Why Small Businesses Should Be Adding More Green Jobs

Chris LaszloThe U.S. economy is now the same size that it was before the 2007 recession, and yet we have 7 million fewer jobs. The latest data from the Department of Labor suggests that zero job growth is here to stay well into 2012. As conversations across the nation shift from how to create economic growth to how to create more jobs, many are asking: what should be done? To answer this question, we have to consider in which sectors America can achieve competitive advantage relative to emerging powerhouses such as China and India.

The quest for national competitive advantage is not new, but how we pursue it is taking on fresh significance. Recent GDP growth, which hovered around a meagre 2% in the first half of 2011, came primarily from cutting the workforce or shifting jobs overseas; this strategy will not help us reach our employment goals.

Small business has historically been a powerful engine of job creation and yet it is shying away from one of the biggest growth opportunities of our time: the Clean Economy, broadly defined here to include not only renewable energy, public mass transit, and waste treatment but all goods and services with environmental benefits. The pursuit of environmental business opportunities by small business may hold the key to America‘s elusive goal of long-term, high-income job creation.

At first glance, environmental anything would seem an unlikely answer to our woes. Environmentalists have a long history of anti-business rants, sometimes against growth itself. Eco-products have a reputation for being expensive or of lower quality; think of premium-priced environmentally-friendly dishwashing liquids that leave spots on your glassware. But, mainstream companies are starting to demonstrate that economically viable and environmentally friendly can go hand in hand. According to a recent report of the Brookings Institution, the clean economy is surging and green jobs already pay more than the median wage.

A new breed of business leader is pursuing environmental sustainability for profit, and it‘s not only niche eco-brands of the 1990s – the cool, hip, but expensive lineups from Patagonia to Seventh Generation. In the last decade, mainstream corporations like Walmart, General Electric and Waste Management got into the act with eco-innovations to better meet customer and investor expectations.

What we are not seeing enough of are small- and mid-sized companies creating green jobs. Too many of these often family-run enterprises still view the environment as a cost or, at best, a matter of energy conservation (‘turn off the lights!’) and two-sided copying. They treat environmental pressures as annoying obligations and only do the minimum required by law. While many others now recognise environmental performance as business opportunity, it often ends up ‘bolted on’ – a few solar panels or hybrid cars at the office headquarters of a manufacturing or services business. These tactics simply do not create the revenues or savings – the financial ‘breathing room’ – needed to deliver new jobs.

This is not to say that small business role models for the clean economy don‘t exist. Among the leaders, you will find an industrial sands manufacturer in Chardon, Ohio; a Chicago-based mosquito control company that won last year‘s U.S. Presidential Green Chemistry Challenge Award; a floor cleaning equipment company in Minneapolis that uses ionised tap water to powerfully clean commercial floors without chemicals; and a next-generation Smart Grid player in Conshohocken, Pennsylvania. Each of these companies is using new environmental realities to differentiate its offering, make more money, and create new jobs in the process.

For now, only a handful of smaller players nationwide is choosing to embed sustainability into the very DNA of what they do, incorporating environmental intelligence into core business activities with no trade-off in price or quality. They are learning to leverage environmental challenges, such as a smaller carbon footprint or reduced water usage, for competitive advantage. Through innovation – in product design and business model – these pioneering heartland companies are proving that we can create even more value for customers and investors than we otherwise would, with smarter products, more powerful brands, and blue ocean opportunities to solve growing environmental problems.

China is already investing more than the U.S. in renewable energy. It now has the largest installed base of wind power in the world, and is targeting to have 20% of its energy sourced from renewables by 2020. U.S. businesses can participate in the race to a cleaner and greener future where environmentally friendly is the new normal. This is no longer just a better environmental strategy; it is a necessary response to a fundamentally different market, one that unifies the economy, the U.S. workforce, and the future of life as we know it.

Chris Laszlo
Sustainability Specialist
Greenleaf Author


This piece was originally posted on Forbes.com. Read the original article here.
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Chris Laszlo is associate professor of business at Case Western Reserve University, and the author of Embedded Sustainability: the Next Big Competitive Advantage. In Embedded Sustainability, authors Chris Laszlo and Nadya Zhexembayeva explain and predict how companies can better leverage global challenges for enduring profit and sustained growth. Most of all, it enables smart companies to create even more value for both their shareholders and stakeholders.

AVAILABLE NOW: buy Embedded Sustainability direct from Greenleaf to receive a 30% discount (hardback). Use voucher code forbes843 at the checkout. Offer valid until 31 October 2011.

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