World Innovation Forum: Q&A with Michael Porter
In a wide-ranging Q&A session to close out the morning of day one of the World Innovation Forum, Michael Porter touched on everything from politics to Wall Street to the state of the health care industry.
While the majority of the Q&A was spent on healthcare—unsurprisingly, given his presentation earlier in the morning–he was perhaps at his most illuminating when talking about wider issues in the economy and business world at large. Below are some of the better points he made on those issues:
• Wall Street’s value is to enable companies the ability to invest and prosper. Instead it is focused on itself now. See Goldman Sachs.
• We’ve defined capitalism too narrowly. Companies need to be efficient in the way they use resources. Sustainability!
• Companies have defined themselves too narrowly recently. Thus, companies thought that protecting the environment wasn’t part of their job. Food companies thought that providing healthy food wasn’t part of their job. The world is changing, and some companies are waking up to the fact that they need to provide products that have deeper social value. Key quote: “Companies that provide products that are not good for their customers in some deep social sense are ultimately not going to survive.”
• We are not reinvesting in our science and technology base. Education in those areas is failing. Let’s not hold back the rest of the world. Americans need to step up and be more dynamic, aggressive, and innovative.
• He’s worried about short termism—particularly in financial markets. His suggestions for dealing with that include providing incentives for long-term thinking. One example: cutting capital gains tax, but requiring organizations to vest the gains for years.
• After two years of cost-cutting, companies and leaders need to sit down with their team and make sure they still have some kind of strategy.