The Origins of Wealth
Topic: The Origins of Wealth
Michael Porter: I’ve developed the worldview that actually most wealth and good is really created by organizations who are at the micro level. That is, it’s entities that can create products and services and add value through doing that profitably.
But I’ve come to understand that, in a sense, the market and the organizational entity that competes in that market is the ultimate source of really good, and wealth, and prosperity, and a good standard of living.
One of the things that I like to tell my government friends when we’re doing economic development discussions is government doesn’t create wealth. Government is pretty good at reallocating it, or spending it. But ultimately wealth can only be created by firms that actually create valuable products and services, or other entities that create valuable products and services.
I’ve come to have a real reverence for, if you will, the economy and economic development as really the most basic of the success factors. If you can get that working, then there’s resources to do a lot of other things to address social needs and to improve the quality of lives of people. But unless you can get that economic piece, that value creation piece working, then the other stuff becomes sort of a holding action and unsustainable. So I’ve come to have a passion about the importance of business.
I used to think that business was just, “Gosh everybody should think business is important.” But there’s a lot of people in the world who don’t think business is good. There are a lot of people who attack multinationals, or think that firms are the root of all evil.
And I’ve come to believe very passionately that without successful businesses that compete appropriately, there can be no good societies. And I tell my corporate friends, “Look. We can’t be defensive in the business community.” Business has the power, and the ability, and the skills to actually do enormous amounts of social good; but we’ve got to understand how to think about that.
And I increasingly have the view that the social and the economic are inextricably intertwined. That is, we can’t pull them apart. And every time we try, we make mistakes. Every time companies ignore the social and just think about the economic, they have trouble. Every time the folks in government and NGOs think only about the social and ignore the economic, and the ability of companies to create productive goods and services, the more they fail.
Recorded on: June 11, 2007
Businesses, not government, have the ultimate power to create social good.
Swipe right to make the connections that could change your career.
Swipe right. Match. Meet over coffee or set up a call.
No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.
A growing body of research shows promising signs that the keto diet might be able to improve mental health.
- The keto diet is known to be an effective tool for weight loss, however its effects on mental health remain largely unclear.
- Recent studies suggests that the keto diet might be an effective tool for treating depression, and clearing up so-called "brain fog," though scientists caution more research is necessary before it can be recommended as a treatment.
- Any experiments with the keto diet are best done in conjunction with a doctor, considering some people face problems when transitioning to the low-carb diet.
Even when they suffer costs in doing so.
- It's commonly thought that the suppression of female sexuality is perpetuated by either men or women.
- In a new study, researchers used economics games to observe how both genders treat sexually-available women.
- The results suggests that both sexes punish female promiscuity, though for different reasons and different levels of intensity.
Thinking your life is worthwhile is correlated with a variety of positive outcomes.
- A new study finds that adults who feel their lives are meaningful have better health and life outcomes.
- Adults who felt their lives were worthwhile tended to be more social and had healthier habits.
- The findings could be used to help improve the health of older adults.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.