The challenges of recent months have created great uncertainty and fear over the likely depths of recession as well as how best to respond and tackle uncomfortable truths about racism.
Against this rather ominous backdrop, thankfully, there is a growing number of economists offering some hope, giving a new sense of purpose and direction to the world of work. One where economies strive to meet the needs of all their people, as well as the planet they live on. One where businesses play a more central role within their own communities, taking on social inequities and environmental responsibilities, rather than narrowly focusing on profit and growth.
Commenting at CIPD’s recent Festival of Work, Professor Andrew J Scott from the London Business School challenged businesses to become ‘more human’ and seize new opportunities to be helpful, kind and supportive.
Economist, Kate Raworth, has gone one step further to create a different model, which she calls Doughnut Economics. She takes the familiar shape of a ring doughnut (mathematically known as a torus) to illustrate her ‘alternative’ approach. The doughnut ring represents sufficiency of all the resources needed for a good life from clean water to social equity (ie a safe and just space for humanity). The outer edge is the environmental boundary or ceiling, beyond which we damage the planet through actions such as pollution, ozone depletion and ocean acidification. The inner edge is the social boundary and the hole in the middle represents human inequalities and various states of deprivation. The doughnut image is used to illustrate how we are falling short of meeting the needs of many, while at the same time causing irreparable damage to our planet. Sadly, billions of people still live inside the hole without access to adequate resources.
Doughnut Economics goes on to challenge the obsession of governments and businesses with growth and the outdated measures used to track that growth. For example, did you know that the concept of GDP (Gross Domestic Product) was created nearly a hundred years ago and makes no provision for measuring wealth and income disparities or the importance of unpaid work, wellbeing or environmental impact?
Raworth’s alternative ’doughnut shaped’ approach asks businesses to think about how they can be distributive and generative. For example, can they strive to be beneficial by both making an active contribution to lifting people out of the centre of the doughnut and contributing to the health of the planet?
This is an ambitious goal, particularly at a time when many businesses are struggling with basic survival post Covid-19. However, I believe there is a huge challenge and opportunity for those enlightened businesses that have the vision to look beyond traditional approaches and explore more inclusive and fairer methods of operating. They will be the businesses of tomorrow that:
These examples will start to challenge traditional business structures and attempt to bring more humanity into businesses and the economies they operate within. A deliberate move away from financial extraction to focus on the generation of benefits to society and the living world is an exciting and necessary proposition.
Who wouldn’t want to work with (and own) a doughnut shaped business?