The latest economic numbers are in, and it looks like the economy may be bottoming out but has a long way to go before reaching anything like normal. It may be years before we see a return to where the economy was, if ever, driving the shift from the consumer economy to the conserver economy in which people are saving more, wasting less, and thinking of the long term.
What do the numbers say? Fewer new unemployment claims were made recently, but unemployment has risen to 8.9%, and could still rise as high as 10%. An AP report from May 8, 2009 states "The Fed says unemployment will remain elevated into 2011. Economists say the job market may not get back to normal — meaning a 5 percent unemployment rate — until 2013." Underlying economic issues are likely to drag down spending for years to come. Home values and other assets are still 40% below where they used to be in many cases, and will not recover their value in just weeks or months. Government spending to get the economy going today will need to be paid tomorrow. The stress test on banks helped to remove some uncertainty, but the results also suggest that some banks are far from healthy. Overall there seems to be a light at the end of the tunnel, but the tunnel is a long one if we try to tunnel through on the same track as before.
Getting on a new track is where the real opportunities are at. Even in the midst of our economic crisis, there are opportunities for individuals and businesses to do well by doing more with less in the conserver economy. The shift is driven by economic necessity, and by reevaluation of priorities people are engaged in as they search for the best way forward.
Where are the opportunities today? The shift toward conserving and away from consuming is creating new opportunities, and reviving some old ones. In a recent visit to a watch repair store I asked how business was and the response was that business is actually good of late, better than usual. Rather than buying new watches, people are fixing the old watches they already have, the ones that have been sitting in their dresser drawer unused. This is just one example. Overall, these trends may not emphasize the environment directly, and may not consider it at all but the end result is often green nonetheless. Most people fixing watches are probably doing it to save money, not out of concern for the environment, but that’s okay. In the end it doesn’t really matter why people take actions that help the environment, as long as it happens.
The six trends to lead in the conserver economy include the following:
We waste resources and money buying seldom-used goods that sit in closets, garages, and boxes taking up space. In the conserver economy, people are thinking again if they need to buy one of everything. This includes our cars. Many cars sit parked most of the time, using money even when they are not moving through insurance costs, maintenance, and depreciating value. By ridesharing and carsharing with businesses like Zipcar and PickupPal, we get more value out of cars, and save parking spaces and resources.
If we need to use a product for a short time, why not rent it? To own it means you have to store it, you have to maintain it, and you absorb its declining value as it ages. This can apply to appliances, tools, and even books. The renting trend can be expanded to include fields where once you would buy goods, and these can be replaced instead with a service. For example, instead of selling an air conditioner, you lease the air conditioner and sell cool air. Instead of buying solar panels, you buy the power they produce from a business like SolarCity. At Bag Borrow or Steal you can rent the latest in designer handbags, which can make a great deal of sense for seldom used fashion accessories.
I mentioned repairing watches earlier. The repairing trend applies to many objects. When times are flush with money, money tends to get flushed. Where before people might buy a new appliance when the old one broke, they are more likely to fix the old one today with the help of businesses like repairclinic.com. Rather than going to the mall to buy new clothes, people are also turning to tailors to fix their clothes, and cobblers to fix their shoes, both professions that are suddenly seeing double-digit surges in business.
Think of all of the goods we have sitting in our closets and packed in our garages gathering dust. Think of the millions of tons of material getting sent to the landfill. Now think of them differently, not as a nuisance, but a resource as businesses and consumers work harder to get more value out of things they already have. Reselling used clothes has seen a big surge at thrift stores like Plato’s Closet, for example. Terracycle is building its whole business around reusing materials that would otherwise be garbage to make and sell new goods, making lunch boxes out of juice pouches, for example. Buildings are deconstructed rather than demolished by companies like The ReUse People, a field with huge opportunity ahead still to reuse building materials of equal quality but much lower cost than new building materials.
We are in the process of rebuilding our infrastructure, including our buildings. Our buildings waste $ billions on energy, money that can be saved with retrofits to increase energy efficiency. The US Government is providing billions to change this through measures like those in the 2009 stimulus package in the process of being implemented. With over 100 million homes in the US, and millions more commercial and industrial buildings in need of attention, this opportunity to save money and help the environment could not be larger.
We are also rebuilding our energy infrastructure, changing from fossil fuels to renewable energy and rebuilding and improving our electrical grid for the needs of the 21st century. We need to rebuild schools and training centers to prepare people for the lean and green economies emerging from the crisis. We need to rebuild the US to get the economy back on track for the long run.
How big of a car do we want or need? How big of a house do we want? People are rethinking these questions, often out of necessity. In a time of crisis Hummers are out, a symbol of excess. Home sizes have steadily risen in recent decades, but there is a move away from McMansions now, as people rethink their homes as part of their changing life priorities. The Not So Big House is part of their Not So Big Life, as described by author and architect Sarah Susanka.
I’ll expand on each of these in the days and weeks ahead. Many of these trends are connected closely to the green economy – by using resources more wisely, getting more out of what we already have, we help the environment as well as our own bottom line. All of these trends make sense for consumers and businesses as they address their everyday priorities like paying the bills.
Glenn Croston is the author of "75 Green Businesses" (www.75GreenBusinesses.com) and the founder of Starting Up Green (www.StartingUpGreen.com), helping entrepreneurs from all backgrounds start and grow green businesses.