Even those who have not studied the works of Charles Darwin, readily equate the basic principle of ‘survival of the fittest’, otherwise known as the ‘principle of natural selection’, with the legendary evolutionist. This theory has two main elements to it: firstly, that nature is never static and a species that does not adapt to the ongoing changes in nature will eventually become extinct; and secondly, intense competition pervades any given habitat and only the fittest, or most adaptable, will survive. Recognizing that these principles apply to economics, the term Darwinomics was coined and apparently first used in an episode of the political TV drama West Wing. While these principles certainly apply to the economy of a country, they can also apply in business. This has become painfully apparent during the economic crisis that continues to wreak havoc around the world, where only the fittest (or some would argue that only those who have been at the front of the government bailout queue) continue to survive, and with the economic climate being a lot more volatile than nature, adapting to rapid change is key to survival.
While Darwinomics doesn’t have an official definition, it clearly does not engender a spirit of co-operation, something which more and more analysts are leaning towards in the common interests of businesses and the communities they impact on. This focuses on an age-old debate regarding whether competition or cooperation is most beneficial to businesses. Competition has its place, as without it collusion would proliferate, with the consumer being the loser, hence the need for competition regulating authorities. However, grabbing the lion’s share of the market can result in obliterating smaller competitors and could very well give rise to an oligopoly or duopoly situation, which is also not ideal, but preferable to a monopoly.
Negotiating a path through the turbulent waters of an economic crisis has raised unprecedented issues which will no doubt produce some ‘seemed like a good idea at the time’ moments in retrospect – hindsight being 20/20. However, the fact that increased emphasis is being placed on transparency in business, as well as corporate social responsibility, offers businesses the opportunity to build a reputation for operating in line with ethical business practices and in a spirit of cooperation, rather than to fight to the top of the food-chain regardless of the consequences. In the long run this is likely to be the wisest course, especially in light of the growing trend of socially responsible investors and the increasingly popular practice of ethical consumerism.
