The past three decades have seen traditional strategy at the heart of business competitiveness but with the emergence of cost-effective and efficient information and communication technologies, there is a bias being created which favours innovative business models. This new strategy focuses on including technological change, globalisation, sustainability and, in some cases, philanthropy.
This is most evident in the developing world where strong economic growth in these countries helped pull the world out of the global financial crisis of 2008-09 by contributing roughly 50% of all global growth.
Additionally, according to the Economist, Western multinationals expect to find 70% of their future growth in emerging markets. Surprisingly, some of the business opportunities are somewhat prosaic in nature: bakeries, hairdressers, spaza shops, whilst others focus on new technology-based and low-cost rivals threatening incumbents, reshaping industries and, through philanthropy, redistributing profits.
Emerging economies typically have some of the highest rates of poverty, injustice and inequality. Simply importing business models from the developed world or tinkering with current models which do not address these needs could be considered myopic as the future of business in these countries relies on the spending power of the expanding middle class.
The world's millennials are also beginning to vote with their wallets. Despite the criticism that millennials tend to be self-absorbed and entitled, many of them are committed to giving back and making the world a better place. In the 2014 Millennial Impact Report produced by Achieve, 87% of millennials aged between 20 and 35, gave some form of financial gift to a not-for-profit company in 2013.
The notion of the pure "donation" is also fading. New technology allows millennials to be more engaged with their world and feel more invested in the causes they love. There is a heartfelt need not just for donations but for empowering their communities and seeing the change. Embedding philanthropy within innovative disruptive business models which allows the new digital age to track their "investment" would then seem prudent should new companies want to appeal to the growing younger generations.
Enter Different Life, an innovative South African direct life insurance company which has embedded philanthropy into its business model without it costing the customer a cent. Different Life allows policyholders to give away their first premium payment every year to a non-profit organisation on the crowdfunding philanthropy platform, Different.org. "Invested" customers are then able to track the change their money is making through comprehensive feedback on projects, showing accountability and authenticity.
Innovative business models focusing on philanthropy not only facilitate change but attract the attention of a generation hungry to engage in sustainable upliftment.
