This effort of estimating the impact of beauty is reflected in the annual Banca Ifis report Economy of Beauty – a volume released in June 2022 and shot by Sanja Marušić
Purpose-driven economy companies
The industry that produces everything intended as beautiful is worth 24.1 percent of the national GDP in Italy. Beautiful continues to assert itself as an element of competitive business. The analysis this year had to deal with a critical biennium – 2020-2021 – marked by the Covid-19 pandemic. The collected results have stimulated a new way of thinking. Parallel to the search for solutions to the effects of the health crisis, an evolution of the concept of beauty itself is taking place. The industry, driven by consumer awareness, is moving toward an ethical dimension. What is ‘right’ and what is ‘beautiful’ now walk hand in hand.
The Banca Ifis report is focused on the concept of purpose-driven companies. They accounted for 8.4 percent of Italian GDP in 2021. There are a total of 46 thousand companies, with an accumulated production of 650 billion euros. The choice to have a positive impact on communities and territories overcomes differences between target markets. The purpose-driven companies represent eleven different production sectors.
For its analysis, Banca Ifis – in addition to more general economic data – collected testimonials from six Italian companies: Foscarini, Trend Group, Mavive, Serveco, ACBC and Lavazza. A noteworthy ele- ment is the average turnover of the set of purpose-driven companies: fourteen million euros annually. The numbers reflect the structure of the Italian system, which is characterized by a strong presence of small and medium-sized companies.
The concept of purpose economy
To understand the concept of purpose economy, it needs to examine the reason why a business is born and operates within the market. The notion is broad and specified through the precise goals a company aims for. Purpose is action – it represents the set of values to be translated into objectives that drive the company to act in the market.
They may not always remain the same. Culture, society, and the economy change, and the values of a company may do so at the same pace. At this historical stage, business purpose appears aligned with the SDGs of the UN’s 2030 Agenda. Purpose economy is also participation – those who work in the same place are an active part of a common project.
There are six main areas on which, in general, the tension of companies toward a purpose is substantiated. They range from gender equality to sustainability, from participation to generational diversity. From worker well-being to attention to the local area and communities. In these sensitivities to social, environmental and economic sustainability, beauty lends resilience to companies. It is not about effective corporate communication and smart market- ing, but a necessity for those who want to maintain a position in the economic system.
The machine learning method – purpose economy
The method of analysis conducted by Banca Ifis is explained in detail in one of the in-depth reviews that appear within the volume – for the identification of companies that can be defined as purpose driven, Banca Ifis has combined three different tools, merging more traditional research methods with the possibilities offered by artificial intelligence and machine learning. Firstly, information that was already available was researched, evaluated and reprocessed. On the one hand, this was done through market intelligence activities, studying and comparing the main sources that have elaborated and discussed the concept of purpose, both in a social and economic sense. We then identified the keywords or their combinations – that could make it possible to understand with exhaustiveness and immedia- cy what purpose means.
The set of key words used includes the perimeter that the companies are certified as Benefit Corporation in those who are purpose-driven. Using Cerved’s Atoka machine learning tool, we were able to develop a summary of information on a field of action of over 6 million companies and identify the companies that best express their purpose. Last steps; analysis of financial statements and dialogue on the estimates obtained. In doing so, a bottom-up approach was adopted: specific parts of a system were connected together, so as to compose a larger picture and assess any interconnections. Until another complete system was formed. The results obtained emerged more clearly through dialogue with industry stakeholders, which allowed the research estimates to be balanced and refined.
Consumers are not a passive entity
Purpose economy. Purpose is an element of competitiveness. For 58 percent of Italians, a company’s values are a parameter when choosing brands. More and more people, deciding whether to buy a plastic or wooden toothbrush, choose the latter. The attention has been translated into products and services characterized by an idea of Beauty in evolution compared to the meaning that the word had assumed until a few years ago. A more inclusive beauty, more attentive to the variety of people’s life contexts. A beauty capable of creating aggregation and social cohesion.
Consumers are turning from an audience into actors. It is increasingly central for a company to present its values in a simple and recognizable way. The Banca Ifis study points out that 31 percent of Italians listen, for example, to the voice and opinions of a company’s em- ployees. 30 percent inform themselves by consulting financial statements, statements and company reports. 29 percent are attentive to the certifications that independent bodies give to companies. The presence of economic actors attentive to their impact on society is not a new phenomenon.
Data collected by Banca Ifis point out that 89 percent of purpose driven companies are already established in the market. Only 11 percent were born in the last four years. This does not mean that the organization of companies will not undergo changes in the future. The analysis, in collaboration with POLI.design, drew a picture of what skills and professionals will be needed for beauty production. Almost half of the training paths will have to be created from scratch. This is a sign that the training models popular today will lose their functionality.
Company’s image affects that of its workers
The employees return to being regular employees when the company develops and submits a purpose with a top-down approach. They become detached from the organization, working solely for financial or career reasons. Detachment and disinterest of employees in their work are among the causes, together with burnout and dissatisfaction with their work-life balance,of Great Resignation, i.e. the voluntary abandonment of one’s job without having an alternative.
The magnitude of the phenomenon can be measured through data from the U.S. Department of Labor: in August 2021, a record number of 4.3 million Americans voluntarily left their jobs, and from the spring to the fall of 2021, the average number was about 4 million, showing a stable and non-occasional phenomenon (source: Network Digital 360). Purpose-driven companies allow the development of a working environment in which the employee is encouraged to express his or her creativity and fulfillment, while supporting business development.
Banca Ifis and the concept of purpose economy
The Banca Ifis S.p.A. Group is active in specialty finance. Its core businesses are: lending services to undertakings, and acquiring/servicing non-performing loan portfolios. Founded in 1983 by Sebastien Egon Fürstenberg, son of Clara Agnelli, Banca Ifis has been listed on the Milan Stock Exchange since 2003.
Sanja Marušić for Banca Ifis
Marušić is a Dutch-Croatian photographer that uses an experimental approach to color, composition, materials and manipulations in her work. The contrasting pictures that appear within the book are shot by the artist.
