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July 20, 2009 Monday

BUSINESS; Pg. 4

731 words

By Scott Kirsner, GLOBE CORRESPONDENT

Shopping sustainably. Will Wal-Mart's Sustainable Product Index change the way we shop? The mega-retailer is working with suppliers to collect information about the environmental impact of products it sells and plans to share that information with consumers via a simple rating. Harvard Business School professor Rosabeth Moss Kanter blogged that Wal-Mart's new initiative ``changed the game with respect to environmental issues.''

Wal-Mart's unilateral decision to put its purchasing and communication power behind going green also shows that a single company using its unique clout can accelerate public action to reduce greenhouse gases and reverse climate change. By rolling out an environmental labeling program disclosing to consumers the environmental costs of making products sold at Wal-Mart, the $401 billion retail behemoth has transformed green standards from nice-to-have to must-have.

This is one small step for Wal-Mart and one giant leap for Planet Earth. It is also one enormous demand on suppliers, among them many small companies that will feel crushed by the giant's new non-carbon footprint. But though Wal-Mart spent $200 billion buying from 56,000 US suppliers in 2007, a high proportion of Wal-Mart's total annual purchases emanate from China, where it is high time environmental standards are raised.

The beauty of the Wal-Mart innovation is that it doesn't ask anyone to change anything except the information that is provided and received. If polluters want to keep polluting, they are free to do so as long as they provide that data on their Wal-Mart labels. And if consumers choose to buy from polluters whose labels they can read, they are free to do so. In theory.

In practice, of course, we know suppliers will change their practices to avoid embarrassing disclosures, and consumers will think twice about the choices they make.

blogs.harvardbusiness.org/kanter

In support of noncompetes. The Boston tech community continues to debate whether noncompete agreements, intended to prevent former employees from competing against a former employer for a defined period of time, are good or bad for the state's economy. Amrith Kumar, vice president at Dataupia Corp., in Cambridge, blogged that he once regarded noncompetes as ``intrusive and unfair to employees,'' but changed his mind.

If, as an entrepreneur, I had an idea that I knew would take many years to completely prosecute, wouldn't I want some protection for my idea and my ability to benefit from it? While I appreciate that noncompetes make it difficult for workers to ``change jobs freely,'' I think that this is a good thing if the purpose of changing the job is to take an idea and develop a competitor. I agree with [those who feel] that noncompetes should not be so broadly and generally worded that they stifle innovation. But, I disagree with the perspective of those who feel that the only answer is to outlaw the noncompete.

There are several areas of innovation where it takes a considerable amount of time, trial and error, and cost, to take an idea to fruition. At any time during this process, the inventor is vulnerable to the theft of the idea, and the non-compete is the only thing that provides protection for the investment in sweat, tears, and midnight oil. Without this protection, we will do more damage to innovation because investors will be reluctant to provide the significant funds for projects that have little or no entry barrier . . .

Rather than outlawing the noncompete (the simplistic solution), why not address the problem in a manner that provides the protection to innovation and inventors and yet deters the use of ``broad'' and ``sweeping'' noncompetes? Or better still, allow the market to regulate itself. If innovators feel strongly about this, let them advertise this fact; prospective employees can weigh offers and consider the benefits of not having a noncompete in their choice. That way, in areas of technology or endeavor where the market supports the lack of a noncompete, that will become the norm. And in areas of the technology where the market supports the noncompete, that will be the norm.

hypecycles.wordpress.com

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INNOVATION ECONOMY BLOG

Read Scott Kirsner's new blog on tech, life sciences, start-ups, and venture capital in New England at www.boston.com/innovation.

July 20, 2009