Green Options

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There’s been a lot of talk recently, as the country slides into recession, about the impact this will have on innovation.

Will companies pull back from risky projects? Or will they re-jigger their efforts to support products that thrive in a recession…new or not.

Suddenly, innovation has a bull’s-eye on its back. As the recession debate shifts from “what if” to “how long,” claims a recent article in Business Week on the world’s most innovative companies.

Green entrepreneurs have no choice. Innovation is why they are in business. But, what strategies make the most sense for eco-friendly businesses facing a not-so-friendly economy?

Couponing is a strategy employed by almost all big packaged goods companies to increase trial and to encourage increased usage. Though most marketing managers today haven’t managed during a recession before, many are now learning the value of coupons during a downturn too.

A recent ICOM study of U.S. shoppers found that two-thirds said they are more likely or somewhat more likely to use coupons during a recession. Well, the recession is here and eco-entrepreneurs should consider using this effective promotional tool.

“The consumer incentive certainly is there,” said Peter Meyers, ICOM marketing vice president. “Look at it this way: households of two adults and two children who use coupons wisely can save 25% on their grocery bill annually, without cutting purchases. That saves $2,400 a year based on a typical $800 a month grocery spend, which outstrips the $1,800 economic stimulus check this family has coming in May from Washington.”

In a day and age where the word recession is being thrown around like a football, when asked to make financial sacrifices you’re more likely to get a kick in the crotch then a handshake. But unlike what the critics would have us believe, cutting carbon emissions could actually economically help the US, and similarly other countries in the same position.

A theoretical US policy to cut carbon emissions by up to 40% over a 20 year period could still result in increased economic growth; this, according to an interactive website created by the Yale School of Foresty and Environmental Studies.

I, for one, don’t remember the stagflation of the 1970s.

It was a time when prices were increasing at the gas pump and grocery store, and when the economy sputtered along with little or no growth. Some neighbors saw their wages flatten — or their jobs disappear altogether. Gold, often seen as a barometer of economic confidence, was at an all time high (adjusted for inflation). I was pre-teen in a comfty Detroit suburb with a father who worked at then stalwart, GM, so a roof over my head and food on the table was never a concern.

But here we are today, with Priuses outselling Suburbans. Oil and gold are at all time highs. Things seem far more perplexing, interconnected, global. First, there’s the perception of a housing crunch, even though fretting over a 15 percent decline in home values over the last year or two seems rather odd given the incredible run-up of many homes over the past decade, sometimes by over 100 percent.

Second, the sub-prime mortgage mess has snared many who agreed with greedy lenders that living beyond our means was okay. That more jobs are being outsourced overseas or replaced by fancy machines in this increasingly global marketplace isn’t helping either.

Even if the Federal Reserve or Congress and the Bush Administration do manage to convince the American people that they should keep on spending by splurging with windfall tax refund checks — thus avoiding a recession — the printing presses rolling off fresh greenbacks and mounting debt on a national level could result in the onset of stagflation. Oil, while swinging up and down with the speculator’s bets and value of the dollar, will continue on its upward trajectory reflecting the reality of “peak oil,” the period by which its extraction and refinement will get ever more expensive and difficult. Our economy, and those linked around the world, are based on this fuel and this fuel is largely denominated in US dollars. When the dollar falls in value, the price of a barrel of oil must increase.

So why will ecopreneurial businesses fare any different than all the rest if, in

Will a recession—or the prospect of a recession—curb consumer desire for green products? In the shadow of flat growth, will corporations slow their corporate social and environmental initiatives? Will we see a decrease in the burgeoning world of green marketing? The word “recession” has been splattered upon every newspaper and on the tongues of anyone with some knowledge of the lending crisis and skyrocketing price of petroleum. The question on my mind is whether an economic downturn will play a factor when consumers shop. Will green products take a backseat again?

According to the big-poppa of all securities firms, Goldman Sachs, consumer spending will continue to slow as the sickly housing markets have made it difficult for people to tap into their home equity. Another interesting thing to think about is how this will cause the unemployment rate (currently 5 %) to increase — economists predict it will increase to 6.5% by the end of 2008. Fewer jobs equals less money to be mixed in the economic batter and one more reason why consumers may opt for less expensive non-green goods.