The New Social Impact Ecosystem
Published November 2020
Bruno Roche, Economics of Mutuality Founder & Executive Director, recently presented the Economics of Mutuality in a webinar at the The John D. Gerhart Center for Philanthropy, Civic Engagement and Responsible Business, which is part of the American University in Cairo School of Business.
The webinar formed part of a series entitled ‘The Aftermath of COVID 19: The New Social Impact Ecosystem’, which was set up to explore concepts with the potential of becoming mainstream as a result of changes to the business landscape wrought by the global pandemic.
The recording is available to watch below and a short extract from Bruno’s contribution has been transcribed.
I believe the Covid crisis is going to accelerate the transition of companies understanding that purpose is the next frontier for value creation.
The value extraction model that has been the rule over the last 50 years, which is essentially Milton Friedman’s doctrine, is coming to an end. This outdated model is driven by the macroeconomic principle that economics is all about managing scarcities.
Saying that our economic model will have to adjust because financial capital is overly abundant whilst human, social, and natural capital are now becoming scarce is not an ideology – it’s an observation. My hope is that the transition will happen through research and education – not through civil wars or catastrophic events.
If business leaders don't embark on this kind of management innovation, not only will they expose their company to a high level of risk, but they will also expose their company to a missed opportunity. There are a growing number of companies that understand the shareholder primacy model is outdated, dysfunctional and sub-optimum – even for the shareholder.
Header photo: Cairo, Egypt
