What is the Gen Z economy going to look like? Based on my previous writings (which I encourage you to read for the sake of not having to write it all out again), Gen Z-ers are massive advocates of the social impact, human-centric approach. Naturally, this leads to questions as to how Gen Z will lead the economy. Based on industry statistics, it is safe to state that Gen Z largely upholds the idea of a quasi capitalist/welfare state. This is because Gen Z believes in both social welfare and justice as government priorities, but also the ability to innovate. So how can we summarize this in an economic model? Doughnuts are the answer, it seems.
First of all, according to the Washington Post, “Seventy percent of them [Gen Z] believe the government should be doing more to solve problems, compared with 53 percent of Gen Xers and 49 percent of baby boomers, according to Pew.” Coronavirus has further cemented Gen Z’s frustrations with the government not doing enough to aid society. Yet at the same time, Gen Z also loves capitalism––contrary to what the media has been spewing. An excerpt from the Los Angeles Times states, “A 2016 Gallup survey found that 90% of 18-to-29-year-olds viewed entrepreneurs — think Silicon Valley — positively, and 98% looked favorably on small businesses.” So, where does Doughnut Economics play into all of this?
Let’s begin with defining this economic model. At the heart of the model is the human or the “Social Foundation” which is prioritized. To put it short, Doughnut Economics is about building a sustainable model for human development, which focuses on social impact, ecology, and innovation as the driving force to cement this objective. If that isn’t a word-for-word description of Gen Z preferences, I don’t know what is. As per Kate Raworth’s explanation, a Doughnut Economics enthusiast:
“The environmental ceiling consists of nine planetary boundaries, as set out by Rockstrom et al, beyond which lie unacceptable environmental degradation and potential tipping points in Earth systems. The twelve dimensions of the social foundation are derived from internationally agreed minimum social standards, as identified by the world’s governments in the Sustainable Development Goals in 2015. Between social and planetary boundaries lies an environmentally safe and socially just space in which humanity can thrive.”
This structure is not capitalist in nature, as the economic focus is not wealth aggregation, but rather sustainability––a point that Gen Z champions. Furthermore, this model emphasizes distribution of wealth and mending the problem of inequality, another area that Gen Z is incredibly vocal about. The World Economic Forum explains well:
“To transform today’s divisive economies, we need to create economies that are distributive by design – ones that share value far more equitably amongst all those who help to generate it. And thanks to the emergence of network technologies – particularly in digital communications and renewable energy generation – we have a far greater chance of making this happen than any generation before us.”
So how will Gen Z carry out the Doughnut Economic model in practice? Let’s look at 3 key areas:
Enterprises: Gen Z will spearhead the notion of coopetition, or mutually beneficial collaboration between business competitors. The focus will be on “Collective Innovation” as Gen Z company leaders, who will implement bottom-up leadership for the most part, will look towards their employees and fellow CEOs towards human-centric solutions.
Connectivity: Gen Z will focus on creating an equal society that plugs underserved communities right into the economy via Smart Infrastructure and digital social impact, such as Community Data Representatives (Read more about Gen Z And The Future of Digital Social Impact here)
Climate: Gen Z will make ecology and saving the planet a chief priority of economic concern. It is likely that Gen Z startup founders will gravitate towards digital climate solutions, and VCs are likely to see movement in this area. Indeed, according to the WEF:
--> Low-carbon investments could provide an opportunity to boost growth and aid recovery.
--> Bold climate action could deliver at least $26 trillion in net global economic benefits and generate 65 million jobs worldwide.
To Conclude: Gen Z principles are fully in line with the model for Doughnut Economics, and due to the COVID crisis, it has only become more apparent that the focus must be on the human and social impact in order to carry on sustainable and meaningful living.