Being socially aware didn’t make Big Pharma innovate. Here’s a risky piece reminding us that profit matters more than seeming nice and safe, whatever the Davos savants pretend or their mantras might say.

This year’s World Economic Forum in Davos was very downbeat. Still, even as profits are becoming difficult to make, we are still (Davos-style) asked to believe they’re not that important anyway.

To take one important example, Edelman’s trust survey reports that respondents rated financial returns at or near the bottom of their priority list in nearly all of the world’s major economic regions. Business, it seems, should be more concerned with wider social issues and causes that are not necessarily connected to its core purpose.

What’s this? False consciousness? Cognitive dissonance? Denial?

As Sandra MacLeod puts it – in an interesting piece here on sustainability and CR – the aha factor was “we can do well by doing good.” She makes some good points about CR, but they’re not ones that will help companies finance innovation.

Meanwhile, business leaders Twitterd from Davos things like “we have to change the success measurement system beyond just money and share price” if we are to rebuild trust.

Few business leaders at Davos felt confident enough to question the notion that shareholders and profit don’t matter most. Few argued that one big problem is that there’s too much waffle. It was almost taken for granted that all stakeholders are now equals.

So, I welcomed the robust counter view in The Times today from Jonathan Waxman, Professor of Oncology at Imperial College London. He makes a compelling case in defence of the importance of the bottom line. He highlights how much harm to the greater good can be done when the profit motive is undermined:

Today it is unusual to see people die in the industrialised world from diphtheria or pneumonia, and we are at the edge of developing effective therapies for Alzheimer’s, multiple sclerosis, rheumatoid arthritis and diabetes.

But where do these marvellous advances originate from? Not, as you might imagine, from the golden glades of the University of Arcadia. The universities have elaborated hypotheses and elucidated mechanisms, but it is the profit motive and the market that have been responsible for these life-improving changes. Big Pharma, that boggle-eyed devil in the undergrowth, has brought forward virtually all the drugs that make our lives liveable.

He points out how the bureaucratization of risk management by over-regulation strikes at the bottom line and sidelines R&D. This is no small matter.

SmithGlaxoKline is axing 6000 staff, mostly from its R&D departments, and AstraZeneca is cutting 8000 more, while Pfizer its slashing its R&D budget from an equivalent of around $11 billion today to around $8 billion and $8.5 billion by 2012. As Waxman says:

The bottom line does matter to the drug industry — and Britain has created a regulatory environment that makes it harder for them to make money and produce the drugs that we depend upon.

He calls for an overhaul of the regulatory system. I concur. I would add that in the interest of the greater good we need to overhaul our attitude to profit, and the bottom line, and to rehabilitate its importance in the public mind. That’s a pressing PR challenge.