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Is Big Business Sustainable?

In most industries, large-scale enterprises can extract resources, create product, and distribute finished goods more efficiently than locally-owned, small-scale businesses. They can use their economic clout to develop new products, broadcast marketing messages to a national audience, and influence government regulation to their benefit.

Despite real economic disadvantages, the small business continues to flourish in some market segments. Small biz advantages include agility, understanding community needs, and ability to cost-effectively utilize resources not easily aggregated for use by larger-scale industries.

More recently, small firms have been touted as one of the building blocks for creating strong local economies. Local businesses can contribute to a community’s development by involving more local partners, creating jobs and offering fair wages to employees. But are small businesses more sustainable? We could argue that small businesses–unable to take advantage of economies of scale–waste more resources than larger businesses. Think of the prepared foods section at a little-trafficked store. Markets, catering shops, and restaurants–most of them small businesses–generate 27 million tons of food waste annually.

High-volume distribution centers such as Walmart would appear to be the most efficient method of distributing foodstuffs and consumer goods. One would think that efficient distribution would be the sustainable choice. Especially at a store like Walmart, which has the following environmental goals:
1. To be supplied 100 percent by renewable energy.
2. To create zero waste.
3. To sell products that sustain our resources and environment.

So, should we all shop at Wal-mart? The answer is: “No.” Sustainability cannot be achieved by centralizing resources and distributing on a large scale. According to “It’s Not Easy Being Green: The Truth Behind Wal-mart’s Environmental Makeover,” big business means bigger environmental impacts. The average Wal-Mart supercenter is a 200,000+ square foot behemoth sitting on 20 to 30 acres of land. There are over 2,200 supercenters in the United States, and they are adding more at such a rate that even if they meet their goal of reducing carbon emissions by 20% by 2013, in the interim, they will have built enough new stores to completely offset emissions reductions at existing stores.

Let’s return to small businesses and vibrant local economies. Suppose that local businesses are created to fulfill local needs. When local businesses use local resources, sustainability and environmental protection become a necessary component of the production lifecyle. More importantly, it will not be possible to produce locally-made goods at the same variety and scale that we do in today’s global market. Not all resources required for producing products will be locally available. Also, production labor will be priced at the local prevailing rate. This means that the price of locally-made goods will be more congruent with the time required to produce it. It will once again be less expensive to have a product repaired than to replace it.

Sociologist Paul Ray, who pioneered the concept of “cultural creatives,” estimates that 36 percent of Americans (45 percent of voters) fall into what he calls the “Wisdom Culture Paradigm.” Among its characteristics are: an “anti-materialism . . . that comes partly from movements like voluntary simplicity and ecological sustainability”; an “emerging post-Eighties dimension [that] wants outright prevention of ecological destruction, a slowing of economic growth for saving the environment . . . and an anti-big business, anti-globalization position”; and “a mainstream concern for relationships, altruism and idealism.”

Much of what we hold dear is neither enhanced nor accrued through improved efficiency. We do not seek to love efficiently, to eat efficiently, or to experience beauty efficiently. Then let us not praise big industry for consuming our natural resources efficiently. Small, local businesses are more sustainable in the long run not because they are more efficient, but, because they are less efficient.