Firstly, policy plays a major role. Where is the world headed with carbon, water, security, privacy and diversity? Today there is a broad set of policy-making and standard setting communities which increasingly have an influence over how a product or service will eventually be received by the marketplace. These include groups such as Oxfam, the Nature Conservancy, the World Resources Institute, WWF, The United Nations, The World Bank and the IMF. Product developers must consider how these types of stakeholders could react to a new value proposition and marketing strategy. Many of these types of groups are potential partners or contributors to new product and service initiatives.
Collating the data
Secondly, there is data. This is not about measuring client satisfaction in a traditional sense. It is also about measuring the performance of a given firm, product or services against new yardsticks such as board diversity or greenhouse gas emissions. Environmental, social and governance performance data on companies, regions or sectors of the economy helps to inform us whether a firm and its product or services are contributing to broader policy goals. Knowing an “ESG score", in real-time, is increasingly relevant to return on product and investor decisions. Globalisation has made technological disturbance more of an issue and new data will be increasingly relevant to product and firm performance.
Measuring net impact
Impact is one of the most important considerations a business must consider in a business strategy today. Considering both the policy landscape, and the increasing availability of data to track performance of individual firms, the net social impact of a company must be contemplated. Mark Epstien, author of Measuring and Improving Social Impacts: A Guide for Nonprofits, Companies, and Impact Investors, states that “for corporate activities, impacts on society should be part of the calculus of manufacturing processes, supply chains, labor practices, and the impact of products and services.” By extension of this concept, it can be argued that the net contribution made by corporations in achieving a broad set of policy goals could impact areas such as the Sustainable Development Goals in a positive or negative manner.
It is difficult to measure such processes in a rigorous and holistic way. In fact, it is more so a big data problem, which we are just beginning to solve. The social impact of a complete set of products, services, leadership decisions and employee actions is coming into measureable focus around sets of global standards. Impact will be more and more measurable, and consequently more and more important. It’s an exciting time indeed for product creators of all stripes. With increasing opportunity for being noticed and rewarded for the full value of a company’s contributions, a new age of sustainable product development is dawning.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
