tag:theconversation.com,2011:/au/topics/walmart-23037/articlesWalmart – The Conversation2024-02-28T12:34:27Ztag:theconversation.com,2011:article/2244712024-02-28T12:34:27Z2024-02-28T12:34:27ZWhat’s next for $25B supermarket supermerger after FTC sues to block it, saying it could raise prices<figure><img src="https://images.theconversation.com/files/578386/original/file-20240227-26-jz6nu4.jpg?ixlib=rb-1.1.0&rect=970%2C550%2C2646%2C1491&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Shoppers select items at a large Kroger supermarket in Atlanta in 2022.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/shoppers-are-seen-in-a-kroger-supermarket-on-october-14-in-news-photo/1244106504?adppopup=true">Elijah Nouvelage/AFP via Getty Images</a></span></figcaption></figure><p><em>The Federal Trade Commission announced on on Feb. 26, 2024, that it’s suing to prevent <a href="https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-challenges-krogers-acquisition-albertsons">Kroger’s attempt to acquire Albertsons</a>. The US$25 billion deal, first announced in 2022, would combine Cincinnati-based Kroger, already the <a href="https://www.foodindustry.com/articles/top-10-grocers-in-the-united-states-2019/#gsc.tab=0">largest traditional U.S. supermarket chain</a>, with Boise, Idaho-based Albertsons, which is currently the fourth-biggest. The Conversation asked <a href="https://scholar.google.com/citations?user=wI3ku0oAAAAJ&hl=en&oi=ao">Christine P. Bartholomew</a>, a professor at the University at Buffalo School of Law who researches consumer protection, to explain what’s at stake and why the government opposes this merger.</em></p>
<h2>Which supermarkets belong to the two companies?</h2>
<p>The proposed merger involves more than <a href="https://thehill.com/business/4489557-ftc-state-ags-sue-to-block-kroger-albertsons-merger/">5,000 stores in 48 states</a>. Millions of their customers, whose shopping routines could be affected if the deal goes through, may not recognize these brand names because they shop at supermarket chains large and small that the companies have acquired in recent decades through previous mergers. </p>
<p><a href="https://www.thekrogerco.com/about-kroger/history/">Kroger has 28 subsidiaries with nearly 2,800 supermarkets</a>, including Harris Teeter, Dillon’s, Smith’s, King Soopers, Fry’s, City Market, Owen’s, JayC, Pay Less, Baker’s Gerbes, Pick‘n Save, Metro Market, Mariano’s Fresh Market, QFC, Ralphs and Fred Meyer.</p>
<p><a href="https://www.albertsonscompanies.com/about-aci/overview/default.aspx">Albertsons owns and operates more than 2,200 supermarkets</a> through its many brands. They include Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Market and Balducci’s. </p>
<h2>Why does Kroger want to acquire Albertsons?</h2>
<p>The <a href="https://www.nbcchicago.com/news/business/us-sues-to-halt-merger-of-kroger-and-albertsons-parent-companies-of-marianos-and-jewel-osco/3366312/">companies argue that they need to join forces</a> to compete against even bigger online and big box retailers. Over the last two years, Walmart and Costco have <a href="https://www.grocerydive.com/news/kroger-albertsons-merger-2023-pardon-the-disruption/696308/">gained market share</a> while other chains have held steady or lost ground. Discount and alternative format stores, like Aldi and Costco, are also placing competitive pressure on these stores, along with stiff competition from dollar stores, one of the <a href="https://www.npr.org/2022/10/14/1129014897/kroger-and-albertsons-plan-merger-to-combine-2-largest-supermarket-chains">fastest-growing segments of U.S. retail</a>.</p>
<p>If the merger goes through over the federal government’s opposition, the new company would cement its position, ensuring it has the largest market share for grocery purchases after Walmart.</p>
<p>By getting even bigger, Kroger and Albertsons contend, these already huge supermarket chains <a href="https://abcnews.go.com/US/wireStory/us-government-kroger-albertsons-merger-bad-grocery-shoppers-107593123">would gain more bargaining power</a>, enabling them to charge lower prices, earn higher profits and spur more innovation. While that might sound like a good thing, they have provided few details on how these gains would be realized.</p>
<h2>What could go wrong?</h2>
<p>The government is getting involved out of concern that this merger could deny many shoppers the benefits of competition.</p>
<p>If the deal goes through, Walmart plus the combined Kroger and Albertsons company would <a href="https://ilsr.org/statement-kroger-albertsons-merger/">control 70% of the grocery market</a> in more than 160 cities. Its dominance could empower the enlarged company to drive up prices at a time when <a href="https://www.washingtonpost.com/business/2024/02/02/grocery-price-inflation-biden/">consumers are already feeling the pinch</a>.</p>
<p>History has taught me and other scholars who study grocery store mergers to be <a href="https://www.promarket.org/2023/11/22/why-the-kroger-albertsons-merger-is-a-mess-for-consumers/">skeptical</a> about claims that adding more stores into ever-larger companies will lower prices and enhance competition.</p>
<p>When the <a href="https://www.ftc.gov/sites/default/files/documents/reports/do-retail-mergers-affect-competition%C2%A0-evidence-grocery-retailing/wp313.pdf">FTC assessed the impact of 14 mergers in the supermarket industry</a>, it found that though companies in virtually every merger promised lower prices, those promises only came true in less than half the deals. </p>
<p>The proposed merger could possibly harm workers too, the government contends. The FTC warns that the <a href="https://www.ftc.gov/news-events/news/press-releases/2024/02/ftc-challenges-krogers-acquisition-albertsons">merger could restrain wages, reduce benefits and weaken worker protections</a> for the 720,000 employees working for supermarkets owned by the two companies. </p>
<p><a href="https://www.axios.com/2024/02/27/price-food-us-inflation-data-groceries">Grocery expenses gobble up almost 11.3%</a> of consumers’ disposable income. Even small price increases for eggs, milk and other groceries that most Americans regularly purchase can strain household budgets.</p>
<p>The FTC’s warning echoes the sentiment of many members of the United Food and Commercial Workers International Union, which has <a href="https://www.reuters.com/markets/deals/unions-praise-ftc-lawsuit-blocking-kroger-albertsons-merger-2024-02-26/">opposed the deal</a> since it was announced.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A group of people protest while holding red and white anti-merger pro-labor signs aloft." src="https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=377&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=377&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=377&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=473&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=473&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578381/original/file-20240227-16-8iokvr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=473&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Unionized grocery store workers rally to oppose the proposed Kroger-Albertsons merger outside a Ralph’s supermarket in Los Angeles on April 13, 2023.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/unionized-grocery-store-workers-rally-to-oppose-the-news-photo/1251799980?adppopup=true">Frederic J. Brown/AFP via Getty Images</a></span>
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<h2>How will the courts decide?</h2>
<p>The central question in the case will be whether the proposed merger violates the <a href="https://www.law.cornell.edu/uscode/text/15/18">Clayton Act</a>. This <a href="https://www.investopedia.com/terms/c/clayton-antitrust-act.asp">1914 law bars mergers</a> that “may be substantially to lessen competition, or to tend to create a monopoly.”</p>
<p>Proof that mergers would result in higher prices isn’t necessary. Rather, there need only be an appreciable danger that the level of competition will decline. <a href="https://nz.finance.yahoo.com/news/us-ftc-announce-suing-block-164053955.html">The initial proceeding is administrative</a>, meaning it would be heard by an in-house administrative judge.</p>
<p>This judge will consider the impact of the merger on competition among supermarket chains, looking at variables such as whether it would increase market concentration and prices while undermining quality and innovation. </p>
<p>If the FTC and state attorneys general succeed in making that case, then Kroger and Albertsons have two choices.</p>
<p>They could argue that any such harm is offset by aspects of the merger that might boost competition in other ways and prove their claims that the merger would <a href="https://www.albertsonscompanies.com/newsroom/press-releases/news-details/2022/Kroger-and-Albertsons-Companies-Announce-Definitive-Merger-Agreement/default.aspx">lower prices for shoppers</a>.</p>
<p>Alternatively, the companies can try to refute any evidence from the FTC supporting its claims that the merger would restrict competition among supermarket companies.</p>
<p>To make their case, Kroger-Albertsons would likely point to its <a href="https://ir.kroger.com/news/news-details/2023/Kroger-and-Albertsons-Companies-Announce-Comprehensive-Divestiture-Plan-with-CS-Wholesale-Grocers-LLC-in-Connection-with-Proposed-Merger/default.aspx">plan to sell off 413 of the supermarkets they currently own</a> across the United States to C&S Wholesale Grocers. The plan, announced in 2023, also calls for the sale of some distribution centers, private labels and other assets to help competition in places like California, Washington and Oregon.</p>
<p>These steps raise key questions that are hard and complicated to answer. For example, which markets could be harmed by a merger? Would the proposed plan to sell off some assets protect consumers who shop in those areas? </p>
<p>The administrative judge will also need to assess the potential impact on workers. </p>
<p>Afterward, the case could go to a U.S. District Court for further review, meaning that resolving this dispute could take several more years.</p>
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<a href="https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Man in suit and tie stands at a podium in front of a map with photos of supermarkets on it." src="https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578380/original/file-20240227-22-ko67ie.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Colorado Attorney General Phil Weiser announces the filing of a lawsuit to block the merger on Feb. 14, 2024.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Grocery%20Store%20Merger%20Lawsuit/d1058b41b38140f4bf4d02a088125fca?Query=kroger%27s&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=2047&currentItemNo=4">AP Photo/David Zalubowski</a></span>
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<h2>What other litigation is going on?</h2>
<p>The <a href="https://www.cbsnews.com/news/kroger-albertsons-ftc-sues-to-block-merger/">state attorneys general</a> representing consumers in eight states – Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming – joined this federal lawsuit. So has the District of Columbia’s attorney general.</p>
<p>And the <a href="https://www.npr.org/2024/01/15/1224401179/kroger-albertsons-merger-grocery-lawsuit-washington">Washington</a> and <a href="https://coag.gov/2024/colorado-attorney-general-phil-weiser-files-lawsuit-to-block-proposed-kroger-albertsons-merger/">Colorado</a> attorneys general have also each filed suit in their own states to block the merger. Those cases are pending in state courts, and both will need to be litigated regardless of what happens with the FTC’s action.</p>
<p>The <a href="https://coag.gov/app/uploads/2024/02/2024-02-14-Complaint-Public.pdf">Colorado complaint may add additional antitrust</a> concerns for the Kroger and Albertsons deal because it includes allegations that the companies have colluded to suppress workers’ benefits and wages. If proved, such conduct violates antitrust laws.</p>
<p>Even if the FTC is not successful, the enlarged supermarket company could face lingering antitrust scrutiny because it would still have to address Washington’s and Colorado’s merger challenges. And even if those challenges fail, the companies will have to respond to the Colorado attorney general’s allegations of collusion.</p>
<p><em>This article has been updated to correct a statement about market share for grocery stores in more than 160 cities. That figure includes Walmart, as well as the proposed Kroger-Albertsons company.</em></p><img src="https://counter.theconversation.com/content/224471/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christine P. Bartholomew does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Turning two big supermarket companies into one even larger one could harm consumers and workers, the government says.Christine P. Bartholomew, Professor of Law, University at BuffaloLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2192802023-12-13T13:36:15Z2023-12-13T13:36:15ZBig-box retail chains were never a solution for America’s downtowns − and now they’re fleeing back to suburbia<figure><img src="https://images.theconversation.com/files/564994/original/file-20231211-89932-pedkqb.jpg?ixlib=rb-1.1.0&rect=12%2C0%2C2032%2C1529&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Merchandise is locked in cases to guard against theft in a Target store in New York City on Sept. 23, 2023. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/target-retail-stores-in-new-york-city-have-installed-locked-news-photo/1726478336">Deb Cohn-Orbach/UCG/Universal Images Group via Getty Images</a></span></figcaption></figure><p>Holiday shopping is in full swing, but city dwellers may have fewer options for buying in person than they did a few years ago. That’s because many large chain stores are pulling out of central cities. </p>
<p>This trend has been building for several years. Target made national headlines in 2018 when it closed its store in a <a href="https://www.nytimes.com/2021/06/30/business/target-baltimore-store-closings.html">predominantly Black Baltimore neighborhood</a> after just 10 years of operation. COVID-19 sped things up by cutting foot traffic in city centers and boosting online commerce. </p>
<p>Target has <a href="https://www.cnn.com/2023/10/12/business/target-closing-us-cities-crime-dg/index.html">closed additional stores</a> in Chicago, Milwaukee, New York, San Francisco, Seattle and Portland, Oregon. <a href="https://www.businessinsider.com/walmart-store-closings-2023-full-list">Walmart</a>, <a href="https://www.thestreet.com/retailers/cvs-is-permanently-closing-hundreds-of-stores-for-a-surprising-reason">CVS</a>, <a href="https://www.usatoday.com/story/money/shopping/2023/11/29/rite-aid-store-closures-grow/71744831007/">Rite Aid</a> and Walgreens have also closed many urban stores.</p>
<p>Closures have spread to many suburbs and small towns. Retailers saddled with high debt, overexpansion, <a href="https://nrf.com/research/national-retail-security-survey-2023">shoplifting losses</a>, slumping sales and <a href="https://www.jpmorganchase.com/institute/research/cities-local-communities/post-covid-consumer-spending-in-new-york-city">online competition</a> are shedding stores fast. But this contraction lopsidedly affects city dwellers, who often lack the shopping options and price competition suburbanites enjoy. </p>
<p>Many news reports, particularly from conservative outlets, have <a href="https://www.nationalreview.com/corner/manhattan-retail-is-getting-destroyed-by-shoplifting/">blamed lawlessness</a> and <a href="https://www.wsj.com/articles/the-root-causes-of-san-franciscos-disorder-crime-homeless-911-auto-theift-public-disorder-a45b170c">weak leadership by progressive city governments</a>. In my view, however, there’s another important factor: flawed corporate strategies.</p>
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<figcaption><span class="caption">As big-box chain drugstores close in St. Louis, an independent pharmacy works to fill the gap with more personal service.</span></figcaption>
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<h2>The self-service revolution</h2>
<p>The concept of letting shoppers serve themselves dates back to 1879, when Frank W. Woolworth <a href="https://guides.loc.gov/this-month-in-business-history/february/woolsworth">opened his first store in Utica, New York</a>. Its successors grew into the F.W. Woolworth chain of “five-and-dime” discount dry goods stores, which became fixtures of hundreds of cities, suburbs and small towns in the early 20th century. </p>
<p>Food stores followed suit in the early 1900s, beginning with the <a href="https://www.supermarketnews.com/archive/early-stores-pioneer-self-service-concept">Alpha Beta chain</a> in California in 1914 and <a href="https://mypigglywiggly.com/aboutus/">Piggly Wiggly</a> in Tennessee in 1916. Instead of having clerks gather customers’ orders from store shelves, these stores let shoppers loose in the aisles, then allowed them to pay at the end of their visit.</p>
<p>This approach seeded the meteoric rise of “big box” stores like <a href="https://www.thestreet.com/markets/history-of-walmart-15092339">Walmart</a> and <a href="https://corporate.target.com/about/purpose-history/history-timeline?era=2">Target</a> in the mid-20th century. With their low manufacturing costs, streamlined logistics, minimally staffed stores, national advertising and vast inventories, big-box chains <a href="https://www.npr.org/2012/11/19/165295840/the-past-and-future-of-americas-biggest-retailers">drove many small retailers out of business</a> – and most Woolworth stores, too. </p>
<p>Self-service came to rule the suburbs, where big chains could build mega-stores with plenty of parking. But they were rare in central cities for most of the 20th century, except for a few affluent enclaves, such as West Los Angeles or Chicago’s North Side. Generally, these chains avoided poor neighborhoods and many downtowns altogether. </p>
<p>As shoppers increasingly gravitated to suburban malls, many urban neighborhoods became <a href="https://www.city-journal.org/article/the-return-of-urban-retail-deserts">retail deserts</a>, with few vendors meeting local needs. Those that endured, often run by small-scale entrepreneurs, typically were businesses that offered a single type of product, such as grocery stores, delicatessens or pharmacies. </p>
<h2>Chains discover downtowns</h2>
<p>Harvard management professor <a href="https://www.hbs.edu/faculty/Pages/profile.aspx?facId=6532">Michael Porter</a> drew attention to the lack of retail services in densely populated urban neighborhoods in a seminal 1995 article, “<a href="https://hbr.org/1995/05/the-competitive-advantage-of-the-inner-city">The Competitive Advantage of the Inner City</a>.” Economic development, Porter argued, was key to revitalizing inner cities – and these zones housed a lot of potential customers.</p>
<p>“Even though average inner city incomes are relatively low, high population density translates into an immense market with substantial purchasing power,” Porter wrote. “Ultimately, what will attract the inner city consumer more than anything else is a new breed of company that is not small and high-cost but a professionally managed major business employing the latest in technology, marketing, and management techniques.” </p>
<p>Chains of many kinds began to <a href="https://www.npr.org/2010/12/21/132231472/big-box-retailers-move-to-smaller-stores-in-cities">rediscover the central city market</a> in the early 2000s. <a href="https://nyc-business.nyc.gov/nycbusiness/article/reduce-operating-expenses">Tax breaks</a> and subsidized redevelopment projects often greased the wheels. Urban gentrifiers were reliably drawn to new urban chain stores like Target, Walmart and Whole Foods.</p>
<p><div data-react-class="InstagramEmbed" data-react-props="{"url":"https://www.instagram.com/p/cLCAmoR6BL/?utm_source=ig_web_copy_link\u0026igshid=MzRlODBiNWFlZA==","accessToken":"127105130696839|b4b75090c9688d81dfd245afe6052f20"}"></div></p>
<p>Many small retail shops now faced a juggernaut of national chains. One example was <a href="http://dx.doi.org/10.1001/jamainternmed.2019.4588">independent pharmacies</a>: Between 2009 and 2015, 1 in 4 urban pharmacies in low-income neighborhoods closed.</p>
<p>And chain stores often failed to generate major benefits for their new neighborhoods. Employees had few chances for advancement beyond <a href="https://www.epi.org/press/new-company-wage-tracker-shows-low-wages-are-the-norm-at-large-retail-and-food-service-employers/">minimum-wage hourly work</a>. Clustering of chain stores in prosperous neighborhoods and business districts failed to address “food deserts” <a href="https://www.ers.usda.gov/amber-waves/2011/december/data-feature-mapping-food-deserts-in-the-u-s/">in impoverished areas</a>.</p>
<h2>Broken big boxes</h2>
<p>Certain qualities that made chains so successful – national sales strategies, self-service stores and brand awareness – are proving to be liabilities in today’s more complicated and divided urban context. </p>
<p>Retail executives and their <a href="https://nrf.com/advocacy/policy-issues/organized-retail-crime">trade associations</a> have cited excessive shoplifting losses and weak law enforcement as factors in urban store closures, even though they have conspicuously <a href="https://www.theatlantic.com/health/archive/2021/12/shoplifting-holiday-theft-panic/621108/">failed to provide shoplifting data</a> by location. There are signs, moreover, that <a href="https://www.nytimes.com/2023/12/08/business/organized-shoplifting-retail-crime-theft-retraction.html">shoplifting is receding</a>, except for in a few large cities like New York.</p>
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<p>In my opinion, there are three reasons why city chain stores are closing at such a high rate compared with those in suburbs.</p>
<p>First, despite job recovery in many cities since the pandemic, low-income urban households remain in crisis, with <a href="https://www.nytimes.com/2023/01/25/realestate/rent-burdened-american-households.html">high rents</a> and inflation driving up the cost of essentials. According to the nonprofit Brookings Institution, 9.6% of suburban residents lived in poverty in 2022, compared with about <a href="https://www.brookings.edu/articles/post-pandemic-poverty-is-rising-in-americas-suburbs/">16.2% in primary cities</a>. Widespread poverty in a city like Baltimore, for instance, is reflected in the <a href="https://mdfoodbank.org/hunger-in-maryland/maryland-hunger-map/">concentration of food banks</a> on the west and east sides. </p>
<p>Less disposable income, compounded by shoplifting losses, can lead to store closures – especially since national chains like Target and Walmart expect the dollar value of sales from stores that have been open for more than a year to <a href="https://www.wallstreetmojo.com/same-store-sales/">increase steadily over time</a>. </p>
<p>Second, urban chains clustered too many of their own branches close together or too near other chains – usually in high-income residential or business districts. <a href="https://www.nytimes.com/2009/07/09/business/media/09adco.html">Manhattan below 96th Street</a> is a clear example of this pattern. With affluent customers shifting to online shopping, and reduced foot traffic overall thanks to remote work, this aggressive strategy has failed. </p>
<p>Third, widely distributed <a href="https://www.cnn.com/2023/12/07/business/shoplifting-surge-hype-nightcap/index.html">media images of rampant shoplifting</a> send a message at odds with these chains’ powerful brand images of order, safety and standardization. A <a href="https://counciloncj.org/shoplifting-trends-what-you-need-to-know/">small but rising share</a> of shoplifting incidents since 2019 have involved assaults or other crimes. These events have the potential to <a href="https://www.vox.com/money/23938554/shoplifting-organized-retail-crime-walmart-target-theft-laws">scare executives</a> concerned about employee lawsuits. Chains want urban locations but not “urban” reputations. </p>
<h2>Retail flight</h2>
<p>Large retail chains have finally figured out that cities aren’t suburbs. Those that remain are adding staff, scaling back self-checkout, checking receipts at exits and <a href="https://www.kqed.org/news/11949025/why-are-retail-stores-locking-up-basic-necessities">locking down higher-priced goods</a> – essentially, abandoning the self-service model. However, these costly measures won’t bring back online-addicted shoppers or daily commuters, nor will they put more money in struggling consumers’ pockets.</p>
<p>Responding to retail association pressure, some city and state governments are imposing <a href="https://www.cnbc.com/2023/08/11/organized-retail-crime-nine-states-pass-laws-to-crack-down-on-theft.html">stricter punishments for shoplifting</a> and cracking down on <a href="https://www.youtube.com/watch?v=5RIjWTO2Yz4">black-market vending</a> on sites like Amazon and eBay. However, it isn’t clear that this get-tough approach can or should rescue the big-box model, since these stores failed to create safe, secure shopping environments in the first place.</p>
<p>As I see it, the urban chain store implosion raises questions about whether suburban-style retail really does much for cities. These stores are mediocre job creators, undercut local entrepreneurs, often <a href="https://www.strongtowns.org/journal/2022/9/13/mainstreet-vs-chain-stores-a-western-north-carolina-analysis">pay relatively low property taxes</a> and build ugly parking lots. They also don’t provide the kind of “<a href="https://medium.com/i-cities/eyes-on-the-street-ab12b39b960b">eyes on the street</a>” local security that small-scale shopkeepers do. In fact, their parking lots and open aisles seem to <a href="https://www.cbsnews.com/newyork/news/yonkers-shoplifting-big-box-stores/">attract disorder</a>.</p>
<p>Shoehorning suburban-style stores into urban neighborhoods now looks like a Band-Aid for much deeper urban problems. In my view, city leaders would do better to focus on <a href="https://www.recastyourcity.com/">building local capacity</a> and protecting smaller stores that usually have greater local wealth-building potential, more reasonable growth expectations and the kind of personal service that <a href="https://www.sfgate.com/bayarea/article/how-retail-crime-impacts-business-16720683.php">naturally deters shoplifting</a>.</p><img src="https://counter.theconversation.com/content/219280/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicholas Dagen Bloom does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Shoplifting has been hyped as a driver of chain-store closures, but did these companies ever really understand urban environments in the first place?Nicholas Dagen Bloom, Professor of Urban Policy and Planning, Hunter CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1952412022-11-23T16:25:19Z2022-11-23T16:25:19ZRampage at Virginia Walmart follows upward trend in supermarket gun attacks – here’s what we know about retail mass shooters<figure><img src="https://images.theconversation.com/files/497021/original/file-20221123-20-8zq33s.jpg?ixlib=rb-1.1.0&rect=8%2C89%2C5982%2C3898&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The latest target in America's gun crime epidemic.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/WalmartMassShooting/3645c5c9fb8e44a8b681bb2a132addef/photo?Query=walmart&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=3337&currentItemNo=2">AP Photo/Alex Brandon</a></span></figcaption></figure><p>A <a href="https://apnews.com/article/walmart-shooting-chesapeake-virginia-b52927596381aa65efed367ce0c81c83">gun rampage at a Walmart in Virginia</a> is the latest amid a rise in mass shootings in general in the U.S., and mass shootings at <a href="https://theconversation.com/drafts/195241/edit">grocery and retail stores</a> in particular.</p>
<p>Multiple people including the gunman <a href="https://www.reuters.com/world/us/deaths-reported-virginia-walmart-gunman-dead-police-say-2022-11-23/">were killed in the incident</a> on Nov. 22, 2022, at an outlet of the retailer in Chesapeake. It follows a <a href="https://abcnews.go.com/US/buffalo-supermarket-shooting-suspect-expected-plead-guilty-court/story?id=93787204">racist attack at a grocery store in Buffalo</a> earlier this year in which 10 Black shoppers were killed. A previous <a href="https://apnews.com/article/el-paso-texas-mass-shooting-shootings-us-news-ap-top-news-ar-state-wire-84747760a7b643b694cc57f464640f4f">Walmart mass shooting in El Paso, Texas, in 2021</a>, was similarly racially motivated – 23 people were killed by a gunman who had posted a hate-filled anti-immigrant manifesto online.</p>
<p>We <a href="https://www.hamline.edu/faculty-staff/jillian-peterson/">are criminologists</a> <a href="https://www.metrostate.edu/about/directory/james-densley">who study</a> the <a href="https://www.theviolenceproject.org/">life histories of mass shooters</a> in the United States. Since 2017, we have conducted <a href="https://www.amazon.com/Violence-Project-Stop-Shooting-Epidemic-ebook/dp/B08WJV7W3P">dozens of interviews</a> with incarcerated perpetrators and people who knew them. We also built a <a href="https://www.theviolenceproject.org/mass-shooter-database/">comprehensive database</a> of mass public shootings using public data, with the shooters coded on nearly 200 different variables.</p>
<p><iframe id="ND4gM" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/ND4gM/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Overall, mass public shootings in which four or more people are killed have become <a href="https://nij.ojp.gov/topics/articles/public-mass-shootings-database-amasses-details-half-century-us-mass-shootings">more frequent, and deadly</a>, in the last decade, to the extent that the U.S. now averages about seven of these events each year. Our definition of mass public shootings excludes cases in which the murders are attributed to any other underlying criminal activity, such as drugs and gang membership, which accounts for why they may be lower than other estimates.</p>
<p>Mass shootings also tend to cluster, with <a href="https://doi.org//10.1371/journal.pone.0117259">one study</a> finding they are contagious for 13 days on average and our <a href="https://www.politico.com/news/magazine/2022/05/27/stopping-mass-shooters-q-a-00035762">own research</a> showing those responsible study other mass shooters and draw inspiration from them. The Buffalo shooting on May 14 preceded a spate of mass shootings this summer, including at <a href="https://www.texastribune.org/series/uvalde-texas-school-shooting/">an elementary school in Uvalde, Texas</a>, at an <a href="https://www.pbs.org/newshour/nation/shooting-at-tulsa-hospital-exposes-vulnerability-of-health-care-facilities">Oklahoma medical facility</a>, and during a <a href="https://www.nytimes.com/news-event/highland-park-shooting">4th of July parade in Highland Park, Illinois</a>. The latest tragedy in Chesapeake, Virginia, comes just three days after a gunman <a href="https://www.coloradoan.com/story/news/2022/11/22/club-q-in-colorado-springs-has-been-a-beacon-for-lgbtq-community/69666975007/">killed five people at a LGBTQ nightclub in Colorado Springs</a>.</p>
<h2>What do we know about mass shootings at stores?</h2>
<p>The tragedy in Chesapeake, Virginia, is the <a href="https://www.theviolenceproject.org/mass-shooter-database/">36th mass shooting in our database</a> to take place in a retail establishment. These shootings claimed 217 lives and injured 227 more, and they have been increasing over time - with 2019 and 2021 the worst years on record for retail shootings. </p>
<p>Retail shootings are most common in Southern and Western states and two-thirds took place in urban locations. The perpetrators were all male except for one woman who committed the shooting with her male partner. </p>
<p>Retail mass shooters were white in 56% of such incidents and Black in 25% of recorded cases and ranged in age from 18 to 70 – although 60% were in their 20s. Around 1 in 10 were employees of the retail establishments they targeted.</p>
<p>Perpetrators usually used one gun (58%). One-third of perpetrators used an AR-15 style assault weapon. </p>
<p>Looking at the life histories of perpetrators, two-thirds had a prior criminal history and half of them <a href="https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2785799">communicated intent to do harm</a> to others ahead of the attack. Yet, retail shootings tend to be less well-planned than other mass shootings – only 22% of perpetrators did significant planning. </p>
<p>Two-thirds of the shooters were suicidal – 26% had a prior suicide attempt and another 37% intended to die during the shooting – and around 30% were experiencing psychosis, although <a href="https://psycnet.apa.org/record/2021-43325-001">perpetrators were only acting on their hallucinations or delusions</a> in 11% of retail shootings. Half of the perpetrators had a known prejudice against a racial or religions group.</p>
<h2>Workplace rampages and what motivates them</h2>
<p>The motive in the Virginia incident is not known, but reports suggest the perpetrator was a Walmart employee. In our data, workplace shootings are motivated by an employment issue such as being fired or suspended in 70% of incidents, and by an interpersonal conflict with another employee 23% of the time. Nearly three-quarters of perpetrators show changes in behavior or warning signs prior to the shooting, such as increased agitation. </p>
<p><a href="https://www.startribune.com/two-minnesota-professors-have-devoted-their-careers-to-researching-mass-shooters/600123369/">Our research</a> suggests many strategies to prevent these types of mass shootings – from anonymous reporting systems for employees to workplace crisis response teams. However, <a href="https://rockinst.org/wp-content/uploads/2021/08/policy-solutions-public-mass-shootings.pdf">restricting access to firearms</a> for high-risk people would be the most effective strategy overall. </p>
<p><em>Editor’s note: Parts of this article were included in a <a href="https://theconversation.com/more-mass-shootings-are-happening-at-grocery-stores-13-of-shooters-are-motivated-by-racial-hatred-criminologists-find-183098">story that was first published</a> on May 15, 2022.</em></p><img src="https://counter.theconversation.com/content/195241/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jillian Peterson receives funding from National Institute of Justice and the Bureau of Justice Statistics</span></em></p><p class="fine-print"><em><span>James Densley receives funding from the National Institute of Justice and the Bureau of Justice Assistance.</span></em></p>At least six people have been killed in an attack at a Walmart in Chesapeake, Virginia. It happened amid a surge of mass shootings in the US.Jillian Peterson, Professor of Criminal Justice, Hamline University James Densley, Professor of Criminal Justice, Metropolitan State University Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1715222021-11-10T13:49:44Z2021-11-10T13:49:44ZAI shop assistants: get ready for a world where you can’t tell humans and chatbots apart<figure><img src="https://images.theconversation.com/files/431068/original/file-20211109-15-ll83na.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">'The customer is always real.'</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/smart-shop-device-scan-go-that-1890320611">Octus_Photography</a></span></figcaption></figure><p>I regularly fly with KLM from Minneapolis to New Delhi, and always stop over in Amsterdam. I am frequently in Minneapolis for research and this is my route to go home to take a break from work. I have done the journey so many times that I know almost all the shops at Schiphol inside out. However, one time in summer 2019, the predictability was broken when I missed my connecting flight to New Delhi. </p>
<p>I was tired, hungry, sleepy, and the customer-service counter was closed. I had the choice to make the long walk to customer services at the next gate or use my iPhone, so I tried my phone. </p>
<p>I texted the KLM WhatsApp number and went back and forth with an assistant on my choices. Within minutes I was on the next flight, with the boarding pass on my phone. It was only later that I discovered that I had been dealing with next-generation artificial intelligence – in an example of the new field of conversational commerce. </p>
<p>If you haven’t encountered it yet, you will soon. Certain supermarkets are providing voice-enabled shopping services to customers, for example. In the US, <a href="https://www.grocerydive.com/news/walmart-launches-voice-activated-grocery-shopping/551830/#:%7E:text=Walmart%20has%20partnered%20with%20Google,Google%2C%20talk%20to%20Walmart.%22">Walmart shoppers</a> can ask <a href="https://www.pocket-lint.com/smart-home/news/google/147645-how-to-voice-shop-at-walmart-using-google-assistant">Google Assistant</a> to add certain things to their virtual shopping trolleys and to learn from their shopping habits.</p>
<p>Google has similar deals with two other supermarket giants – <a href="https://us.fashionnetwork.com/news/target-partners-with-google-on-voice-activated-shopping,879678.html">Target</a> in the US and <a href="https://www.carrefour.com/en/newsroom/voice-grocery-shopping-new-e-commerce-grocery-experience">Carrefour</a> in France – while Amazon provides voice-enabled shopping in the UK to online customers of <a href="https://internetofbusiness.com/ocado-launches-alexa-app-voice-activated-online-shopping/">Ocado</a>. Not to be outdone, <a href="https://www.chainstoreage.com/walmart-acquires-tech-boost-conversational-commerce">Walmart recently bought</a> conversation-commerce specialist Botmock to expand its services in this area. </p>
<p>There <a href="https://www.economist.com/business/2021/07/10/will-conversational-commerce-be-the-next-big-thing-in-online-shopping">are already</a> more than a billion people interacting with businesses via either text or voice-based conversational tools. In 2021, conversational commerce is <a href="https://www.juniperresearch.com/press/conversational-commerce-channels-to-facilitate?mc_cid=686d43b596">expected to</a> account for total sales of US$41 billion (£30 billion) worldwide, and is forecast to grow five-fold to nearly US$300 billion by 2025 – half of it from chatbots. So how is this market developing, and what does it mean for our shopping habits?</p>
<h2>Coffee diehards and hyper-personal shopping</h2>
<p>If conversational commerce still feels under the radar, one reason is that most growth has been in <a href="https://www.businesswire.com/news/home/20210405005025/en/Juniper-Research-Conversational-Commerce-Channels-to-Facilitate-Spending-of-over-290-Billion-Globally-by-2025-as-Omnichannel-Strategies-Drive-Interest">China, Japan and South Korea</a>. All the same, it is cropping up everywhere. If you are talking to your girlfriend or boyfriend on Facebook and suddenly want to send them flowers, you don’t even have to break the conversation. You click on <a href="https://www.facebook.com/1800flowers/">1-800-Flowers.com</a>, a conversational AI tool integrated with Messenger, and explain what you want. You don’t even need to enter card details if you use Apple, Samsung or Google Pay.</p>
<p>Or maybe like me you are a die-hard coffee lover. I used to stand in a queue to get my morning latte, but not now. I just order from my couch from the chatbot on the <a href="https://stories.starbucks.com/multimedia/2017/barista_beta_2/">My Starbucks Barista</a> app, and my coffee is waiting when I reach my local store. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/431070/original/file-20211109-15-1n02vq.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A cafe latte with a phone hovering over it" src="https://images.theconversation.com/files/431070/original/file-20211109-15-1n02vq.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/431070/original/file-20211109-15-1n02vq.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/431070/original/file-20211109-15-1n02vq.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/431070/original/file-20211109-15-1n02vq.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/431070/original/file-20211109-15-1n02vq.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/431070/original/file-20211109-15-1n02vq.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/431070/original/file-20211109-15-1n02vq.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">More than just froth.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-girl-using-photography-smartphone-latte-584926501">Jirapong Manustrong</a></span>
</figcaption>
</figure>
<p>The AI underpinning these advances encompass are <a href="https://towardsdatascience.com/5-deep-learning-trends-leading-artificial-intelligence-to-the-next-stage-11f2ef60f97e?gi=7d7348c037eb">deep learning</a>, sophisticated <a href="https://online.york.ac.uk/the-role-of-natural-language-processing-in-ai/">natural language-processing</a>, <a href="https://www.upgrad.com/blog/speech-recognition-in-ai/#:%7E:text=Depending%20on%20the%20end%2Dgoal,your%20dictated%20words%20to%20text.">voice recognition</a>, and <a href="https://searchenterpriseai.techtarget.com/definition/cognitive-computing#:%7E:text=The%20term%20cognitive%20computing%20is,aim%20to%20simulate%20human%20thought.&text=A%20number%20of%20AI%20technologies,networks%2C%20NLP%20and%20sentiment%20analysis.">cognitive computing</a> – which is a system for machine-thinking that emulates human thought. But the big selling point – besides ease, comfort and shopping anywhere at any time – is probably the potential to make a customer’s retail experience much more personal. </p>
<p>If it lives up to expectations, customers might soon be able to interact with an AI who understands what they want in specific detail. We already see big retailers offering personalised products to attract customers – for example <a href="https://www.nike.com/gb/nike-by-you">Nike</a> and <a href="https://www.adidas.co.uk/personalisable-trainers">Adidas</a> allowing people to design their own trainers. </p>
<p>But by using sophisticated AI, personalisation can move to a whole new level. Customers will receive personalised recommendations in their own language, easing the burden of choice and making the experience as enjoyable as possible. They might spend more money as a result – not because they are being manipulated, but because they almost feel like they are buying from a friend.</p>
<p>Meanwhile, businesses will gain new insights into people’s shopping behaviour. Yes this raises privacy questions, but it will also help businesses to refine their offering. This should reduce returns and increase sales.</p>
<h2>Where it’s heading</h2>
<p>Conversational commerce reminds me of the <a href="https://www.youtube.com/watch?v=dJTU48_yghs">2013 movie Her</a>, set in a near future where Theodore (Joaquin Phoenix) falls in love with Samantha (Scarlet Johannson), an AI-based virtual assistant. The relationship eventually becomes unworkable when it emerges that Samantha is simultaneously having intimate friendships with thousands of men. She then combines with other AIs to perform an upgrade that leads to them withdrawing from human interaction. </p>
<p>We may be some way from falling in love with chatbots, but clearly there are questions about ethics here. The technology must not harm humans or pose any threat to their dignity. For instance, <a href="https://news.knowledia.com/IN/en/articles/money-mimicry-and-mind-control-big-tech-slams-ethics-brakes-on-ai-ca744c0295389e9cffdf378ff84a38d87c5fae38">Microsoft recently</a> restricted its voice mimicry technology because it makes it easier to create <a href="https://theconversation.com/deepfakes-five-ways-in-which-they-are-brilliant-business-opportunities-131591">deep-fake videos</a>.</p>
<p>Another issue is jobs. Automation is clearly a threat to the workforce, and conversational commerce could well be part of that. But unfortunately, businesses will not pay for so many support staff if AI can do the job at least as well. One consolation is that AI in its entirety might create more jobs than it destroys. For instance, the World Economic Forum predicted in 2018 that the net new jobs created by AI would be <a href="https://www.forbes.com/sites/amitchowdhry/2018/09/18/artificial-intelligence-to-create-58-million-new-jobs-by-2022-says-report/?sh=59eb02644d4b">58 million by 2022</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/431064/original/file-20211109-15-1dol6qd.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Shopper in supermarket using AR glasses to interact with a bot" src="https://images.theconversation.com/files/431064/original/file-20211109-15-1dol6qd.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/431064/original/file-20211109-15-1dol6qd.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/431064/original/file-20211109-15-1dol6qd.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/431064/original/file-20211109-15-1dol6qd.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/431064/original/file-20211109-15-1dol6qd.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/431064/original/file-20211109-15-1dol6qd.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/431064/original/file-20211109-15-1dol6qd.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The day after tomorrow.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/augmented-reality-smart-ar-glasses-technology-708240001">Zapp2Photo</a></span>
</figcaption>
</figure>
<p>Looking further ahead, conversational commerce could become all the more prevalent in the metaverse, the virtual reality representation of the internet, with voice-enabled shopping potentially <a href="https://voicebot.ai/2021/10/07/how-walmarts-innovation-lab-thinks-about-voice-ai-and-conversational-commerce/">accounting for 30%</a> of all ecommerce revenues by 2030. It seems foreseeable that we will be interacting with AI avatars in virtual reality stores, or talking to bots in real-life supermarket aisles via augmented reality glasses.</p>
<p>What may seem alien to our generation is likely to be second nature to the shoppers of tomorrow. There are pros and cons to this technology, but I suspect my little chat with the KLM chatbot at Schipol airport will soon seem quaint compared to what comes next.</p><img src="https://counter.theconversation.com/content/171522/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shweta Singh does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>You may not have heard of conversational commerce, but it’s quietly appearing in more and more places.Shweta Singh, Assistant Professor, Information Systems and Management, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1644752021-08-04T18:42:46Z2021-08-04T18:42:46ZThe advantages of unionization are obvious, so why don’t more workers join unions?<figure><img src="https://images.theconversation.com/files/414615/original/file-20210804-17-11xdoqh.jpg?ixlib=rb-1.1.0&rect=21%2C32%2C3535%2C2586&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Thousands of teachers from the Peel District School Board hold a one-day strike in Mississauga, Ont., in February 2020.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette </span></span></figcaption></figure><p>It’s well established that unionized workers earn <a href="https://pressprogress.ca/why_joining_a_union_could_mean_a_big_raise_for_canadians/">better wages</a> and have better benefits than their non-union counterparts. Unionized workers also experienced much greater levels of <a href="https://labourstudies.mcmaster.ca/research/impact-of-covid-19/labour-market-employment-covid">job security</a> during the COVID-19 pandemic. But if the advantages of union membership are so obvious, why are <a href="https://www.canada.ca/en/employment-social-development/services/collective-bargaining-data/reports/union-coverage.html">fewer than one in three</a> workers in Canada unionized?</p>
<p>While there’s no consensus about which factors are most likely to sway support for unionization, dissatisfaction with working conditions and the desire for dignity and voice at work <a href="https://www.usw.ca/join/why">are often cited</a> as key reasons why workers seek out unions. </p>
<p>Wanting a union and securing a union, however, are two very different things. That’s because there are enduring obstacles to unionization that make it incredibly difficult for workers to turn their initial support for the idea of a union into reality.</p>
<h2>Barriers to unionization</h2>
<p>Labour laws play a fundamental role in either helping or impeding unionization. For example, independent contractors and the self-employed are <a href="https://cirhr.library.utoronto.ca/sites/default/public/research-projects/Lynk-11-Exclusions%20Under%20LRA.pdf">legally excluded from union membership</a> in Canada and, in many provinces, so are agricultural and domestic workers. For workers who can legally unionize, provincial governments — under pressure from the business community — have generally made it <a href="https://doi.org/10.1177%2F0309816818815262">more difficult</a> to exercise that right in recent decades. </p>
<p>Employers intent on resisting unionization frequently exploit loopholes in labour law to build opposition to unions within their own workforces. While many union avoidance tactics are illegal, employers are often less fearful of the penalties they may face for engaging in “union-busting” activities than of the consequences of unionization. </p>
<figure class="align-center ">
<img alt="A banner outside an Amazon facility encourages workers to vote for unionization." src="https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=405&fit=crop&dpr=1 600w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=405&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=405&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=509&fit=crop&dpr=1 754w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=509&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/414620/original/file-20210804-25-bqvo8i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=509&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Amazon fought hard against a unionization push, which was ultimately unsuccessful.</span>
<span class="attribution"><span class="source">(AP Photo/Jay Reeves)</span></span>
</figcaption>
</figure>
<p>Union avoidance is a multi-million dollar business. Lawyers and consultants <a href="https://www.vox.com/recode/2020/10/6/21502639/amazon-union-busting-tracking-memo-spoc">devise strategies</a> for managers to maintain union-free workplaces. These strategies can include active intimidation and surveillance of union supporters, exploiting divisions within the workforce to stir up opposition to the union or spreading misinformation about the implications of unionization. </p>
<p>These common union avoidance strategies are difficult to overcome, especially given the power imbalance between employers and workers.</p>
<h2>Union substitution, suppression</h2>
<p>Effective anti-union campaigns often rely on a combination of union substitution and union suppression. </p>
<p>Union substitution techniques are the carrots designed to increase worker loyalty to the employer, thus making employees less likely to identify with the union. Some non-union companies operating in highly unionized sectors try to keep wages and working conditions in line with those of unionized workers <a href="https://www.cbc.ca/news/business/steelworkers-drop-bid-to-unionize-hamilton-s-dofasco-1.737233">in an effort to dissuade</a> their own workforces from considering a union.</p>
<p>If union substitution represents the carrot, <a href="https://www.epi.org/publication/fear-at-work-how-employers-scare-workers-out-of-unionizing/">union suppression techniques</a> are the stick. Union suppression seeks to plant anti-union seeds of doubt in workers’ minds and play on fears that unionization might result in job loss. Suppression techniques often include targeting pro-union employees for discipline and dismissal. </p>
<p>In recent years, <a href="https://www.theguardian.com/sustainable-business/target-anti-union-video-cheesy-but-effective">retail giants Target</a> and <a href="https://vancouversun.com/news/staff-blogs/anti-union-home-depot-video-mandatory-viewing-for-employees/">Home Depot</a> had their slick anti-union videos leaked on social media, providing insight into how much money and effort employers are willing to pour into such initiatives. </p>
<p>Walmart, meantime, uses a “<a href="https://www.chicagoreader.com/chicago/chicago-walmart-low-wages-unions/Content?oid=2043233">Union Probability Index</a>” to monitor employee behaviour and morale. If a store’s index gets high enough, head office sends teams into the store to ensure it remains union-free. And, as we saw in the cases of <a href="https://thewalrus.ca/walmart-has-everything-except-unions/">Walmart in Jonquière</a>, Que., and <a href="https://www.cbc.ca/news/business/foodora-canada-closing-may-1.5546642">Foodora in Ontario</a>, some companies will shut down outlets or operations rather than tolerate a union. </p>
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Read more:
<a href="https://theconversation.com/despite-foodora-ruling-app-based-workers-face-uphill-union-battle-132744">Despite Foodora ruling, app-based workers face uphill union battle</a>
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<h2>Shortage of unions</h2>
<p>Despite these aggressive union avoidance tactics, <a href="https://www.huffingtonpost.ca/2013/12/20/unions-canada-poll_n_4479321.html">public opinion polls</a> indicate that, if given the choice, many non-union workers would opt to unionize. </p>
<p>However, many of these workers, particularly those concentrated in relatively small workplaces in the private sector, simply can’t find a union willing to organize them. Organizing small workplaces is generally cost-prohibitive for unions and rarely results in broader bargaining power for workers in a particular sector.</p>
<p>Union supply problems explain why we’re <a href="https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410013201">more likely</a> to see unions in large workplaces with more than 500 employees than in smaller workplaces with fewer than 20 employees. </p>
<figure class="align-center ">
<img alt="Striking workers hold signs as one speaks into a megaphone." src="https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C2995%2C2124&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=431&fit=crop&dpr=1 600w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=431&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=431&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=542&fit=crop&dpr=1 754w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=542&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/414611/original/file-20210804-17-mufbei.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=542&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Swissport employees protest outside Pierre Elliott Trudeau Airport in Montréal in December 2019. About 108 workers who are responsible for refuelling planes walked off the job.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Graham Hughes</span></span>
</figcaption>
</figure>
<p>The lack of union supply, labour relations power dynamics and the union avoidance strategies of employers all work together to dissuade workers from exercising their right to unionize. </p>
<p>This outcome isn’t accidental. It’s <a href="https://irpp.org/research-studies/can-labour-relations-reform-reduce-wage-inequality/">no coincidence</a> that the rate of unionization has fallen in conjunction with the passage of anti-union labour law reforms in most provinces. Those reforms have made it more difficult for workers to exercise their legal right to unionize and easier for employers to interfere in union-organizing campaigns. </p>
<h2>What’s ahead?</h2>
<p>Governments could certainly change labour laws to facilitate unionization and crack down on employers engaging in union avoidance activities. </p>
<p>Many of the proposals contained in the former Ontario Liberal government’s now shelved <a href="https://www.ontario.ca/document/changing-workplaces-review-final-report">Changing Workplaces Review</a> could provide a road map for offering workers the necessary tools to exercise their rights more meaningfully, including a framework for broader based bargaining that would help workers in small workplaces. </p>
<p>Given growing levels of social and economic inequality in the wake of the COVID-19 pandemic, the need to facilitate unionization is more urgent than ever.</p><img src="https://counter.theconversation.com/content/164475/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephanie Ross receives funding from the Social Sciences and Humanities Research Council.</span></em></p><p class="fine-print"><em><span>Larry Savage receives funding from the Social Sciences and Humanities Research Council.</span></em></p>Wanting a union and securing a union are two very different things. That’s because there are enduring obstacles to unionization that make it incredibly difficult for workers to unionize.Stephanie Ross, Associate Professor and Director, School of Labour Studies, McMaster UniversityLarry Savage, Professor, Labour Studies, Brock UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1518932020-12-15T13:21:41Z2020-12-15T13:21:41ZWhat vaccine distribution planners can learn from Amazon and Walmart<figure><img src="https://images.theconversation.com/files/374902/original/file-20201214-21-g98p3l.jpg?ixlib=rb-1.1.0&rect=117%2C100%2C5467%2C3628&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Efficient shipping and storage could prevent a lot of wasted vaccines. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/VirusOutbreakPfizerVaccine/ce919919df354686beff759c9d0f522b/photo?Query=vaccine%20AND%20truck&mediaType=photo&sortBy=&dateRange=Anytime&totalCount=48&currentItemNo=6">AP Photo/Morry Gash, Pool</a></span></figcaption></figure><p>The initial rollout of Pfizer’s COVID-19 vaccine has begun, and <a href="https://www.nytimes.com/live/2020/12/14/world/covid-19-coronavirus/america-begins-its-most-ambitious-vaccination-campaign">vaccines are shipping</a> across the U.S. Demand for COVID-19 vaccines will <a href="https://www.nytimes.com/2020/11/17/health/coronavirus-vaccine-operation-warp-speed.html">outpace supply</a> for the foreseeable future. Yet experts have warned that a substantial proportion of these highly perishable vaccines <a href="https://www.politico.com/amp/news/2020/11/22/scarce-covid-vaccine-waste-438928">could go to waste</a> if they are not being used before they expire. </p>
<p>With such short supplies and high demand, worrying about waste may sound paradoxical, but is actually a predictable result of two well-known medical distribution challenges: <a href="https://hub.jhu.edu/2020/12/04/tinglong-dai-vaccine-distribution-logistics/">complicated storage requirements</a> and <a href="https://www.bloomberglaw.com/product/health/document/XT3U3Q4000000">variability in demand</a>.</p>
<p>We are two supply-chain experts who have studied <a href="https://dx.doi.org/10.2139/ssrn.2178157">vaccine purchasing</a> and <a href="https://www.bloomberglaw.com/product/health/document/X5TJQ4LG000000">distribution</a>. Drawing from our decadeslong research into <a href="https://scholar.google.com/citations?user=Kk-QbksAAAAJ&hl=en">supply-chain management</a> and <a href="https://scholar.google.com/citations?user=cpd3_bYAAAAJ&hl=en">health care operations</a>, we believe two supply-chain ideas practiced by Amazon and Walmart can help reduce waste and minimize shortages of COVID-19 vaccines. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/374905/original/file-20201214-16-15h74ac.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two pharmacists pushing a cart with a box of Pfizer vaccines." src="https://images.theconversation.com/files/374905/original/file-20201214-16-15h74ac.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/374905/original/file-20201214-16-15h74ac.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/374905/original/file-20201214-16-15h74ac.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/374905/original/file-20201214-16-15h74ac.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/374905/original/file-20201214-16-15h74ac.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/374905/original/file-20201214-16-15h74ac.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/374905/original/file-20201214-16-15h74ac.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">By supplying vaccines when needed, fulfillment centers could help deal with spikes and slumps in demand.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/VirusOutbreakPfizerVaccineRhodeIsland/27922a209cf141e8b78a72ad19cc7b7f/photo?Query=vaccine%20storage%20freezer&mediaType=photo&sortBy=&dateRange=Anytime&totalCount=8&currentItemNo=3">AP Photo/David Goldman</a></span>
</figcaption>
</figure>
<h2>Fulfillment centers solve demand variability</h2>
<p>For a given county, it is reasonable to expect demand for COVID-19 vaccines to be <a href="https://www.wsj.com/articles/pfizer-sales-fall-as-company-races-toward-covid-19-vaccine-11595936314">relatively stable</a>. But forecasting demand at individual vaccination sites within a county on a weekly or daily basis is going to be challenging. People might miss or skip appointments for a variety of reasons, and <a href="https://www.scientificamerican.com/article/the-covid-cold-chain-how-a-vaccine-will-get-to-you/">few hospitals</a> have the ability to share real-time usage and inventory information with public health authorities. Any time there is a mismatch between supply and demand, there is waste: Doses could spoil if they were already defrosted, or be sitting unused in freezers at one hospital while another hospital nearby is running short.</p>
<p>Fast fulfillment of uncertain demand is not unique to vaccine distribution. Amazon faces highly volatile demand for millions of products and yet is able to offer same-day and one-day delivery to <a href="https://www.cnbc.com/2019/05/05/amazon-can-already-ship-to-72percent-of-us-population-in-a-day-map-shows.html">72% of the U.S. population</a>. Its secret lies in <a href="https://www.logiwa.com/blog/amazon-inventory-management-system">regional fulfillment centers</a> that pool inventory to meet demand across large regions. </p>
<p>Instead of shipping vaccines directly to hospitals and pharmacies, states could set up regional “fulfillment centers” in different counties with pooled inventory – much like Amazon’s. These fulfillment centers can restock vaccination sites on demand on a daily or weekly basis as needed. By using this just-in-time distribution strategy, supply could better match demand at specific sites and reduce potential waste of vaccines.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/374904/original/file-20201214-24-1ppmkdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two workers removing a case of vaccines from an ultracold freezer showing a temperature of minus 69 degrees Celsius" src="https://images.theconversation.com/files/374904/original/file-20201214-24-1ppmkdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/374904/original/file-20201214-24-1ppmkdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=376&fit=crop&dpr=1 600w, https://images.theconversation.com/files/374904/original/file-20201214-24-1ppmkdc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=376&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/374904/original/file-20201214-24-1ppmkdc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=376&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/374904/original/file-20201214-24-1ppmkdc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=472&fit=crop&dpr=1 754w, https://images.theconversation.com/files/374904/original/file-20201214-24-1ppmkdc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=472&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/374904/original/file-20201214-24-1ppmkdc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=472&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ultracold storage requirements are a challenge for many places.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/APTOPIXVirusOutbreakPfizerVaccine/d42fdc0f34ec46caaf29b7597146d659/photo?Query=vaccine%20AND%20freezer&mediaType=photo&sortBy=&dateRange=Anytime&totalCount=35&currentItemNo=3">AP Photo/Morry Gash, Pool</a></span>
</figcaption>
</figure>
<h2>Getting vaccines to where they are needed</h2>
<p>Regional fulfillment centers can help alleviate waste from fluctuating demand at different local sites, but you still need to be able to get vaccines to fulfillment centers. The faster this happens – and the less storage needed along the way – the less possibility for wasting vaccines.</p>
<p>Pfizer’s vaccine has to be kept at minus 70 degrees Celsius (minus 94 degrees Fahrenheit) for long-term storage. This requires expensive, ultralow-temperature freezers that have quickly <a href="https://www.reuters.com/article/us-health-coronavirus-freezers-focus-idINKBN27T2S6">become scarce</a> as countries and states race to build their vaccine logistics infrastructure. Moderna’s vaccine requires only regular freezers, but some rural areas in the U.S. and many developing countries <a href="https://theconversation.com/keeping-coronavirus-vaccines-at-subzero-temperatures-during-distribution-will-be-hard-but-likely-key-to-ending-pandemic-146071">lack cold-chain infrastructure</a>. </p>
<p>One way to minimize storage needs is to use an approach called cross-docking. Walmart, sometimes called “<a href="https://www.ame.org/sites/default/files/target_articles/04-20-3-Crossdocking.pdf">the king of cross-docking</a>,” popularized this idea that all but does away with excess storage requirements. </p>
<p>Instead of taking deliveries from incoming trucks to intermediate national or state-level warehouses, and then from warehouses to outgoing trucks, cross-docking skips the storage step. You can simply move goods across a loading dock directly from the trucks that came from airports or vaccine manufacturers straight to the outgoing trucks that are headed to various regional fulfillment centers.</p>
<p>Applying the cross-docking idea to vaccine distribution would greatly reduce the need for cold storage by getting rid of the need for freezers at intermediate warehouses. This would be especially beneficial to rural areas and developing countries.</p>
<p>To be certain, cross-docking requires meticulous planning and coordination from vaccine manufacturers, distributors, health departments, ground transportation companies, health care providers and patients, but it is doable. Walmart has built <a href="http://www.scdigest.com/ASSETS/ON_TARGET/12-07-27-1.php">one of the most efficient</a> supply chains on earth using this very idea.</p>
<h2>A smooth chain from manufacturer to hospital</h2>
<p>U.S. health authorities could set up a system that uses cross-docking and freezer trucks to first deliver the vaccines from airports or manufacturers to multiple regional fulfillment centers while minimizing the need for intermediary storage. Pfizer’s vaccine is shipped in packages containing a minimum of <a href="https://hub.jhu.edu/2020/12/04/tinglong-dai-vaccine-distribution-logistics/">975 doses</a>. Once taken out of the the freezer and put in a refrigerator, each vaccine can last <a href="https://www.fda.gov/media/144413/download">no more than five days</a>. But not every vaccination site, especially in rural areas, can give 975 doses within five days. At the fulfillment centers, the vaccines would be split up into smaller packages and moved into vehicles that distribute these defrosted doses in small batches to local vaccination sites for just-in-time <a href="https://news.sky.com/story/covid-19-who-will-get-the-pfizer-biontech-vaccine-and-when-12150269">immediate use</a>.</p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>Large retailers like Amazon and Walmart have developed time-tested supply-chain tools that public health authorities could learn from. Designing effective COVID-19 vaccine supply chains could help vaccinate the population efficiently and smoothly with less waste.</p><img src="https://counter.theconversation.com/content/151893/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>COVID-19 vaccines have very specific storage requirements that make shipping a difficult task. Two ideas – fulfillment centers and cross-docking – could help overcome some distribution challenges.Tinglong Dai, Associate Professor of Operations Management & Business Analytics, Johns Hopkins Carey Business School, Johns Hopkins University School of NursingChristopher S. Tang, Distinguished Professor and Edward W. Carter Chair in Business Administration., University of California, Los AngelesLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1436672020-12-02T18:30:00Z2020-12-02T18:30:00ZThe U.S. takes aim at Facebook — here’s why the big tech giants must be reined in<figure><img src="https://images.theconversation.com/files/371993/original/file-20201130-17-1j2jep3.jpg?ixlib=rb-1.1.0&rect=0%2C348%2C6128%2C3586&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Big tech giants have become not just omnipresent but omnipowerful. Will their might be reined in in 2021?</span> <span class="attribution"><span class="source">(AP Photo/Ng Han Guan)</span></span></figcaption></figure><p>The COVID-19 pandemic has made it clearer than ever that we are at risk of losing <a href="http://www.oecd.org/coronavirus/policy-responses/social-economy-and-the-covid-19-crisis-current-and-future-roles-f904b89f/">control of our economies</a>.</p>
<p>Our institutions have increasingly struggled to meet the challenges of economic development before the crisis, and yet throughout the pandemic we’ve seen surging <a href="https://www.barrons.com/articles/are-big-tech-stocks-in-a-bubble-not-according-to-this-investment-house-51602738023">stock market valuations of tech giants</a> — including staggering <a href="https://www.vox.com/recode/2019/5/2/18522927/ceo-pay-ratio-tech-employee-salary-2018">CEO salaries</a> — the inability of anti-trust regulators, particularly in the United States, to effectively <a href="https://review.chicagobooth.edu/economics/2019/article/does-america-have-antitrust-problem">regulate markets</a> and the rise of <a href="https://www.scmp.com/magazines/style/news-trends/article/3020895/tencent-xiaomi-7-chinese-tech-giants-are-poised-be">China’s tech companies</a>.</p>
<p>Tech giants are not just surviving the pandemic; they’re thriving.</p>
<h2>The superstar economy</h2>
<p>What’s known as <a href="https://www.jstor.org/stable/1803469?seq=1#metadata_info_tab_contents">the superstar economy</a> is one with a few hyper-productive, gigantic and highly profitable companies. </p>
<p>Superstar firms such as Walmart, Amazon or Facebook use new technologies to redefine markets, and benefit from <a href="https://www.forbes.com/sites/forbescoachescouncil/2018/01/02/how-to-harness-the-power-of-network-effects/">what are known as network effects</a> — simply put, the value of a product is enhanced the more people use it. Facebook is an example — people are more likely to join Facebook if their friends and loved ones are on it.</p>
<p>Initially, superstar companies bring new ways of delivering value to customers, but as they grow, they become powerful monopolies. <a href="https://ir.law.fsu.edu/cgi/viewcontent.cgi?article=1489&context=articles">Our institutions have struggled with how to deal with these relatively new firms</a> and, for example, have allowed many mergers and acquisitions that eroded competition in their respective markets. Prominent examples include <a href="https://theconversation.com/why-the-eu-should-dismantle-facebook-97035">the acquisition of Instagram and WhatsApp by Facebook</a>.</p>
<p>The U.S., finally, appears to be lowering the boom on Facebook, <a href="https://www.usatoday.com/story/tech/2020/12/08/facebook-antitrust-lawsuits-instagram-whatsapp-mark-zuckerberg/6502309002/">filing antitrust lawsuits on behalf of 46 states, Guam and the District of Columbia</a> over its takeover of Instagram and WhatsApp.</p>
<p>Superstar firms have also contributed to the shift in <a href="https://doi.org/10.1016/j.ecosys.2013.04.001">wealth distribution from labour to capital</a>. Wealth was once commonly built through labour, rather than via capital that is often inherited or otherwise privileged.</p>
<p>Many superstar firms also have the <a href="https://www.businessinsider.com/25-giant-companies-that-earn-more-than-entire-countries-2018-7">balance sheets of mid-sized economies</a> and hold more information about us than any country. Take Facebook. <a href="https://www.nytimes.com/2015/01/20/science/facebook-knows-you-better-than-anyone-else.html">Mark Zuckerberg probably knows more about you than your government</a>. However, you have no way of finding out because <a href="https://www.wired.com/insights/2014/02/owns-data/">data ownership</a> is at best a complicated issue, and retaining your data would require you to have next to no online footprint.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/371997/original/file-20201130-21-v9y810.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371997/original/file-20201130-21-v9y810.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371997/original/file-20201130-21-v9y810.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371997/original/file-20201130-21-v9y810.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371997/original/file-20201130-21-v9y810.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371997/original/file-20201130-21-v9y810.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371997/original/file-20201130-21-v9y810.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Facebook CEO Mark Zuckerberg appears on a screen as he speaks remotely during a hearing before the Senate Commerce Committee on Capitol Hill in October 2020 about content moderation leading up to the U.S. presidential election.</span>
<span class="attribution"><span class="source">(Michael Reynolds/Pool via AP)</span></span>
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</figure>
<p>That citizens don’t have access to data about themselves is problematic. Clearly, the only person who should own your data is you. European data privacy laws are about to become <a href="https://www.economist.com/business/2020/10/07/google-antitrust-and-how-best-to-regulate-big-tech">even stricter</a>, but in North America, the erosion began in the aftermath of the Sept. 11, 2001, terrorist attacks that resulted in laws that dramatically eroded our privacy. Those laws have provided firms with the right to use the abundant data they collect. </p>
<p>Google is an example. One of the reasons Google is the gold standard of search engines is that it uses advanced machine learning algorithms. These algorithms use our data to learn what we want to see when we’re online.</p>
<p><a href="https://hbr.org/2020/01/when-data-creates-competitive-advantage">Any successful competitor to Google would need to outperform years of learning advantage</a>. That makes competition at best <a href="https://www.ft.com/content/fd311801-e863-41fe-82cf-3d98c4c47e26">very challenging</a>. </p>
<h2>What to do?</h2>
<p>Primarily, we have seen two attempts to address the sheer might of tech giants and their lack of competitors.</p>
<p>In China, <a href="https://www.bloomberg.com/opinion/articles/2018-04-12/china-is-nationalizing-its-tech-sector">superstar firms have been largely nationalized</a>. The state is increasingly involved in the most powerful companies in the country. <a href="https://www.npr.org/2020/11/03/930799521/regulators-squash-giant-ant-ipo">Chinese regulators recently quashed the initial public offering of a financial company, Ant Group, in a high-profile example of government involvement</a>. </p>
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Read more:
<a href="https://theconversation.com/ant-group-is-holding-the-biggest-ipo-of-all-time-heres-what-it-is-147403">Ant Group is holding the biggest IPO of all time – here's what it is</a>
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<p>In such a regime, <a href="https://www.wired.co.uk/article/china-social-credit-system-explained">the state is set up to have unlimited access to your data</a>, so the principles upon which western democracies were built do not apply. </p>
<p>Second, in the western world, we traditionally address issues of market domination with antitrust regulations. Antitrust laws have started to hit the superstar economy hard in Europe. Google alone had to pay <a href="https://www.cnn.com/2019/03/20/tech/google-eu-antitrust/index.html">fines of US$9.3 billion</a> in the last three years. </p>
<figure class="align-center ">
<img alt="The Google logo on a glass building with trees in front." src="https://images.theconversation.com/files/371998/original/file-20201130-15-1fl41sf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371998/original/file-20201130-15-1fl41sf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=411&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371998/original/file-20201130-15-1fl41sf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=411&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371998/original/file-20201130-15-1fl41sf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=411&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371998/original/file-20201130-15-1fl41sf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=517&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371998/original/file-20201130-15-1fl41sf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=517&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371998/original/file-20201130-15-1fl41sf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=517&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Google’s headquarters in Mountain View, Calif.</span>
<span class="attribution"><span class="source">(AP Photo/Marcio Jose Sanchez)</span></span>
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</figure>
<p>However, antitrust measures have so far not been very effective given there’s little room for action — it’s either none at all or breaking up companies, which authorities are often hesitant to do. </p>
<p>Examples of such limited success from the past are <a href="https://www.latimes.com/archives/la-xpm-1992-12-30-me-2389-story.html">Standard Oil and, later, AT&T</a>. Standard Oil served America as a monopoly before it was broken up into 34 smaller companies in 1911. Many of these companies are known today under the names Chevron, ExxonMobil, BP and Marathon. Decades later, AT&T was also broken apart into seven smaller, regional companies.</p>
<p>The west also seems ill-equipped to regulate new markets that have emerged outside the traditional boundaries of an industry, including the highly digitized sectors that were fuelled by the growth of the internet over the past few decades. </p>
<h2>New ideas needed</h2>
<p>Antitrust regulations for tech companies in the post-pandemic era need to change. Restricting networked companies to expand beyond their core business, and preventing mergers and acquisitions that inhibit the self-regulating character of markets, could increase the competitive forces in the market. </p>
<p>For example, Amazon as a platform for connecting buyers and sellers has transformed how we buy things. However, there is an obvious conflict of interest and a threat to competition when Amazon offers their own products on their own platform. Microsoft, as a provider of the most popular operating system for computers in the world, is a threat to competitors by offering its own browser.</p>
<figure class="align-center ">
<img alt="A woman gestures while speaking in front of an Amazon sign." src="https://images.theconversation.com/files/371990/original/file-20201130-17-ldangz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/371990/original/file-20201130-17-ldangz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=366&fit=crop&dpr=1 600w, https://images.theconversation.com/files/371990/original/file-20201130-17-ldangz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=366&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/371990/original/file-20201130-17-ldangz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=366&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/371990/original/file-20201130-17-ldangz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=460&fit=crop&dpr=1 754w, https://images.theconversation.com/files/371990/original/file-20201130-17-ldangz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=460&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/371990/original/file-20201130-17-ldangz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=460&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Margrethe Vestager, vice-president of the European Executive, speaks during a news conference regarding an antitrust case with Amazon at EU headquarters in Brussels on Nov. 10, 2020. Amazon is accused of using data to gain an unfair advantage over merchants using its platform.</span>
<span class="attribution"><span class="source">(Olivier Hoslet, AP)</span></span>
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<p>There is no harm in restricting superstar firms to their core businesses, but a lot of harm when we don’t.</p>
<p>Regulators need to better understand the innovative forces in industries and markets to prevent anti-competitive behaviour rather than looking at traditional measures like market share. More competitive markets would offer better outcomes for consumers. </p>
<p>Better antitrust measures also require applying national data security laws. In practice, this would mean that all online platforms need to fulfil the national regulations in the markets where they’re doing business as opposed to only in their home countries. These ideas are currently being advanced in Europe and will likely be a game-changer for tech giants.</p>
<p>A localized market approach could also reduce the effect of data breaches. Competition would become healthier as well, because superstar firms couldn’t impose the rules of the game in the same way anymore. </p>
<p>We must better define the role of superstars in our economies and decide whether it’s wise to readjust our market principles to accommodate tech giants, or whether we should restrict tech giants to adhere to our market principles. </p>
<p>Capital-rich investors will certainly enjoy reaping the benefits from accommodating the Googles and Amazons of the world but the average customer likely won’t.</p><img src="https://counter.theconversation.com/content/143667/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Felix Arndt does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Tech giants are not just surviving the pandemic; they’re thriving. In 2021 and in the post-pandemic era, anti-trust regulations in tech must be revamped.Felix Arndt, John F. Wood Chair in Entrepreneurship, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1465662020-09-22T04:23:36Z2020-09-22T04:23:36ZTrump’s TikTok deal explained: who is Oracle? Why Walmart? And what does it mean for our data?<figure><img src="https://images.theconversation.com/files/359205/original/file-20200921-14-w06chf.jpg?ixlib=rb-1.1.0&rect=7%2C22%2C5102%2C3011&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Plot twists in the TikTok saga continue to emerge daily, with a proposed deal to secure the future of the video sharing platform in the United States now in doubt. </p>
<p>Under the deal — which US President Donald Trump <a href="https://www.theverge.com/2020/9/19/21437850/president-trump-approves-oracle-tiktok-partnership-bytedance-china-ban">initially approved</a> but now <a href="https://www.theage.com.au/world/north-america/oracle-deal-for-us-tiktok-now-in-doubt-after-trump-china-remarks-20200922-p55xvy.html">may not</a> — US computer tech firm Oracle and retailer Walmart proposed a joint venture called TikTok Global, which would see customer data move to US-controlled infrastructure.</p>
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<p>This venture would have allowed TikTok to continue operating in the US. Trump had earlier <a href="https://www.theverge.com/2020/9/20/21447702/tiktok-wechat-avoid-ban-china-trump-apps">ordered</a> TikTok to be <a href="https://arstechnica.com/tech-policy/2020/09/tiktok-wechat-to-be-pulled-from-us-app-stores-as-of-september-20/">removed from mobile app stores</a> but enforcement of the order could be delayed if the Oracle-Walmart deal goes ahead.</p>
<p>Questions remain: what difference will this deal (if approved) make to the TikTok service; how will it affect the security concerns for governments (and users) in the US and Australia; and is this just political posturing with the US elections looming?</p>
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Read more:
<a href="https://theconversation.com/the-us-has-lots-to-lose-and-little-to-gain-by-banning-tiktok-and-wechat-144478">The US has lots to lose and little to gain by banning TikTok and WeChat</a>
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<h2>The Oracle-Walmart deal</h2>
<p>This deal would see Oracle and Walmart take around 20% of TikTok Global, with ByteDance (the Beijing-based owner of TikTok) retaining 80%.</p>
<p>News reports suggest Walmart and Oracle may <a href="https://finance.yahoo.com/news/walmart-hits-a-grand-slam-with-its-tik-tok-deal-with-oracle-110306137.html">pay a combined US$12 billion</a> for their stake in TikTok Global.</p>
<p>Trump has <a href="https://edition.cnn.com/2020/09/20/business/trump-education-fund/index.html">said</a> he wants US$5 billion from companies creating TikTok Global to go into an education fund to teach American children “the real history of our country”.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1308104703209869313"}"></div></p>
<p>ByteDance had earlier this month <a href="https://www.abc.net.au/news/2020-09-14/tiktok-rejects-microsoft-bid-clearing-path-for-oracle/12661984">rejected a plan</a> by Microsoft to buy the US arm of TikTok, which cleared the way for the Oracle deal. Oracle’s involvement was likely influenced by a <a href="https://www.oracle.com/corporate/pressrelease/zoom-selects-oracle-to-support-growth-042820.html">recent decision by video meeting software firm Zoom to use Oracle cloud infrastructure</a>. Oracle’s surprise win in that deal over more familiar names such as Amazon Web Services was a public relations boon for Oracle.</p>
<p>Walmart was an unexpected contender for the TikTok Global partnership, but it makes sense; access to the TikTok user base opens <a href="https://finance.yahoo.com/news/walmart-hits-a-grand-slam-with-its-tik-tok-deal-with-oracle-110306137.html">significant marketing opportunities</a> for Walmart to benefit from a large, younger audience.</p>
<h2>What does this mean for TikTok users?</h2>
<p>If the deal goes ahead — and that is far from certain — most users will not notice any difference. TikTok users will still be able to make viral videos and confuse non-TikTok users. </p>
<p>As TikTok already <a href="https://9now.nine.com.au/today/tiktok-privacy-company-insists-australian-users-their-data-is-safe/87b32c68-aa8d-4417-ae74-88fd06beb1e2">stores data in the US or Singapore</a>, the move to Oracle-provided infrastructure is unlikely to have any tangible impact on users.</p>
<p>The (claimed) <a href="https://www.vox.com/recode/2020/8/11/21363092/why-is-tiktok-national-security-threat-wechat-trump-ban">national security concerns</a> will likely remain – if ByteDance retains a significant share in TikTok Global, there will still be US concerns over Chinese government influence.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/trumps-attempts-to-ban-tiktok-and-other-chinese-tech-undermine-global-democracy-144144">Trump's attempts to ban TikTok and other Chinese tech undermine global democracy</a>
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<p>The potential for the Chinese Communist Party to demand access to user data through its <a href="https://www.lawfareblog.com/beijings-new-national-intelligence-law-defense-offense">National Intelligence Law</a> will still be of concern, as the law applies to any Chinese-owned company (and being the majority stakeholder may be enough to enable such powers to be applied). </p>
<p>This hasn’t been put to the test yet, but in <a href="https://www.cnbc.com/2019/03/05/huawei-would-have-to-give-data-to-china-government-if-asked-experts.html">a similar discussion relating to Huawei 5G technology</a>, China law expert and New York University professor Jerome Cohen said there was “no way Huawei can resist any order from the [People’s Republic of China] government or the Chinese Communist Party to do its bidding in any context, commercial or otherwise.”</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/359226/original/file-20200922-16-m2wzll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A young man gestures at a phone." src="https://images.theconversation.com/files/359226/original/file-20200922-16-m2wzll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/359226/original/file-20200922-16-m2wzll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/359226/original/file-20200922-16-m2wzll.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/359226/original/file-20200922-16-m2wzll.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/359226/original/file-20200922-16-m2wzll.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/359226/original/file-20200922-16-m2wzll.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/359226/original/file-20200922-16-m2wzll.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">TikTok’s main user base tends to be younger people.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<p>Of course the same is true for any US-owned organisation, thanks to the <a href="https://www.congress.gov/bill/115th-congress/house-bill/4943">Clarifying Lawful Overseas Use of Data (CLOUD) Act</a>, which gives the US government very similar powers. </p>
<p>So even if ByteDance sold the entire TikTok platform to a US company, Australian users’ data would still be subject to access requests; they’d just be from the US government rather than the Chinese Communist Party.</p>
<p>Nevertheless, Oracle was quick to provide reassurances over data security, with chief executive Safra Cruz <a href="https://www.prnewswire.com/news-releases/oracle-chosen-as-tiktoks-secure-cloud-provider-301134314.html">saying</a> he was “100% confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users, and users throughout the world.”</p>
<p>Setting aside concerns over location and access to user data, the proposed deal would still seem to leave the <a href="https://www.scmp.com/economy/china-economy/article/3101362/tiktoks-algorithm-not-sale-bytedance-tells-us-source">TikTok algorithms in the hands of ByteDance</a>. This may yet cause the deal to fail, and seems to be at odds with Trump’s <a href="https://www.whitehouse.gov/briefings-statements/remarks-president-trump-marine-one-departure-092020/">comment</a> that the deal:</p>
<blockquote>
<p>… will have nothing to do with China. It’ll be totally secure.</p>
</blockquote>
<h2>How much of this is influenced by politics?</h2>
<p>In the lead-up to the November US elections, <a href="https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-protecting-america-chinas-efforts-steal-technology-intellectual-property/">Trump has promoted a narrative that he is the “protector” of Americans</a> against external, particularly Chinese, threats — from coronavirus to Tik Tok. </p>
<p>A <a href="https://www.nytimes.com/2020/09/20/business/economy/court-wechat-ban.html">Californian federal judge</a> has halted Trump’s attempt to limit Chinese social media apps. The fact this happened in a state led by a <a href="https://www.tiktok.com/@cagovernor?source=h5_m">Democrat, Tik-Tok-using governor</a> allows Trump to accuse his rivals of blocking his efforts.</p>
<p>The deal is still up in the air. Trump might have been happy with a win, but whether or not he gets one doesn’t matter. He’s already cast China as a threat, he’s <a href="https://www.wired.co.uk/article/tiktok-china-trump">deflected attention from COVID-19 and focused the discussion on a foreign government</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/359218/original/file-20200922-14-11aeir1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A phone sits against the Oracle brand logo." src="https://images.theconversation.com/files/359218/original/file-20200922-14-11aeir1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/359218/original/file-20200922-14-11aeir1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/359218/original/file-20200922-14-11aeir1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/359218/original/file-20200922-14-11aeir1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/359218/original/file-20200922-14-11aeir1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/359218/original/file-20200922-14-11aeir1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/359218/original/file-20200922-14-11aeir1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Oracle is a US-based multinational computer technology corporation.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>But what does all this mean for Australians? Ultimately, not much.</p>
<p>Australia doesn’t use China as a scapegoat in the way Trump’s America has. And although <a href="https://www.abc.net.au/news/2020-09-03/china-australia-deteriorating-trade-diplomatic-relationship/12618738">relations with China are strained</a>, Australians are more acutely aware of our financial and cultural ties with China. In the US, China’s public influence is niche and diluted. </p>
<p>At the end of the day, though, Trump railing against China is like the father of a teenage girl hating his daughter’s boyfriend. He can make a lot of noise about it, but, in the end, his influence is limited. She’s going to grow up and do whatever she wants.</p><img src="https://counter.theconversation.com/content/146566/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Plot twists in the TikTok saga continue to emerge daily, with a proposed deal to secure its future in the US now in doubt. Here’s what it means for TikTok users — and for geopolitics.Paul Haskell-Dowland, Associate Dean (Computing and Security), Edith Cowan UniversityNathalie Collins, Academic Director (National Programs), Edith Cowan UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1425402020-07-16T12:14:06Z2020-07-16T12:14:06ZBlack Lives Matter, LGBTQ rights, Trump: The risks and rewards of corporate activism<figure><img src="https://images.theconversation.com/files/347698/original/file-20200715-23-11ncdkq.jpeg?ixlib=rb-1.1.0&rect=14%2C315%2C3131%2C1777&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Dozens of companies have recently expressed support for Black Lives Matter. </span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/A-MJ8YGsGQA">Jessica Felicio via unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p><em>The Research Brief is a short take about interesting academic work.</em></p>
<h2>The big idea</h2>
<p>Companies and CEOs are <a href="https://www.cnn.com/2020/07/12/business/strike-for-black-lives-union-wages/index.html">increasingly wading into political issues</a>. <a href="https://doi.org/10.1177/0022242920937000">My latest research</a> suggests that such corporate activism can come with high costs if it doesn’t align with the political values of a company’s customers, employees and local lawmakers — or big gains when it does. </p>
<p>In what we think is the first study to examine how corporate activism affects financial performance, three co-authors and I built a database of decisions by publicly traded companies that took a stand on <a href="https://www.pewresearch.org/wp-content/uploads/sites/4/2014/06/2014-Polarization-Topline-for-Release.pdf">polarizing issues</a> such as LGBTQ rights, abortion, immigration and gun control over a five-year period. We then looked at the relationships between activism and immediate changes in a company’s stock price and subsequent changes in its sales. We found that the impact depended on how well the company’s activism aligned with the political values of the people the company represents. On average, well-aligned activism boosts a stock price by approximately 1% and sales by approximately 10%. Misaligned activism lowered a stock price by over 2% and reduced sales by over 4%. </p>
<p>The impact on stock prices depends on whether investors think the activism will strengthen or weaken long-term relationships with customers, employees and lawmakers — who may retaliate by <a href="https://fortune.com/2018/08/23/delta-ceo-ed-bastian-nra-backlash/">rescinding tax breaks</a> or making other policy changes. We found that companies can avoid or mitigate stock drops when they explain to investors how activism is good for business. </p>
<h2>Why it matters</h2>
<p>Companies and their executives are increasingly moving into political terrain. Recently Amazon, Walmart and other companies <a href="https://theconversation.com/corporate-activism-is-more-than-a-marketing-gimmick-141570">expressed support for Black Lives Matter</a>. <a href="https://www.vox.com/policy-and-politics/2020/7/12/21320954/goya-foods-unanue-boycott-cancel-culture-free-speech">Goya Foods CEO Bob Unanue praised</a> President Donald Trump’s leadership during the pandemic. </p>
<p>This trend began in the 1990s and early 2000s as human rights activists and environmentalists pressured companies to be “responsible” members of society. Today consumers, employees and local citizens are pressuring <a href="https://www.edelman.com/sites/g/files/aatuss191/files/2018-10/2018_Edelman_Earned_Brand_Executive_Summary_Brochure.pdf">companies to take actions that support their own political views</a>. </p>
<p>Currently, nearly <a href="https://assets.kpmg/content/dam/kpmg/pdf/2016/02/kpmg-international-survey-of-corporate-responsibility-reporting-2015.pdf">every major company</a> promotes its efforts to protect the environment and ensure workers’ rights. As <a href="https://hbr.org/2018/01/the-new-ceo-activists">more companies take political positions</a>, our research shows companies may want to ensure its views reflect those of its employees and customers. Unanue’s comments about Trump, for example, drew an immediate backlash and calls for a <a href="https://www.nbcnews.com/think/opinion/goya-ceo-s-trump-comments-led-latinos-call-boycott-goya-ncna1233516">boycott by its largely Latino customer base</a>. This reaction also drew calls for a <a href="https://www.foxbusiness.com/markets/goya-food-sales-trump-controversy">“buycott”</a> of Goya’s products, suggesting companies might also gain new customers even while losing others. </p>
<h2>What still isn’t known</h2>
<p>We are only beginning to understand how corporate activism affects profits, brand perceptions, competitive reactions and – importantly – public attitudes toward the issues at hand. </p>
<p>Future research may evaluate how corporate activism affects a brand’s market position. For example, certain activist brands like <a href="https://www.latimes.com/business/la-fi-nike-kaepernick-20180905-story.html">Nike</a> and <a href="https://www.benjerry.com/whats-new/2019/12/unexpected-activism">Ben & Jerry’s</a> have a reputation for taking political stances. Does having an activist reputation reduce competitive threats? How does it affect the way customers view the brand and its products? </p>
<h2>What other research is being done</h2>
<p>A small but growing field of researchers is examining activism from a variety of perspectives. For example, in the recent “<a href="https://academic.oup.com/jcr/article/45/6/i4/5390577">Future of Brands</a>” conference at Columbia University, scholars presented <a href="https://www8.gsb.columbia.edu/globalbrands/sites/globalbrands/files/DRAFT%20Future_of_Brands_Agenda_as_of_2019_10_15.pdf">work</a> examining how corporate activism shapes consumers’ moral decision making. More broadly, we need <a href="https://doi.org/10.1093/jcr/ucx037">more research</a> to understand how people’s political views shape what they buy.</p>
<p>[<em>Get the best of The Conversation, every weekend.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklybest">Sign up for our weekly newsletter</a>.]</p><img src="https://counter.theconversation.com/content/142540/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joshua T. Beck does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Companies are increasingly taking stands on hot-button political issues from LGBT rights to Black Lives Matter. New research shines light on whether and when it can benefit the bottom line.Joshua T. Beck, Assistant Professor of Marketing, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1404202020-06-10T00:03:53Z2020-06-10T00:03:53ZBy sacking staff and closing stores, big businesses like The Warehouse could hurt their own long-term interests<figure><img src="https://images.theconversation.com/files/340735/original/file-20200609-21226-13p4xb5.jpg?ixlib=rb-1.1.0&rect=22%2C14%2C4925%2C3278&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>To paraphrase Winston Churchill, it is curious to see The Warehouse Group (TWG) not letting a good crisis go to waste. </p>
<p>Despite recently receiving NZ$68 million in government wage subsidies as a result of the COVID-19 lockdown, TWG has <a href="https://www.stuff.co.nz/business/industries/121752684/this-is-going-to-be-a-rough-ride-more-store-closures-likely-as-1080-jobs-hang-in-the-balance-warehouse-group-ceo-says">now proposed</a> store closures and more than 1000 staff layoffs across its Warehouse, Noel Leeming and Warehouse Stationery brands.</p>
<p>The company joins the likes of <a href="https://www.stuff.co.nz/business/industries/121575363/coronavirus-air-new-zealand-making-more-than-1300-staff-redundant-union-says">Air New Zealand</a>, <a href="https://www.rnz.co.nz/news/business/416450/bunnings-to-close-seven-nz-stores-with-145-job-cuts#:%7E:text=Hardware%20and%20DIY%20retailer%20Bunnings,as%20many%20as%20145%20jobs.&text=The%20Australian%2Downed%20business%20said,shops%20were%20no%20longer%20viable.">Bunnings</a> and <a href="https://www.rnz.co.nz/news/business/417066/fletcher-building-to-lay-off-1000-staff-in-new-zealand">Fletcher Building</a> which have announced major cuts and closures.</p>
<p>While it is laudable to see TWG CEO Nick Grayston fronting as spokesperson for the move, it is disappointing to see management-speak alive and well in his explanations – “agile principles” and changes to their “footprint” to “improve productivity” in an “uncertain environment”. </p>
<p>While it lends a kind of credibility to strategic manoeuvring, this type of jargon is often used to detract from the negative impact of business restructuring on people and communities.</p>
<h2>Following in the steps of Walmart</h2>
<p>The Warehouse has an interesting history in New Zealand. <a href="https://www.thewarehousegroup.co.nz/about-us/history">Founded</a> by <a href="https://www.thewarehousegroup.co.nz/about-us/board-directors/sir-stephen-robert-tindall">Sir Stephen Tindall</a> in 1982, it attempted to replicate the business model and operating style of the giant American retailer Walmart. </p>
<p>Much like Walmart’s original <a href="https://www.westkyjournal.com/news.php?viewStory=178">move into smaller towns</a> in the USA, the arrival of The Warehouse and other big box stores <a href="https://theregister.co.nz/2016/06/02/change-heart-keeping-retail-alive-heartland-new-zealand/">demolished</a> the economic viability of numerous family-owned enterprises in New Zealand. This was especially felt in the kinds of small towns where store closures are currently being proposed.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/kindness-doesnt-begin-at-home-jacinda-arderns-support-for-beneficiaries-lags-well-behind-australias-139387">Kindness doesn't begin at home: Jacinda Ardern's support for beneficiaries lags well behind Australia's</a>
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<p>Nevertheless, like its founder, TWG has a <a href="https://www.twgcareers.co.nz/nz/en/purpose-and-values">long history</a> of prioritising people, communities and the environment, reflected in the group’s motto of “helping Kiwis live better every day”.</p>
<p>Indeed, following the introduction of the living wage movement in 2013, then-TWG CEO Mark Powell <a href="https://www.youtube.com/watch?v=cUT209kpm7Q">announced</a> his intention to introduce a “career retailer wage”. This aimed to both pay a living wage and lift the profile of working in retail as a long-term career option. </p>
<p>It wasn’t until late 2019, however, that current Chief Operating Officer Pejman Okhovat <a href="https://www.stuff.co.nz/business/money/115429143/the-warehouse-to-pay-thousands-of-employees-the-living-wage">confirmed</a> the company was acquiescing to union demands for wide-scale adoption of the living wage. </p>
<p>Okhovat said the move recognised the importance of the company’s employees to the success of the brand, and the well-being of communities in which the stores were located. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/340736/original/file-20200609-21201-sy6agd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/340736/original/file-20200609-21201-sy6agd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/340736/original/file-20200609-21201-sy6agd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/340736/original/file-20200609-21201-sy6agd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/340736/original/file-20200609-21201-sy6agd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/340736/original/file-20200609-21201-sy6agd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/340736/original/file-20200609-21201-sy6agd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Warehouse Stationery, part of TWG’s stable of retail brands, is also affected by the store closures and staff cuts.</span>
<span class="attribution"><span class="source">www.shutterstock.com</span></span>
</figcaption>
</figure>
<h2>‘Helping Kiwis live better every day’</h2>
<p>Unfortunately, these fundamental company priorities seem to have been undermined by the latest move by TWG to lay off staff and close some stores at an incredibly challenging time – particularly in centres where there are few other retail options or employment opportunities.</p>
<p>Such a move raises the wider question of the purpose of business and its responsibilities to wider stakeholder groups, not least in times of uncertainty. While CEO Grayston stresses a need for increased productivity and adaptability, in essence the proposed plan undermines the core brand promise of “helping Kiwis live better every day”.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-four-day-working-week-could-be-the-shot-in-the-arm-post-coronavirus-tourism-needs-139388">A four-day working week could be the shot in the arm post-coronavirus tourism needs</a>
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<p>As long ago as 2011, social impact consultant Mark Kramer and Harvard strategy professor Michael Porter described the need for business to adopt <a href="https://hbr.org/2011/01/the-big-idea-creating-shared-value">shared value creation</a> as a key to success. Their proposal followed the fallout from the global financial crisis, and the reputational damage suffered by so many businesses at the time. </p>
<p>By creating shared value a business doesn’t just prioritise the financial outcomes of its operations, but also social outcomes as measures of performance. To do so, managers are required to recognise the broad array of stakeholders that enable their firm’s ongoing success. </p>
<h2>What is the purpose of business anyway?</h2>
<p>It is logical that a firm performs best when its workforce is highly skilled and happy, when the local community is not suffering economic distress, and natural resources are sustainably managed to guarantee reliable supply chains.</p>
<p>Walmart has been extremely successful in the past by adopting a shared value creation approach to its business operations. <a href="https://walmart.org/what-we-do">Initiatives</a> have included modifying product ranges to deliberately include healthier foods in under-served communities; introducing in-store health clinics and low-cost pharmaceuticals; and promoting small businesses owned by women on their e-commerce platform. </p>
<p>None of this is news to TWG. In recent years, <a href="https://www.thewarehousegroup.co.nz/investor-centre/2019-annual-report">TWG’s annual reports</a> have adopted <a href="https://www.thewarehousegroup.co.nz/application/files/3815/6936/2434/AR_2019_p24-39_Integrated_Report-spreads.pdf">integrated reporting</a> that details numerous outcomes beyond the financial, including environmental capital, relationship capital with suppliers and manufacturers, and the human capital present in employees, their knowledge and expertise. </p>
<p>So it’s disconcerting to see TWG pushing ahead with major changes that conflict not only with their own values, but with the broader needs of New Zealand and its local communities at this time. </p>
<p>Shareholder value is obviously important for the ongoing viability of a business. But one has to ask whether retaining a broader focus on overall community well-being might pay better dividends in the long run for this important New Zealand brand.</p><img src="https://counter.theconversation.com/content/140420/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jonathan Baker does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>“Helping Kiwis live better every day” is the Warehouse motto. Now it’s laying off staff and closing stores.Jonathan Baker, Lecturer in Business Strategy, Auckland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1304272020-01-22T17:14:27Z2020-01-22T17:14:27ZCan capitalism solve capitalism’s problems?<figure><img src="https://images.theconversation.com/files/311432/original/file-20200122-117907-966dsh.jpg?ixlib=rb-1.1.0&rect=68%2C73%2C3718%2C2015&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A session at Davos highlighted the consequences of capitalism. </span> <span class="attribution"><span class="source">Fabrice Coffrini/AFP via Getty Images</span></span></figcaption></figure><p>Capitalism is in trouble – at least judging by recent polls. </p>
<p>A <a href="https://www.washingtonpost.com/news/wonk/wp/2016/04/26/a-majority-of-millennials-now-reject-capitalism-poll-shows/">majority of American millennials reject</a> the economic system, while 55% of women age 18 to 54 <a href="https://www.axios.com/axios-hbo-poll-55-percent-women-prefer-socialism-f70bf87e-34fd-4b63-b1f6-2f2b6900f634.html">say they prefer socialism</a>. More Democrats now <a href="https://www.pewresearch.org/fact-tank/2019/06/25/stark-partisan-divisions-in-americans-views-of-socialism-capitalism/">have a positive view of socialism</a> than capitalism. And globally, 56% of respondents to a <a href="https://www.reuters.com/article/us-davos-meeting-trust/capitalism-seen-doing-more-harm-than-good-in-global-survey-idUSKBN1ZJ0CW">new survey agree</a> “capitalism as it exists today does more harm than good in the world.”</p>
<p>One problem interpreting numbers like these is that there are many definitions of capitalism and socialism. More to the point, people seem to be thinking of a specific form of capitalism that deems the sole purpose of companies is to increase stock prices and enrich investors. Known as shareholder capitalism, it’s been the <a href="https://prospect.org/article/when-shareholder-capitalism-came-town">guiding light of American business</a> for more than four decades. That’s what the survey meant by “as it exists today.”</p>
<p>As a <a href="https://www.umass.edu/spp/people/faculty/elizabeth-schmidt">scholar of socially responsible companies</a>, however, I cannot help but notice a <a href="https://ssrn.com/abstract=3406867">shift in corporate behavior in recent years</a>. A new kind of capitalism seems to be emerging, one in which companies value communities, the environment and workers just as much as profits. </p>
<p>The latest evidence: Companies as diverse as alcohol maker <a href="https://www.beveragedaily.com/Article/2020/01/09/AB-InBev-to-brew-all-beers-with-renewable-electricity-in-Europe">AB InBev</a>, airline <a href="https://www.businesswire.com/news/home/20200106005549/en/JetBlue-Prepares-Business-New-Climate-Reality">JetBlue</a> and money manager <a href="https://www.wsj.com/articles/blackrock-joins-worlds-largest-investor-group-on-climate-change-11578594349">BlackRock</a> have all in recent weeks made new commitments to pursue more sustainable business practices. </p>
<h2>The purpose of business</h2>
<p>Nearly 50 years ago, the economist <a href="https://graphics8.nytimes.com/packages/pdf/business/miltonfriedman1970.pdf">Milton Friedman</a> proclaimed that the sole purpose of a business is “to use its resources and engage in activities designed to increase its profits.”</p>
<p>Within a decade, Friedman’s claim <a href="http://rooseveltinstitute.org/wp-content/uploads/2018/06/The-Shareholder-Myth.pdf">became accepted wisdom</a> in corporate boardrooms. The era of “shareholder primacy capitalism” had begun.</p>
<p>One result has been <a href="https://forecast-chart.com/historical-sp-500.html">remarkable growth in the stock market</a>. But critics argue companies and the “shareholder value theory” <a href="https://hbr.org/2017/05/managing-for-the-long-term#the-error-at-the-heart-of-corporate-leadership">are also complicit</a> in exacerbating many <a href="https://www.washingtonpost.com/us-policy/2019/02/25/race-shareholder-profits-has-left-workers-dust-according-new-research/">economic</a>, <a href="https://www.theatlantic.com/business/archive/2012/04/how-investing-turns-nice-people-into-psychopaths/255426/">social</a> and <a href="https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change">environmental</a> problems, such as <a href="https://www.washingtonpost.com/posteverything/wp/2017/03/02/perspective-on-the-stock-market-rally-80-of-stock-value-held-by-top-10/">income inequality</a> and <a href="https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change">climate change</a>.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=804&fit=crop&dpr=1 600w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=804&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=804&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1010&fit=crop&dpr=1 754w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1010&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/285409/original/file-20190723-110187-1ag0vc1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1010&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Milton Friedman won prizes for his research on consumption analysis and monetary history.</span>
<span class="attribution"><a class="source" href="https://en.wikipedia.org/wiki/Milton_Friedman#/media/File:Milton_Friedman_1976.jpg">Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>They also note that putting profits first actually <a href="https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?referer=http%253A%252F%252Fwww.bing.com%252Fsearch%253Fq%253Dlynn%2520stout%2520toxic&amp=&go=Search&amp=&qs=n&amp=&form=QBRE&amp=&sp=-1&amp=&pq=lynn+stout+toxic&amp=&sc=1-16&amp=&sk=&amp=&cvid=79A92B3E536049C493D0683540E953E5&amp=&httpsredir=1&amp=&article=1031&amp=&context=penn_law_review&amp=&sei-redir=1#search=%22lynn%20stout%20toxic%22">harms shareholders</a> in the long run by encouraging managers to take actions that may eventually reduce earnings.</p>
<h2>The rebellion</h2>
<p>Many consumers, workers and socially conscious investors have also noticed these shortcomings and increased pressure on corporations to change.</p>
<p>For starters, more Americans no longer find it acceptable for companies to exclusively seek profits. A <a href="http://www.conecomm.com/research-blog/2017-csr-study">2017 poll</a> found that 78% of U.S. consumers want businesses to pursue social justice issues, while 76% said they would refuse to buy a product if the business supported an issue contrary to their beliefs. Almost half the respondents said they had already boycotted a product for that reason.</p>
<p>Workers increasingly expect their employers to share their values. A <a href="https://sustainablebrands.com/read/organizational-change/3-4-of-millennials-would-take-a-pay-cut-to-work-for-a-socially-responsible-company">2016 study</a> found that most Americans – particularly millennials – consider a company’s social and environmental commitments when deciding where to work. Most would also be willing to take a pay cut in order to work for a “responsible” company – and are demanding their current employers behave that way.</p>
<p>For example, workers at online furniture company Wayfair <a href="https://www.forbes.com/sites/rakeenmabud/2019/07/12/two-lessons-from-the-wayfair-walkout/#71c1ddc33a88">recently walked out</a> when they learned it had sent beds to detention centers at the U.S.-Mexico border. More than 8,100 Amazon employees signed an open letter supporting a <a href="https://medium.com/@amazonemployeesclimatejustice/public-letter-to-jeff-bezos-and-the-amazon-board-of-directors-82a8405f5e38">shareholder resolution</a> urging the retailer to do more to address climate change. </p>
<p>Finally, investors are <a href="https://hbr.org/2019/05/the-investor-revolution">becoming more socially aware</a> and putting more of their money behind businesses that behave in sustainable and responsive ways. At the beginning of 2018, portfolio managers <a href="https://www.ussif.org/files/Trends/Trends%202018%20executive%20summary%20FINAL.pdf">held US$11.6 trillion</a> in U.S. assets using environmental, social and governance criteria to guide their investments, up from <a href="https://www.ussif.org/files/Publications/10_Trends_Exec_Summary.pdf">$2.5 trillion in 2010</a>. </p>
<p>Laurence Fink, founder and CEO of BlackRock, the <a href="https://www.bloomberg.com/news/articles/2019-06-13/blackrock-looks-to-five-megatrends-to-expand-etf-business">world’s largest asset manager</a>, <a href="https://www.blackrock.com/corporate/investor-relations/2018-larry-fink-ceo-letter">summed up the growing sentiment</a> when he said in 2018, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”</p>
<h2>The corporate response</h2>
<p>Presumably realizing how important these constituencies are to their bottom lines, businesses are paying attention. </p>
<p><a href="https://www.brookings.edu/blog/future-development/2020/01/21/stakeholder-capitalism-arrives-at-davos/">Stakeholder capitalism</a> is this year’s theme at Davos, the global gathering of the world’s elite in the Alps. And last year, the leaders at some of the world’s largest companies said that <a href="https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans">they are ditching</a> shareholder-first capitalism and instead embracing a corporate purpose that seeks to serve all constituents. The sentiment is hardly isolated. </p>
<p>Dick’s Sporting Goods, Kroger, Walmart and L.L. Bean, for example, responded to growing concerns over mass shootings by <a href="https://www.triplepundit.com/story/2019/parkland-year-2-gun-safety-and-business-response-gun-violence/82451/">restricting the sale of guns</a>. Procter and Gamble, a major sponsor for U.S. Soccer, expressed support for the quest of the <a href="https://www.tmz.com/2019/07/14/procter-and-gamble-donate-us-womens-national-soccer-team-equal-pay/">women’s team</a> for equal pay and donated $500,000 to help narrow the pay gap with men. </p>
<p>Airlines including American, United and Frontier <a href="https://www.nytimes.com/2018/06/20/us/airlines-transport-immigrant-children.html">refused to knowingly fly children</a> separated from their parents at the border following outrage over the Trump administration’s policy. And even though Amazon shareholders rejected the worker-supported shareholder resolution described above, <a href="https://www.ecowatch.com/amazon-climate-change-resolution-2637862790.html?rebelltitem=3#rebelltitem3">Amazon set stronger goals</a> for reducing its carbon footprint after the resolution was introduced.</p>
<p>These actions have sometimes hurt the bottom line. The decision to restrict gun sales cost Dick’s Sporting Goods <a href="https://www.bloomberg.com/news/articles/2019-03-29/dick-s-dks-ceo-ed-stack-says-gun-shift-cut-sales-by-150m">$150 million</a>. Delta <a href="https://www.marketwatch.com/story/georgia-lawmakers-kill-jet-fuel-tax-break-after-delta-drops-nra-discount-2018-03-01">lost a $50 million tax break</a> in Georgia after severing ties with the NRA. </p>
<p>But these and <a href="https://www.dailysignal.com/2018/08/30/how-louisiana-stood-up-to-the-anti-gun-corporate-elite/">other companies</a> didn’t back down. The CEO of Dick’s Sporting Goods <a href="https://tennesseestar.com/2019/03/30/dicks-sporting-goods-lost-millions-over-anti-gun-policies/">explained</a> that when something is “to the detriment of the public, you have to stand up.”</p>
<p>Companies are also setting tougher social and environmental goals for themselves and then reporting their successes and failures. Tesla, Unilever, Nike and Whole Foods are among nine companies with annual revenues of at least $1 billion that “<a href="https://www.theguardian.com/sustainable-business/2016/jan/02/billion-dollar-companies-sustainability-green-giants-tesla-chipotle-ikea-nike-toyota-whole-foods">have sustainability or social good at their core</a>.” </p>
<p>In 2018, <a href="https://www.ga-institute.com/press-releases/article/flash-report-86-of-sp-500-indexR-companies-publish-sustainability-responsibility-reports-in-20.html">86% of Standard & Poor’s 500 companies</a> reported on their environmental, social and governance performance and achievements, up from less than 20% in 2011. </p>
<p>And companies have found that putting more emphasis on social justice can pay off. Unilever, for example, said in 2017 that its “<a href="https://www.marketingweek.com/unilever-sustainable-brands-growth/">sustainable living” brands</a>, such as Ben & Jerry’s, Dove and Hellmann’s, are growing much faster than its other brands. Companies with the best scores on their sustainability reports <a href="https://www.forbes.com/sites/terrywaghorn/2017/12/04/sustainable-reporting-lessons-from-the-fortune-500/#7a4d9f756564">generally perform better financially</a> than those with lower scores. </p>
<h2>The end of shareholder capitalism?</h2>
<p>Skeptics can be forgiven for believing these corporate “changes” are not real or are simply public relations stunts designed to appeal to a new generation.</p>
<p>Businesses can, of course, say they will be responsible citizens while doing the opposite. Few sustainability reports in the United States are <a href="https://www.cpajournal.com/2017/07/26/current-state-assurance-sustainability-reports/">externally audited</a>, and the companies are asking us to take them at their word.</p>
<p>Even if they are well-meaning, intentions are not enough to create systemic change. A 2017 study showed that many companies with climate change goals actually <a href="https://hbr.org/2017/11/how-bold-corporate-climate-change-goals-deteriorate-over-time">scaled back their ambitions over time</a> as the reality clashed with their lofty goals.</p>
<p>But businesses can’t afford to ignore their customers’ wishes. Nor can they ignore their workers in a tight labor market. And if they disregard socially responsible investors, they risk both <a href="https://hbr.org/2019/05/the-investor-revolution">losing out on important investments</a> and facing <a href="https://www.porticobenefits.org/Overview/ReponsibleInvesting/InvestingForSocialImpact/ClimateChangeResolutions">shareholder resolutions</a> that force change.</p>
<p>The shareholder value doctrine is not dead, but we are beginning to see major cracks in its armor. And as long as investors, customers and employees continue to push for more responsible behavior, you should expect to see those cracks grow. </p>
<p><em>This is an updated version of an <a href="https://theconversation.com/investors-consumers-and-workers-are-changing-capitalism-for-the-better-by-demanding-companies-behave-more-responsibly-119281">article originally published</a> on July 24, 2019.</em></p>
<p>[ <em>Like what you’ve read? Want more?</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=likethis">Sign up for The Conversation’s daily newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/130427/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elizabeth Schmidt does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As capitalism’s image crumbles, many of the world’s biggest companies are trying to give it new life by showing it can mean more than just making money.Elizabeth Schmidt, Professor of Practice, Nonprofit Organizations; Social & Environmental Enterprises, UMass AmherstLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1290662019-12-19T18:57:11Z2019-12-19T18:57:11ZOur addiction to stuff: How Walmart enables us to destroy the planet<figure><img src="https://images.theconversation.com/files/307588/original/file-20191218-11924-71py9t.jpg?ixlib=rb-1.1.0&rect=0%2C16%2C5405%2C3379&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An employee prepares items for a 2019 holiday sale at a Walmart in Las Vegas. </span> <span class="attribution"><span class="source">(AP Photo/John Locher)</span></span></figcaption></figure><p>‘Tis the season when shoppers fill the malls, and UPS and FedEx trucks crowd the roads. </p>
<p>The amount of “stuff” that moves in and out of households during the Christmas season is staggering. According to the business consulting firm Deloitte, <a href="https://www2.deloitte.com/us/en/insights/industry/retail-distribution/holiday-retail-sales-consumer-survey.html">the average American household will spend about US$1,500 during the holiday season.</a> </p>
<p>People will fill their living rooms with boxes, only to discard the packaging — and some gifts — the morning after. Many of us can simply look inside our own closets to see the skeletons of Christmas’ past. </p>
<p>We are addicted to buying stuff during these holidays. </p>
<p>If we are the addicts, then who are the drug dealers? They are the retailers. Retailers “push” their wares, enabling a habit that is destroying the planet and creating mountains of landfill. </p>
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<em>
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Read more:
<a href="https://theconversation.com/tis-the-season-to-redesign-and-reduce-our-waste-88461">’Tis the season to redesign and reduce our waste</a>
</strong>
</em>
</p>
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<p>Many retailers make gestures towards sustainable development. They claim to be reducing their own waste or that of their suppliers, but this is simply putting lipstick on a pig. The real harm to the planet is in the stuff they sell. </p>
<h2>Why retailers won’t change</h2>
<p>The largest company in the world, <a href="https://fortune.com/fortune500/">based on revenues</a>, is Walmart. Its sells US$514 billion of stuff annually. That amount of stuff is staggering. </p>
<p>Walmart claims to be committed to sustainability. <a href="https://www.walmartsustainabilityhub.com/project-gigaton">It just launched Project Gigaton</a>, which will “avoid one billion metric tons (a gigaton) of greenhouse gases from the global value chain by 2030.” This goal is laudable. Walmart seeks to divert waste from its own operations and from its suppliers’ by reducing energy and packaging. </p>
<p>It makes sense for Walmart to work through suppliers. After all, Walmart’s environmental footprint is relatively small. Walmart claims that only 10 per cent of its footprint is from its own stores and facilities; the other 90 per cent is from its suppliers and the suppliers of its suppliers.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/307591/original/file-20191218-11919-19th65s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/307591/original/file-20191218-11919-19th65s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=394&fit=crop&dpr=1 600w, https://images.theconversation.com/files/307591/original/file-20191218-11919-19th65s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=394&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/307591/original/file-20191218-11919-19th65s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=394&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/307591/original/file-20191218-11919-19th65s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=495&fit=crop&dpr=1 754w, https://images.theconversation.com/files/307591/original/file-20191218-11919-19th65s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=495&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/307591/original/file-20191218-11919-19th65s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=495&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">As the world’s largest company by revenue, Walmart has more than 60,000 direct suppliers.</span>
<span class="attribution"><span class="source">(AP Photo/John Locher)</span></span>
</figcaption>
</figure>
<p>With over 60,000 direct suppliers and at least double that many that want to supply to Walmart, the giant retailer’s reach is vast. If Walmart asks something of its suppliers, it can force significant product changes within and across markets. For example, Walmart’s initiatives led to <a href="https://corporate.walmart.com/newsroom/2008/05/29/wal-mart-completes-goal-to-sell-only-concentrated-liquid-laundry-detergent">concentrated laundry detergents</a> and <a href="https://www.reuters.com/article/us-retail-summit-walmart/wal-mart-wants-pcs-to-sleep-earlier-idUSBRE88B1GB20120912">the default for personal computers to enter sleeping mode</a>.</p>
<p>Pressuring suppliers is seen as best practice among retailers. Even the fast fashion houses like H&M and Zara are pressuring their suppliers. </p>
<h2>The problem isn’t upstream, it’s downstream</h2>
<p>But focusing only on suppliers is a distraction. Upstream waste production isn’t the problem, it’s the downstream stuff that retailers cajole, coax and push us into buying that’s polluting the land and clogging the oceans. </p>
<p>It’s simple arithmetic. The efficiency ratio may be getting slightly smaller, but the multiplier (the amount of stuff) keeps getting significantly larger. The drug dealer may be offering cleaner drugs, but they are growing our addiction. </p>
<p>So, why doesn’t Walmart fix the real problem? </p>
<p>By working on suppliers, Walmart’s costs go down. For example, concentrated detergents cost less to transport and take less shelf space. What’s good for its suppliers is good for Walmart — the proverbial win-win. </p>
<h2>An incentive to sell more</h2>
<p>However, Walmart does not want to work on reducing the stuff it sells to consumers, because doing so reduces sales, which reduces the share price. So Walmart, like all retailers, seeks to sell more and more. </p>
<p>What’s good for Walmart is bad for the planet and that’s ultimately bad for consumers — it’s a win-lose. </p>
<p>Selling stuff that clogs landfills and oceans is clearly the problem. But there is another part of the issue that is more subtle, yet may be even more important. </p>
<p>By pressuring suppliers to clean up their production processes, Walmart may inadvertently be hindering — not helping — sustainable development. </p>
<p>Sustainable development is enabled through the circular economy, which requires suppliers to produce stuff that lasts longer, biodegrades faster or can be repurposed more efficiently. But transitioning into a more circular economy may not always be economically valuable for retailers.</p>
<p>The issue of single-use plastic versus paper bags is a clear case in point. Walmart has refused to take a stand on single-use plastic. </p>
<p>On upstream impacts, plastic wins over paper. Plastic uses <a href="https://www2.gov.scot/Resource/Doc/57346/0016899.pdf">less carbon to produce and fewer greenhouse gas emissions to transport</a>. However, on downstream impacts, paper is the clear winner. If properly diverted from landfills, paper will biodegrade in less than a year rather than the hundreds of years that it takes for plastic. By selecting plastics over paper upstream prevents us from addressing the issue downstream.</p>
<h2>What can a responsible consumer do?</h2>
<p>Most consumers believe they need to “walk with their feet.” So they threaten retailers to take their business elsewhere if the retailer doesn’t take more action on sustainability. It’s like the drug addict threatening to buy their drugs from another drug dealer. It solves the immediate problem, but the drug addict still needs drugs and the drug dealer is still selling them — just different buyers and sellers. </p>
<p>Instead, consumers need to demand retailers to focus on the downstream impacts, not just the upstream — what is often called “<a href="https://www.oecd.org/env/tools-evaluation/extendedproducerresponsibility.htm">extended producer responsibility</a>.” Walmart, along with other retailers, must be held responsible for taking back the stuff that they sell or working with suppliers and other retailers so they can.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/307593/original/file-20191218-11909-1vfawbp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/307593/original/file-20191218-11909-1vfawbp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=385&fit=crop&dpr=1 600w, https://images.theconversation.com/files/307593/original/file-20191218-11909-1vfawbp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=385&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/307593/original/file-20191218-11909-1vfawbp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=385&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/307593/original/file-20191218-11909-1vfawbp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=484&fit=crop&dpr=1 754w, https://images.theconversation.com/files/307593/original/file-20191218-11909-1vfawbp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=484&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/307593/original/file-20191218-11909-1vfawbp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=484&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Patagonia, the outdoor gear company, has started a unique eco-friendly program where it will take back its used clothing from customers, fix them and resell them.</span>
<span class="attribution"><span class="source">(AP Photo/Bebeto Matthews)</span></span>
</figcaption>
</figure>
<p>There are only a few examples of retailers that are taking this step. <a href="https://clients1.ibisworld.ca/reports/us/industry/majorcompanies.aspx?entid=1016">Ikea is the largest furniture retailer in the U.S</a>, with 11.3 per cent of the market. It will now buy back used furniture from consumers for in-store credit. Patagonia has also started a new business called <a href="https://gearjunkie.com/patagonia-worn-wear-shop-upcycled-recycled">Worn Wear</a>, which will take back worn clothes, fix them and resell them. In so doing, Patagonia learns about the flaws in their clothing so they can manufacture even more durable clothing. </p>
<p>Imagine if consumers could take their used packaging and toys back to Walmart. The mountains of waste that would pile up in Walmart stores would demand action. And that would assure the health of our planet, not just at Christmas, but forever.</p>
<p>[ <em>Like what you’ve read? Want more?</em> <a href="https://theconversation.com/ca/newsletters?utm_source=TCCA&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=likethis">Sign up for The Conversation’s daily newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/129066/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tima Bansal receives funding from the Social Sciences and Humanities Research Council of Canada. She also runs the Ivey Innovation Learning Lab in which organizations pay to participate. </span></em></p><p class="fine-print"><em><span>Jury Gualandris does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We are addicted to consumption during these holidays, which leads to a massive amount of landfill waste. Giant retailers like Walmart could help the problem, but they haven’t.Tima Bansal, Canada Research Chair in Business Sustainability, Western UniversityJury Gualandris, Assistant Professor of Operations & Sustainability, Western UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1241162019-10-08T12:22:07Z2019-10-08T12:22:07ZColt ends public sales of the AR-15, but gun-control advocates shouldn’t celebrate<figure><img src="https://images.theconversation.com/files/295670/original/file-20191004-118252-zqjm9a.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C2022%2C508&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A Colt AR-15 from 1973.</span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:1973_Colt_AR15_SP1.jpg">Steelerdon/Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>When the Colt gun manufacturing corporation announced in September that it would stop producing its AR-15 semiautomatic rifle for sale to the general public – to focus on handguns and military production – some gun-control advocates declared victory, saying the move would help limit the availability of assault weapons in the U.S.</p>
<p>The Brady Campaign to Prevent Gun Violence counted the news among “<a href="https://twitter.com/bradybuzz/status/1174876657687113728">recent victories</a>.” Celebrity gun-control activists Michael Moore and Debra Messing also <a href="https://twitter.com/MMFlint/status/1175516745945272320">trumpeted Colt’s move</a> as progress toward <a href="https://twitter.com/DebraMessing/status/1174877920264884226">eliminating the weapons from public circulation</a>. In fact, the evidence indicates their celebrations are probably premature.</p>
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<p>Colt has said that it didn’t act as a result of political or popular pressure, but rather because the company <a href="https://www.colt.com/news/2630">has so many contracts with military and police agencies</a> that it doesn’t have capacity to make rifles for the civilian market. In addition, a number of other companies make <a href="https://www.cheaperthandirt.com/firearms/rifles/">rifles similar to AR-15s</a> and are selling plenty of them to the public. An industry trade group estimates that <a href="https://www.nssf.org/msr/">more than 16 million</a> of them are owned by U.S. citizens.</p>
<p>The gunmaker’s move is, therefore, a tacit acknowledgment of how prevalent AR-15s and comparable weapons are in the U.S. It’s not a response to concerns that too many of them are potentially available to <a href="https://www.axios.com/deadliest-mass-shootings-common-4211bafd-da85-41d4-b3b2-b51ff61e7c86.html">would-be mass shooters</a>. </p>
<p><div data-react-class="InstagramEmbed" data-react-props="{"url":"https://www.instagram.com/p/B2neeU_nCdz/?igshid=1emcjtsti3h09","accessToken":"127105130696839|b4b75090c9688d81dfd245afe6052f20"}"></div></p>
<h2>A flooded marketplace</h2>
<p>Assault weapons – AR-15s and others – have been used in some of the <a href="https://www.axios.com/deadliest-mass-shootings-common-4211bafd-da85-41d4-b3b2-b51ff61e7c86.html">grisliest U.S. gun massacres</a> in recent years, including Aurora, Colorado and and Newtown, Connecticut in 2012; Orlando in 2016; Las Vegas in 2017; Parkland, Florida in 2018; and El Paso, Texas, and Dayton, Ohio in 2019.</p>
<p>Colt’s AR-15 is a <a href="https://www.theatlantic.com/notes/2017/11/on-the-military-and-civilian-history-of-the-ar-15/545660/">close cousin</a> of military rifles such as the M-16 and M-4. All are relatively lightweight, powerful and capable of accommodating large ammunition magazines, typically containing 30 rounds. The more ammunition, the more rounds a shooter can fire quickly before having to stop and reload. </p>
<p>Unlike the military variants, which can unleash short bursts or a stream of bullets with each trigger pull, AR-15s and other civilian large-capacity rifles fire only a single shot at a time. They are classified as semiautomatic because they automatically reload, but the shooter has to pull the trigger each time he wants the gun to fire.</p>
<p>Colt’s AR-15 <a href="https://www.prepperpress.com/books-nonfiction-evolution-black-rifle-20-years-upgrades-options-accessories/">patents expired decades ago</a>, and today there are <a href="https://gunnewsdaily.com/best-ar-15-for-the-money/#The_Best_AR-15_Manufacturers">numerous imitations available</a>. They’re often referred to generically as “AR-15-style” rifles or assault weapons. It’s also legal and relatively easy <a href="https://www.dailydot.com/layer8/gun-laws-by-state/">in more than 40 states</a> to buy semiautomatic variants of other large-capacity military-style weapons, such as the <a href="https://www.britannica.com/technology/AK-47">AK-47</a>, originally a Soviet design. </p>
<p>It’s possible that by suspending AR-15 sales, Colt hopes to distance itself from the carnage connected to the use of assault weapons. More likely, though, the company is still recovering from its <a href="https://money.cnn.com/2016/01/13/news/companies/colt-guns-bankruptcy/index.html">bankruptcy proceedings in 2015 and 2016</a>, and wanted to drop an unprofitable product line, which it refers to as “<a href="https://www.colt.com/news/2630">modern sporting rifles</a>.”</p>
<h2>Not a matter of ideology</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/295671/original/file-20191004-118239-zzlze3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/295671/original/file-20191004-118239-zzlze3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/295671/original/file-20191004-118239-zzlze3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=810&fit=crop&dpr=1 600w, https://images.theconversation.com/files/295671/original/file-20191004-118239-zzlze3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=810&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/295671/original/file-20191004-118239-zzlze3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=810&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/295671/original/file-20191004-118239-zzlze3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1018&fit=crop&dpr=1 754w, https://images.theconversation.com/files/295671/original/file-20191004-118239-zzlze3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1018&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/295671/original/file-20191004-118239-zzlze3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1018&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Colt CEO Dennis Veilleux.</span>
<span class="attribution"><a class="source" href="https://www.businesswire.com/news/home/20130822006112/en/Colt-Defense-Announces-Senior-Management-Change">BusinessWire</a></span>
</figcaption>
</figure>
<p>The <a href="https://www.colt.com/news/2630">company’s announcement</a> of the change made no reference to mass shootings and went out of its way to say Colt remains “committed to the Second Amendment,” which guarantees <a href="https://www.law.cornell.edu/constitution/second_amendment">Americans’ right to bear arms</a>. Colt CEO Dennis Veilleux’s reasoning was clear in his statement that “<a href="https://www.colt.com/news/2630">the market for modern sporting rifles</a> has experienced significant excess manufacturing capacity” and as a result, “there is adequate supply of modern sporting rifles for the foreseeable future.”</p>
<p>The National Rifle Association’s “Shooting Illustrated” blog <a href="https://www.shootingillustrated.com/articles/2019/9/19/colt-will-make-ar-15s-if-you-want-them/">said some gun owners assumed</a> Colt’s “halt in civilian rifle production had anti-gun motives.” But the NRA said the problem was lack of consumer demand for Colt-made AR-15s, which were often <a href="https://gunnewsdaily.com/best-ar-15-for-the-money/#Price_Points">hundreds of dollars more expensive</a> than similar models from other companies. Colt noted that the company will continue to focus on civilian handguns and military rifles.</p>
<p>From the evidence, it appears Colt’s decision was different from other corporations’ actions, which clearly responded to concerns about mass shootings. </p>
<p>Walmart, for example, <a href="https://www.cbsnews.com/news/gun-control-assault-weapons-ban-walmart-ceo-doug-mcmillcalls-for-debate-over-reauthorizing-assault-weapons-ban/">stopped selling</a> military-style rifles in 2015. In August 2019, after a shooter with an AK-47-style rifle massacred 22 people at an El Paso Walmart, company CEO <a href="https://www.cbsnews.com/news/gun-control-assault-weapons-ban-walmart-ceo-doug-mcmillcalls-for-debate-over-reauthorizing-assault-weapons-ban/">Doug McMillon urged Congress to consider restoring an assault-weapons ban</a> that was in effect from 1994 through 2004. Walmart isn’t the only major gun seller recently to limit sales of certain firearms. Dick’s Sporting Goods <a href="https://www.nytimes.com/2018/02/28/business/walmart-and-dicks-major-gun-retailers-will-tighten-rules-on-guns-they-sell.html">stopped selling military-style semiautomatic rifles and large-capacity magazines</a> in 2018.</p>
<p>Colt’s retreat on the AR-15 should not be seen as a signal of a breakthrough in the gun debate or a change of heart within the firearm industry. Sales of new Colt-made AR-15s may come to an end, but there are plenty of assault weapons available to the public, among whom may be potential mass shooters.</p>
<p>[ <em>Like what you’ve read? Want more?</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=likethis">Sign up for The Conversation’s daily newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/124116/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul M. Barrett is deputy director of the New York University Stern Center for Business and Human Rights, which receives funding from a variety of foundations and individuals. </span></em></p>The gunmaker’s move to stop selling AR-15s to civilians is not a response to concerns about gun control. Instead it’s a reflection of how prevalent the AR-15 and comparable weapons are in the US.Paul M. Barrett, Deputy Director, Center for Business and Human Rights, Stern School of Business; Adjunct Professor of Law, New York UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1219202019-09-25T12:12:31Z2019-09-25T12:12:31ZWhat Amazon, Walmart employees risk when they use the workplace for activism<figure><img src="https://images.theconversation.com/files/293846/original/file-20190924-51457-1ksz51c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Amazon workers in Seattle walked off the job on Sept. 20 in a climate strike. </span> <span class="attribution"><span class="source">(AP Photo/Elaine Thompson</span></span></figcaption></figure><p>It has somehow become sort of normal to use the workplace to protest social issues unrelated to the job itself. This was something almost unheard of even five years ago.</p>
<p>The latest example came on Sept. 20 as more than 1,000 Amazon employees <a href="https://edition.cnn.com/2019/09/20/tech/amazon-climate-strike-global-tech/index.html">staged a walkout</a> over the retailer’s “inaction” on climate change. In recent months, there has also been <a href="https://www.wlbt.com/2019/08/08/few-walmart-employees-heed-call-walkout-over-gun-sales/">unrest</a> among Walmart employees over gun sales and protests by <a href="https://www.nytimes.com/2018/04/04/technology/google-letter-ceo-pentagon-project.html">Google</a> and <a href="https://gizmodo.com/employees-protest-microsoft-bid-for-huge-military-contr-1829740921">Microsoft</a> workers over military use of their software. And of course, there’s <a href="https://www.nytimes.com/2019/02/15/sports/nfl-colin-kaepernick-protests-timeline.html">Colin Kaepernick</a> and other professional athletes who used the field – a football player’s office – to protest racialized police violence.</p>
<p>The workplace used to be the very last place you would want to bring attention to social issues, however important. That’s because the office or factory isn’t a democracy where activism is protected. To a <a href="https://law.uoregon.edu/explore/elizabeth-tippett">workplace scholar</a> like me, what’s really interesting is how employees are increasingly willing to undertake this risky form of protest – and how employers are adapting.</p>
<h2>The risks of workplace activism</h2>
<p>As a legal matter, there is a big difference between marching in the street – for example, as part of a climate protest – and walking off the job as part of that same protest.</p>
<p>Let’s say you have the day off, and you decide to join a march through the streets. The government can’t just arrest you or banish you to another country. Your <a href="https://www.loc.gov/law/help/peaceful-assembly/us.php">activism is protected</a> under the First Amendment.</p>
<p>Those rights fall away the minute you cross the threshold into your job. Unless the government’s your boss, you stop being a citizen and become a worker subject to your employer’s rule. There, you live in something of a “dictatorship, in which bosses govern in ways that are largely unaccountable to those who are governed,” as philosopher Elizabeth Anderson <a href="https://press.princeton.edu/titles/10938.html">puts it</a>. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/CE7k4LwBBfI?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Philosopher Elizabeth Anderson explains why the workplace is like a dictatorship.</span></figcaption>
</figure>
<p>You may think calling the office a dictatorship is an exaggeration, but in reality it’s not. Like a real dictatorship, you can be exiled at any moment for virtually any infraction. The <a href="https://www.bls.gov/news.release/union2.nr0.htm">vast majority</a> of workers in the United States are employed “at-will,” which literally means you can be terminated at any time, without notice, for any reason or no reason at all. </p>
<p>As a lawyer, I have written countless “at-will” provisions into contracts, and it’s not even strictly necessary. Courts will presume that you are “at-will” unless you <a href="https://scholar.google.com/scholar_case?case=9927157615128210379&q=employment-at-will&hl=en&as_sdt=2006">present</a> a mountain of evidence showing the employer intended to offer real job security. </p>
<p>If companies can fire you for any reason, that reason might include stirring the pot. And employers tend to respond to social activism the way the “Seinfeld” character George Costanza reacted when his friend Elaine tried to invite his fiance to the opera: by freaking out. </p>
<p>“Everybody knows,” he shouts, “that you gotta keep the worlds apart!” </p>
<p>Work is for work. Save your activism for evenings and weekends.</p>
<figure>
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<figcaption><span class="caption">In ‘Seinfeld,’ Costanza panics when his social spheres converge, threatening his independence.</span></figcaption>
</figure>
<h2>Weak workplace protections</h2>
<p>Lawmakers and courts have long known that employers can abuse their power to fire workers. Over many decades, the law has developed to specify certain circumstances in which employers cannot retaliate against workers. </p>
<p>But the key here is that those exceptions are limited, and the law generally lags several years – or sometimes decades – behind what is happening in the workplace.</p>
<p>The law prohibits employers from firing workers where they are trying to advance or protect other key employment rights – like trying to <a href="https://www.nlrb.gov/rights-we-protect/whats-law/employees/i-am-not-represented-union/your-rights-during-union-organizing">organize a union</a> or filing a <a href="https://www.nytimes.com/2019/03/08/sports/womens-soccer-team-lawsuit-gender-discrimination.html">gender discrimination lawsuit</a>. Courts will also protect workers who really had no choice but to act against their employer’s preferences – like when they are summoned for <a href="https://scholar.google.com/scholar_case?case=13046597298312614812">jury duty</a>, or when their boss asks them to engage in <a href="https://scholar.google.com/scholar_case?case=6106113470135055631">illegal conduct</a>.</p>
<p>Even whistleblowers who unearth illegal conduct have to walk a tightrope if they want to keep their jobs. For example, the anonymous national security whistleblower who complained about Trump’s alleged call with the Ukrainian president would have lost legal protection – and faced potential <a href="https://eu.usatoday.com/story/news/nation/2017/05/17/chelsea-manning-prison-release/101783186/">criminal prosecution</a> – if he or she went straight to the press. The whistleblower could <a href="https://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1152&context=lawfacpub">maintain protection</a> only by complaining confidentially within authorized government channels.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/HAAjZyJWsc0?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Law professor Richard Moberly discusses national security whistleblowers.</span></figcaption>
</figure>
<h2>Activists out on a limb</h2>
<p>Today’s social activists don’t really qualify as whistleblowers, though. </p>
<p>Whistleblower protections are designed to protect those who disclose important information about misconduct to corporate heads or government authorities. Like a sports referee, true whistleblowers are pointing out a violation that others overlooked. Social activists in the workplace, by contrast, lend their voice to a known cause.</p>
<p>In that sense, social activists are perhaps most closely analogous to employees who object to work assignments on religious grounds – a pharmacist who <a href="https://law.justia.com/cases/federal/appellate-courts/ca7/06-2831/06-2831-2007-05-02-nonprecedential-disposition-2011-02-25.html">refuses to fill</a> prescriptions for religious reasons, for example. But those workers are on much firmer legal ground, because Title VII of the Civil Rights Act <a href="https://scholar.google.com/scholar_case?case=10710673220333405680&q=eeoc+v+abercrombie+%26+fitch+stores+inc&hl=en&as_sdt=2006">requires</a> employers to provide some accommodation for workers’ religious beliefs. </p>
<p>By contrast, employers can and do punish workers for activism they consider <a href="https://scholar.google.com/scholar_case?case=750170895929306990">too disruptive</a> or <a href="https://scholar.google.com/scholar_case?case=9748700253424262526">distracting</a>.</p>
<p>That’s why Walmart <a href="https://gizmodo.com/walmart-retaliates-against-worker-who-urged-walk-out-ov-1837012050">apparently shut down</a> network access for the worker who called for the gun-related walkout. It’s why Google issued a new policy, <a href="https://about.google/community-guidelines/">essentially telling</a> workers to focus on their jobs; why <a href="https://www.newsweek.com/us-soccer-bans-kneeling-during-anthem-donald-trump-wants-nfl-671291">U.S. Soccer</a> imposed a ban on kneeling during the national anthem; and why Colin Kaepernick still has <a href="https://fivethirtyeight.com/features/yes-its-strange-that-colin-kaepernick-doesnt-have-a-deal-yet/">no contract</a>. </p>
<p>Perhaps more surprising, though, is the ways in which companies have proved responsive to employee activism. Amazon let workers take <a href="https://www.wired.com/story/amazon-walkout-climate-change/">vacation time</a> to walk off the job and issued a <a href="https://edition.cnn.com/2019/09/19/tech/amazon-climate-pledge/index.html">carbon pledge</a>. Google declined to <a href="https://thenextweb.com/artificial-intelligence/2018/06/01/google-announces-it-wont-renew-military-ai-contract/">renew</a> a contract providing artificial intelligence to the military. Even Walmart <a href="https://corporate.walmart.com/newsroom/2019/09/03/mcmillon-to-associates-our-next-steps-in-response-to-the-tragedies-in-el-paso-and-southaven">discontinued</a> some of its ammunition sales and is urging lawmakers to pass gun control legislation.</p>
<p>In a competitive labor market, it’s almost as if allowing employee protest has become a workplace perk of sorts, a special privilege companies selectively dispense for workers – software programmers in particular – who are hard to replace. Tellingly, far fewer store workers at Walmart walked off the job than salaried workers at Amazon’s headquarters. They may have sensed that Walmart would call their bluff.</p>
<p>But like all privileges dispensed by authoritarian rulers, the freedom to protest can be retracted at will. I would not expect it to survive the next downturn. </p>
<p>[ <em><a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=expertise">Expertise in your inbox. Sign up for The Conversation’s newsletter and get a digest of academic takes on today’s news, every day.</a></em> ]</p><img src="https://counter.theconversation.com/content/121920/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elizabeth C. Tippett previously worked as a employment lawyer at Wilson Sonsini Goodrich & Rosati, where she represented technology companies.</span></em></p>There’s no First Amendment in the workplace, which leaves worker activists at the whim of their employers.Elizabeth C. Tippett, Associate Professor, School of Law, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1229972019-09-11T12:19:26Z2019-09-11T12:19:26ZWhy community-owned grocery stores like co-ops are the best recipe for revitalizing food deserts<figure><img src="https://images.theconversation.com/files/291808/original/file-20190910-190044-cpinfc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Detroit People's Food Co-op, opening later this year in a food desert, is an example of a community-driven project.</span> <span class="attribution"><span class="source">DPFC</span></span></figcaption></figure><p>Tens of millions of Americans <a href="https://www.dosomething.org/us/facts/11-facts-about-hunger-us">go to bed hungry</a> at some point every year. While poverty is the primary culprit, <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2722409/">some blame food insecurity</a> on the lack of grocery stores in low-income neighborhoods.</p>
<p>That’s why <a href="https://www.ccachicago.org/wp-content/uploads/2015/08/Chicago-2011-Transition-Report.pdf">cities</a>, <a href="http://thefoodtrust.org/what-we-do/supermarkets">states</a> and national leaders including former first lady <a href="https://foodinsight.org/first-lady-michelle-obamas-healthy-food-financing-initiative-announcement-highlights-the-importance-of-affordable-healthful-foods-in-underserved-communities/">Michelle Obama</a> made eliminating so-called “food deserts” a priority in recent years. This prompted some of the biggest U.S. retailers, <a href="https://www.marketwatch.com/story/retailers-seek-answers-to-food-desert-problem-2016-11-10">such as Walmart, SuperValu and Walgreens</a>, to <a href="https://apnews.com/8bfc99c7c99646008acf25e674e378cf">promise to open or expand</a> stores in underserved areas. </p>
<p>One problem is that many neighborhoods in inner cities <a href="https://pdxscholar.library.pdx.edu/usp_fac/191/">fear gentrification</a>, when big corporations swoop in with development plans. As a result, some new supermarkets never <a href="https://www.forbes.com/sites/instituteforjustice/2014/12/23/philadelphia-artist-defeats-eminent-domain-land-grab-will-keep-his-studio/#7cf79659591e">got past the planning stage</a> or <a href="https://www.mdpi.com/1660-4601/10/8/3325">closed within a few months of opening</a> because residents did not shop at the new store. </p>
<p>To find out why some succeeded while others failed, three colleagues and I <a href="https://doi.org/10.1002/pa.1863">performed an exhaustive search</a> for every supermarket that had plans to open in a food desert since 2000 and what happened to each. </p>
<h2>What’s a food desert?</h2>
<p>I’m actually rather skeptical that food deserts have a significant impact on whether Americans go hungry.</p>
<p>In previous research with urban planners <a href="https://www.pdx.edu/profile/meet-professor-megan-horst">Megan Horst</a> and <a href="http://foodsystemsplanning.ap.buffalo.edu/raj/">Subhashni Raj</a>, we found that diet-related health <a href="https://doi.org/10.2148/benv.43.3.328">more closely correlates with household income</a> than with access to a supermarket. One can be poor, live near a grocery store and still be unable to afford a healthy diet.</p>
<p>Nonetheless, the lack of one, particularly in urban neighborhoods, is often a broader sign of disinvestment. In addition to selling food, supermarkets act as <a href="https://ideas.repec.org/a/fip/fedfcr/y2009p75-87nv.5no.3.html">economic generators</a> by providing local jobs and offering the convenience of neighborhood services, such as pharmacies and banks. </p>
<p>I believe every neighborhood should have these amenities. But how should we define them?</p>
<p>U.K.-based public health researchers Steven Cummins and Sally Macintyre coined the term in the 1990s and described food deserts as low-income communities whose residents <a href="https://doi.org/10.1080/0042098022000011399">didn’t have the purchasing power</a> to support supermarkets. </p>
<p>The U.S. Department of Agriculture began looking at these areas in <a href="https://www.ers.usda.gov/data-products/food-environment-atlas/">2008</a>, when it officially defined food deserts as communities with either 500 residents or 33% of the population living more than a mile from a supermarket in urban areas. The distance jumps to 10 miles away in rural areas. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/291841/original/file-20190910-190002-ujn60d.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/291841/original/file-20190910-190002-ujn60d.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/291841/original/file-20190910-190002-ujn60d.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=334&fit=crop&dpr=1 600w, https://images.theconversation.com/files/291841/original/file-20190910-190002-ujn60d.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=334&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/291841/original/file-20190910-190002-ujn60d.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=334&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/291841/original/file-20190910-190002-ujn60d.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=420&fit=crop&dpr=1 754w, https://images.theconversation.com/files/291841/original/file-20190910-190002-ujn60d.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=420&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/291841/original/file-20190910-190002-ujn60d.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=420&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The map shows how many people in different counties across the country lived in food deserts in 2015.</span>
<span class="attribution"><a class="source" href="https://www.ers.usda.gov/data-products/food-environment-atlas/go-to-the-atlas/">USDA ERS</a></span>
</figcaption>
</figure>
<p>Although the agency has created <a href="https://www.ers.usda.gov/data-products/food-access-research-atlas/documentation/">three other ways</a> to measure food deserts, we stuck with the original 2008 definition for our study. By that measure, <a href="https://www.ers.usda.gov/webdocs/publications/82101/eib-165.pdf?v=0">about 38% of U.S. Census tracts</a> were food deserts in 2015, the latest data available, slightly down from 39.4% in 2010. </p>
<p>That means about 19 million people, or 6.2% of the U.S. population, <a href="https://www.ers.usda.gov/data-products/food-access-research-atlas/documentation/">lived in a food desert in 2015</a>.</p>
<h2>Michelle Obama makes it a priority</h2>
<p><a href="http://thefoodtrust.org/what-we-do/supermarkets">The Food Trust</a> was among the first to tackle the problem. In 2004, the Philadelphia-based nonprofit used US$30 million in state seed money to help finance 88 supermarket projects throughout Pennsylvania, which helped make healthy food available to about 400,000 underserved residents. </p>
<p>Our research followed the success as it drew attention nationally. Rahm Emanuel <a href="https://www.ccachicago.org/wp-content/uploads/2015/08/Chicago-2011-Transition-Report.pdf">made eliminating food deserts in Chicago a top initiative</a> when he became the city’s mayor in 2011. And Michelle Obama <a href="https://foodinsight.org/first-lady-michelle-obamas-healthy-food-financing-initiative-announcement-highlights-the-importance-of-affordable-healthful-foods-in-underserved-communities/">helped launch</a> the <a href="https://www.acf.hhs.gov/ocs/programs/community-economic-development/healthy-food-financing">Healthy Food Financing Initiative</a> in 2010 to encourage supermarkets to open in food deserts across the country. The following year major food retailers promised to open or expand 1,500 <a href="http://get-hwhc.org/wp-content/uploads/2015/08/Partnership-for-a-Healthier-America.pdf">supermarket or convenience stores</a> in and around food desert neighborhoods by 2016.</p>
<p>Despite <a href="https://www.frbsf.org/community-development/files/supermarkets-in-food-deserts-development-financing-health-promotion.pdf">receiving generous federal financial support</a>, retailers <a href="https://apnews.com/8bfc99c7c99646008acf25e674e378cf">managed to open or expand just 250 stores</a> in food deserts during the period. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/291648/original/file-20190909-109952-1j1a1zm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/291648/original/file-20190909-109952-1j1a1zm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/291648/original/file-20190909-109952-1j1a1zm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/291648/original/file-20190909-109952-1j1a1zm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/291648/original/file-20190909-109952-1j1a1zm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/291648/original/file-20190909-109952-1j1a1zm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/291648/original/file-20190909-109952-1j1a1zm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The food trust financed dozens of supermarket projects in Pennsylvania in 2004.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Healthy-Corner-Stores-/75483a880946408da27cd14c0fd03293/2/0">AP Photo/Matt Rourke</a></span>
</figcaption>
</figure>
<h2>How to grow in a food desert</h2>
<p>We wanted to dig deeper and see just how many of the new stores were actually supermarkets and how they’ve fared. </p>
<p>I teamed up with <a href="https://www.spi.ox.ac.uk/people/dr-benjamin-chrisinger">Benjamin Chrisinger</a>, <a href="https://humanecology.ucdavis.edu/student-spotlight">Jose Flores</a> and <a href="https://sociology.ucdavis.edu/people/cglennie">Charlotte Glennie</a> and examined press releases, website listings and scholarly studies to assemble a database of supermarkets that had announced plans to open new locations in food deserts since 2000. </p>
<p>We were particularly interested in the driving forces behind each project. </p>
<p>We identified only 71 supermarket plans that met our criteria. Of those, 21 were driven by government, 18 by community leaders, 12 by nonprofits and eight by commercial interests. Another dozen were driven by a combination of government initiative with community involvement.</p>
<p>Then we looked at how many actually stuck around. We found that all 22 of the supermarkets opened by community or nonprofits are still open today. Two were canceled, while six are in progress. </p>
<p>In contrast, nearly half of the commercial stores and a third of the government developments have closed or didn’t it make it past planning. Five of the government/community projects also failed or were canceled.</p>
<p><iframe id="QNZor" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/QNZor/5/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>A shuttered supermarket is more than just a business failure. It <a href="https://www.fastcompany.com/40499246/how-closing-grocery-stores-perpetuate-food-deserts-long-after-theyre-gone">can perpetuate the food desert problem</a> for years and prevent new stores from opening in the same location, <a href="https://www.courier-journal.com/story/news/local/2019/01/10/louisville-food-deserts-how-grocery-stores-closing-hurt-community/1944809002/">worsening a neighborhood’s blight</a>. </p>
<h2>Why co-ops succeeded</h2>
<p>So why did the community-driven supermarkets survive and thrive? </p>
<p>Importantly, 16 of the 18 community-driven cases were structured as cooperatives, which are rooted in their communities through customer ownership, democratic governance and shared social values. </p>
<p>Community engagement is vital to opening and sustaining a new store in neighborhoods where residents are understandably skeptical of outside developers and worry about <a href="https://www.attomdata.com/news/market-trends/attom-data-solutions-2019-grocery-store-battle/">gentrification and rising rents</a>. Cooperatives often adopt local hiring practices, <a href="https://cdi.coop/coop-cathy-coops-benefit-communities/">pay living wages</a> and help residents counteract <a href="https://civileats.com/2019/01/25/new-research-explores-the-ongoing-impact-of-racism-on-the-u-s-farming-landscape">inequities in the food system</a>. <a href="https://www.fci.coop/sites/default/files/Startup%20guide-02.2017.pdf">Their model</a>, in which a third of the cost of opening typically comes from member loans, ensures communities are literally invested in their new stores and their use. </p>
<p>The <a href="https://www.mandelagrocery.coop/">Mandela Co-op</a>, which opened in a West Oakland, California, food desert in 2009, is a great example of this. The worker-owned grocery store focuses on purchasing from farmers and food entrepreneurs of color. As a result of its success, the Mandela Co-op <a href="https://www.sfchronicle.com/food/article/Mandela-Grocery-Cooperative-marks-10-years-in-13959570.php?psid=mc7QM">is expanding</a> and supporting the local economy at the same time many commercial supermarkets are closing locations as the <a href="https://www.grocerydive.com/news/why-grocery-consolidation/535608/">grocery industry consolidates</a>.</p>
<p>Our study suggests policymakers and <a href="https://ajph.aphapublications.org/action/doSearch?AllField=food+desert&ConceptID=">public health officials interested</a> in improving wellness in food deserts should take community ownership and involvement into account. </p>
<p>The success of a supermarket intervention is predicated on use, which may not happen without community buy-in. Supporting cooperatives is one way to ensure that shoppers show up.</p>
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<p class="fine-print"><em><span>Catherine Brinkley does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Prodded by Michelle Obama and other government leaders, Walmart and other major US retailers vowed to build hundreds of stores in food deserts. What happened?Catherine Brinkley, Assistant Professor of Community and Regional Development, University of California, DavisLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1231632019-09-10T22:26:12Z2019-09-10T22:26:12ZHow corporations are stepping up to tackle crises when governments won’t<figure><img src="https://images.theconversation.com/files/291395/original/file-20190909-175714-1amg2ts.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C6495%2C4335&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Corporations are stepping in to support and invest in social and environmental change when governments cannot or will not. </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Today we’re facing a whole slew of social, economic and environmental crises—gun violence, climate change, gender inequality, job dislocation, food insecurity, plastic pollution and the opioid epidemic, to name just a few. </p>
<p>The responses from governments are often inadequate. Indeed, the problems are so complex that no single sector can address these challenges alone. Policies may not go far enough, or simply cannot address the entire issue. And, as we are seeing in the United States, governments may actually be <a href="https://www.nytimes.com/interactive/2019/climate/trump-environment-rollbacks.html">pulling back</a> on regulations meant to address these crises.</p>
<p>What’s interesting is how often corporations are stepping in to fill the void. </p>
<p>In the wake of a recent wave of mass shootings in the U.S., Walmart announced it would <a href="https://www.cnn.com/2019/09/03/business/walmart-ends-handgun-ammo-sales/index.html">stop selling most types of ammunition</a>. Dick’s Sporting Goods <a href="https://www.cnn.com/2019/03/14/investing/dicks-sporting-goods-guns/index.html">took guns off its shelves</a> in many stores. CVS, Walgreens, Wegmans and Kroger <a href="https://www.washingtonpost.com/business/2019/09/06/weve-got-protect-ourselves-some-threaten-shop-elsewhere-if-they-cant-openly-carry-guns/">joined Walmart</a> in asking customers not to openly carry weapons into their stores.</p>
<p>When the U.S. announced it was <a href="https://www.theguardian.com/environment/2017/dec/01/trump-climate-change-paris-withdrawal-ford-walmart">withdrawing from the Paris climate accord</a>, more than <a href="https://www.wearestillin.com/signatories">2,200 companies</a>, large and small, signed on to the <a href="https://www.wearestillin.com/">We Are Still In</a> declaration, stating: </p>
<blockquote>
<p>“In the absence of leadership from Washington, states, cities, counties, tribes, colleges and universities, health-care organizations, businesses and investors representing a sizeable percentage of the U.S. economy will pursue ambitious climate goals, working together to take forceful action and to ensure that the U.S. remains a global leader in reducing emissions.”</p>
</blockquote>
<p>When North Carolina introduced a bill to prevent transgender people from using restrooms that did not match the gender on their birth certificates, 68 corporations, including American Airlines, Apple, Cisco, eBay, General Electric, IBM, Intel, LinkedIn, Microsoft, Nike and Salesforce <a href="https://www.nbcnews.com/feature/nbc-out/major-corporations-join-fight-against-north-carolina-s-bathroom-bill-n605976">signed an amicus brief</a> aimed at blocking the bill.</p>
<h2>Corporations stepping up</h2>
<p>In other words, corporations are stepping in to support and invest in social and environmental change when governments cannot or do not. </p>
<p><a href="https://www.theguardian.com/business/2019/jul/21/ex-unilever-boss-seeks-heroic-ceos-to-tackle-climate-change-and-inequality-paul-polman">Says former Unilever chief Paul Polman</a> about the <a href="https://www.un.org/sustainabledevelopment/sustainable-development-goals/">United Nations Sustainable Development Goals</a> that are meant to address a wide range of global challenges: </p>
<blockquote>
<p>“Over the next 10 years, more responsibility will be put on business to move faster to implement the sustainability goals simply because of financial flow that needs to happen that cannot come right now from government.”</p>
</blockquote>
<p>In constitutional democracies, we often talk of the checks and balances created across the three sources of power. Today, these are the executive branch or Crown, the legislature and the judiciary. </p>
<p>The news media became known as the Fourth Estate because it was a means to hold the other three sources of power accountable. </p>
<p>Now, we are starting to talk about social media as the <a href="https://www.phrases.org.uk/meanings/fifth-estate.html">Fifth Estate</a> in that its power can rival these other powers. </p>
<p>Increasingly, corporations are coming to play an equally powerful role in our society. They are a part of the system of checks and balances, both to check abuses of power and to be checked by others.</p>
<h2>Too powerful</h2>
<p>There are many risks, of course, that come from corporations being too powerful. When the Federal Aviation Administration <a href="https://www.npr.org/2019/04/04/709431845/faa-is-not-alone-in-allowing-industry-to-self-regulate">largely left Boeing</a> to establish and administer its own safety tests, it contributed <a href="https://www.businessinsider.com/faa-let-boeing-self-regulate-software-believed-737-max-crashes-2019-3">to the 737-Max crashes</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/291527/original/file-20190909-109927-eqzubz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/291527/original/file-20190909-109927-eqzubz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/291527/original/file-20190909-109927-eqzubz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=373&fit=crop&dpr=1 600w, https://images.theconversation.com/files/291527/original/file-20190909-109927-eqzubz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=373&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/291527/original/file-20190909-109927-eqzubz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=373&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/291527/original/file-20190909-109927-eqzubz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=469&fit=crop&dpr=1 754w, https://images.theconversation.com/files/291527/original/file-20190909-109927-eqzubz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=469&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/291527/original/file-20190909-109927-eqzubz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=469&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">In July, members of a Senate subcommittee in the U.S. clashed with Federal Aviation Administration officials, contending the agency was too deferential to Boeing in approving the 737 Max airliner.</span>
<span class="attribution"><span class="source">(AP Photo/Ted S. Warren)</span></span>
</figcaption>
</figure>
<p>After the <a href="https://theconversation.com/five-years-after-deadly-factory-fire-bangladeshs-garment-workers-are-still-vulnerable-88027">Rana Plaza and Tazreen factory disasters</a> in Bangladesh, corporations such as Canadian Tire, Hudson’s Bay, Costco, Sears and the Gap created the Alliance for Bangladesh Worker Safety. But it was <a href="https://cleanclothes.org/news/2013/07/10/safety-scheme-gap-and-walmart">immediately criticized</a> by labour leaders as serving the interests of the companies, not the workers. </p>
<p>The 2008 financial crisis has been attributed to <a href="https://www.usnews.com/opinion/articles/2013/01/04/greed-bailouts-and-the-causes-of-the-financial-crisis">corporate greed</a> of the <a href="https://www.reuters.com/article/us-usa-economy-geithner/financial-crises-caused-by-stupidity-and-greed-geithner-idUSBRE83P01P20120426">big banks</a>. And there is an appropriately robust debate about how to <a href="https://www.theguardian.com/commentisfree/2014/dec/08/taming-corporate-power-key-political-issue-alternative">tame corporate power</a>.</p>
<p>However, there’s also an increasing interest among the people who work in companies to be part of the solution rather than part of the problem. The U.S. Business Roundtable, an organization that periodically issues corporate governance principles, <a href="https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans">recently announced</a> it was rejecting shareholder primacy in favour of a commitment to create value for all stakeholders. </p>
<p>Larry Fink, head of BlackRock, the world’s largest asset manager, now <a href="https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter">writes to the CEOs</a> of the companies in which he invests that they must pursue purpose as well as profit. <a href="https://www.globenewswire.com/news-release/2019/05/16/1826306/0/en/FLASH-REPORT-86-of-S-P-500-Index-Companies-Publish-Sustainability-Reports-in-2018.html">Most of the S&P 500 companies</a> (and <a href="https://docs.wixstatic.com/ugd/66e92b_72d0c7b3e0244a408407b07894c37c23.pdf">slightly more than half</a> of Canada’s S&P/TSX firms) produce corporate social responsibility reports.</p>
<h2>Stockholder responsibility</h2>
<p>Some might argue that this attention to creating value for all stakeholders runs against the responsibility of the corporation to the stockholder. Up until the recent announcement, the U.S. Business Roundtable claimed that stakeholders interests <a href="https://qz.com/work/1690439/new-business-roundtable-statement-on-the-purpose-of-companies/">were subsidiary</a> to financial performance. </p>
<p>In Canada, <a href="https://ecgi.global/code/where-were-directors-guidelines-improved-corporate-governance-canada-toronto-report">the guidance</a> from the Toronto Stock Exchange is still: “Directors have only one constituency and that is the corporation and its shareholders generally.” <a href="https://www.cii.org/aug19_brt_response">Some worry</a> that having more than one objective provides no clear way to choose when faced with trade-offs.</p>
<p>But there is potential in these pronouncements and reports. Signing a statement, such as the CEOs of the Business Roundtable did, is a means of holding one’s feet to the fire. It is a commitment mechanism. Producing a corporate social responsibility report requires companies to analyze the data, understand the trade-offs created by their business models, and demonstrate progress over time. </p>
<p>To make good on those promises, it won’t be enough just to sign statements and produce reports. Companies are going to have to <a href="https://www.sup.org/books/title/?id=30100">transform how they do business</a>. In doing so, businesses can address the many environmental, economic and social crises we face, and also counterbalance the forces that might slow down action.</p>
<p>[ <em><a href="https://theconversation.com/ca/newsletters?utm_source=TCCA&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=expertise">Expertise in your inbox. Sign up for The Conversation’s newsletter and get a digest of academic takes on today’s news, every day.</a></em> ]</p><img src="https://counter.theconversation.com/content/123163/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sarah Kaplan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Corporations are often stepping in to fill the void when governments are failing to adequately address social, economic and environmental crises.Sarah Kaplan, Professor, Strategic Management, Rotman School of Management; Director, Institute for Gender and the Economy, University of TorontoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1209622019-08-09T13:01:36Z2019-08-09T13:01:36ZCompanies promoting causes can be accused of ‘wokewashing’ – allying themselves only for good PR<figure><img src="https://images.theconversation.com/files/287221/original/file-20190807-144855-18ceuo0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ben & Jerry's opened Art for Justice, which highlights the need for criminal justice reform and features art by formerly incarcerated artists.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Ben-and-Jerry-s-Celebrates-Opening-of-New-Art-f-/78848a4b6a684aca829c1a71a4f4346b/1/0">AP Images/Andy Duback</a></span></figcaption></figure><p>More consumers want companies to <a href="https://www.forbes.com/sites/dangingiss/2019/02/11/study-consumers-blame-government-for-dividing-the-nation-but-look-to-brands-to-fix-it/#2c91af526ac4">address societal problems</a>, including <a href="https://www.marketingweek.com/erin-lyons-ad-industry-address-climate-change/">climate change</a> and <a href="https://www.marketingdive.com/news/53-of-consumers-believe-brands-can-do-more-to-solve-social-problems-than-g/538925/">crumbling infrastructure</a>.</p>
<p>Additionally, <a href="https://www.accenture.com/_acnmedia/Thought-Leadership-Assets/PDF/Accenture-CompetitiveAgility-GCPR-POV.pdf">more than half</a> want to buy <a href="https://sproutsocial.com/insights/data/social-media-connection/">from brands that take stands on social issues</a>.</p>
<p>At the same time, consumers are <a href="https://marketingland.com/brands-strive-for-authenticity-as-audiences-turn-a-skeptical-eye-toward-ads-236295">increasingly skeptical about these partnerships</a>, seeing them as marketing stunts. It’s called wokewashing.</p>
<p>I’m a <a href="https://www.researchgate.net/profile/Kim_Sheehan2">professor of brand responsibility</a>, and my forthcoming research investigates brands and their relationships with social issues, including the importance of both allies and advocates.</p>
<h2>Allies or advocates</h2>
<p>In marketing terms, allies are members of a dominant social group that <a href="https://www.brandeis.edu/teaching/Evaluating%20Ally%20Role.pdf">bring attention to important social issues</a>.</p>
<p>A company can serve as an ally when it works to increase awareness about issues affecting marginalized groups.</p>
<p>Advocates take a more active role, working to change <a href="https://web.archive.org/web/20100402225054/http://www.npaction.org/article/articleview/76/1/248">political, economic and social systems</a>.</p>
<p>Companies can be advocates when they create campaigns to promote institutional change and provide financial support for groups engaged in creating social change. </p>
<p>Yoplait’s campaign to address <a href="https://econsultancy.com/five-brand-campaigns-that-took-a-stand-on-social-issues/">patronizing attitudes toward moms</a> is an example of corporate advocacy.</p>
<p>Another is Stella Artois’ partnership with Water.org to <a href="https://www.youtube.com/watch?v=mHnVMfjFMVs">end the global water crisis</a>. This partnership has already raised more than US$3 million in donations <a href="https://washdiplomat.com/PouchArticle/cms/index.php?option=com_content&view=article&id=574">to bring almost a million people access to clean water</a>, according to a spokesperson from Water.org.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/mHnVMfjFMVs?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">The brand Stella Artois advocates to end the global water crisis.</span></figcaption>
</figure>
<h2>Pride month</h2>
<p>However, corporate adventures into social issues aren’t always well thought out or received.</p>
<p>For example, consider this year’s Pride celebrations. The number of brands participating in Pride was at <a href="https://adage.com/article/cmo-strategy/how-brands-are-showing-their-pride-month/2176256">an all-time high in 2019</a>. Brands, including <a href="http://www.sfpride.org/">T-Mobile, Alaska Airlines</a> and <a href="https://www.nycpride.org/sponsors/">MasterCard</a>, featured <a href="https://twitter.com/WunThompson/status/1138187421009436672">supportive messages</a> and <a href="https://www.newsweek.com/these-30-brands-are-celebrating-pride-giving-back-lgbt-community-1441707">announced donations</a> to support the queer community.</p>
<p>Pride sponsors also included brands <a href="https://www.equinox.com/poweredbypride">Equinox</a> and <a href="https://www.youtube.com/watch?v=c4K-K4dxh84">SoulCycle</a>. Customers organized a <a href="https://www.usatoday.com/story/money/2019/08/07/soulcycle-equinox-boycott-members-upset-over-trump-fundraiser/1947904001/">boycott</a> of the brands on Aug. 7, 2019 after the chairman of their parent company announced that he is <a href="https://www.cbsnews.com/news/equinox-boycott-calls-customers-threaten-equinox-and-soulcycle-boycott-over-trump-fundraiser/">hosting a fundraiser for Donald Trump</a>, who advocates say is anti-LGBTQ.</p>
<p>Some LGBTQ community members did not welcome large brand sponsorships to Pride, arguing that sponsorships take the focus away from <a href="https://www.theguardian.com/commentisfree/2017/jul/02/brands-rainbow-queasy-but-bring-lgbt-lives-into-mainstream-skittles-gay">issues of LGBTQ marginalization</a>. These brands were not seen as authentic advocates, as they were not contributing directly to LGBTQ causes, but instead were paying for exposure.</p>
<p>They argued that brands don’t really care about the community, pointing to a lack of supportive messages <a href="https://www.redstate.com/brandon_morse/2019/06/04/dear-lgbt-community-corporations-dont-care/">throughout the rest of the year</a>.</p>
<p>There are also concerns from members of the community that brands Pride while taking political <a href="https://www.usatoday.com/story/money/2019/06/28/pride-marketing-benefits-lgbtq-community-corporate-america/1511433001/">stances that harm the LGBTQ community</a>. More companies may be facing criticism of this kind as we approach <a href="https://www.opensecrets.org/news/2019/06/companies-political-spending-contradicts-pride-support/">the upcoming election cycle</a>.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1159187673388670983"}"></div></p>
<h2>The importance of allies</h2>
<p>Some companies may <a href="https://www.marketingdive.com/news/the-year-of-woke-washing-how-tone-deaf-activism-risks-eroding-brands/557606/">use causes to pander to consumers</a> and <a href="https://thesocialelement.agency/brand-purpose-woke-washing/">deserve to be called out</a>, but my research shows that corporate allies and advocates can have an important role in society.</p>
<p>Both engagement through allyship and advocacy continue to be important to keep issues in the spotlight in order to create significant social change.</p>
<p>I’m finding in my research that brands connecting with social issues can be a win-win: Consumers become aware of important social issues that may lack media exposure and brands connect with like-minded consumers in a more authentic way.</p><img src="https://counter.theconversation.com/content/120962/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kim Sheehan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Today, companies often take stances on social issues. A professor of brand responsibility compares ally brands with advocates.Kim Sheehan, Professor of Journalism and Communication and Director of the Master's Program in Brand Responsibility, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1186162019-06-12T11:45:59Z2019-06-12T11:45:59ZOnline shopping: why its unstoppable growth may be coming to an end<figure><img src="https://images.theconversation.com/files/278908/original/file-20190611-32373-1m41xwl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">What goes up ...</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/online-shopping-concept-1070185271?studio=1">Bogdan Vija</a></span></figcaption></figure><p>Many people probably assume that online stores are making a fortune, without all the costly bricks and mortar. But the reality is rather different. Many ecommerce activities are, in fact, unprofitable; if people had to pay the true cost of what they bought online, they would probably buy less. In fact, we think there is <a href="https://www.bostonglobe.com/ideas/2018/12/06/how-amazon-prime-will-change-way-our-cities-look/POt25dZIWoaph01gNKkJoN/story.html">an inflection point</a> approaching, when consumers will either have to pay more for online purchases or end up with fewer products and services to choose from. </p>
<p>Let’s start with the online retail leviathan Amazon, which <a href="https://ir.aboutamazon.com/quarterly-results">chalked up</a> record profits and revenues in 2018. This is great news for Amazon shareholders, but deeper scrutiny reveals a different picture. To begin with, most of the profit was not from retail activities. Amazon Web Services, a cloud-hosting business unrelated to ecommerce, <a href="https://www.zdnet.com/article/in-2018-aws-delivered-most-of-amazons-operating-income/">generated</a> more <a href="https://www.investopedia.com/ask/answers/122714/what-difference-between-operating-income-and-revenue.asp">operating income</a> than the company’s entire North American retail operation – and with margins over five times higher. </p>
<p>Even then, this was a much better performance from the retail division than in 2017, when the North American operating income was completely offset by international retail losses. In that year, Amazon’s positive operating income was <a href="https://www.zdnet.com/article/all-of-amazons-2017-operating-income-comes-from-aws/">entirely thanks</a> to the cloud-hosting business. </p>
<h2>Profit push</h2>
<p>Amazon’s retail improvement in 2018 came on the back of a profitability drive, much of which involved raising the consumer cost of ecommerce. For example, Amazon <a href="https://www.theverge.com/2018/4/26/17287528/amazon-prime-annual-membership-cost-increase-price-hike">increased</a> the annual membership cost of priority customer service <a href="https://www.amazon.co.uk/gp/help/customer/display.html?nodeId=201910360">Prime</a> by 20% to US$119 (£94) in the US, along with comparable rises in other countries. </p>
<p>According to one estimate, this US hike <a href="https://www.fool.com/investing/2018/10/27/surprise-amazons-e-commerce-beats-walmart.aspx">accounted for</a> nearly a third of Amazon North America’s operating margin in 2018. Yet not all of this extra profitability looks sustainable: Amazon is <a href="https://www.nytimes.com/2019/04/25/technology/amazon-earnings-one-day-prime-shipping.html">now seeing</a> shrinking growth in Prime membership in North America and declines in some countries as customers at the margin decide to walk away. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/279108/original/file-20190612-32351-1nlcn7c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/279108/original/file-20190612-32351-1nlcn7c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/279108/original/file-20190612-32351-1nlcn7c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=992&fit=crop&dpr=1 600w, https://images.theconversation.com/files/279108/original/file-20190612-32351-1nlcn7c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=992&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/279108/original/file-20190612-32351-1nlcn7c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=992&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/279108/original/file-20190612-32351-1nlcn7c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1246&fit=crop&dpr=1 754w, https://images.theconversation.com/files/279108/original/file-20190612-32351-1nlcn7c.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1246&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/279108/original/file-20190612-32351-1nlcn7c.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1246&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">CRaP water.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/plastic-bottle-drinking-water-isolated-on-146174870?src=phc4zvgW61mkTOdv9QKQSg-1-89&studio=1">Tarasyuk Igor</a></span>
</figcaption>
</figure>
<p>Amazon has also been targeting its <a href="https://www.businessinsider.fr/us/amazon-wants-to-stop-selling-unprofitable-items-report-2018-12">CRaP products</a>, which stands for “cannot return a profit”. Product lines end up in this category because of small margins or logistical challenges such as their weight or size. Bottled water, fizzy drinks and snack foods are all examples. </p>
<p>Amazon has been pressuring the manufactures of these products to lower sales costs. It’s unlikely that this will succeed on the whole, since in many cases there’s little room for improvement. This will force Amazon to choose between charging more for these products or delisting them, which will translate into higher prices for consumers or a narrower selection on the site. </p>
<p>Not all of Amazon’s initiatives are at the expense of the consumer, it should be said. The company <a href="https://www.nytimes.com/2019/04/25/technology/amazon-earnings-one-day-prime-shipping.html">recently reported</a> a 4% drop in the cost of fulfilling orders, mainly because it has been building fewer new warehouses and ramping up throughput at existing sites instead. This is a welcome development for the company, since the costs of both fulfilling orders and shipping <a href="https://www.supplychain247.com/article/amazons_ever_increasing_ecommerce_shipping_costs">increased</a> as a percentage of sales each year between 2010 and 2017. </p>
<p><strong>Shipping and fulfilment as a % of Amazon sales</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/278881/original/file-20190611-32361-129gyrx.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/278881/original/file-20190611-32361-129gyrx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/278881/original/file-20190611-32361-129gyrx.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=372&fit=crop&dpr=1 600w, https://images.theconversation.com/files/278881/original/file-20190611-32361-129gyrx.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=372&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/278881/original/file-20190611-32361-129gyrx.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=372&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/278881/original/file-20190611-32361-129gyrx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=468&fit=crop&dpr=1 754w, https://images.theconversation.com/files/278881/original/file-20190611-32361-129gyrx.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=468&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/278881/original/file-20190611-32361-129gyrx.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=468&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.supplychain247.com/article/amazons_ever_increasing_ecommerce_shipping_costs">Statista</a></span>
</figcaption>
</figure>
<p>Within its warehouse network, Amazon handles own-brand goods and those of many of the other vendors who sell via the platform. These vendors have the <a href="https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/">choice between</a> paying Amazon a premium to completely handle their distribution and pricing, giving them full access to the Prime customer base; or having a looser relationship that can involve paying Amazon or an independent logistics company to use the warehouse network instead. </p>
<p>Amazon <a href="https://www.visualcapitalist.com/breaking-amazon-makes-money/">has</a> succeeded in growing these different types of looser relationships – they <a href="https://www.statista.com/statistics/259782/third-party-seller-share-of-amazon-platform/">now make up</a> over half of total retail sales. Developing the third-party logistics strand is creating a new revenue stream and lowering working capital, since it means that Amazon covers less of the cost of overall sales fulfilment. This resembles the <a href="https://www.investopedia.com/articles/investing/061215/difference-between-amazon-and-alibabas-business-models.asp">business model</a> of the Chinese ecommerce giant Alibaba. Yet saving on working capital doesn’t represent an inherent efficiency, since offloading some distribution expenses is likely to eventually be passed on to consumers as higher prices from costs incurred elsewhere. </p>
<h2>Competitors</h2>
<p>Major rival Walmart has its own techniques for trying to make online sales more profitable. Its new approach to CRaP products <a href="https://www.wsj.com/articles/why-walmart-shoppers-are-finding-more-items-out-of-stock-1535716801?mod=searchresults&page=1&pos=7">is to</a> hide them from view in Walmart consumer search results, showing as out of stock alongside alternatives that are more profitable to the company. </p>
<p>Interestingly, Walmart is also <a href="https://news.walmart.com/2019/05/14/free-nextday-delivery-without-a-membership-fee?mkt_tok=eyJpIjoiTmpFd1pHRm1ObVkwT0RFeSIsInQiOiJYWm5QNzljWktHT21SaTZSeHNLMTRMQXhKVkhBMXhFZ2dCRWFUMHdxMWlsM0J2U0VEZWp5b0dPd0xUV1ZQNUJLeExoc2g2MXFGbnVaVUJmQ3BFejBNM0xXSDY0dXBHdnNFYloyTmxRbENDZDc2RWlPN2RXaWpiTmlON1JMbVR5NyJ9">piloting</a> free next-day deliveries from its stores in the US without customers having to be members of any Prime-equivalent service. The wrinkle is that the offering is limited to only high-volume, higher margin products. In both examples, Walmart is therefore pruning consumer choice in its search for more profitability online. </p>
<p>Walmart is <a href="https://news.walmart.com/2019/05/14/free-nextday-delivery-without-a-membership-fee?mkt_tok=eyJpIjoiTmpFd1pHRm1ObVkwT0RFeSIsInQiOiJYWm5QNzljWktHT21SaTZSeHNLMTRMQXhKVkhBMXhFZ2dCRWFUMHdxMWlsM0J2U0VEZWp5b0dPd0xUV1ZQNUJLeExoc2g2MXFGbnVaVUJmQ3BFejBNM0xXSDY0dXBHdnNFYloyTmxRbENDZDc2RWlPN2RXaWpiTmlON1JMbVR5NyJ9">also</a> one of <a href="https://www.tesco.com/groceries/en-GB/zone/Same-day-delivery">numerous</a> big retailers that offer same-day grocery delivery, but this too is not all it seems.</p>
<p>An experienced grocery retail manager has told us that online grocery is necessary as a marketing loss leader but “impossible” to make money from. Such delivery offers are only possible, he said, because online grocery is just 2% of the overall market, since most consumers don’t buy these products online. <a href="https://www.capgemini.com/wp-content/uploads/2019/01/Report-Digital-%E2%80%93-Last-Mile-Delivery-Challenge1.pdf">A recent study</a> agreed with this thinking, finding that online grocery orders have a negative margin of about 15%. It is reminiscent of that old business joke about losing money on every sale but making it up in volume. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/278910/original/file-20190611-32373-1b7394x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/278910/original/file-20190611-32373-1b7394x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/278910/original/file-20190611-32373-1b7394x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=434&fit=crop&dpr=1 600w, https://images.theconversation.com/files/278910/original/file-20190611-32373-1b7394x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=434&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/278910/original/file-20190611-32373-1b7394x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=434&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/278910/original/file-20190611-32373-1b7394x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=545&fit=crop&dpr=1 754w, https://images.theconversation.com/files/278910/original/file-20190611-32373-1b7394x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=545&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/278910/original/file-20190611-32373-1b7394x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=545&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Basket case?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/online-shopping-concept-1070185271?studio=1">Billion Photos</a></span>
</figcaption>
</figure>
<p>To understand the mindset of retailers like Walmart and other smaller rivals who are not purely online, a supply chain consultant <a href="https://www.imd.org/research-knowledge/articles/the-hidden-cost-of-cost-to-serve/">told us</a> last year that they are placing a priority on speed of change before profitability, amid pressure to stay competitive with the likes of Amazon. “It’s a logic of desperation as much as it is of strategy,” he said. </p>
<p>We can see the consequences in an <a href="http://www.neeley.tcu.edu/Centers/Center_for_Supply_Chain_Innovation/PDFs/Future_of_Supply_Chain.aspx">interesting survey</a> which found that in 2017, 61% of supply chain executives reported increasing product lines due to ecommerce, up from 55% in 2013. When asked about the impacts on distribution, 26% said they were implementing smaller, more localised warehouses, up from 20% in 2013. These changes <a href="https://theconversation.com/will-amazon-do-to-the-grocery-industry-what-it-did-to-ecommerce-96874">inevitably</a> lead to higher costs, which will again be passed on, at least in part, to the consumer. </p>
<p>Viewed as a whole, the inflection point in online shopping that we mentioned earlier could be getting close. We may have reached peak convenience and cheap prices, and might now be entering a world of more targeted offerings, with less geographic coverage, variations in order turnaround and perhaps even higher prices – all of which will slow the growth curve. At least for high street retailers who have been living with seemingly endless freefall, this may be the best news in a very long time.</p><img src="https://counter.theconversation.com/content/118616/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Even Amazon can’t defy gravity forever.Ralf Seifert, Professor of Operations Management, International Institute for Management Development (IMD)Richard Markoff, Supply Chain Researcher, EPFL – École Polytechnique Fédérale de Lausanne – Swiss Federal Institute of Technology in LausanneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1130152019-05-13T10:40:42Z2019-05-13T10:40:42ZDemise of Walmart ‘greeters’ reveals shortcomings in the Americans with Disabilities Act<figure><img src="https://images.theconversation.com/files/272585/original/file-20190503-103060-hiyydj.gif?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Putting up signs is easy. Providing workplace accommodations is harder.
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cerritos-california-usa-april-18-2016-410544589?src=ndp3Y-2pkP5oXVZIOhqTng-1-38">Supannee_Hickman/Shutterstock.com</a></span></figcaption></figure><p>Walmart’s decision to eliminate the “greeter” position in all its stores is a case study of why the <a href="https://www.eeoc.gov/eeoc/history/35th/thelaw/ada.html">Americans with Disabilities Act</a> is falling short of its original vision. </p>
<p>Back in 2015, the retailer <a href="https://blog.walmart.com/business/20160504/offering-customers-more-at-the-door">began experimenting</a> with a new position it called “hosts” to replace the employee who traditionally greeted customers entering a store. The new position, however, required the ability to lift 25 pounds, clean up spills and stand for long periods of time – duties that would be difficult or impossible <a href="https://www.npr.org/2019/02/25/696718872/walmart-is-eliminating-greeters-workers-with-disabilities-feel-targeted">for many greeters with a disability</a>. </p>
<p>After a <a href="https://www.nbcnews.com/news/us-news/walmart-getting-rid-greeters-worrying-disabled-n977256">public backlash</a>, <a href="https://www.nbcnews.com/business/business-news/greeter-job-going-away-disabled-employees-are-not-walmart-says-n978431">Walmart said it would give greeters with disabilities</a> extra support and time to find a new job in the company. </p>
<p>The <a href="https://www.usatoday.com/story/money/2019/02/27/walmart-greeters-some-disabled-lose-their-jobs-customer-hosts/3010732002/">change took final effect</a> late last month. Former greeters who weren’t given a new position – which Walmart earlier had estimated at as many as 20% – were to be terminated with severance. Walmart didn’t respond to a request for comment.</p>
<p>Some disabled greeters who have already lost their jobs over the past couple years as part of the shift <a href="https://www.npr.org/2019/02/25/696718872/walmart-is-eliminating-greeters-workers-with-disabilities-feel-targeted">have filed claims</a> with the Equal Employment Opportunity Commission alleging that they were not offered a “reasonable accommodation” under the ADA.</p>
<p>While the outcome of their cases remains unclear, <a href="https://doi.org/10.1111/ablj.12125">my research has shown</a> that the reality is that the ADA – and how courts interpret it – offers companies like Walmart several ways to legally avoid accommodating disabled workers, a group with <a href="https://www.bls.gov/news.release/disabl.nr0.htm">persistently high unemployment rates</a>. </p>
<p>What employers may not realize is the mistake they’re making when they do this.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273684/original/file-20190509-183093-1q94d7l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273684/original/file-20190509-183093-1q94d7l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273684/original/file-20190509-183093-1q94d7l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273684/original/file-20190509-183093-1q94d7l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273684/original/file-20190509-183093-1q94d7l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273684/original/file-20190509-183093-1q94d7l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273684/original/file-20190509-183093-1q94d7l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Ramps are almost everywhere thanks to the ADA.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/handicapped-woman-on-wheelchair-leaving-building-298842380?src=4kgEiPTjiMXNpVOtPcwlTQ-1-52">nongningstudio/Shutterstock.com</a></span>
</figcaption>
</figure>
<h2>‘Reasonable acommodations’</h2>
<p>Perhaps the most visible signs of the ADA, passed in 1990, <a href="https://www.thebalancesmb.com/ada-ramp-construction-844440">are the ramps</a> and handicap parking spaces that have proliferated next to curbs and offices throughout the country. </p>
<p>The ADA, however, <a href="https://www.ada.gov/ada_title_I.htm">was intended</a> to do <a href="https://www.eeoc.gov/eeoc/history/ada25th/ada.cfm">a lot more to provide</a> people with physical and mental limitations job opportunities. A key element involved an employer’s responsibility to offer <a href="https://www.ada.gov/pubs/adastatute08.htm#12112">“reasonable accommodations”</a> to enable a person with a disability to carry out his or her duties, such as by modifying a work schedule, providing technological aids or <a href="https://www.eeoc.gov/policy/docs/accommodation.html#job">transferring the worker</a> to another position that he or she can perform.</p>
<p>The one caveat was if “doing so would pose an undue hardship” for the employer, meaning it would require significant difficulty or expense. What that meant in practice was left up to the courts to decide. </p>
<h2>Employer discretion</h2>
<p>In its early years, the ADA only <a href="https://www.doi.org/10.1177/10442073040150020301">moderately increased</a> the availability of accommodations in the workplace. And when workers sued, more than 90% of cases <a href="https://heinonline.org/HOL/Page?handle=hein.journals/menphydis31&div=22&g_sent=1&casa_token=&collection=journals">were decided</a> in favor of employers. </p>
<p>That’s because courts <a href="https://works.bepress.com/stacy_hickox/2/">have generally deferred</a> to employers in determining how to comply with the law. </p>
<p>Courts relied heavily on formal job descriptions and the employer’s judgment when interpreting <a href="https://www.eeoc.gov/eeoc/internal/reasonable_accommodation.cfm#_Toc531079187">essential job duties</a>, limiting the rights of people with disabilities to obtain accommodations. </p>
<p>For example, employers might deny a transfer as an accommodation by claiming another applicant for that position is better qualified to fill the role. The <a href="https://scholar.google.com/scholar_case?case=10492470324161296111&q=842+F.3d+1333&hl=en&as_sdt=80000006">discretion granted to employers</a> in determining who is better qualified means that companies can refuse to provide a transfer even when termination is the only alternative.</p>
<h2>Assumptions and stigmas</h2>
<p>Another goal of the ADA was to prevent employers from stigmatizing people with disabilities. </p>
<p>But <a href="https://doi.org/10.1111/ablj.12125">research I co-authored in 2018</a> examined how courts have permitted employers to rely on assumptions and stereotypes about what a person with disabilities is capable of when denying an accommodation request. This is of particular concern for people with a psychological or intellectual impairment, who are <a href="https://heinonline.org/HOL/Page?handle=hein.journals/berkjemp21&div=6&g_sent=1&casa_token=&collection=journals">often deemed</a> unqualified based on a diagnosis alone. </p>
<p>For example, an employer <a href="https://heinonline.org/HOL/Page?handle=hein.journals/emplrght9&div=13&g_sent=1&casa_token=&collection=journals">can require mental health</a> as a job requirement. That assumption – that someone with a mental health disorder such as bipolar disorder is fundamentally incapable of performing a specific task – makes it difficult for an applicant to show he or she is qualified for a job, with or without an accommodation. </p>
<p>Or an employer could intentionally define a job so as to disqualify people with disabilities. In 2005, Walmart <a href="https://www.nytimes.com/2005/10/26/business/walmart-memo-suggests-ways-to-cut-employee-benefit-costs.html">proposed that all jobs</a> require some physical activity to reduce the number of unhealthy job applicants and lower its health care costs.</p>
<p>But intentional discrimination is <a href="https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?referer=https://scholar.google.com/scholar?hl=en&as_sdt=0%2C23&q=intentional+discrimination+hard+to+prove&btnG=&httpsredir=1&article=1203&context=faculty_scholarship">hard to prove</a>, particularly when an employer <a href="https://www.eeoc.gov/eeoc/internal/reasonable_accommodation.cfm#_Toc531079187">retains the discretion</a> to define essential job duties.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273663/original/file-20190509-183089-19xxtmr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273663/original/file-20190509-183089-19xxtmr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=412&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273663/original/file-20190509-183089-19xxtmr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=412&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273663/original/file-20190509-183089-19xxtmr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=412&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273663/original/file-20190509-183089-19xxtmr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=518&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273663/original/file-20190509-183089-19xxtmr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=518&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273663/original/file-20190509-183089-19xxtmr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=518&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Activists march in New York’s annual Disability Pride Parade.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/PGroup-Rainmaker-Photo-MediaPunch-MediaPunch-IP-/ce87a1b0e6db4dc9b217445f7d7f6718/16/0">Rainmaker Photo/MediaPunch/IPX</a></span>
</figcaption>
</figure>
<h2>Missing an opportunity</h2>
<p>Although Congress <a href="https://www.eeoc.gov/laws/types/adaaa_notice_of_rights.cfm">amended the ADA</a> in 2008 to broaden the definition of who is covered, <a href="https://law.ubalt.edu/academics/publications/lawreview/volumes/8_Hickox%2040%203.pdf">I’ve found</a> that these changes didn’t do anything to ensure employers actually provide “reasonable accommodations” to their disabled workers. Instead, employers can still rely on generalized assumptions about what they’re qualified to do based on a diagnosis or past behavior.</p>
<p>While the <a href="https://caselaw.findlaw.com/us-supreme-court/527/471.html">Supreme Court has called</a> on companies to <a href="https://heinonline.org/HOL/Page?handle=hein.journals/hmax26&div=11&g_sent=1&casa_token=&collection=journals">analyze the abilities of each individual employee or job applicant</a> rather than rely on assumptions, lower courts continue to allow employers to do just that.</p>
<p>One fix is for Congress to tighten the definition of when an accommodation is reasonable, rather then allowing companies to decide for themselves. Unfortunately, I don’t see that happening anytime soon, and individual courts will interpret the act however they like. </p>
<p>But even without further tweaks to the ADA, there’s a strong case to be made that employers should be willing to do more to hire and retain people with disabilities, particularly in such a <a href="https://www.cnbc.com/2018/10/24/fed-says-these-are-highest-demand-jobs-from-this-tight-labor-market.html">tight labor market</a>. <a href="https://www.doi.org/10.1002/hrm.20211">Research shows</a> that these workers tend to perform well and remain loyal to employers who treat them with respect. </p>
<p>Not only that, accommodating a good worker rather than firing her <a href="https://heinonline.org/HOL/Page?handle=hein.journals/deplr46&div=27&g_sent=1&casa_token=&collection=journals">reduces turnover costs</a>. </p>
<p>If companies finally see the light, workplaces may eventually become as accessible to the disabled as public buildings.</p><img src="https://counter.theconversation.com/content/113015/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stacy Hickox does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ambiguities in the Americans with Disabilities Act have allowed employers to sidestep a major component of the law: the requirement to provide workers with ‘reasonable accommodations.’Stacy Hickox, Assistant Professor, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1167732019-05-09T18:25:39Z2019-05-09T18:25:39ZTV streaming titans are locked into a real-life Game of Thrones – here’s a way around this fight to the death<figure><img src="https://images.theconversation.com/files/273573/original/file-20190509-183112-1tzj83.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Let battle commence. </span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/index-in.mhtml">Vitalii Petrushenko</a></span></figcaption></figure><p>American retail giant Walmart is <a href="https://www.theverge.com/2019/5/5/18530069/vudu-walmart-initial-slate-original-content-streaming-shows-free-ads">becoming</a> the latest challenger to clamber into the ring and take on the reigning TV/movie streaming heavyweights with original material.</p>
<p>At a press conference in New York, Walmart announced a slate of new commissions for its streaming contender, Vudu. Added to the 100,000-plus TV shows and movies already available on the service, viewers can expect the likes of Friends in Strange Places, a travel/comedy series overseen by Queen Latifah; interview documentary strand Turning Point with Randy Jackson; and a series-length reboot of 1983 Michael Keaton comedy Mr Mom. </p>
<p>The new offering is aimed primarily at Middle America, which Walmart feels has been undersold by streaming incumbents like Netflix and Amazon Prime Video. Vudu’s shows will be a vehicle for new interactive advertising going live over the summer which will allow consumers to buy what they see without leaving their sofa. Thanks to its monster customer database, a senior Vudu manager <a href="https://www.mediapost.com/publications/article/335313/walmarts-vudu-positions-itself-as-sleeping-giant.html">recently described</a> Walmart as the “sleeping giant of the digital entertainment space”. </p>
<p>If so, it’s about to wake up to a very crowded marketplace. It’s only weeks since Apple <a href="https://www.whathifi.com/advice/apple-tv-app-and-apple-tv-streaming-service-everything-you-need-to-know">announced</a> streaming service Apple TV+, which is to combine licensed shows with original programming when it launches worldwide this autumn.</p>
<p>Disney, <a href="https://mashable.com/article/disney-plus-apple-tv/?europe=true">meanwhile</a>, is following suit with Disney+ in November – <a href="https://www.nytimes.com/2019/04/11/business/media/disney-plus-streaming.html">initially</a> in the US, then rolling out to other countries next year.</p>
<p>Other existing streamers include <a href="https://techcrunch.com/2018/11/09/disney-to-invest-in-more-original-content-for-hulu-expand-service-internationally/">Hulu</a> and <a href="https://www.vanityfair.com/hollywood/2019/01/hbo-plan-to-win-the-streaming-wars">HBO Now</a>, while <a href="https://www.broadcastingcable.com/news/discovery-to-launch-streaming-service-with-bbc-content">Discovery</a> and <a href="http://www.nbcuniversal.com/press-release/nbcuniversal-announces-direct-consumer-streaming-service-and-new-leadership-structure">NBCUniversal</a> are both launching rivals next year as well (click on the table below to make the full details bigger). Between them, these companies are spending many billions of dollars on content. It doesn’t take a seer to predict that a good few will likely fail. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/273844/original/file-20190510-183086-vvjdg9.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/273844/original/file-20190510-183086-vvjdg9.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273844/original/file-20190510-183086-vvjdg9.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=257&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273844/original/file-20190510-183086-vvjdg9.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=257&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273844/original/file-20190510-183086-vvjdg9.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=257&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273844/original/file-20190510-183086-vvjdg9.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=322&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273844/original/file-20190510-183086-vvjdg9.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=322&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273844/original/file-20190510-183086-vvjdg9.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=322&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">*US subscriptions only.</span>
</figcaption>
</figure>
<h2>Sizing them up</h2>
<p>Among these newer announcements, Apple and Disney look the stronger contenders. Apple has the ready-made platform of a billion devices to promote and deliver its service, while Disney has the richest content portfolio across multiple categories – from video games to live sports to superheroes. </p>
<p>Vudu may have the heft of Walmart behind it, but the content investment is likely to be a fraction of the other two: Apple has said it will spend US$2 billion (£1.5 billion) a year at first, while Disney is spending only $500m on originals, including the likes of three Avengers spin-offs, but the group’s total annual content spend <a href="http://fortune.com/2018/12/10/netflix-spending-hollywood-disney-comcast-budget/">is nearly</a> 50 times bigger. Walmart has not said what Vudu is spending. On the other hand, Vudu’s offering will be mostly free while Disney+ and Apple TV+ will both charge monthly subscriptions. </p>
<p>At any rate, all three are likely to struggle – and the same goes for the other new arrivals. We are heading for a serious case of “subscription fatigue”. When consumers watch free-to-air television, broadcasters take care of the messy process of making deals with content owners, aggregating it and serving it up. As pay-TV operators like Sky or the cable networks started to emerge, consumers had to sometimes choose a package to get a particular channel or programme. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/273576/original/file-20190509-183096-iq51a0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/273576/original/file-20190509-183096-iq51a0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273576/original/file-20190509-183096-iq51a0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273576/original/file-20190509-183096-iq51a0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273576/original/file-20190509-183096-iq51a0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273576/original/file-20190509-183096-iq51a0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273576/original/file-20190509-183096-iq51a0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273576/original/file-20190509-183096-iq51a0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">They have been warned.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/index-in.mhtml">diy13</a></span>
</figcaption>
</figure>
<p>But with streaming in future, this experience is going to become more and more frustrating – Where can I find Westworld? Where is Blue Planet these days? – not to mention expensive for anyone tempted by multiple offerings. By building competing services, all these media giants are playing their own Game of Thrones.</p>
<h2>The fix</h2>
<p>The way forward is clear, but controversial. Apple, Disney, AT&T, NBCUniversal and the other large players should collaborate to create a dominant content platform. Partnering among subscription services would take some of the burden off consumers and make the combined offering more appealing than existing options. Imagine subscribing to a single service to receive access to everything from classic TV and movies to the latest shows. The market can probably handle two or three mega platforms, but not more.</p>
<p>Ironically, Disney already has a ready-made option in its arsenal. Hulu was set up as a joint venture between Disney, NBCUniversal, Fox and WarnerMedia (now owned by AT&T). Yet Hulu’s claim to be a cross-industry platform is getting weaker, not stronger: Fox’s 30% share <a href="https://www.businessinsider.com/how-disney-fox-merger-affects-consumers-hulu-marvel-streaming-2019-3?r=US&IR=T">defaulted</a> to Disney when it was taken over, and AT&T <a href="https://www.theverge.com/2019/4/15/18312068/disney-hulu-att-sells-stake-comcast-control-streaming">has announced</a> it wants to sell its 10% holding. Hulu may have recently diversified with its recent <a href="https://techcrunch.com/2019/03/12/hulu-and-spotify-launch-an-even-more-steeply-discounted-bundle-of-9-99-per-month/">partnership announcement</a> with music streamer Spotify, but Disney’s new dominance of the service will probably make it a less attractive option for other media companies to buy into than previously.</p>
<p>If media companies collaborated with their streaming services, it would certainly come with antitrust concerns. But unless they evolve into an industry platform soon, the door will open for other players to take the lead – I’m thinking digital giants like Google or Facebook, internet service providers or telecommunications companies.</p>
<p>Many of these players already have a subscription relationship with consumers, so it would be relatively easy for them to bundle video streaming into existing services. Amazon’s shift into the media world is a textbook example of how this could play out. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/273578/original/file-20190509-183089-1m577og.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/273578/original/file-20190509-183089-1m577og.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273578/original/file-20190509-183089-1m577og.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273578/original/file-20190509-183089-1m577og.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273578/original/file-20190509-183089-1m577og.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273578/original/file-20190509-183089-1m577og.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=425&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273578/original/file-20190509-183089-1m577og.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=425&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273578/original/file-20190509-183089-1m577og.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=425&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">One service to rule them all.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/index-in.mhtml">Metamorworks</a></span>
</figcaption>
</figure>
<p>It is reminiscent of the early 2000s, in which the record majors built walled gardens around their content only to watch in horror as Apple’s iTunes stole the market from under them with a convenient, cheap and comprehensive option. Spotify then stole it again a few years later. Media companies should also beware the prospect of consumers being driven in larger numbers to illegal or quasi-legal video consolidation services. </p>
<p>There are recent precedents that they could follow of competitive partnering in other industries: BMW and Daimler <a href="https://www.theverge.com/2019/2/22/18235941/daimler-bmw-mobility-joint-venture-billion-dollars">recently announced</a> they would join forces to build common platforms for ride sharing and electric vehicle charging, among other things, having realised they are stronger together than apart. </p>
<p>The media giants would be well advised to start exploring similar possibilities.
Consumers <a href="https://variety.com/2019/digital/news/streaming-subscription-fatigue-us-consumers-deloitte-study-1203166046/">are already</a> baulking at both the cost of multiple subscription services and the inconvenience of having to keep track of which shows are on which services. The ultimate winner will be the first option that can provide scale and convenience at a reasonable cost. If today’s streaming companies aren’t careful, they will end up on the outside looking in.</p><img src="https://counter.theconversation.com/content/116773/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Wade does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Vudu, Apple TV+, Disney +, NBC Universal: there’s going to be a lot of blood on the carpet.Michael Wade, Professor of Innovation and Strategy, Cisco Chair in Digital Business Transformation, International Institute for Management Development (IMD)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1154152019-04-15T10:54:47Z2019-04-15T10:54:47ZRetailers like Walmart are embracing robots – here’s how workers can tell if they’ll be replaced<figure><img src="https://images.theconversation.com/files/269093/original/file-20190412-76862-1p14d7l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Who needs a worker checking shelves when you have a robot?</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Higher-Pay-More-Productive/cc6e8eb899654b4da762986b4c224db1/2/0">AP Photo/David J. Phillip</a></span></figcaption></figure><p>Walmart <a href="https://news.walmart.com/2019/04/09/squadgoals-how-automated-assistants-are-helping-us-work-smarter">recently said</a> it plans to deploy robots to scan shelves, scrub floors and perform other mundane tasks in its stores as the <a href="https://www.wsj.com/articles/walmart-is-rolling-out-the-robots-11554782460">retail giant seeks to lower labor costs</a>. </p>
<p>While the retail giant did not say which jobs, if any, might be lost as a result, the announcement – and the many more surely to follow at other big box retailers – begs the question: How can workers prepare for a future of increasingly automated work? </p>
<p>Millions of today’s jobs are expected to be affected by artificial intelligence and automation as part of the “<a href="https://timreview.ca/article/1117">fourth industrial revolution</a>.” But just which occupations are most at risk has been a guessing game among economists, futurists and scholars trying to predict <a href="https://hbr.org/2019/02/research-automation-affects-high-skill-workers-more-often-but-low-skill-workers-more-deeply">winners and losers</a>. </p>
<p>As experts on <a href="https://scholar.google.com/citations?user=rNnjLUsAAAAJ&hl=en&oi=ao">workers’ identities and careers</a> and <a href="https://scholar.google.com/citations?hl=en&user=2rn8CPEAAAAJ">industry and technological change</a>, we developed a new tool we believe will help workers more accurately determine the fate of their professions – and figure out how best to prepare.</p>
<h2>Who will be hurt</h2>
<p>A host of research studies have examined where industrial revolution 4.0 is likely to wield its greatest impact. </p>
<p>Driven by a focus on cost and efficiency, most predictions pit one group of workers against another. For example, <a href="https://www.doi.org/10.1257/jep.29.3.3">blue collar versus white collar</a>, <a href="https://www.doi.org/10.1086/697242">skilled versus unskilled</a>, <a href="https://www.pbs.org/newshour/show/automation-threatens-jobs-can-education-create-new-ones">college-educated versus not college-educated</a> and even predictions by <a href="https://www.mckinsey.com/featured-insights/future-of-work/automation-and-the-future-of-the-african-american-workforce">race</a> and <a href="https://iwpr.org/publications/women-automation-future-of-work/">gender</a>.</p>
<p>While these broad groupings <a href="https://www.newyorker.com/magazine/2019/03/04/are-robots-competing-for-your-job">may grab headlines</a>, they offer little guidance to individual workers at a time when, more than ever, individuals are expected to take responsibility for managing and <a href="https://hbr.org/2018/11/a-simple-way-to-map-out-your-career-ambitions">driving their own careers</a>.</p>
<p>Rather than focus on efficiency or cost, <a href="https://sloanreview.mit.edu/article/four-ways-jobs-will-respond-to-automation/">our research</a> offers a more nuanced and sustainable tool for examining the fate of one’s profession: value.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/269239/original/file-20190415-147508-qdo8va.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/269239/original/file-20190415-147508-qdo8va.gif?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/269239/original/file-20190415-147508-qdo8va.gif?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/269239/original/file-20190415-147508-qdo8va.gif?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/269239/original/file-20190415-147508-qdo8va.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/269239/original/file-20190415-147508-qdo8va.gif?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/269239/original/file-20190415-147508-qdo8va.gif?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">While humans will still value the skills of a college professor in the future, AI and online learning tools are threatening the way those abilities are delivered.</span>
<span class="attribution"><span class="source">AP Photo/Matt Rourke</span></span>
</figcaption>
</figure>
<h2>Worker value</h2>
<p>Our research is based on the idea that every individual’s work creates value in his or her day-to-day job. </p>
<p>That value may be something a customer pays for, may enable co-workers to do their own jobs or may help the company to function internally. In any case, every job provides some degree of worth or usefulness to another party. The value is constant, but the way it is created and delivered to the end user can be threatened by automation and AI. Only after we’ve evaluated that can we determine how the coming wave of technological change will affect a job’s future prospects. To assess these threats, we need to break value down into two key components.</p>
<p>First, value is created by the skills required to complete a job, such as a programmer’s ability to code or a painter’s knack at prepping a wall and applying paint cleanly. In general, we’ve found that when skills are standardized, they are more likely to be threatened by automation or AI. </p>
<p>The second component of value, though, is separate from skills. It’s the method of delivering a job’s value to someone else, which can also be threatened by new technology. We call this “value form.”</p>
<p>For example, while a college professor’s skills and expertise in a particular domain may not be under immediate threat, the form in which their value is delivered is certainly threatened by <a href="https://qz.com/is/what-happens-next-2/1469287/future-of-college/">online learning platforms</a> and the increased use of <a href="https://qz.com/1065818/ai-university/">AI education tools</a>.</p>
<p>By considering these two threats together, workers can better assess if their jobs are at risk. </p>
<h2>Displaced or durable</h2>
<p>Our framework has four categories: A job could be displaced, disrupted, deconstructed or durable depending on the level of threat facing its skills and value form. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/269098/original/file-20190412-76856-1ygf7m0.gif?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/269098/original/file-20190412-76856-1ygf7m0.gif?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/269098/original/file-20190412-76856-1ygf7m0.gif?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/269098/original/file-20190412-76856-1ygf7m0.gif?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/269098/original/file-20190412-76856-1ygf7m0.gif?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/269098/original/file-20190412-76856-1ygf7m0.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=498&fit=crop&dpr=1 754w, https://images.theconversation.com/files/269098/original/file-20190412-76856-1ygf7m0.gif?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=498&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/269098/original/file-20190412-76856-1ygf7m0.gif?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=498&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">This value matrix helps workers assess the threat their occupations face based on the two components of value.</span>
<span class="attribution"><a class="source" href="https://sloanreview.mit.edu/article/four-ways-jobs-will-respond-to-automation/">Latham and Humberd, MIT Sloan Management Review</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p><strong>Displaced</strong> signifies the jobs that are most in danger. Our analysis shows <a href="https://www.pbs.org/newshour/science/3-white-collar-jobs-robots-can-already-better">pharmacists</a>, <a href="https://www.wsj.com/articles/how-robots-may-make-radiologists-jobs-easier-not-redundant-1511368729">radiologists</a> and <a href="https://www.smithsonianmag.com/smart-news/robot-librarian-locates-haphazardly-placed-books-180959381/?no-ist">librarians</a> all belong in the displaced category. </p>
<p><strong>Disrupted</strong> means the skills are highly threatened, but people desire the recognized or current method of delivery, which often involves a human interaction. Examples include fast food servers, <a href="https://blogs.wsj.com/cfo/2017/03/07/need-an-accountant-try-a-robot-instead/">accountants</a> and real estate agents. </p>
<p><strong>Deconstructed</strong> flips those two around: The skills are hardly standardized but automation poses a serious threat to how the job’s value is delivered. Photographers, college professors and livery drivers are in this category. </p>
<p><strong>Durable</strong> jobs are the safest ones because both the skills and the value form are difficult or costly to automate. Lucky workers in this category include electricians, plumbers and physician assistants. </p>
<h2>What we learn from value</h2>
<p>In some ways, the value framework confirms what others have found. </p>
<p>For example, no one would have argued that shelf stockers at big box retailers like Walmart would be a safe job for years to come – as the retailer’s announcement confirms. Putting them in our framework, their primary skills of keeping inventory stocked and shelves clean are severely threatened because they are standardized and routine. </p>
<p>Furthermore, robots can deliver more value through automated transmission of inventory information. Thus, our model shows these workers will most likely be displaced. </p>
<p>However, our focus on value suggests that other predictions based merely on categories of at-risk jobs may be missing the mark. For example, <a href="https://interestingengineering.com/ai-expert-claims-plumbers-and-electricians-will-be-last-to-get-replaced-by-robots">some people predict</a> many jobs are threatened simply because they are routine, non-college-educated or blue-collar, like plumbers, electricians and hospice workers. Yet, rewiring an electrical system in a historic home or caring for a hospice patient are nonstandard jobs that require a human to create and deliver value, which is why these jobs can be quite durable.</p>
<h2>What workers can do</h2>
<p>Once workers understand the value they create and the threat automation poses to their skills and value form, what actions can they take? </p>
<p>The common answer they’ve been given thus far involves encouraging them to engage in <a href="https://hbr.org/2018/05/automation-will-make-lifelong-learning-a-necessary-part-of-work">lifelong learning</a>. But a focus on value the way our model does provides much more nuanced guidance. </p>
<p>Workers in deconstructed jobs, for example, don’t need new skills. They just need to learn to adapt existing skills to new forms of delivery. Conversely, workers in disrupted jobs need training to work alongside robots and AI systems during periods of transition.</p>
<p>And even if displaced workers – a fate that is likely to be on the horizon for Walmart’s shelf stockers – need to consider retraining, the traditional higher education system is <a href="https://www.forbes.com/sites/heathermcgowan/2019/04/03/what-if-the-future-of-work-starts-with-high-school/#567e3bdb5964">not well suited</a> for the future of work. Universities focus on the longer-term bachelor’s-to-master’s pathway. Rather, individuals need access to quick, modular and adaptable pathways to new jobs. </p>
<p>The 48-year-old parent who just lost his job as an accountant is not able to begin a new four-year degree program. But a three-month program to earn a cybersecurity certificate would be doable and all he needs. </p>
<p>The future of work is already here. Days after Walmart’s announcement, workers at Stop & Shop, a large regional grocery chain in the Boston area, are <a href="https://www.bizjournals.com/boston/news/2019/04/12/stop-shop-strike-shows-mass-labor-unions-growing.html">striking</a> over increased automation. But we have time. Let’s worry less about robots and AI itself and more about the value workers can create in different jobs in a landscape that will continue to change for years to come. Value is the only constant.</p><img src="https://counter.theconversation.com/content/115415/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Two management experts devised a new way to predict whether your job is likely to get stolen by a robot – and what you can do about it.Beth Humberd, Assistant Professor of Management, UMass LowellScott F. Latham, Associate Professor of Strategic Management, UMass LowellLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1113032019-02-19T22:10:32Z2019-02-19T22:10:32ZClimate action helps companies build reputations and attract investors<figure><img src="https://images.theconversation.com/files/259359/original/file-20190216-56208-w0vexd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Investors are starting to demand businesses take action on climate change. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/new-york-city-usa-october-30-1065011192">(Shutterstock)</a></span></figcaption></figure><p>This year, climate change topped off the agenda at the annual meeting of the World Economic Forum in Davos, Switzerland — where every January, global leaders and the heads of the world’s largest companies gather to find ways to improve the state of the world. When surveyed, <a href="https://www.reuters.com/article/us-davos-meeting-climatechange/failure-to-curb-climate-change-a-top-risk-davos-survey-idUSKCN1PA13J">experts from government, business, academia and non-governmental organizations said the failure to respond to climate change is a key risk</a>. </p>
<p>Companies committed to tackle climate change are addressing their greenhouse gas emissions (GHGs) via <a href="https://sciencebasedtargets.org/what-is-a-science-based-target/">science-based targets</a>. These voluntary goals are compatible with the global push towards a low-carbon economy that aims to keep the global temperature increase to less than 2°C.</p>
<p>One program that is gaining traction globally is the <a href="https://sciencebasedtargets.org/">Science Based Targets initiative</a> (SBTi), a collaboration between <a href="https://www.cdp.net/en">CDP, a not-for-profit charity</a>, the <a href="https://www.unglobalcompact.org/">UN Global Compact</a>, the <a href="https://www.wri.org/">World Resources Institute</a> and the <a href="https://climatesavers.org/">World Wildlife Fund</a>. This program creates a global community where companies can set targets that align with the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement">Paris Agreement</a>. </p>
<p>Joining a global community like SBTi not only provides a formal framework for measurement and tracking goals, it also signals <a href="https://www.forbes.com/sites/mikescott/2018/07/10/the-worlds-biggest-companies-are-set-to-decarbonize-their-products/#75b8577038f1">a company’s commitment to climate change action</a>. As of early 2019, <a href="https://sciencebasedtargets.org/companies-taking-action/">525 companies</a> have signed on, including 169 with approved targets.</p>
<h2>Big companies at the forefront</h2>
<p>IKEA, Unilever, Tesco, General Mills, L’Oreal, Walmart and McDonald’s are among the large multinational corporations that have signed on to the SBTi. </p>
<p><a href="https://www.ikea.com/us/en/about_ikea/newsitem/061318-IKEA-Group-climate-positive-2030">IKEA Group</a>, for example, has committed to an 80 per cent reduction in GHG emissions in stores and other operations and a 50 per cent reduction in emissions from travel and customer deliveries by 2030, compared to 2016 levels. It will also cut emissions in its value chain by at least 15 per cent, resulting in a 70 per cent reduction in the climate footprint of an <a href="https://www.prnewswire.com/news-releases/ikea-group-commits-to-zero-emissions-targets-for-home-delivery-in-five-major-cities-by-2020-300712424.html">average IKEA product</a>.</p>
<p>Large companies can make change within their own operations and along the supply chain. <a href="https://www.newswire.ca/news-releases/mcdonalds-becomes-the-first-restaurant-company-to-set-approved-science-based-target-to-reduce-greenhouse-gas-emissions-677353923.html">McDonald’s</a> plans to reduce its emissions intensity across its supply chain by 31 per cent by 2030 (baseline 2015) by targeting energy use and packaging waste in restaurants, and streamlining its beef production, which make up more <a href="https://sciencebasedtargets.org/2018/03/20/mcdonalds-has-pledged-to-slash-greenhouse-gas-emissions-its-charting-a-course-for-sustainable-growth/">60 per cent of emissions</a>.</p>
<p>Similarly, General Mills, the packaged food company (Cheerios, Yoplait and Green Giant) set a science-based target to cut its GHG emissions by 28 per cent by 2025 (from a 2010 baseline) across its entire value chain, from <a href="http://www.csrwire.com/press_releases/38222-General-Mills-Announces-New-Commitment-on-Climate-Change">farm to table to landfill</a>. It plans to do this by <a href="https://www.generalmills.com/en/News/Issues/climate-policy">getting its farmers to adopt sustainable practices that reduce emissions and protect at risk water sources</a>, for example. </p>
<p>Companies participate in global sustainability initiatives and set external goals because of their sustainability mindset, <a href="https://www.theguardian.com/sustainable-business/three-reasons-investors-consider-sustainability">strategic gains, external competitive or reputational risk pressures</a> and <a href="https://www.wri.org/our-work/project/mind-science-mind-gap-aligning-corporate-ghg-emissions-reduction-targets-climate-0">recognition of an inexorable shift to a low-carbon economy</a>. </p>
<p>While participation in the SBTi is voluntary, the results are reported publicly. Even though there are few tangible sanctions for non-performance, the absence of achievement or reporting can harm a company’s reputation.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259360/original/file-20190216-56208-19hbkpy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Former U.S. Vice-President Al Gore speaks during the ‘Safeguarding the planet’ session at the annual meeting of the World Economic Forum in Davos, Switzerland, in January 2019.</span>
<span class="attribution"><span class="source">(AP Photo/Markus Schreiber)</span></span>
</figcaption>
</figure>
<p>In Canada, only nine companies have joined the SBTi, and all but one remain at the commitment-setting stage. <a href="https://www.cn.ca/-/media/Files/Delivering-Responsibly/Environment/CDP-2017-en.pdf">Canadian National Railway</a> has promised to reduce its emissions intensity by 29 per cent by 2030, based on a 2015 baseline. </p>
<p>There are several reasons for the low participation in SBTi among Canadian companies. <a href="https://www.cpacanada.ca/en/news/world/2018-12-07-climate-change-and-business">The Chartered Professional Accountants of Canada</a> argues that more than 99 per cent of businesses in Canada are small businesses, with fewer resources, employees and pressures.</p>
<h2>Key benefits</h2>
<p>SBTi and the participating companies, however, see a number of benefits from setting targets. They also provide companies with long-term goals that will be resistant to changes in management and shifts in business priorities.</p>
<p>A major European electric company, EDP, found <a href="https://www.huffingtonpost.com/entry/utility-edp-key-benefits-from-setting-a-science-based_us_595e0944e4b0cf3c8e8d5671">strategic benefits</a> in laying plans to decarbonize — it builds reputation, improves visibility and helps it benefit from innovation, and had a favourable response from investors, employees and customers. </p>
<p><a href="https://www.walmartsustainabilityhub.com/project-gigaton/emissions-targets">Walmart</a> says it is part of their sustainability journey to encourage others to look at emissions as a form of waste with financial value or inefficiency in the value chain. <a href="https://news.walmart.com/2017/04/19/walmart-launches-project-gigaton-to-reduce-emissions-in-companys-supply-chain">In 2017, it launched Project Gigaton</a> to encourage suppliers to eliminate one billion tonnes of GHG emissions from their operations and supply chains by 2030 by targeting one of six pillars: energy, waste, packaging, agriculture, forests or product use. Suppliers achieving goals and communicating performance publicly are recognized as “<a href="https://www.walmartsustainabilityhub.com/supplier-recognition">Giga-Gurus</a>.”</p>
<p><a href="https://www.unilever.com/news/news-and-features/Feature-article/2018/what-are-science-based-targets-and-why-do-we-use-them.html">Unilever</a> looks at science-based targets to boost its competitive advantage in the shift towards a low-carbon economy and to hedge against regulator pressures and the costs related to carbon pricing. In 2017, <a href="https://www.unilever.com/sustainable-living/reducing-environmental-impact/greenhouse-gases/">Unilever</a> reduced energy-related emissions by 47 per cent per tonne of production from 2008 levels, and shifted towards renewable energy in manufacturing. The company also identified a nine per cent increase in GHG emissions from its consumer products since 2010, largely due to the consumers’ <a href="https://www.unilever.com/sustainable-living/reducing-environmental-impact/greenhouse-gases/">hot showers</a> when using their products. </p>
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Read more:
<a href="https://theconversation.com/how-divesting-of-fossil-fuels-could-help-save-the-planet-88147">How divesting of fossil fuels could help save the planet</a>
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<p>The food and beverage sector — considered a <a href="https://www.globalpolicyjournal.com/blog/05/02/2019/will-science-based-targets-save-us-insights-global-food-industry">significant driver of global climate change</a> and the one with the <a href="https://oxfamilibrary.openrepository.com/bitstream/handle/10546/610563/tb-science-based-targets-carbon-emmissions-250516-en.pdf">most at risk from climate change</a> — has been an early adopter of science-based targets. Fifty-nine businesses, including Ben & Jerry’s and PepsiCo, have either set targets or are at the commitment stage. </p>
<p>Other global initiatives to encourage businesses to develop responsible practices and meet climate goals are also on the rise. For example, <a href="https://www.unpri.org/pri/about-the-pri">Principles for Responsible Investment</a> has attracted 2,232 investors who believe in an “economically efficient, sustainable global financial system” and who agree to incorporate environmental, sustainability and governance issues into their investment practice. </p>
<p><a href="https://www.newswire.ca/news-releases/majority-of-canadians-support-more-action-on-climate-change-615563183.html">Eighty-seven per cent of Canadians</a> believe businesses must make a stronger commitment to climate change action. Youth, in particular, are demanding more commitment, and future consumers such as Greta Thunberg are <a href="https://www.theguardian.com/environment/2019/feb/15/the-beginning-of-great-change-greta-thunberg-hails-school-climate-strikes">taking to the world stage and inspiring other students</a> to raise their voices.</p>
<p>It is unlikely that one company or one nation will make a significant impact on reducing emission levels, however, climate change can have significant impact on business.</p><img src="https://counter.theconversation.com/content/111303/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rumina Dhalla does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Business leaders are beginning to take the global climate issue seriously by setting science-based targets to reduce greenhouse gas emissions.Rumina Dhalla, Associate Professor, Organizational Studies and Sustainable Commerce, CSR/Sustainability Coordinator and MBA Graduate Coordinator, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1055602018-11-22T23:05:09Z2018-11-22T23:05:09ZHow today’s MBA graduates can help save the world<figure><img src="https://images.theconversation.com/files/246692/original/file-20181121-161641-rpqwyx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">MBA programs that produce leaders who are committed to sustainability are on the rise. Here's why Canada can lead the pack in turning out business leaders who can change the world.
</span> <span class="attribution"><span class="source">Baim Hanif/Unsplash</span></span></figcaption></figure><p>Recent <a href="https://www.wsj.com/articles/m-b-a-applications-keep-falling-in-u-s-this-year-hitting-even-elite-schools-1538366461">news reports</a> have suggested that the MBA (masters in business administration) may be “losing its lustre” at American business schools, including some of the most elite on the planet.</p>
<p>The Graduate Management Admission Council (GMAC) has reported <a href="https://www.gmac.com/-/media/files/gmac/research/admissions-and-application-trends/gmac-application-trends-survey-report-2018.pdf">declining U.S. applications</a>, while in Canada the opposite is true, with applications increasing almost eight per cent last year. </p>
<p>The council’s report also found that of 60 Canadian business school programs, almost half reported growth or stability in domestic applications, while 76 per cent reported growth or stability in international applicants.</p>
<p>Why are we seeing this increase? </p>
<p>It’s because Canada offers an attractive destination for international students looking for a progressive environment in which to study, alongside the prospect of gaining Canadian work experience and residency following <a href="https://www.canada.ca/en/immigration-refugees-citizenship/services/study-canada/work/after-graduation.html">the completion of their degrees</a>.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/246690/original/file-20181121-161641-ma3tyu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/246690/original/file-20181121-161641-ma3tyu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/246690/original/file-20181121-161641-ma3tyu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/246690/original/file-20181121-161641-ma3tyu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/246690/original/file-20181121-161641-ma3tyu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/246690/original/file-20181121-161641-ma3tyu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/246690/original/file-20181121-161641-ma3tyu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">International students are attracted to Canada to further their business education.</span>
<span class="attribution"><span class="source">Andre Hunter/Unsplash</span></span>
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</figure>
<p>For both international and domestic students, program quality, cost, convenience and reputation related to business school rankings are also significant factors. </p>
<p>While those rankings typically use salary and reputational data as primary determinants, we are seeing a shift towards more progressive criteria.</p>
<p>The most notable of that type of measurement is the Toronto-based Corporate Knights’ <a href="https://www.corporateknights.com/reports/2018-better-world-mba-methodology/making-the-grade-15417432/">Better World MBA ranking</a>.</p>
<p>Last week, Corporate Knights released its 2018 Better World MBA rankings, selecting programs based on how they encourage future business leaders to contribute to building a better, more sustainable world. There were 11 Canadian schools in the Top 40, including the University of Guelph at No. 9 for its MBA in sustainable commerce.</p>
<h2>Consumers want companies to fuel change</h2>
<p>It has never been more important to teach leaders of the future the skills to solve pressing issues. Sixty-four per cent of consumers now expect <a href="https://www.edelman.com/sites/g/files/aatuss191/files/2018-10/2018_Edelman_Earned_Brand_Global_Report.pdf">brands to drive</a> positive change, according to a recent Edelman report. And it’s through sustainably focused programs that we can ensure future leaders have the ability to solve global problems.</p>
<p>By 2025, millennials will make up 75 per cent of the workforce. Businesses need to adapt in order to compete for talent given 81 per cent of millennials believe that a successful business needs to have <a href="https://www.forbes.com/sites/annefield/2017/12/11/millennials-want-companies-mixing-mission-and-money/#3202dcaabf2c">genuine purpose</a>, and two-thirds aspire to make a positive difference in the world.</p>
<p>One in two consumers today are belief-driven buyers, according to Edelman, and of these, <a href="https://www.edelman.com/sites/g/files/aatuss191/files/2018-10/2018_Edelman_Earned_Brand_Global_Report.pdf">two-thirds</a> will not buy from a brand if it stays silent on an issue its potential customers feel it has an obligation to address. </p>
<p>Brands are consequently responding to modern consumer expectations. </p>
<p><a href="https://www.forbes.com/sites/edfenergyexchange/2018/10/25/walmart-and-unilevers-push-to-halt-deforestation-may-signal-change-for-business/#1cbc89f8281e">Walmart and Unilever</a> recently came together to limit tropical deforestation in response to demand for sustainable supply chains.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/246683/original/file-20181121-161615-145zjdf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/246683/original/file-20181121-161615-145zjdf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=376&fit=crop&dpr=1 600w, https://images.theconversation.com/files/246683/original/file-20181121-161615-145zjdf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=376&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/246683/original/file-20181121-161615-145zjdf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=376&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/246683/original/file-20181121-161615-145zjdf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=472&fit=crop&dpr=1 754w, https://images.theconversation.com/files/246683/original/file-20181121-161615-145zjdf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=472&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/246683/original/file-20181121-161615-145zjdf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=472&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">A deforested area near Novo Progresso in Brazil’s northern state of Para.</span>
<span class="attribution"><span class="source">(AP Photo/Andre Penner, File)</span></span>
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</figure>
<p><a href="https://www.microsoft.com/en-us/diversity/inside-microsoft/cross-disability/hiring.aspx">Microsoft</a> is championing inclusion, providing employment opportunities to people with disabilities, while workplace messaging giant Slack recently <a href="https://www.theatlantic.com/technology/archive/2018/08/big-techs-newest-experiment-in-criminal-justice-reform/568849/">announced an apprenticeship offering jobs to the formerly incarcerated.</a></p>
<p>Rapidly growing international companies like <a href="https://www.benandjerrys.ca/">Ben & Jerry’s</a>, <a href="https://www.patagonia.ca/home/">Patagonia</a> and <a href="https://www.danone.ca/">Danone</a> have committed to social, environmental, governance and employee accountability. </p>
<p>In a world where employees and consumers are pushing businesses to be more sustainable, there’s a growing need for leaders who share these values — and for business degrees committed to developing people who will guide the purpose-driven organizations of the future.</p>
<h2>A role for Canada</h2>
<p>At the University of Guelph’s <a href="https://www.uoguelph.ca/business/">College of Business and Economics</a>, we aim to improve life through business. As champions of the <a href="http://www.unprme.org/">United Nations Principles of Responsible Management Education</a> initiative, we are pushing the frontiers of knowledge through socially relevant curricula and research in line with the <a href="https://sustainabledevelopment.un.org/?menu=1300">UN’s Sustainable Development Goals</a>. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/246243/original/file-20181119-76137-yham37.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/246243/original/file-20181119-76137-yham37.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/246243/original/file-20181119-76137-yham37.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/246243/original/file-20181119-76137-yham37.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/246243/original/file-20181119-76137-yham37.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/246243/original/file-20181119-76137-yham37.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/246243/original/file-20181119-76137-yham37.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/246243/original/file-20181119-76137-yham37.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">University of Guelph business students hold the United Nations Sustainable Development Goals.</span>
<span class="attribution"><span class="source">University of Guelph</span></span>
</figcaption>
</figure>
<p>Our undergraduate students participate in the <a href="https://aim2flourish.com/">Aim2Flourish</a> program, interviewing leaders of innovative social-purpose organizations, and they’re increasingly launching their own entrepreneurial ventures. </p>
<p>In our MBA program, students are participating in live case studies, helping organizations increase their profits and their positive impact on society. Through all of this, we are inspiring students to tackle issues like poverty, hunger and inequality through business innovation, but we recognize that no one business school can fully change the world.</p>
<p>Collaboration is key to affecting positive change, and Canadian business schools are leading by example in driving purposeful collaboration. </p>
<p>Business schools, thought leaders and associations are coming together to learn from one another through initiatives such as the dean’s and director’s cohort of the <a href="http://www.grli.org/">Globally Responsible Leadership Initiative</a> and the <a href="https://www.cfbsd.ca/event-2726026">Canadian Federation of Business School Deans’</a> meetings on disruption and sustainability in education. </p>
<p>By working with others, we’re all creating a new kind of educational experience. Rankings and application numbers prove the appetite exists for this new form of business education.</p>
<p>Last year, the University of Guelph saw a 46 per cent increase in applications to our MBA program. While still relatively small, enrolment in the MBA in Sustainable Commerce has doubled since 2015.</p>
<p>We fully anticipate that demand will continue to rise. That’s because of the increasing need for a new kind of business leader, one who aspires to use business as a “force for good” in confronting the world’s most pressing problems, whether it’s social inequality, environmental degradation or food insecurity.</p>
<p>For the good of the planet, it’s essential that business schools increasingly emphasize sustainability and ethical leadership. MBA programs — the most dominant graduate degree in the world — must endeavour to develop the leaders so desperately needed. And this is where Canada can truly lead.</p><img src="https://counter.theconversation.com/content/105560/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Julia Christensen Hughes is affiliated with
University of Guelph - Dean
Canadian Federation of Business School Deans - Vice Chair
Founding member GRLI Deans and Directors Cohort</span></em></p>In a world where employees and consumers want businesses to be more sustainable, there’s a growing need for business leaders who share these values — and a new type of business education.Julia Christensen Hughes, Dean, College of Business and Economics, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1064912018-11-21T11:49:53Z2018-11-21T11:49:53ZBlockchain systems are tracking food safety and origins<figure><img src="https://images.theconversation.com/files/245985/original/file-20181116-194497-1czc4nj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">It looks good, but where did this pork come from?</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/different-types-raw-pork-meat-beef-1038555919">Artem Shadrin</a></span></figcaption></figure><p>When a Chinese consumer buys a package labeled “Australian beef,” there’s only a <a href="https://www.farmonline.com.au/story/5403286/food-fraud-bites-aussie-ag-exports/">50-50 chance</a> the meat inside is, in fact, Australian beef. It could just as easily contain <a href="https://www.farmonline.com.au/story/5403286/food-fraud-bites-aussie-ag-exports/">rat, dog, horse or camel meat</a> – or a mixture of them all. It’s gross and dangerous, but also costly.</p>
<p>Fraud in the global food industry is a <a href="https://press.pwc.com/News-releases/fighting--40bn-food-fraud-to-protect-food-supply/s/44fd6210-10f7-46c7-8431-e55983286e22">multi-billion-dollar problem</a> that has lingered for years, <a href="https://www.theguardian.com/world/2013/may/03/china-arrests-fake-meat-scandal">duping consumers</a> and even <a href="https://qz.com/1323471/ten-years-after-chinas-melamine-laced-infant-milk-tragedy-deep-distrust-remains/">making them ill</a>. Food manufacturers around the world are concerned – as many as <a href="https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12039985">39 percent</a> of them are worried that their products could be easily counterfeited, and <a href="https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12039985">40 percent</a> say food fraud is hard to detect.</p>
<p>In <a href="https://doi.org/10.1080/01436597.2017.1298438">researching blockchain for more than three years</a>, I have become convinced that this technology’s potential to <a href="https://theconversation.com/blockchain-based-property-registries-may-help-lift-poor-people-out-of-poverty-98796">prevent fraud</a> and <a href="https://theconversation.com/using-blockchain-to-secure-the-internet-of-things-90002">strengthen security</a> could fight agricultural fraud and improve food safety. Many companies agree, and are already running various tests, including tracking wine from grape to bottle and even following individual coffee beans through international trade.</p>
<h2>Tracing food items</h2>
<p>An early trial of a blockchain system to track food from farm to consumer was in 2016, when Walmart collected information about pork being raised in China, where consumers are <a href="https://doi.org/10.1111/rego.12160">rightly skeptical</a> about sellers’ claims of what their food is and where it’s from. Employees at a pork farm <a href="https://classic.qz.com/perfect-company-2/1146289/the-worlds-biggest-retailer-wants-to-bring-blockchains-to-the-food-business">scanned images of farm inspection reports</a> and livestock health certificates, storing them in a secure online database where the records could not be deleted or modified – only added to. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/245986/original/file-20181116-194509-l5d5hx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/245986/original/file-20181116-194509-l5d5hx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/245986/original/file-20181116-194509-l5d5hx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/245986/original/file-20181116-194509-l5d5hx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/245986/original/file-20181116-194509-l5d5hx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/245986/original/file-20181116-194509-l5d5hx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/245986/original/file-20181116-194509-l5d5hx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/245986/original/file-20181116-194509-l5d5hx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Government inspectors review processing plants for safe handling practices.</span>
<span class="attribution"><a class="source" href="https://www.usda.gov/media/blog/2013/01/17/committed-food-safety-meet-supervisory-veterinary-medical-officer-dr-douglas">U.S. Department of Agriculture</a></span>
</figcaption>
</figure>
<p>As the animals moved from farm to slaughter to processing, packaging and then to stores, the drivers of the freight trucks played a key role. At each step, they would <a href="https://classic.qz.com/perfect-company-2/1146289/the-worlds-biggest-retailer-wants-to-bring-blockchains-to-the-food-business">collect documents detailing the shipment</a>, storage temperature and other inspections and safety reports, and official stamps as authorities reviewed them – just as they did normally. In Walmart’s test, however, the drivers would photograph those documents and upload them to the blockchain-based database. The <a href="https://medium.com/coinmonks/how-does-hyperledger-fabric-works-cdb68e6066f5">company controlled the computers</a> running the database, but <a href="https://www.prnewswire.com/news-releases/maersk-and-ibm-unveil-first-industry-wide-cross-border-supply-chain-solution-on-blockchain-300418039.html">government agencies’ systems could also be involved</a>, to further ensure data integrity.</p>
<p>As the pork was packaged for sale, a sticker was put on each container, displaying a smartphone-readable code that would link to that meat’s record on the blockchain. Consumers could <a href="https://classic.qz.com/perfect-company-2/1146289/the-worlds-biggest-retailer-wants-to-bring-blockchains-to-the-food-business">scan the code right in the store</a> and assure themselves that they were buying exactly what they thought they were. <a href="https://www.thedrum.com/news/2018/04/30/alibaba-launches-blockchain-technology-improve-supply-chain-integrity-and-enhance">More recent advances</a> in the <a href="https://thenextweb.com/apps/2015/05/18/alibaba-is-using-attractive-qr-codes-so-you-can-check-if-products-are-authentic/">technology of the stickers</a> themselves have made them more <a href="https://techcrunch.com/2015/05/18/dotless-qr-codes/">secure</a> and <a href="https://www.wired.com/2015/05/alibaba-reveals-retro-way-fight-counterfeits-qr-codes/">counterfeit</a>-<a href="https://www.alizila.com/alibaba-turning-lowly-qr-code-fakes-fighter-2/">resistant</a>.</p>
<p>Walmart did similar tests on mangoes imported to the U.S. from Latin America. The company found that it took <a href="https://www.ethnews.com/walmart-tests-food-safety-with-blockchain-traceability">only 2.2 seconds</a> for consumers to find out an individual fruit’s weight, variety, growing location, time it was harvested, date it passed through U.S. customs, when and where it was sliced, <a href="http://fortune.com/2017/08/22/bitcoin-ethereum-blockchain-cryptocurrency/">which cold-storage facility</a> the sliced mango was held in and for how long it waited before being delivered to a store.</p>
<h2>Preventing counterfeiting</h2>
<p>Beyond tracking products’ origins, blockchain systems are helping ensure cheap plonk isn’t sold in bottles promising expensive wines. Some counterfeiters get their hands on empty wine bottles with top-quality labels, refill them with cheaper wine and <a href="https://nypost.com/2017/10/07/how-an-illegal-immigrant-pulled-off-the-greatest-wine-scam-in-us-history/">reap fraudulent profits</a>.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/245989/original/file-20181116-194488-17plq00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/245989/original/file-20181116-194488-17plq00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/245989/original/file-20181116-194488-17plq00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/245989/original/file-20181116-194488-17plq00.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/245989/original/file-20181116-194488-17plq00.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/245989/original/file-20181116-194488-17plq00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/245989/original/file-20181116-194488-17plq00.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/245989/original/file-20181116-194488-17plq00.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A secure database could help buyers identify if any of these wines are counterfeit.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Wine_shop.jpg">Matt Pourney/Wikimedia Commons</a></span>
</figcaption>
</figure>
<p>In December 2016, wine expert Maureen Downey debuted a blockchain system that gives <a href="http://www.wine-searcher.com/m/2016/12/wine-vault-offers-security-in-a-digital-age">each bottle a unique digital identity</a> combining more than 90 pieces of data about its production, ownership and storage history – including high-resolution photographs and data from the glass and cork. As the bottle moves from winery to distributors and resellers, the data are updated, and can easily be checked by warehouses, retailers and even auction houses.</p>
<p>More recently, Downey’s system has been updated to fight even more sophisticated wine counterfeiters, who have <a href="https://www.youtube.com/watch?v=tDQuGzJmCZo">reverse-engineered a wine-preservation system</a> to extract wine without opening the bottle. The upgraded protection embeds a small microchip above the top of a wine’s cork, so if someone removes the capsule wrapper or <a href="https://www.bizjournals.com/sanfrancisco/news/2018/04/12/maureen-downey-chai-vault-blockchain-wine-fraud.html">pierces the chip</a>, it will be unreadable.</p>
<h2>Ensuring living wages</h2>
<p>Consumers are worried not only about contaminated or counterfeit food products. Many consumers say they prefer products that are <a href="https://doi.org/10.1007/BF02927269">environmentally friendly</a> and contribute to improved <a href="https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=1886">living and working conditions of small farmers and workers</a>. Middlemen siphon off a lot of the money. In the US$200 billion global coffee industry, for instance, <a href="https://dailycoffeenews.com/2018/09/04/coffees-price-collapse-how-did-we-get-here-and-what-can-we-do/">only 10 percent</a> stays in producing countries.</p>
<p>Global sales of products approved by Fairtrade, a major certifier of products that respect environmental and human-rights concerns, reached <a href="http://www.freshplaza.com/article/9034300/fairtrade-sees-sales-growth-in-exceeding-eu-billion-for-first-time/">$9.6 billion in 2017</a>. But Fairtrade and other programs like it have not substantially improved poor people’s lives. A study of small farms growing flowers, coffee and tea in Ethiopia and Uganda indicated that areas dominated by Fairtrade producers <a href="https://www.theguardian.com/global-development/2014/may/24/fairtrade-accused-of-failing-africas-poor">paid lower wages</a> compared to farms that were larger, commercial and not Fairtrade-certified.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/245991/original/file-20181116-194491-k47dq2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/245991/original/file-20181116-194491-k47dq2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/245991/original/file-20181116-194491-k47dq2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/245991/original/file-20181116-194491-k47dq2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/245991/original/file-20181116-194491-k47dq2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/245991/original/file-20181116-194491-k47dq2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/245991/original/file-20181116-194491-k47dq2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Each of these coffee cherries is unique, ready for a 3D scan to help determine quality.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/organic-red-berries-coffee-beans-hands-539631301">P-fotography/Shutterstock.com</a></span>
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<p>Colorado-based Coda Coffee seeks to ensure fair payments by using a blockchain system to <a href="https://www.foodlogistics.com/technology/news/21000940/coffee-brewers-turn-to-blockchain">track its coffee</a> from <a href="https://sprudge.com/132380-132380.html">African farms to U.S. coffee shops</a>. The system includes a camera that takes <a href="https://sprudge.com/132380-132380.html">a three-dimensional scan of each bean’s outer fruit</a>, called a cherry, <a href="https://techcrunch.com/2017/04/11/bext360-is-using-robots-and-the-blockchain-to-pay-coffee-farmers-fairly/">paying farmers more</a> if they supply bigger and riper cherries and recording the amount paid in a blockchain database for consumers to inspect later. </p>
<p><a href="https://www.forbes.com/sites/alexknapp/2018/06/01/agtech-blockchain-startup-bext360-raises-3-35-million-to-provide-traceability-to-commodities/">The bean’s record</a> is updated as it is processed, packed, blended with other beans, roasted and ground, letting consumers know <a href="https://moyeecoffee.ie/blogs/moyee/world-s-first-blockchain-coffee-project">who did what to the bean</a> and how much they got paid. Wholesalers and roasters can learn about where it came from and how it was handled, and evaluate the resulting taste, <a href="https://sprudge.com/132380-132380.html">informing future purchasing decisions</a>.</p>
<p>These are <a href="https://dailycoffeenews.com/2018/07/11/fully-blockchained-coffee-brand-token-invites-consumers-into-the-matrix/">far from</a> the <a href="https://www.thedrum.com/news/2018/04/30/alibaba-launches-blockchain-technology-improve-supply-chain-integrity-and-enhance">only examples</a> – <a href="http://www.foodsafetynews.com/2017/03/a-new-era-of-food-transparency-with-wal-mart-center-in-china/">countless others</a> <a href="http://www.zdnet.com/article/alibaba-and-auspost-team-up-to-tackle-food-fraud-with-blockchain">around the world</a> are <a href="https://www.techinasia.com/alibaba-fake-food-blockchain-pilot">underway</a>.</p>
<h2>Ensuring data integrity</h2>
<p>Blockchain systems are secure, but their data – like other databases – are only as accurate as what is entered. <a href="https://www.seattletimes.com/business/questions-remain-about-organic-foods-grown-in-china/">Fraudsters</a> may try to <a href="https://sustainablefoodnews.com/usda-warns-industry-of-6-fake-organic-certificates/">counterfeit certifications of organic processes</a> or farm inspections. </p>
<p>In addition, most of the food products in developing economies like <a href="https://agra.org/agribusinesses-and-african-smallholders-seize-1-trillion-food-market-as-meals-replace-minerals-to-restart-african-economic-growth-new-report/">Africa</a> and <a href="https://www.nationalgeographic.com/magazine/2018/02/feeding-china-growing-appetite-food-industry-agriculture/">China</a> are produced on very small farms that don’t have access to technology or internet connectivity. Blockchain systems can also be expensive, which is part of why early trials have involved <a href="https://cointelegraph.com/news/chinese-retail-giant-to-use-blockchain-to-track-beef-prove-food-safety">high-end beef</a>, wine and coffee.</p>
<p>The research already happening holds the promise of developing cheaper systems that are easier to use and trust – for farmers, food processing plants and customers alike.</p><img src="https://counter.theconversation.com/content/106491/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nir Kshetri does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Food suppliers and sellers around the world are using blockchain technologies to ensure that what consumers buy is labeled clearly and accurately.Nir Kshetri, Professor of Management, University of North Carolina – GreensboroLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1045082018-10-17T22:55:57Z2018-10-17T22:55:57ZGrocers: Get ready to join the blockchain party<figure><img src="https://images.theconversation.com/files/240689/original/file-20181015-165905-pbcwzh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Five people died and more than 200 got sick during a 2018 E. coli outbreak, the largest in more than a decade. The bacteria was traced to contaminated romaine lettuce.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></figcaption></figure><p>In the wake of this year’s large E. coli outbreak, Walmart notified its leafy green suppliers that <a href="https://www.nbcnews.com/tech/tech-news/lettuce-blockchain-walmart-s-push-lends-legitimacy-much-hyped-technology-n916406">they must be using blockchain technology to trace their products before the end of 2019</a>. </p>
<p>Walmart, one of the world’s largest retailers, has been <a href="https://www.ibm.com/blockchain/solutions/food-trust/get-started">piloting blockchain projects with IBM for the past 18 months</a>. It is banking on this relationship to put pressure on the entire sector to give consumers what they want from the food industry: more transparency. </p>
<p>In Europe, Carrefour also recently began using blockchain to track food products on <a href="http://www.carrefour.com/current-news/carrefour-launches-europes-first-food-blockchain">several of its product lines</a>. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/everything-you-need-to-know-about-fresh-produce-and-e-coli-90230">Everything you need to know about fresh produce and E. coli</a>
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<p>The whole idea is to better manage food recalls, farm to fork and back, and also to tackle <a href="https://www.theglobeandmail.com/report-on-business/rob-commentary/canadian-food-fraud-presents-fresh-challenge-for-officials/article35712072/">the intricate issue of food fraud</a>, which is receiving an increasing amount of attention.</p>
<p>Meanwhile, many others are wondering if the investment is worth it. Consumers tend to want many things from the food industry without paying for them. </p>
<h2>The power of blockchain</h2>
<p>Blockchain is about data, but it is mostly about accountability through enhanced digitalized transparency. With blockchain everyone knows what’s happening all at once. </p>
<p>To use a simple analogy, think of blockchain as a hockey rink. All the data is on the ice, protected by the boards so that it can’t be altered. Everyone participating in a blockchain is in the stands. The activity on the ice lets everyone else know who is buying from whom, when, at what price and volumes.</p>
<p>As a result, a recalled product can be traced back in seconds instead of taking days. It took investigators days to trace the source of an <a href="https://www.vox.com/science-and-health/2018/6/29/17517906/romaine-lettuce-e-coli-outbreak-over">E. coli outbreak to contaminated romaine lettuce</a>. They had to look through documents to find the source and the potential causes, all the way up the food chain. It would have been managed quite differently with blockchain. </p>
<p>Food safety is an obvious driver for blockchain, but food fraud appears to be what is moving the blockchain agenda much faster these days.</p>
<h2>Why pay extra?</h2>
<p>Blockchain technologies have been used in other sectors, but they have only recently entered the food sector. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/240671/original/file-20181015-165888-19rbsdp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/240671/original/file-20181015-165888-19rbsdp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=902&fit=crop&dpr=1 600w, https://images.theconversation.com/files/240671/original/file-20181015-165888-19rbsdp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=902&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/240671/original/file-20181015-165888-19rbsdp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=902&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/240671/original/file-20181015-165888-19rbsdp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1133&fit=crop&dpr=1 754w, https://images.theconversation.com/files/240671/original/file-20181015-165888-19rbsdp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1133&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/240671/original/file-20181015-165888-19rbsdp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1133&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In this June 7, 2011 photo, an employee throws away tomatoes in Werder, Germany, during an E. coli outbreak. Authorities had trouble identifying the source of the outbreak, causing major losses for farmers in the European Union.</span>
<span class="attribution"><span class="source">(AP Photo/dapd/ Klaus-Dietmar Gabbert, File)</span></span>
</figcaption>
</figure>
<p>Food safety was never going to be enough for consumers to embrace blockchain. Consumers expect safety and don’t want to pay more for it. Why pay extra for a safety belt when buying a car? Food safety may have never had market currency, but food authenticity does. </p>
<p>Fraudulent products can compromise brands and the viability of a company in a heartbeat. We have seen many cases already around the world.</p>
<p>Food fraud is difficult to measure, but <a href="https://www.cnbc.com/2014/04/12/rising-prices-aid-15b-food-fraud-problem.html">it has arguably kept food prices lower</a>, allowing some companies to cut costs and offer lower price points. </p>
<p>Economically motivated adulteration is a growth killer, something Walmart and Carrefour both know. To increase sales, companies must eliminate fraudulent food products from their shelves, and blockchain technologies can provide the perfect antidote.</p>
<h2>Jumping on the blockchain bandwagon</h2>
<p>How better to deal with food fraud than by making the whole system more transparent? </p>
<p>Transparency in the context of blockchain, however, is neither absolute nor unconditional. Each solution will offer <a href="https://www.newfoodmagazine.com/article/36978/blockchain-can-save-food/">a different level of transparency depending on how the system is set up</a>. This is likely why grocers are jumping on the blockchain bandwagon, to exercise their power with the supply chain and generate their own rules of engagement. </p>
<p>It is also likely making everyone else less comfortable, <a href="https://www.newfoodmagazine.com/article/34815/block-chain-food-fraud/">including processors and producers</a>.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/how-technology-will-help-fight-food-fraud-85783">How technology will help fight food fraud</a>
</strong>
</em>
</p>
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<p>If food fraud is properly addressed, growth in the food sector can be expanded. Over the next decade or so, we should not be surprised to see the disruptive nature of blockchain technologies generate tensions among grocers, processors and producers as they try to cope with grocers’ impositions.</p>
<p>Other sectors made traceability a priority decades ago. <a href="https://www.pharmaceutical-technology.com/digital-disruption/blockchain/blockchain-pharma-opportunities-supply-chain/">Drugs, car parts, minerals and so on can be tracked to their sources in seconds</a>. Consumers know the technology exists and are putting the pressure on grocers. It’s time for the food industry to catch up.</p><img src="https://counter.theconversation.com/content/104508/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sylvain Charlebois does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With Walmart bringing blockchain technology to its grocery stores, other retailers will soon have to get on board.Sylvain Charlebois, Professor in Food Distribution and Policy, Dalhousie UniversityLicensed as Creative Commons – attribution, no derivatives.