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The health, economic, social, and environmental crises we’re experiencing highlight the limits of a capitalist system founded on the unlimited use of resources. For Navi Radjou, these crises present an opportunity to change our business model.

Do you find the idea of a frugal economy  creating busines and social value while minimizing the use of resources  abstract and utopian?  Here are three concrete measures for creating one: 

  • Apply the sharingeconomy model to your business. In your personal life, you’re probably using peer-to-peer online platforms to share cars or lodging. So why shouldn’t your company share its premises, its equipment, or even its experts in a similar way?  Although still in their infancy in Europe, these initiatives would render under-used assets more profitable.
  • Reintroduce smallscale local industry. After the breakdown of supply chains in recent months, small, local production sites offered a way of meeting specificinnovative demands rapidly
  • Boost your social impact. Increasing consumer expectations means that customers now expect businesses to have a positive impact on society, by hiring disadvantaged staff, for example, or by reusing natural resources. Such “frugality” creates value for everyone. 

 

To go further: “The Rising Frugal Economy by Navi Radjou (MIT Sloan Management Review, 6 August 2020).

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She spent 12 years in industry, working for Bolloré Technologies, among others. She co-founded Business Digest in 1992 and has been running the company since 1998. And she took the Internet plunge in 1996, even before coming on board as part of the BD team.