Towards a New Economy

A narrative for a new economy.

“We’re shaking up the system. We welcome diversity. We bring back a human scale to business and financial interactions. We envision a society that is fair and inclusive. We’re open to collaboration and reciprocity. We imagine a sustainable society that lives with nature, not off it.

This is no fantasy, this can be done and we know how. We can design products from a perspective of abundance, not scarcity. We can create reciprocity between consumers and farmers. We can develop local financial schemes. We can develop trust between companies and their customers. We can discourage pollution and the use of virgin materials, and support remanufacturing and recycling.

Soon sustainability will be part of the core business of companies, governments and society.”

Cracks in the system

The way a society works, how people interact, what types of business models are successful, etc. is largely determined by the way the economy is structured. Who owns the resources? Who receives the profits? Where are taxes paid? What do we value? This structure influences social and environmental systems. We can see the negative effects of the current growth-dependent system on (in)equality, climate change, biodiversity loss and so on, because: how can an economy continue to grow on a finite planet?

In the new economy we envision, the economy works in the service of life (Capital Instituteregenerative capitalism). In recent years social enterprises have been leading the way in developing new business models. They have environmental and social missions, and see profit as a means to that end. However, if the economic system doesn’t change, the social enterprises will never have a level playing field to compete with business-as-usual.

This is why we also need ‘system entrepreneurs.’ “The system entrepreneur identifies the promising alternatives to the dominant approach and then works with networks of others to stimulate and take advantage of opportunities for scaling up those innovations. Working at the level of the whole system, system entrepreneurs develop the alternatives, attract the resources, and work toward the moment when the system tips” (Westley, SSIReview 2013).

Their initiatives are widening the cracks that are becoming apparent in the economic system and provide viable alternatives. Eventually together they will make sure that sustainability will become part of the core of successful business models. Fortunately other stakeholders, from governments to science, education, etc., are also developing sustainability initiatives. And this is also the case at many (big) corporations. This is important to note, because to transition to a sustainable system, change needs to come from all directions. The frontrunners are willing to take a risk because they want to develop new solutions, new models, and new business cases. And this way they show what’s possible and inspire others; other entrepreneurs, corporations, governments, etc. These initiatives that form part of a new economy share a common purpose, which is very well described by John Fullerton:

“A regenerative economy is inspired by the way nature is regenerative and abundant. Indeed, close examination showed holistic concepts emerging in almost every field imaginable, from agriculture and healthcare to monetary systems, urban planning, and network-centric technology. At the same time, a multitude of innovators and entrepreneurs around the world are experimenting with practical ways to re-imagine capitalism so that it works for all levels of society, as well as for the planet. In our terms, their common goal is to create a self-organizing, naturally self-maintaining, highly adaptive regenerative form of capitalism that produces lasting social and economic vitality for global civilization as a whole.” (John Fullerton, Capital Institute)

The ‘system entrepreneurs’ that were supported share this vision and many values. Common values that are clearly visible in all initiatives are co-creation, transparency, collaboration, trust, long-term views and localism. All are innovative and entrepreneurial in themselves, or supporting social entrepreneurship.

‘Their initiatives are widening the cracks that are becoming apparent in the economic system and provide viable alternatives. Eventually together they will make sure that sustainability will become part of the core of successful business models.’

Some great examples that I see are those looking at changing the systems around materials, either through Cradle-to-Cradle design or by looking differently at ownership by providing services (lease), not ownership of the products and returning them to the producer after serving their purpose. Others support the innovative startups, building an ecosystem for them, like the Impact Hub Amsterdam or Enginn in Haarlemmermeer. Also for natural landscapes we need an ecosystem approach, like for example is shown in the inclusive Four Returns model of Commonland Foundation, which includes social and financial returns. Diversity is important in nature, but also in the financial system. Initiatives bringing different currency options into play, create this diversity, like Berkshares in the US (Schumacher Center) or Bangla-Pesa in Kenya (Grassroots Economics).

All these initiatives are gaining traction, they are showing a proof of concept and they’re getting support from more, and diverse stakeholders.

The narrative at the beginning of this text mentioned shaking up the economic system. With the growth of, and collaboration between, these new economy initiatives, and also the work of other stakeholders, soon sustainability will be part of the core business of companies, governments and society. That way we can have an economic system that sustains all life on Earth.

This text was written by Manon Klein as an assignment for the Masterclass Societal Transitions, offered by DRIFT and Impact Hub Amsterdam in Oct-Dec 2015. It is based on Manons work at The DOEN Foundation in the funding program Designing of a New Economy.