WhitePaper Series: The Purpose Economy
Hey ChangeMakers, we will be coming out with posts and articles called the WhitePaper Series. This series is meant to outline, define and explain the issues in impact investing, POI’s solution and application that we believe are necessary for the impact industry to bring forth the Purpose Economy and promote measurable and transparent progress in our world. In this first installment, we’ll be talking about the purpose economy and the impact currency.
The Purpose Economy
Impact is by and large invisible:
Those who want to fund it do not know if their money is put to work to achieve the impact they seek.
Those implementing impact have very few means of showing the progress towards the impact they achieved.
There is an opportunity to create a direct link between an impact event and its funding. We propose to do this by building a global marketplace for impact capital. We argue that this is the best way to connect impact outcomes to funding.
By combining emerging technology with transparency and financial engineering, we anticipate that impact can eventually transition from an impact lens to a tradable asset class thus improving both the amount and efficiency of investing in impact.
Context: Changemakers and the Purpose Economy
In our lifetimes alone, economic fundamentals have shifted several times under the pressure of innovation. Starting in the 80s, industry-centered models powered by capital and fixed assets made way to information-centered models powered by technology and software. Then, new models emerged, centered around social networks, powered by connections and engagement.
Each era produced winners and losers. Every time, incumbents slow to embrace the new rules were forced to submit to first-principle, new generation businesses that “got it right”. Most recently, social engagement models gave people a taste of their potential power over companies and governments. Yet there are strong signals that the “social economy” is slowing down. Feeling exploited by false engagement and a forced social narratives, a whole new generation of users are left wanting a more active, authentic role for themselves, in a new type of economy, powered by the new rules.
These new consumers — we call them Changemakers — are ready to define an identity for themselves through acts of positive change. They care for their impact on the world. They need Purpose. And they want to be in control.
Impact: the currency of the changemaker generation
Changemakers want to change the status quo. They don’t believe in output industries and traditional economic theories that glorify growth without taking into account externalities and the social and environmental long term costs. They don’t buy property, even when they can afford it. They don’t set up pension funds and do not invest in the stock market. They embrace alternative economic models that prioritize community and sustainability over fast growth: Circular economies. Farm to table. Local, organic farming. Artisanal economies. Social capital. Natural capital.
Conflicts and struggles on the other side of the world feel a lot more real than they did for any previous generation. For the first time, perhaps this generation doesn’t only feel that they may be able to cure disease, end poverty, save the planet, but they feel that it is their responsibility to do so.
Spearheaded by the Changemakers, a new economic paradigm is here:
The Purpose Economy. Powered by impact.
As consumers, businesses and policymakers adjust to The Purpose Economy, a need is emerging for a dedicated, first-principles infrastructure that allows global economic interactions at scale, around purpose and impact.
