CogX 2020: Rethinking technological innovation
Reimagining capitalism
Rebecca Henderson, an American economist who teaches a module on ‘re-imaging Capitalism’ at Harvard Business School, similarly told CogX attendees that capitalism is “broken,” but instead focused on how ordinary people have been left behind economically, socially and politically.
“Many people can’t compete in today’s world, and most people haven’t seen a pay raise in 20 years. So I see stakeholder capitalism as really as a response to a form of capitalism, an overwhelming focus on shareholder value at any cost, that is past its prime and needs to be reimagined,” she said, adding the onset of the Covid-19 pandemic, whether for good or bad, has shifted people’s perspectives.
“I’m really noticing a change. Six months ago when I talked about the need to systemically re-think capitalism, everyone would look at me uneasily, like ‘yeah right, Professor Henderson’. Now people are super-curious. I think there’s a sense that things can go wrong, that they are going wrong, that the system is not working. The pandemic’s like a huge flashlight that’s shown what’s wrong with our society – issues of exclusion, of government incapacity, of firms not stepping up to do the right thing.”
Speaking on the same panel about ‘Stakeholder capitalism’, CEO of the Employee Ownership Association Deb Oxley said government would have a “hugely important” role to play in widening participation in and control of the means of production.
“The opportunity that Rebecca talks about to broaden capitalism – so instead of it being just about a narrow group of owners owning the well-being of the farm, the production process – actually spreading that it will require governments to start paying, because it will require governments to incentivise, when it’s appropriate, but also to use those incentives wisely,” she said.
“Rebecca has talked about inequality and we’ve got a levelling up agenda in the UK, so you can clearly see the opportunity to incentivise firms to step up to more employee ownership as a means of repairing some of that inequality in society.”
Read more about technology innovation
In a separate conversation between TechCrunch journalist Steve O’Hear and Skype founder Niklas Zennström about VC’s role in the next decade, the latter said technology companies and startups would be much more focused on “society and the planet” as a result of the tensions created by ever-widening inequality.
“In the old world, we used to think that progress and purpose were something that could build a great company and have financial success, [but] There was a cost to society. What’s happening today with a lot of companies is you can actually build companies which are using technology that is benefiting all different types of stakeholders, so purpose and profit are no longer exclusive – they are now mutually reinforcing,” he said.
“I think the big opportunity for entrepreneurs [is] to step up and build companies that are not only long term sustainable in a financial way, but can also help to build a sustainable society.”
He added that access to talent was the most important part of a technology companies success, and that this would increasingly force them to adopt more ethical positions that take into account a wider range of views when producing new innovations.
“More and more tech workers around the world care about where they work – if the company they’re working for is doing something that is ethical or not ethical, and there are many people… leaving companies they consider to be doing unethical things. So, for companies to be able to continue to attract great talent they need to think about whether are they doing things that are fundamentally ethical with the technology and the practices,” he said.
Henderson added that, while these “moment of transition” are always difficult, “we know how to run firms in a different way – in ways that are much more equitable, profitable and productive – we can get there, and as more and more people see that we’re going to see this transition.”