
The good news is that new approaches can utilize an ecosystem’s self-regulating dynamics. Successful approaches are simultaneously increasing their own agility, focusing on desired regulatory ends rather than means, and emphasizing regulatory interplay over primary jurisdiction.
But the idea has now also taken root far beyond the US technology sector. Over the last few decades, driven largely by digital technologies and massively increased connectivity, the economy has been moving beyond narrowly defined industries built around large, vertically integrated, and mainly “self-contained” corporations. New means of creating value have been developing everywhere in the form of ever-denser and richer networks of connection, collaboration, and interdependence.