7 trends are shaping the emergence of Human economy
In a previous blog[1], we looked at what could come after the Knowledge Economy. One possible scenario is the emergence of so-called Human Economy. This is the form of the economy where we would shift from having knowledge as a key competitive advantage to the form of economy where humanity, human skills and human needs will come to the fore. It is the economy where the ability to engage, deploy and capitalise on human qualities that cannot be programmed and replaced by intelligent machines — qualities like collaboration, passion, empathy, creativity and innovation — will become a new source of competitive advantage for organisations. Knowledge will remain very important, but it will become much more democratised and widely accessible.
Trends towards the Human Economy
I see numerous interlinked trends that are at work right now, transforming the Knowledge economy and shaping the emergence of the Human economy.
1. Sustainability: perhaps the most visible trend that shapes the emergence of Human economy is the sustainability trend. There is a growing understanding that the world needs to be firmly set on a sustainable path and not only in terms of climate change, loss of biodiversity and the environmental degradation. We need to change how we produce, consume, move, travel, grow food and it is urgent. The concept of sustainability is now also defined in broader terms, including the idea that we can only achieve sustainable peace and prosperity when we focus on human well-being for all[2].
2. Economy of Well-being[3]: another important trend that is not yet mainstream is the idea of the Economy of Well-being. This is idea of reorienting the measurements of growth and development at country-level from the measures like Gross Domestic Product (GDP) to new indicators that better capture the aspects of broader human well-being. The OECD defines an economy of well-being around the idea of a “virtuous circle” in which individual well-being and long-term economic growth are mutually reinforcing. The four areas that research has shown to be particularly important for well-being are Education and Skills; Health; Social Protection and Redistribution; and Gender Equality. We have seen the governments around the world are starting to experiment with the idea of well-being economics. The most visible example is the New Zealand’s Well-being budget[4].
3. Role of business: the mounting global challenges of climate change, inequality, injustice, poverty, make it a priority to leverage the power of business to improve social and environmental conditions across the world. Corporate social responsibility (CSR) has become already an integral part of modern business practices, but the years 2020 and 2021 have pushed the companies to go even further. As Covid-19 exposed societal inequity while natural disasters rang alarm bells, many organisations increased their efforts towards diversity, inclusion, and sustainability. This moves hand-in-hand with changing consumers and employees’ preferences, where 77% of consumers are motivated to purchase from companies committed to making the world a better place and 95% of employees believe businesses should benefit all stakeholders — not just shareholders[5].
4. Social entrepreneurship: there has been an explosion in social entrepreneurship. A social enterprise is a cause-driven business focused on improving social objectives and serving the common good. The concept of social entrepreneurship has become so important that even the top business schools consider it a must topic for their curriculums[6]. The UK estimates, for example, that the social enterprises already employ 5% of the working population, which is more than the whole creative sector employs[7]. Social entrepreneurship brings with it innovative ways to improve our society, making it more human-oriented.
5. The digital commons[8] created a new paradigm for the production and dissemination of cultural and knowledge goods focused on sharing and reuse rather than to exchange as a commodity. The distinction between digital commons and other digital resources is that the community of people is building them, and it can also intervene in the governing of their interaction processes and of their shared resources. Open-source software is a big part of this paradigm change. More than 10.000 programmers worked for free on the largest collaborative project in the history of computing — the Linux operating system[9]. Wikipedia is another such project. More than 42 million people contribute to its articles for free[10]. Massive open online courses (MOOCs) are a great example of new opportunities for all digital commons bring. Democratising access and usage of knowledge and information is a big contributor to the humanisation of our economy.
6. The sharing economy: building on the digital commons, the sharing element of the economy is emerging, where the starting point is access instead of ownership. The sharing economy is also known as collaborative consumption, it focusses on redistribution, sharing and reuse of goods and services. Crowdfunding, coworking, carsharing, ridesharing — the examples are in abundance.
7. Branding with “human” elements: as a sign of humanity becoming more prominent in business, more and more companies worldwide are starting to brand themselves as “human” (e.g. Chevron is the “human energy” company and Cisco is the “human network”).
There are surely more trends and signals out there than these seven trends. If you see other trends that point at the emergence of the Human economy, please share your ideas in the comments’ section.
All views are personal views.
[1] What comes after the Knowledge Economy: Sustainability Economy, Machine Economy or Human Economy? | by Tanya Verrier | Nov, 2021 | Medium
[2] The UN’s 17 Sustainable Development Goals (SDGs), the COP26 climate conference in Glasgow in 2021 and growing commitments by countries and companies towards climate neutrality by 2050.
[3] https://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=SDD/DOC(2019)2&docLanguage=En
[4] Wellbeing Outlook — Budget 2021–20 May 2021
[5] 15 Eye-Opening Corporate Social Responsibility Statistics (hbs.edu)
[6] Social Entrepreneurship and Systems Change — Course Catalog — Harvard Business School (hbs.edu)
[7] Government must harness the power of social enterprise to make UK competitive and inclusive finds new research. » Social Enterprise UK
[8] Digital commons (economics) — Wikipedia
[9] 111+ Mind-boggling Linux Statistics and Facts for 2021 — Linux Rocks! (hostingtribunal.com)
