Green and Competitive: Ending the Stalemate

In the paper “Green and Competitive: Ending the Stalemate”, Harvard-based academic Michael Porter’s argument focuses on the influx of environmental policies and guidelines and their large bearing on a firm’s ability to compete in the market.

He clearly identifies his belief of a Paradigm Shift from the notion of environmental controls damaging the bottom line to the concept of innovation based on greater productivity, and also states that to gain the edge in today’s competitive world, whoever can develop and improve all aspects of their operations on a constant basis will be the most competitive.

Porter’s main body of his work conveys that properly crafted innovation can serve at least 6 purposes:
1. Regulation identifies resource inefficiencies
2. Regulation raises corporate awareness
3. Regulation reduces uncertainty through investment in the area
4. Regulation creates pressures that innovation and progress
5. Regulation levels the playing field for all organisations
6. Regulation will improve environmental quality

Thus, he explains, innovation offsets occur as companies get smarter about how to deal with negative externalities resulting in reduced compliance costs, and also as products are directly improved and more industry competitive.

To finish, it is clear that throughout his research, the author formulates a ‘Porter Hypothesis’, believing that protecting the natural environment and business performance are not incompatible and that government environmental regulation can act as a trigger to innovation (Porter and the Conventionalists, Eiadat, Y et al, University College Dublin, Ireland).
Further info on Porter and his works:
http://www.fastcompany.com/online/44/porter.html
http://www.isc.hbs.edu/

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Posted in government policy, sustainable technologies
One comment on “Green and Competitive: Ending the Stalemate
  1. darragh2 says:

    Porter offers a convincing argument supporting innovation-based solutions that address both environmental and competitive concerns for industry. However I still believe that government intervention is necessary in many cases. Many companies do not view sustainable development as a necessary long term strategy. By imposing regulations and green taxes governmnets can ensure that change occurs now. The more importance governments, consumers, communities etc place on sustainable development, the sooner companies will adapt their practices. Only then will we see how innovative industries can be. The market will eventually reward those that innovate and adapt while remaining competitive. We do however, still need action now!

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