Is the resource curse slowing you down?
On the eve of the publication of his new book, A Beautiful Constraint, Adam Morgan explains the power of doing more with less, sharing the story of the McLaren Formula One team that overturned expectations by fighting back following the tobacco sponsorship ban.
The Resource curse is a term coined by the economist Richard Auty to describe the tendency for countries that are rich in natural resources to perform worse economically than countries that have none. While this is not inevitable (see those prudent Norwegians), the possession of such resource wealth all too often leads to economic and political behaviours that, in fact, limit the sustainable growth potential of the country, rather than accelerate it.
The apparently counter-intuitive idea that less wealth leads to stronger performance is illustrated by the journey made by the McLaren Formula One team after the EU banned tobacco sponsorship in 2005. Tobacco had bankrolled the business and the lavish lifestyle its 11 teams enjoyed – the private jets that flew the teams to the races, the best hotels, the abundance of resources. And the concomitant mindset in Formula One, at the time, was that money bought performance.