Successful advertising entrepreneur Nick Hanauer suggests that it is not the 1% of wealth generating and low tax paying entrepreneurs that drive economic value. It is the gigantic mass of middle classes, the customer base of which enterprise depends on, which bring the vast economic power. But these guys have been pummeled, all over the world, by taxes that reward the 1% at their expense. I would add that the middle classes have also been pummeled by the fallacy of debt-driven consumerism. This group have been encouraged to overspend by spending money that is not actually theirs, in order to keep the economy growing and the 1% getting richer.
I have suggested a need for a Shared Value Academy that makes use of the vast economic and human capital that is the ‘expanding middle class’. Nick Hanauer is right to suggest that it is this segment of society that economies depend. It is very evident here in Brazil. But there is a third way that does not only depend only on the purchasing power of middle classes but that includes them in the value chain, so that they too can share the value created through enterprise. Apple has been hugely successful at enabling this with the iPhone/IPad application revolution, albeit to a wealthy / upper middle class base who can afford its products and to invest in the application development cycle. IBM have recognised the need to integrate its customers within its supply chain. It is incubating ‘customer-entrepreneurs’ all over the world working on clean tech solutions that align with IBM’s Smater Planet vision. IBM ensure their technology is embedding within their customer’s solutions, so that overtime, both parties share the value together. On a completely different scale AirBnB has created a platform that enables its customers to become entrepreneurs – renting our spare capacity in the home and connecting people all over the world.