Kate Raworth: Doing Business in the Doughnut
Hello. Let. Me be straight from the start if you've come for the donuts I'm gonna disappoint, they, are only virtual but. If you've come for the future business and even the future cities you're, in the right place so I. Want. To introduce you to the only doughnut in the world that's actually going to turn out to be good for us here. It is. Imagine. Humanity's, use of resources radiating. Out from the middle of this picture so. That hole in the middle is a place where people worldwide. Are, left falling short on the essentials of life without. The food healthcare, education housing. Political. Voice energy. That every, person has a claim to to lead a life of dignity opportunity. And, community, we. Want to get everybody out of that doughnut hole into, that green doughnut, itself, but. It's. A big but we. Cannot, afford, to overshoot, that outer, ring the ecological, sealing because there we put so much pressure on. This. Extraordinary. Unique. Delicately. Balanced. Living, planet, that. Is our home that we begin to kick her out of balance we caused climate breakdown, we acidify the oceans, create a hole in the ozone layer. Catastrophic. Levels of biodiversity loss and these nine, planetary. Boundaries, around the outside, are. What Earth System scientists, around a decade ago believed. Are the nine critical. Life supporting. Systems, that make Earth such, a home, sweet home for Humanity. So. I proposed to you this is a compass, for the 21st, century to meet the needs of all people within. The means of the planet but. If it's a compass, you want to know where we are now and that's, not an easy picture to look at all that, red in the middle shows the extent to which Humanity is falling short on the, essentials of life see. You at the top food. 11%. Of people in the world don't, have enough food to eat every day so that red wedge goes eleven percent of the way to the middle of the picture on water, nine percent of people don't have access to clean water one person, in three doesn't. Have access to what we call a toilet, but, you can see on every one of those dimensions there, are millions or billions of people falling short and yet. We have already overshot. At. Least four of these planetary, boundaries on climate, change on. Excessive, fertilizer, use on too much converting, land surface, for human use and on critical, biodiversity. Loss, so. This is the state of humanity, in our planetary home and. For we the people of the early 21st century. This. Is our selfie. None. Of last century's, economists, politicians or. The. Future is calling the future has already seen that selfie, and wants to change today's. Business, models politics, and economic theories because no one from the last century saw this we. Have to come up with designs. Of, our own that are fit for our times because we're the first generation to realize this is the challenge we face and, it's. Our legacy to our children's. Children, to turn this story around, I've. Presented this diagram, to many communities, over the last five years and for me one of the most fascinating conversations. I have is with, business, imagine. If every company in the world drew. Up its corporate strategy, seated at this table asking, itself does, the way we do business help bring humanity, into this space or let's, be honest, does. The way we do business actually push humanity, out of this space because that's basically how 20th century business was, designed and I. Believe if we are going to create businesses, that actually help bring humanity, into the doughnut that meet the needs of all people within, the means of the planet we, need to put at the heart of business to design, principles. Businesses. That are regenerative, and, distributive. By design I want to tell you a bit about each of those so distributed. By design what do I mean, businesses, that are designed, to share value, created, far. More equitably, with all who helped co-create, it moving, from that centralized. Design, to, distributive. I'll. Give you some examples, of businesses that are starting to actually put this in practice so. Rather, than have corporate, ownership where, enterprise, is owned by shareholders who, never actually step inside the enterprise we're. Seeing a resurgence of employee ownership of cooperative. Ownership where the workers themselves, only enterprise whether it's John Lewis or in cooperatives, and small-scale, employee, owned companies, rising. Up around the world this is resurgent, fascinating. Change in the, ownership of business. But. Also companies that commit to paying fair taxes, like lush has taken, on the FairTax mark, saying. We commit, that we recognize, private. Business does not create, its own well it is invested. In the base of society and in public vestments, and we need to give back to, the social base from, which we build our business. Many. People today may have drunk a cup of coffee that came from Ethiopia, and we're all used to pictures of workers, far down the supply chain growing, those beans but usually, the beans leave the country and then.
Most Of the value gets added in Europe. In America in Australia, moya, coffee is an enterprise that wants to distribute far more of the value, of your cup of coffee back towards. Those who actually grow the coffee so instead of just growing the coffee in Ethiopia, they are now also roasting, it they're creating. The infrastructure, that captures, more of the value in fact two-thirds of the value in the country of origin that is a far more distributive. Way of designing coffee, for the future and this. Picture may look like a rock concert actually it's a software developers concert for Drupal which is an open source software, for designing websites. Any. Major, corporation. Would be desperately, envious, of the passion, and size of this R&D, team of people who get together once a year and create, and patch and innovate the software, that they collectively, share they're, holding their fingers up like this to say I may be just one drop but. Look what happens when we put our minds together, so. These are some of the ideas just some illustrations, of the possibility, of distributive, design which, is coming up in new kinds of business, what about regenerative design through. The middle of this diagram is the degenerative. Linear, 20th, century economy, we take Earth's materials, make, it into stuff we want use. It for a while and then throw it away and. That pushes, us over planetary, boundaries so we need to bend those arrows around so that resources. Aren't used up they're used again and again creating, economies, that run on sunlight wind and waves. Let. Me give you some examples, of enterprises, that are trying to work with and within these cycles. The living world in. The, slums of Kenya is one of the places where there were no toilets but now there are because the enterprise Sanergy has, created a micro franchise, of toilets throughout the community so, the for the first time in their lives people can use a toilet with, soap clean, water and toilet paper that brings dignity, it, also brings a health and it creates enterprise through the community the waste is collected every day and turned. Into fertilizer sold, back to farmers so. At the technical, level they're closing. The loop of nutrient, use but. At the social, level they are distributing, opportunity. And value throughout the community if. You, were to buy a car from a company called open motors it arrives looking like this like a wardrobe, from Ikea and good. Luck if you know how to put it together they say you can in under an hour. But, if you don't know how to put it together the good news is you can take it somebody who does because. This car is open-source, by design the hardware and how to connect, it is free. And available for anybody to see on the internet so anyone in the world can set up to, be an assembler, a distributor. A repairer, a refurbisher. A customizer. Of an open mochas car and once, this chassis, is assembled. Then you can create a design, like this or, a design like this you can build different kinds, of designs on top of this a hundred percent one hundred electric. 100 percent modular, electric. Car I live. In Oxford and at the end of my street is the place for all the mini cars in the world are shipped out full, of air and shipped, around the world and I think the future of cars and of transport is like this modular, and not in not even just cars and transport industry ship. The parts assemble, them reassemble, and refurbish, them customise them locally this is 21st, century distributed, manufacturing and, this, company, is called Houdini they make sportswear, in Sweden, and they're, trying to ensure that all of their clothing is made either from, organic, fibers, like wool and tensile so they can be decomposed and used again and again in, fact they put some of their wool clothing, in a, bin turned, it into compost grew, mushrooms, on top and served, it to their customers and said you're eating your old ski wear to, show that loop going round or they make it from recycled, nylon and recycled polyester and, houdini. Have actually released the first company, to release an assessment, all the textiles, they use assessing. Them against the planetary, boundaries and against the social foundation so they have done a doughnut, assessment, of their company, their impact they're, pioneers, because they are trying to create a circular economy but what I want to argue is the business alone cannot.
Do This and let me show you I never. Travel with that so. Here we are here's, the linear degenerative, 20th century economy right take, us materials, stuff them in the pie make them into stuff we want and throw, the waste away and we, need to bend that loop around so, that the loop is closed imagine, this is a Houdini sports where top this, lady looks like she's wearing Houdini stop can you just hold back there we are so sending. Your send your clothes back to us and we will close the loop but then maybe Marx dispensers, or Zara or French Connection or H&M say we'll send your clothes back to us and we'll close the loop as well hold. That there. We have every. One of you in this room to. Imagine that the clothing on your back whichever, company it's made by that company says send. The, clothes back to us make a loop above your head yes really make, a loop above your head exactly. So that every, company has its own little loop and is sending the clothing, back oh you. Look fantastic you. See, you look wonderful but nature, would laugh at us because, nature doesn't turn a daffodil, back into a daffodil and a peacock into a peacock, nature. Creates. An ecosystem, of resources. We use nature breaks the building box back down, to. The basics, of life and recreates, again and again no, one company alone can create an ecosystem, of textile reuse of metals. Reuse, of minerals. Of ceramics, of plastics, we need to create ecosystems. And that, means we need intervention. Above what any one company alone, can do so. How are we going to get there you, see we have the risk in, trying. To create a circle economy that we ended up with this segmented, circularity, that you all just did, where. We have the material, flowing in closed loops returning, to the brand the, resources, are owned and controlled the, standards, they're, mine you can't connect with my standards, the governance is in-house the. Technology, is proprietary I'm, not telling you how I made that what. We need is ecosystem. Circularity, where, the materials, flow in nest, loop's they, returned not to the brand but to the ecosystem, the. Standards, are open and shared so they connect its. Network, wide governance, and the knowledge of how it's done is in the Commons how, do we get there, well. I think cities, and governments, play a huge and important role to create the space, possible we, need citywide, planning, here's a plan, being drawn up in Glasgow, to look at the possible loops and the ecosystem. In the food sector between meat beer, and bread I don't know if that tells you something about the Glaswegian diet but, look, at all the connections, that are being built there no one company alone can make that happen we. Need public procurement I was delighted, to be in the Netherlands last week traveling on a train with. The woman who is responsible for getting Dutch, state railways, to, be a hundred percent powered. By wind what, if in every country the government committed to ensure that all public institutions public transport, were powered, by renewable energy. That would transform. The, energy system, and create a dynamic that brings us way faster, down a cost curve of renewable, energy. Public. Provisioning, it's fantastic, that in cities like London and Bristol and Oxford around, the UK public. Water fountains, are coming back to get the plastic bottles away so we don't have to recycle them because we just don't use them in the first place and. We, need more community, initiatives, where. We create space for people like in this repair cafe, communities.
Get Together and at repair and refurbish, and reuse goods without disposing. Of them these are just a few ways that. We can create nested, circularity. Not, that segmented, circularity, that will never work what. About the future of networks of course, we've got lots of people here talking today about the dangers, of the networks that we hoped, will be open and shared but actually we've got corporate, networks whether it's alphabet, Amazon, Facebook Apple, Google Microsoft. They. Of course have, created networks that are taken up because. Of their size because, of the power they. Are designed, for. Finance reasons. They're not designed to work, for us they're designed to capture our attention for advertising their, governance is proprietary, the. Data is captured by those networks and the. User what, we just seen as a consumer, of course, there is a complete, different way these networks can evolve, open-source. Community, networks like Habad online in amsterdam. Like linux, they're. Taken up because, they're fit for purpose because, of the way they're designed and they're designed to work for the communities, they're driven by the community of users their. Governance is free and open-source and, their, data rather been captured its sovereign to the individual, or data, about the commons belongs in the commons and the user of course becomes, the co-creator, of that system so how on earth can. We go from the internet that we have to, this kind of Internet that we actually want community based networks, many. Changes need to happen I'm just going to draw attention to a few small ones that any city, can already, do now first. Of all recognize the. Commons we, are not just rational, economic man as 20th century economics taught us as either. Labor or consumer, we, are creators. Sharers. Coke. You know collaborators. We care. We steward we neighbor we have multiple, identities, and. Once you recognize the Commons you can start to create spaces for the Commons you may be familiar with amazing work that Jeannette Sadiq Khan has done in New York opening. Up public spaces where people can actually physically, meet not, just in outdoor spaces but also within old buildings, those. Deserted. Public high streets create spaces where commoners, can meet and begin, to create nodes of this, community-based, network. Become. An open digital city I know Francesca, brie is here talking about what's going on in Barcelona, how, can the city adopt, these, technologies. That actually take, away from the corporate control and open it up to citizen control and lastly, empower community, networks as they emerge habayit, online which means area online in, Amsterdam, is popping. Up it's like a Facebook, except, it's created, for and by the local, community designed for their needs owned by them as a cooperative and the, city empowered. That these, are some ways that we can begin to create a very different, future, of digital, networks from the one that we seem to be heading towards, so. Can, business do the doughnut yes. But not alone we need ecosystems, of material, reuse and of digital design that actually make something, bigger than any individual, business possible. But. I want to talk finally, let me just go back there because why not meet company some companies, and they see this donut they say it's.
A Sad story you know but the, business of business is business and, everything. We're doing is nearly legal, so. We're just gonna keep going until somebody, catches us and then, other companies I mean other enterprises, they say this. Diagram, this. Is why we, created our enterprise we created, an enterprise in order, to sequester carbon in order to improve health bring, water access to this community in order to empower women this is why we're in business and these, incredibly. Different responses, fascinate. Me and I. Think the, reason, for such different responses, is because we are living in the middle of an incredible, psychological. Drama about, what business is for what it can do and be in the world and, in, the simplest of terms I think we're leaving the, extractive. Era the 20th century extractive, Enterprise design where, business was. Designed to ask one overriding. Question that underpinned every conversation, how. Much financial value can, we extract from the way we design this enterprise but. When I talk to what I think of 21st century Enterprise designers, those, Moya coffee when. I talk to open, designers. Sanergy. Toilets, open motors cars they are coming from a completely different place how. Many benefits, can, we layer into the way we design this enterprise benefits. For the community for culture, for the living world ensuring. That we make enough profit that we can open the doors next week next month next year, totally. Different starting point what is it about the internal, design of an enterprise that, leaves it in one place or the other and here. I'm gonna turn to the work of Marjorie Kelly who's a brilliant corporate, analyst she'd identifies, five, design, traits and if any kind of organizational. Enterprise that you're involved in I invite, you to, question it through these five lenses first. What is the purpose of, this. Enterprise of this organization, the. Purpose of a pretty mainstream car company might be well we want to be the biggest market. Share of 4x4, vehicles in Europe for example in, the world open. Motors ask them their purpose their, purpose is to democratize. The mobility, the. Purpose of Sanergy toilets, well. It's a safe and prosperous, their purpose is far bigger than themselves and they are merely contributing, towards, it what about governance. What. Kind of principles, govern, the way companies talk on Monday, morning, what metrics, our staff, asked, to report against is it. The. Tight market. Metrics what's, this week's market share, what's your profits what's your sales because if that's not growing you're, under pressure or is, it a longer term metrics, about our, reduction, of carbon use our reduction, of water use our transformation. Of our relationship, to the suppliers in the community, what. About the network's how companies networked, with, their suppliers with their customers, with their allies. Maybe. They'd see them as their competitors but perhaps they're their allies in transformation. Because. Networks, determine, what any one company can do bigger than itself alone and now, we're going to the deep stuff I've put the most powerful, stuff deepest like in psychotherapy, the powerful. Of stuff lies deepest, so how is the company owned because, whether a company is owned by its, employees by. Its, customers, by, a family by private, equity or by shareholders. These. Different, designs of ownership deeply. Determine, the, quality of finance that it attracts, and whether that finance, is saying yeah but how. Much financial value can we extract in the next quarter or whether. That finance is saying we're here with you for long term social, environmental. Return with a fair financial return and of course has, anyone knows who's involved in enterprise that, pretty much shapes everything I think. We are at a moment actually of split identity. In many companies where, they may be changing. Their purpose, their governance, their, networks, innate sounds great on paper but so, many are still owned either, by the shareholders, a stock, market or by venture capital which pulls them back in, a, very extractive. Model and if looking at this slide makes you feel that inside. I feel. Your pain it's, a very 21st century, pain because, I think we are going through this psychological, drama and it's very difficult to live with day by day when you were caught in that, what. Of course needs to happen is that all those arrows point in one direction which. To me means we need to see transformation, in models, of business ownership, so, that the way companies are owned and the way they're financed, can, actually be aligned with, generative, purpose, with, a purpose of enterprise being to regenerate.
This Living planet that we are destroying to, regenerate, communities, that have been fragmented, and that. For me is the purpose of what 21st, century business, can be and can do if. You're, interested in these ideas and you want to know what, it would mean to think like a 21st century economist you're welcome to watch these one-minute, animations, that I've had the privilege of working with brilliant, stop-motion, workers as you can see they're. Silly playful, funny because, economics. Has to become fun if we're gonna widen the conversation, and please join this discussion group online if you want to be part of that but, I leave you with, the one donut that turns out to be good for us because, if this could be our compass, in business. In economics. In government, and in economic theory we. Really could turn around the story of where we're heading thank, you very much. You.