The Purpose economy

Abstract

If we take a look at the past, it can be noticed that the evolution of the economy follows the order of the Maslow pyramid of needs. As a matter of fact, we started with the agrarian economy to satisfy our biological needs and we proceeded with the industrial and information economies to satisfy the psychological ones. Ultimately, the emergence of the purpose economy is the consequence of the fulfilment of all the levels of the Maslow pyramid but the highest: self-actualization, which nowadays has to be found in our lives and workplace. Millennials and the following generations are looking for careers with purpose, in purpose-driven organizations focused on the maximization of the double bottom-line (purpose and profit). They want to be treated as assets to be developped rather than as costs to be controlled. The purpose driven economy is the result of a set of transitions started many years ago when the limits of the pure capitalism have been acknowledged and several terms including “responsible capitalism”, “stakeholders capitalism” and “conscious capitalism” have appeared. Moreover, the current state of the economy, combined with a widening gap between affluent and underprivileged communities, indicates the private sector has an important role to play in improving the quality of life for stakeholders all around the world. For this reason, a new type of corporation has been introduced: the benefit-corporation. In a nutshell, this kind of organization uses the power of business to solve social and environmental problems. The need for purpose-driven organizations comes also from the consumers, which are already aligning their buying behaviour with their personal values. As a matter of fact, they use their purchasing power to punish companies for negative corporate conduct and to reward those that positively address a social or environmental issue.