Has the Future Economy arrived?
You know, the one that will help us and the planet survive.
Couchsurfing. CSAs. Neighborhood energy. Local food clusters. Coops. Promising, hip business models are cropping up all around the country.
Do they constitute the new economy we all long for, the one people have been out in the street demanding—the one that delivers social and financial benefits broadly while restoring the environment? I certainly hope so. But unless we take a clear eyed-look at what’s really going on with these new innovations, we can’t know for sure.
That’s why a new round of research just out is hopeful. To better weigh the progress of innovative business models in the new economy, the E3 Network—a national network of economists focused on equity and environment—deployed researchers around the country to separate hype from reality. Armed with an analytical framework developed by a national steering committee, these researchers looked deeply into how new business models function, what their impacts are, how scalable they are, and how replicable they are.
Their case studies, all hosted along with multimedia stories at FutureEcon.org, turned up a host of interesting – even startling – conclusions.
We love it, but it doesn’t pay. Community supported agriculture – CSA – is spreading like wildfire, with more than 6,000 farm businesses nationwide. Customers love the good stewardship practices of most CSAs and knowing where their food comes from. But Researcher Mark Paul found 80% of CSA farmers don’t make a living wage and most can’t pay one to workers either. Farmers remain committed to the CSA model, they just may need some policy help to evolve it.
Place-based initiatives create good jobs for the disadvantaged – five hundred jobs in five Cleveland neighborhoods in one year, in fact, as part of the Greater University Circle Initiative effort to expand opportunities for low-income residents. Researchers Julia Poznik, Jonathan Ramse and Ruchira Sen show how shared effort and deep local knowledge by three large institutions, the Cleveland Foundation, and community organizations made it happen.
Park building can fight poverty: In Portland, OR, an innovative community organization called Verde has created social enterprises, organized neighborhood planning and trained up dozens of residents to land green jobs in the nursery, building, and energy industries — all to harness growth for low-income residents and communities of color as Portland continues to grow green.
Sharing doesn’t always mean caring. New sharing platforms, from Couchsurfing to Craigslist, have huge benefits for low income users and grow important new relationships. Economist Anders Fremstad says we need to think about governance models for large sharing platforms to make sure they treat their users and service workers well. That needs to happen before they get too big to regulate.
Good news: This local food economy is not an island. Economist Kate Olson unpacked the hallowed food town of Hardwick, Vermont, held up as a model of the local food movement, and found that businesses depend as much on urban markets far away as they do on local outlets. This has been a good thing for everyone involved: Hardwick’s unemployment rate and poverty rate have shrunk as successful food businesses have grown.
Harnessing local energy can pencil out. Vancouver, BC started a neighborhood utility that is delivering 70% of local thermal energy needs for one district by harnessing heat from sewer lines. Economist Marc Lee found that the utility has established a reliable business plan while reducing greenhouse gases – a model that could be replicated around the world. Vancouver engineers are consulting globally to make that happen.
This first round of ground-breaking analyses establishes a practice of asking hard questions of new business models. If we are to truly build a more equitable, restorative economy, we need engage business owners, communities, civic organizations, customers and active citizens everywhere in a lively public conversation about living and working in the future. FutureEcon.org is a candid contribution to driving the dialogue forward.