Although it may not look like it, we are well on the way of a radical shift in the global economic framework. A revolution, as it were.
Funny thing with revolutions: most people actually miss them, even while they are happening.
Everyone loves to point out their disruptive impact now, but in fact most people — and most businesses — have actually missed the smartphone revolution. Or the social media revolution. Before that, many more have missed the internet revolution (sometimes hilariously so). The signs were there for everyone to see, but somehow most people missed their compound relevance. Experts were as usual the worst offenders.
The truth is that we are all great at picking trends in hindsight, but suck spectacularly at noticing the importance (or lack thereof) of things that are slowly unfolding under our very eyes.
Is Purpose a Trend?
Here are some numbers that we should be paying more attention to (Source):
- 56% of US consumers refuse to buy from companies they believe are unethical
- 35% of consumers stop buying from brands they perceive as unethical even if there is no substitute available
- 74% would pay an extra 5% if there was a guarantee workers were being paid fairly & working in safe conditions;
As you are processing these numbers, spare a thought for all the independent, ethical, purpose-driven businesses cropping everywhere from San Francisco to San Jose, from Baltimore to Beijing. Organic stores. Farm-to-market. Artisanally crafted products. Ethically sourced coffee. They are all claiming back market from the big boxes, franchised efficient money-making machines of yesteryear.
Just a few years ago businesses like that were a fringe in the wealthier parts of US or European cities. Now, they grow their share in markets everywhere.
What is going on here?
The Purpose Economy
The changemakers are emerging from the fringes of a legacy, broken, GDP-obsessed economic framework and demanding new a new economic compact, globally. This shift is happening fast and incumbent businesses ignore it at their own peril.
We are already operating in an economic environment where Purpose is a powerful differentiator. To Changemaker it is THE differentiator.
And there’s more: as changemakers enter the ranks of entrepreneurs, investors and voters, Purpose will evolve from a mere consumer differentiator to a minimum standard — a passport requirement for any economic actor to even enter a market. You either have a clear, proven purpose or you won’t even have a chance, as a business.
The Big Opportunity
In the early 2000s businesses realized that they need to have an online presence of some sort. Their only option then was to invest in a bunch of servers, put them on a rack somewhere in an aggressively air conditioned room and make sure the servers are always online. This sort of vertical integration worked for well funded companies. It was expensive and created a lot of friction.
But then, sometimes in the mid 2000 AWS started offering servers as a service and all of a sudden, everyone with a credit card could have servers up and running in minutes with all the world’s processing power on tap. Servers became a utility, just like electricity or water. That changed everything. From then on, a small startup with no money to their name could operate the same servers as the world’s biggest multinationals. Everyone gets to focus on their core business, without worrying about server downtime and speed.
Something similar will happen with the Purpose Economy
Right now, purpose-driven companies are spending significant amounts of money to build vertically integrated infrastructure to track, evaluate and share their impact. It’s a big distraction from their core business and a bit of a hassle. Small businesses cannot afford such vertical integration and therefore operate on vague impact assumptions, or, more often, on impact that no-one knows about.
The purpose economy NEEDS a utility service. A plug-and-play layer into which anyone can connect their own backend and verify & track their impact on the go. Then, new business will emerge that will build entire new categories of products on top of this impact data.
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