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Traditional economic models depend upon perpetual material increases to thrive. However, we live on a round planet with finite resources, begging the question: is uncontrolled business growth sustainable? If the reality of climate change is any indication, the current mindset is toxic to the planet.
It’s not exactly great for humanity, either. Depression and anxiety are at all-time highs, leading to countless deaths of despair. Furthermore, despite technological innovations promising to make life easier, many people work longer and harder than ever.
People could continue doing the same thing, hoping for different outcomes, but someone defined such behavior as insanity. Is there a better way? Economist Kate Raworth thinks so, and her doughnut economics model offers an alternative to the traditional worldview that may just be what humanity and the planet need to coexist in harmony while fostering sustainable business growth.
Doughnut economics addresses two of humankind’s most urgent problems: eradicating global poverty while staying within the means of the planet’s limited resources. It sounds simple, but the mindset shift is the toughest part of implementing such a program. Instead of worshiping growth as the sole indicator of progress, it relies on human and environmental well-being as measures of sustinable business growth.
Doughnut economics takes its name from its visual representation as two discs:
The rich, gooey middle represents progress and how far humanity can go while respecting the planet’s limits. It allows for growth that collectively elevates the life experience without making it harder for other living beings.
That’s why the mindset shift is the toughest hurdle leaders often face when implementing doughnut economic principles for sustainable business growth. It requires nurturing human nature’s cooperative and caring side instead of the competitive, individualistic half.
In a traditional economic system, progress is straightforward and easy to measure: growth or, more specifically, GDP. However, doughnut economics determines how well a society is doing by its ability to meet 12 essential goals for sustainable business growth, which are:
In examining the goals of doughnut economics, the necessary mindset shift becomes more apparent. Instead of individual and tribal achievements, doughnut economics seeks the advancement and betterment of all humanity.
Doughnut economics recognizes the stark reality that advancement for a few individuals can mean significant destruction for many other people and their way of life. This becomes most apparent in using the world’s natural resources for economic purposes.
This theory proposes nine thresholds that individuals, corporations and nations should not cross to achieve the goals of a better life for all — and keep the planet inhabitable. We can foster sustainable business growth by taking measures to address the folowing:
Critics of doughnut economics often cite that it is too pie in the sky, taking an unrealistic view of human nature. Can these principles work in real-world scenarios? How can people implement them without the government playing too heavy of a role in enterprise? Will people accept human and environmental well-being as measures of sustainable business growth?
You can see two examples of doughnut economics in practice in Amsterdam and Brussels.
The capital of the Netherlands has embraced doughnut economics as part of its COVID-19 recovery plan. Some of their projects include:
Neighboring Brussels is also giving doughnut economics a go at the local and national levels. Some of their projects include:
These examples show that introducing doughnut economic principles need not entail an abrupt and catastrophic overhaul of national financial systems. What it requires is making active policy choices that align with the 12 essential goals, fostering sustainable business growth while remaining within the nine thresholds.
Shifting to doughnut economics necessitates a mindset shift away from the “greed is good” philosophy embraced by Michael Douglass in “Wall Street” and toward one where human potential is considered the most valuable capital asset. However, it also offers a powerful way forward toward a world where everyone is truly free to actualize their potential.
The harsh reality is our round planet has finite resources. It’s also the only habitat uniquely suited for human life, making protecting it a matter of survival.
Doughnut economics proposes a way for businesses to enjoy sustainable growth in which all individuals collectively share in the advances and wealth created. By embracing eco-friendly, circular principles for material use, it conserves sufficient resources for everyone.
Perhaps more importantly, its principles of fairness and equity elevate the human quality of life within the economic system. Operating within sensible ecological boundaries lets people enjoy today’s technological conveniences by making them create less “busy work,” not more.
Instead of improved production methods resulting in higher workloads, more stress and isolation from the community, they can instead reduce overflowing to-do lists, allowing individuals more time for their passions and bonding with loved ones. A human-centered economy leaves more time for personal development and achieving self-actualization and for people to assist one another with these aims.
To achieve this, the first thing people need to do is adjust their worldview. Doughnut economics offers a more realistic and human-centered approach to value — but it requires all people to value fellow life and the greater good more highly than more easily measurable traditional material wealth.
Doughnut economics offers a radically new way to look at financial systems. Instead of material goods being the sole indicator of sustainable business growth, this philosophy values human potential as the ultimate measure of achievement.
Doughnut economics offers a way for businesses to embrace sustainable growth that works in conjunction with the planet. By conserving and reusing resources responsibly, humans have the knowledge and ability to maintain comfortable living conditions for all for an immeasurable time to come — if they make the right choices.
