http://flowingdata.com/2010/05/26/bp-tries-to-mislead-you-with-graphs/

Society today is composed of a series of institutions: from political institutions, legal institutions and religious institutions to institutions of social class, familial values and occupational specialization. It is obvious the profound influence these ‘traditionalized’ structures have in shaping our understandings and perspectives. Once created, institutions are powerful external forces that help determine how people make sense of their world and act in it (Campbell, 2004).

The influence of globalization on institutions is clear to everyone with one of the best examples provided by European colonization. One should only visit Latin America where to experience the institutionalizing power of Globalization. Though institutionalization might not (mainly) be about converting native subjects to Christianity anymore, the results are everywhere. Today the globalization debate is more focussed on its economic impact with ‘the Battle of Seattle (1999)’ as a famous example. In stead of religious institutionalization it is now mainly about organizations like the World Trade Organization (WTO), the International Monetary Fund (IMF) and the World Bank who are by some believed to force their ‘conviction’ upon poorer nations as Joseph Stiglitz (2002) elaborates.

As globalization and institutionalization are highly related, globalization indirectly has influence in shaping our understanding and perspectives. As Campbell (2004) puts it, institutions are the foundation of social life, consisting of formal in informal rules, monitoring and enforcement mechanisms, and systems of meaning that define the context within which individuals, corporations, labor unions, nation-states, and other organizations operate and interact with each other. Of course without stable institutions, life becomes chaotic and arduous (Campbell, 2004) but potential problems with [institutions such as national governments, corrupt regimes, global financial institutions, and central infrastructure planners] are their top-down approach, protectionism of developed markets and the status quo, bureaucracy, and corruption (de Soto, 2000; Easterly, 2006; Stiglitz, 2002). Also established institutional arrangements can also suppress the diffusion of innovations and constrain market creation (Vermeulen et.al. 2007). The granular case of Vermeulen et.al. (2007) is conducted within the Netherlands which means that innovation that is being suppressed in that particular market might offer opportunity in different markets. Also Stuart L. Hart (2007) empathizes the opportunity in different markets:
The four billion people at the base of the world economic pyramid represent the most attractive early market for many of the most exiting new clean technologies. Because most such technologies are disruptive and will, therefore, be resisted by established markets, the vast underserved populations in shantytowns an rural villages offer the most promising places to incubate and grow the technologies of tomorrow. (p. 26)

Whereas yesterday’s businesses were often oblivious to their negative impacts and today’s responsible businesses strive to reduce their impacts, tomorrow’s businesses will learn to make a positive contribution. Increasingly, companies will be selling solutions to the world’s social and environmental problems, and doing so in a way that respects diversity and cultural differences. Envisioning tomorrow’s businesses, therefore, requires that we gain a fuller appreciation of a complex set of global interdependencies; we will have to understand our environment. In fact, the global economy is really composed of three different, overlapping economies: the money economy, the traditional economy, and nature’s economy.

The Money Economy
The money economy is the familiar world of industry an commerce comprising both de the developed economies and the so-called emerging economies. Roughly two billion people participate in the money economy, with less than half of those living in the wealthy countries of the developed world. Although industrialization has produced tremendous economic benefits, it has also generated significant pollution burden and continues to consume virgin materials, resources, and fossil fuels at an increasing rate (Hawken et. al., 19993). The money economy thus leaves a large ecological footprint, defined as the amount of land and resources required to meet a typical consumer’s needs. Stringent environmental regulation, the greening of industry and the relocation of most polluting activities toward emerging market economies have declined pollution in developed economies but given the much larger population base in those countries, their rapid industrialization could easily offset the environmental gains made in developed countries.

The Traditional Economy
The second economy is the traditional economy: the village-based way of life found in the rural parts of most developing countries. It is made up of roughly four billion people – fully two-third of humanity – meeting their direct needs directly from nature, while participating only sparingly in the cash or money economy. Developing countries will account for 90 percent of the predicted population growth, and most of it will occur in the traditional economy. Indigenous cultures, once able to live in a self-sufficient manner based upon the principles of community, frugality, and sufficiency, have been irreversible changed by the introduction of cash and wage employment (Norberg-Hodge, 19914). Structural adjustment, privatization, and free trade have accelerated this trend over the past two decades. Indeed, massive poverty appeared only when the spread of the money economy eroded community ties and traditional cultures. Extractive industries and the development of infrastructure have also, in many cases, degraded the ecosystem upon which the traditional economy depends. Rural populations are driven further into poverty as they compete for natural resources often made scarce through expansion of the money economy. Ironically, these conditions encourage high fertility rates because, in the short run, children help the family to garner needed resources. But in the long run, population growth in the traditional economy only reinforces a vicious cycle of resource depletion and poverty. Survival pressures often force these rapidly growing rural populations into practices that cause damage to forest, soil, and water. As it becomes more difficult to live off the land, millions of desperate people migrate to already overcrowded cities in search of wage employment, often splitting up families and fracturing village communities. Most never find full-time wage employment and instead join the burgeoning informal or extralegal sector of the economy, working in literally millions of small, unregistered enterprises. In fact, Hernando de Soto (2000) estimats that the informal sector accounts for 40-70 percent of total economic activity in developing countries. Because corrupt governments and bureaucracy make offical registration of small businesses by the poor prohibitively expensive, the informal economy has become the fastest-growing sector in much of the developing world (de Soto, 2000).

Nature’s Economy
The third economy is nature’s economy, which consists of the natural systems and resources that support the money and the traditional economy. In fact, the money and traditional economies are actually embedded in nature’s economy because the former could not exist without the latter. Nonrenewable resources such as oil, metals, and other minerals are finite. Renewable resources such as soils, fisheries, and forest will replenish themselves – as long as their use does not exceed critical thresholds. Technological innovations have created substitutes for many commonly used nonrenewable resources and in the developed economies, demand for some nonrenewable materials might actually diminish in the decades ahead because of reuse and recycling. Ironically, the greatest threat to sustainable development today is depletion of the world’s renewable resources (Hart, 2007). As we begin the twenty-first century, the money and traditional economies are slowly destroying their own support system (Brown, 20015). Increasing demands of the two economies are surpassing the sustainable yields of the ecosystems that underpin them.

Collision Course
The interdependence of the three economic spheres is plain. In fact, the three economies have become worlds in collision, creating the major social and environmental challenges facing the planet, but also opening up business opportunities of vast proportions.

source / more info at: Hart, S. (2007). ‘Capitalism at the Crossroads.
Aligning Business, Earth, and Humanity’. (2nd Ed.), Upper Saddle River: Wharton School.