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Toxic and Abusive Relationships between Global Industry and Nature
The global industry is an ever-evolving and ever-innovating sphere of specialized human activity. These two characteristics are fundamental and innate to the worldwide industry. It implies two things; these are constantly growing production output and a rising amount of resources for consumption and use. As production and consumption processes grow, the number of externalities rises too, the negative ones especially. Among the most affecting negative externalities are external costs, specifically environmental damage such as pollution. As these costs are enormous, catastrophic, and extremely difficult to reverse and compensate, economists have begun to develop regulatory and innovative concepts to address this type of risk.
The Porter Hypothesis: A Way for Humanity to Avoid Environmental Doomsday?
The response to the expert and social demand for a more ethical, eco-friendly, and selfaware industrial and business management came from Porter and van der Linde in 1995. They designed a concept that postulates that well-designed environmental regulations might lead to improved competitiveness& success must involve innovation-based solutions that promote both environmentalism and industrial competitiveness (Porter & van der Linde, 1995, pp. 115- 116). Simply put, the Porter Hypothesis states that welldesigned ecological regulations will not limit the capacities of the global industry but will lead to drastic qualitative technological innovations satisfactory for producers, consumers, and environmentalists (Porter & van der Linde, 1995).
Industrial Titans Go First For Redemption
Interestingly, one of the first who began to implement the Porter Hypothesis widely and mandatorily was such industrial leaders as the European Union and China. It is most likely due to the high juridical status of European and Chinese authorities in their economic regions.
The application of the Porter Hypothesis in Europe has led to a decrease in greenhouse gas emissions and the optimization of air routes in the aeronautical field (Pérez-Calderón et al., 2019). In China, its implementation resulted in an increase in green total factor productivity (Zhao et al., 2022).
Factors that contribute to a better practical implementation of the ideas of the Porter Hypothesis have been induced investment in research and development, improvements in operations management, and systematic supervision.
References
Pérez-Calderón, E., Pache-Durán, M., & Galindo-Manrique, A. (2019). Sustainability and tourism: Cluster analysis on the effectiveness of the Porter hypothesis in the European aeronautical sector. In V. Ratten et al. (Eds.), Tourism innovation: Technology, sustainability and creativity (pp. 95-112). Routledge. Porter, M. E., & Van der Linde, C. (1995). Toward a new conception of the environment-competitiveness relationship. Journal of economic perspectives, 9(4), 97-118. doi:10.1257/jep.9.4.97
Zhao, S., Cao, Y., Feng, C., Guo, K., & Zhang, J. (2022). How do heterogeneous R&D investments affect Chinas green productivity: Revisiting the Porter hypothesis. Science of the Total Environment, 825, 1-14.
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