A rent seeking model that takes pride to wield its monopolistic pricing power to the extreme with little regard to higher order negative externalities is not sustainable. Along the way, it erects economic moats to protect its franchise and over time is increasingly far removed from reality. Eventually it will collapse under its own weight.
The mantra of growth at all cost has but one chink in the armor. When a key metric such as return on invested capital is thrown out of the window, it can only imply one thing – amplifying the value destruction. This is what is occurring when an outlier – black swan – manifests itself in untimely way.
A more sustainable way is to go capital-lite. A back to basic, common sense approach of a human resource-centric model where a community comes together to work for the betterment of the stakeholders which is more likely to enjoy the rising tide lifting all boats aphorism.
When an ecosystem that is so addicted to heavy doses of capital, stakeholders are likely to suffer chronic pain points. The adjustments, moving away from such addictions, if done conscientiously will nonetheless create another set of pain points that will be acute but will go away once healing occurs.
A parallel system of trust underpins by well-constructed tokenomics can help a new ecosystem to take root. Stakeholders will be incentivized to work hard and smart once it is evident that free loading is not only not rewarded but penalised.
What is necessary is not to take away whatever grazing fields remaining so that there is sufficient feeding ground for the stakeholders to coexist and thrive. As old habits die hard, it is critical to leverage on technology to nurture stakeholders to build a vibrant community that can gain market access and create jobs organically.