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NEWECONOMYLAB ///
James Slezak | @jslez
MIT Media Lab guest lecture
1. Organizations making transformative social impact have access to growth channels that others don’t
2. New Economy businesses must ask first what value they can create, and only later how to capture a piece
3. This can be applied across production, consumption and finance. Illustrations we will discuss: § Sharing Economy movement § Social innovation in large businesses § Financial innovation for good
The future used to look so good
But it has failed us as people
INEQUALITY
SOURCE: Economic Policy Institute; New York Times
+10%
+80% Labor productivity
Median wage
1973 2011
1.0
1.8
INEQUALITY
The world’s 300 richest people have the same wealth as the poorest 3 billion
Per capita income has tripled since the 1940s yet average happiness and life satisfaction has fallen
9
Production, control and wealth are largely centralized
Industrial Economy
Sharing Economy
We are beginning to see alternatives
12
14
Organizations making transformative social impact have access to growth channels that others don’t
1
25,000,000
3,000,000
0 Year
50
Amnesty International
At the heart of these models is peer growth!
18
New Economy businesses must ask first what value they can create, and only later how to capture a piece
2
volume x (price-cost) EVA = Not a formula for wealth extraction Σ
products (risk weighting)
The world is dependent on polluting
forms of energy
$176 M venture funding
Information is hard to find
$225 Bn created in 12 years
Staying connected to people is difficult
$50 Bn created in 8 years
Economic value creation flows from solving a problem in society
$225 Bn +$$
Direct cash value created for others: Consumer surplus
+$$$ Social value created: Non-monetary value
Shareholder value captured
The value captured by these social businesses is only a fraction of the value they create for others
The other model
$228 Bn Shareholder value
captured (Chevron)
-$??? Bn Social value destroyed:
Unaccounted, uncharged externalities
Social innovation can be regarded as a search heuristic for the space of new products
Conventional approaches that are not social innovation:
1. Incremental product improvement based on market research (e.g. next year’s car model)
2. Auteur intuition-driven product innovation (Apple)
3. Fast followship (Samsung)
4. Raw exertion of market power (monopolists)
There are infinite products you could create. Searching any infinite space requires a heuristic, that is, a strategy that simplifies what you’re looking for
CITIZEN
Economic power
CONSUMER PRODUCER
INVESTOR
LEVERS OF POWER
26
Social innovation and collective action are beginning to be applied to consumption and production
3
SOURCE: http://bit.ly/186vwhc
30
! !
MEMBERS WIN LEGALIZED RIDE SHARING THROUGHOUT CALIFORNIASEPTEMBER 19, 2013CAMPAIGN EXAMPLE
! !
MEMBERS TURN OUT IN SILVERLAKE TO DEFEAT A BAN ON HOME SHARINGSEPTEMBER 9, 2013CAMPAIGN EXAMPLE
35
We now need to transform finance
Funds 50
World net wealth $500 Trillion (6 x GDP)
All financial assets 200
HNW 10
Retirement 40
SRI 0.1
Alternatives 5
Impact investing 0.005
NEWECONOMYLAB Source: NEL analysis, public reports
NEWECONOMYLAB ///
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