If there is one thing which is slowing down our human progress what would it be? I propose that human greed is a significant obstacle to innovation and human progress.
Take a moment to think about all the businesses started and investments made solely because of greed. There are millions of people in the world who do what they do because they are greedy. Too many people want to have more money, earn a bigger salary, drive the most expensive car, own the largest mansion. There is this huge desire to have more.
However, I don’t think there is an actual problem in people wanting more. I believe there is a real problem in people wanting more instantly. The lack of patience and the abundance of greed is holding us back.
Awarding Short-Term Achievements
Our current financial and economic system are designed to award short-term achievements. Shareholders of publicly listed companies have access to real-time stock quotes, and they are used to quarterly earnings calls. Salespersons are awarded for how many deals they close in a week, a month, or a year. Executives are paid bonuses based on yearly performances. Speculators earn millions when a company dismisses thousands of employees. The examples are counting, even when you leave the business and financial world.
Now you might ask yourself: Why is this bad? And why is this holding back innovation and progress?
To explain both questions I would like to invite you to a short gedankenexperiment. Imagine what would happen if shareholders are choosing to invest only in positions they will hold for ten years or longer. In which companies will these shareholders invest their money in? Investors will, first of all, choose their investments much more wisely. Speculations based on technical analysis or earnings forecasts are past. I propose that investors will instead select companies as their investments which offer the most promising future outlook. Organizations which are working on making the world a better place.
Let’s look at a second example. Imagine millions of entrepreneurs worldwide who decide to work on a product which improves the world. Instead of creating the next copycat business or writing the next “how to get rich” book, these entrepreneurs use their talents and their time to enhance the world.
However, both gedankenexperiments require the elimination of greed. Eliminating greed from the equation is necessary. Money being the primary motivation is probably bad when looking at innovation. By getting rid of greed and by shifting to a long-term business and investment model we might see more bold companies and investors investing in them.