Low Tech Solutions for First World Problems, Part 1

I was pleased to stumble across an interesting article written by David Roberts on Grist today regarding the use of advances in our understanding of behavioral science to tackle some of the more recalcitrant problems of our times.  The article addresses a personal concern of mine, namely that much greater emphasis is typically placed on the development of novel technologies to accomplish a goal, rather than clever implementation of our existing tools and knowledge.  While new technologies will clearly have a role to play, I am of the personal opinion that much of the novel gadgetry we are attempting to make is already preemptively obsolete by existing techniques we aren’t utilizing.  It seems that there is no better example of the disconnect between our understanding of an area and our implementation of that information than in the area of behavioral research.

Many recent studies into the ways that humans think and perceive are revealing some shared psychological traits that shape decision-making on the individual and cultural levels.  These studies are remarkable both because they expose some of the underlying thought processes we all share, and because their conclusions tend to be so intuitive once they are pointed out.   If you are curious about some of this research, I’d recommend the books Predictably Irrational by Dan Ariely and Nudge by Richard Thaler, which both do excellent jobs of pointing out how sometimes we don’t behave nearly as logically as we think we do.  Indeed, ‘Nudge’ is entirely devoted to the concept of how we can use some of these human fallibilities to steer a crowd of people to make a socially responsible decision without taking away any of their choices.

As an illustration, both the Grist article and Nudge refer to some power companies (such as socially-minded, OPOWER) that are moving towards a system of informing people of their relative power consumption compared to their neighbors.  This has the effect of allowing the consumer to rank themselves and know relatively how frugal or gluttonous they are with their power usage.  With a little positive reinforcement, consumers can be steered in the direction of conserving more energy.  What is most remarkable is how insubstantial the reinforcement needs to be.  Namely, by simply putting a smiley face on the utility statements for consumers, the company can leverage the consumers’ desire for approval, do-gooder instincts, and competitive drive to “beat” their neighbors.  It seems too simple to work, yet the result of providing transparency beside a printed smiley face has been a substantial drop (up to 3.5%) in the energy consumption of OPOWER’s consumers.  Sure, it alone won’t save the world, but it is still more effective than switching everyone to compact fluorescent bulbs, doesn’t eliminate any consumer choice or generate controversy, and is essentially free.

While this example is narrow in focus, it isn’t difficult to see how similar principals could be employed to passively encourage conservation in a wide variety of other daily activities.  Or even translated into other areas, for example, encouraging citizens to be more charitable or involved in their community.  Perhaps best of all, these are methods that don’t impose outside regulations on people or markets, which might keep them from getting bogged down in the depressingly slow/embattled political wrangling of other efforts to influence consumer choice.

India’s CSR Credits? Can You Sell “Good” as a Commodity?

Last week, India’s government announced that they were considering making Corporate Social Responsibility (CSR) a commodity, to be traded on an open market.  The move has drawn analogies to the cap-and-trade concept of carbon credits, where the amount of greenhouse gas emissions within the country are locked in at a given level, then the rights to “pollute” are traded like any other commodity.  In the case of CSR credits, India appears to be mulling the possibility of requiring companies that are deemed to be particularly socially irresponsible to purchase CSR credits from those companies, charities, or organizations that are more socially conscientious.

The announcement has drawn ample criticism from commentators involved in CSR, and for some good reasons.  Of primary importance, it seems nearly impossible to come up with a specific numerical value for any one socially minded effort, much less to be capable of comparing the value of two different programs in absolute terms (say, shelter for the homeless and increasing accessibility of vaccines to vulnerable populations).  I personally wonder how much value a company would ascribe to a CSR credit, in the cap-and-trade system, companies are purchasing something tangible and there is a limit on the availability of that resource.  With CSR credits, it seems that one might have a nearly endless supply of potential organizations claiming to be generating CSR credit, coupled with an intangible value of owning said credits, except for bragging rights.  Which raises ironic visions in this commentator’s head of “morality” being sold on the open market for fractions of cents per share.

But skepticism aside, the announcement has at least drawn some chatter and does highlight a growing awareness of the need to innovate for new approaches to hold businesses accountable, within India and abroad.  It also highlights what some see as a growing divide between the social awareness of corporate impact in developing countries compared to some western nations.  While I won’t be holding my breath for the success of this particular plan, it does suggest that attitudes about “business as usual” are rapidly changing.

Michigan Promotes FastTrac NewVenture Program for Small Business

Yesterday, Governor Granholm announced a number of new initiatives within Michigan to support the growth and liquidity within local small businesses.  Granholm highlighted new funding and support for the FastTrac NewVenture program, a service providing advice and 10-week courses on launching and developing new businesses.  In addition, the state government has entered agreements with the Michigan Small Business and Technology Development Centers (MI-SBTDC) and Michigan Credit Union League (MCUL) to expand credit availability to small business owners.