Purpose: the $50 trillion business opportunity of the century
How the purpose economy is deploying the tools of capitalism to help solve massive global challenges and creating value in the process
This is Part 2 of a 3-part series on the purpose economy. Check out Part 1.
In Part 1 of this series, I introduced the concept of the purpose economy as an alternative to the predominant paradigm of business, based on maximization of growth and profit for their own sake. I showed how the purpose economy is based on two foundational facts about human nature and the economy: people want to be of service, and being of service is economically efficient in the long run. I then described various, mutually-reinforcing feedback loops and secular trends across all sectors of the economy — encompassing the labor market, finance industry, consumer behavior, and supply chain structure — that are creating and augmenting strategic advantage for businesses that operate from the purpose paradigm.
In this article, I’ll discuss the benefits that this paradigm shift will generate over the next few decades. As the purpose paradigm gains scale, shape and operational efficiency, the firms comprising it will start making transformative contributions to the global challenges facing humanity and the planet; we will see capitalism becoming a wellspring of solutions.
Now, the two paradigms — profit and purpose — will certainly coexist for quite some time. There will be a long period in which the majority of companies will still be hellholes led by mediocre, growth-obsessed executives, staffed by frustrated employees and churning out crappy products moved by advertising dollars. I’m not even sure that the purpose economy will ever become the only or even the dominant paradigm; though that is a possible long-term outcome, the profit paradigm is just too self-perpetuating to go away all at once. But here’s the beautiful thing: the purpose economy doesn’t need to take over the world in order to change it. Just as nonviolent action by less than 4% of a country’s population may be enough to topple a dictator, even a small fraction of firms aligned to the purpose economy may be enough to effectively solve our greatest challenges.
To see how, consider a scenario where “only” 5% of the world’s businesses become fully purpose-oriented. If we were to consider that group as its own industry, it would…