Kate Raworth entered the field of economics with a vision of changing the world like many of us dreamt of doing. During her years of obtaining her degree, she realised most economic theories had simplified concepts into one that is to do with basic supply and demands between people and businesses. Economic concepts in the past had no room for complexities that make up every human being and society.
The concept of Doughnut Economics shook the well-embedded capitalist worldview of measuring economic growth through the well-established metric Gross Domestic Product (GDP) with the publication of her book in 2017, ‘Doughnut Economics: 7 Ways to Think Like A 21st Century Economist’.
The concept is simple, like a doughnut that you’d find in the store, there is an outer ring and an inner ring. What we have to achieve as a planetary household is to ensure that we stay in the inner ring where all the goodness of a doughnut is where there is ecological balance and everyone’s basic needs (food, water, housing, healthcare, etc) are met.
The challenge is staying within the ring – collectively as a society, leaving no one behind, because the concept warns that if we push beyond the boundaries of the ring, we will overshoot ecologically or push Mother Nature to more pressure than she could withstand.
It is a tough call to apply this interesting, but serious approach to safeguard the future of our society and planet.
As a global citizen, each individual that comes together as communities and builders of economies through small-medium sized businesses can play a part in creating an equitable society. Here’s how:
Building Back Your Businesses Better
With the looser SOP restrictions, businesses are opening back as usual after months of closure. The top priority is, of course, to recover from the financial dent the pandemic has caused. And while we look at how revenue and profits are shared in businesses where stakeholders are prioritised in terms of returns, it is also one of the many causes of inequality observed today. Instead, can businesses shift their mindset to a more equitable distribution of wealth?
1: Instilling fairer ways of business dealing
As a business, there are a few questions that you could ask in ensuring your business is one that is beneficial to society through the five pillars of corporate psychotherapy:
- What is the purpose of your business?
- How is your business governed?
- What is your current business network?
- Who owns the business?
- How is your business funded?
2. It’s Never Too Late To Jump On The Sustainable Bandwagon
If the answers to the initial question shed a light on major flaws in your business model, it is time to review them once more with doughnut economic lenses. It is time to do our fair share by acknowledging the changes in reducing greenhouse gas emissions and at the same time giving back to both the community and the living systems that have supported us.
Social enterprises are the perfect example of a sustainable business model with core values that aim to reduce the shortfall and attempt to contain the ecological overshoot with innovative methods such as making compost out of food waste.
3. Profit Isn’t Everything
A business goal is none other than reaping profits and contributing to the economic growth of a country. A successful businessperson in the 21st century said Raworth” is one who drives their business to be both regenerative and distributive.”
Regenerative entails that a business is returning what it takes from society and nature; by providing a better distribution of income (distributive) and ensuring no harm was done to the environment.
Don’t just eat the doughnuts!
A commendable addition to the Doughnut economy is its consideration of informal employment, domestic workers and traditionally undervalued roles such as full-time parents and volunteers. Their roles are necessary for the core economy, yet have been cast aside in the mainstream market.
Raworth suggests that a national basic income, paid unconditionally to all will ensure that every person will have sufficient income to meet the basic needs of their daily life. While this radical approach is not within the citizen’s control, it helps frame possibilities, especially for policymakers.
There are ways that individuals can apply some of the Doughnut Economics concepts in our daily lives. A good start is to examine our consumption and find ways to reduce it. Try responsible purchasing by sourcing for pre-loved items, ethically sourced products and supporting local, small enterprises.
At the same time, ask yourself and your peers how we could uplift the undervalued roles of carers and our informal workers in the community? And, who knows, it could be the start of a new social enterprise or organisation that could benefit those who had fallen into the hole through economic empowerment, financial aid or advocacy.
We urgently need financial, political and social innovations that enable us to overcome this structural dependency on growth, so that we can instead focus on thriving and balance within the social and ecological boundaries of the doughnut. – Kate Raworth, economist, author of Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
Kate Raworth will be giving a keynote address at The Hasanah Forum 2021. The two-day online forum on 17 and 18 November 2021 aims to bring together local and global leaders from across civil society, academia, government and corporates to deliberate and intensify conversations on how Malaysia can move towards a just and equal nation and the significant role of changemakers at every level. Registration is free and we invite you to be part of the conversation. Register now!