Monday, October 15, 2007

Goods and Services

When economists discuss economic productivity, they often use the term "goods and services." Don't ask me why, but I began to wonder a bit about this term the other day. I mean, how much of what we buy is really "good"? Which services really "serve" their customer?

Webster's defines a "good" as "something that has economic utility or satisfies an economic want... personal property having intrinsic value." If, as an entrepreneur, you want to create products for a more sustainable economy, you need to look at "utility" as including economic, social and ecological value. By digging deep into the opportunity, sometimes you find that these factors can reinforce each other and more value is created. For example, Envirofit's use of carbon credits will help provide additional revenue for activity it was going to do anyway. Or Patagonia's use of recycled plastic for its clothing. Both of these are 1.0 approaches. My guess is that 2.0 approaches will go beyond reuse or conservation and actually be ecologically regenerative. The flows in sustainable agricultural and forestry approaches provide useful models.

If you are embarking on an entrepreneurial venture, focus on being sure your goods are really "good" and your services really "serve" mankind and the planet.

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