The social concerns and impacts of private business have increasingly become a topic of concern across both the private and public sectors. The agricultural industry has received particular attention as the need for food is one thing that is common to all communities. As we continue to become increasingly aware of the effects of modern farming practices it is inevitable that the commercialization of agriculture will remain a heavily contested topic, and rightly so. However, irrespective of which side of the debate each one of us stands on, what is certain is that commercial agriculture is going to be around for a while. The increasing demand for food by growing global populations can no longer be met by subsistence farming methods. From an economic point of view, large scale agricultural production presents significant economies of scale that, to an extent, allow for food to remain relatively affordable. Using the agricultural industry as an example, I explore how investing in technology and engaging the public sector can play an important role in creating a more socially minded business landscape.
Technological and scientific advancements within agriculture have interestingly served a considerable amount of good that often goes unmentioned. Taking corn production in the United State as a particular example, I analyzed official data from the United States Department of Agriculture (USDA) and found that over the course of the last 30 or so years, the rates of nitrogen fertilizer application to corn fields (in pounds per acre) have for the most part remained constant while the yield from each acre continues to grow. Such trends are indicative of improved agricultural efficacy which can be attributed to the adoption of better farming methods. The utilization of technology for better field and crop monitoring has been vital in reshaping these farming practices. Whereas it is important not to forget that the overall amount of excess fertilizer escaping into the environment is increasing, it is also crucial to note that, for corn fields at least, it is doing so at a much reduced rate. We are now essentially able to produce more food with proportionally less harm done to the environment.
There is also an important role that the public sector and policy makers need to play to ensure the continued creation of more socially cognizant business organizations. It is undeniable that there is a need for better federal and state policies that set standards to which corporations are held. However, it is also just as important that these policies are not simply mandates but that they are designed to create market ecosystems that incentivize innovation among companies. As we have seen with the success of the Clean Air act in steering the adoption of catalytic converters in cars, informed and well-designed policies can be effective in encouraging private business to use technological innovation as an avenue for achieving more efficient products and processes.
I have found myself increasingly questioning some of the conventional wisdom that has come with my business education. Whereas I do believe in the need for every business to seek maximum returns on its investments, I have increasingly pondered on the relevance of dollar values as the sole measure of returns. Should we be thinking more broadly and assessing potential investments based not just on their projected dollar values but also on the intrinsic value they present in furthering goals like social and environmental development? If so, how do we make a business case for this point of view? I believe that it is our burden and privilege as the business leaders of tomorrow to not only answer questions such as these, but to also ensure that these questions are continually asked and that they become a part of the business discussion in board rooms.
Tefiro Serunjogi is a Stern MBA 1 student and graduate fellow with the Center for Business and Human Rights.