Starting a business

Im am starting to better understand how to actually go about starting a business successfully. Steve Blank and Eric Ries advocate the Lean Startup method. This basically boils down to several key elements. First, do not create a full business plan, get funding for it, and then start executing the plan. You will most likely be wrong or off-base enough in your assumptions that the business will not go as planned. By the time you figure that out, many thousands of dollars and hours of time are wasted for something that might have actually worked if you had taken this advice. Start with a business idea which solves some customer problem and which you have a passion for. Then, get out of the building at various stages of the development of this idea to actually talk with customers thus testing the idea, and more importantly, getting feedback with which to re-work/iterate your business model. Blank and Ries advocate doing this multiple times. 

Two, figure out what your minimum viable product is, and start making/selling it. This stage is still part of the search for a business model however. The point of a minimum viable product is to have something beyond the idea to literally sell to customers to see if anyone actually buys it, if it is solving their problem, and to again learn more about how you can better accomplish doing that. Then you will know wheter you just need to iterate multiple more times to hone in the model, or if you need to pivot and change directions. This is possible because you have not yet invested so much time and money into the business infrastructure without knowing if you have found the successful model yet. Your organization is more nimble and able to iterate, innovate and pivot at this early stage. 

I understood all of this in my mind when I read Blank and Ries's books. However, I don't know that it had really sunk in yet. This quarter when we created a full business plan for our team projects, it became very clear to me. We put a substantial amount of time into researching and writing this business plan, yet we still had to make assumptions. These assumptions are a big deal and could lead to wildly more success than we calculated, or wild failure. I actually want to make this particular business that we worked on a reality, which makes this learning so very important to me. If we got some folks to invest in this business plan (really business idea), then I would want to start very small (minimum viable product) in order to successfully do more research and testing with actuall customers and suppliers. This would get us the information that we really need to get to the scale necessary to make a real impact in Spokane. I want to test all of our assumptions, and I want to do it while slowly scaling the business as we discover the real business model that will be viable, acheive the purpose we set out to acheive with the business, and solve the customer/community problems we identified when we started this project. 

Of course, I feel like all of this learning will still be very difficult and stressful when there is more at stake than our grade. However, perhaps it will also be much more exciting and rewarding! Here's to successfully changing business for good!

Do we want to end the extractive destruction?

One part of the New Economy movement is calling for divestment. The cry is for institutional investors to divest from Wall Street and the multi-national corporations that are profitably fueling the high probability of an uninhabitable planet for the coming generations. Institutional investors range from the endowments of churches, colleges and universities to the pension funds of municipalities, unions and again colleges and universities. This is important because institutional investors own 70% of the largest 1000 publicly traded corporations! Also, most of these institutions are created for the purpose of serving the greater good, they have a social mission, and yet through the choices of their investment fiduciaries, they are funding the destruction of the commons.

This is not the first time Americans have made the connection between where our collective money is invested and those profiting off of doing harm, or the investees. In 1962 the United Nations General Assembly passed a resolution calling for economic and other sanctions on the government of apartheid South Africa. This resolution was a call for action to stop the atrocious South African government and their absurd and abusive system of minority white rule over the black majority. The resolution was boycotted by many of the western nations, primarily the US and Britain, because they did not want to stomach the lost revenue necessitated by divestment from South African companies and western companies doing business in South Africa.

A very strong anti-apartheid movement began to sweep the US in the 70’s and 80’s, led primarily by students as they called for their institutions of higher learning to divest from any company doing business in South Africa. This movement was fairly successful over time with some holdouts, like Harvard, which eventually gave in to the pressure as well with a “partial divestment” policy. In 1984 53 educational institutions divested, 128 in 1985, and 155 in 1988. This campaign spread to local municipalities and finally, the federal government. In 1986 the congress passed the Comprehensive Anti-Apartheid Act which banned new U.S. investment in South Africa, sales to the police and military, and new bank loans. The act was vetoed by president Ronald Reagan in all his wisdom, but then the republican controlled senate overruled his veto. Then in 1987 in the Budget Reconciliation Act there was an amendment passed which closed a tax reimbursement loophole for corporations paying income tax in South Africa. All of this pressure ultimately led to the dismantling of the apartheid system.

Now, students are once again realizing that where we invest our money matters. One of the 14 New Economy summits which happened across the nation this spring was at Swarthmore College and it focused on the idea that the college’s $1.5 million endowment should not be invested in the companies and industries making it more certain every day that this generation will not have a future. John Fullerton from The Capital Institute, spoke at the summit further on this idea of divestment. He also hit on one of my favorite concepts, that of investment risk. He lays out a scene for us of the trustees at Swarthmore having a conversation about what divestment would look like and why they should or should not do it. One part goes like this, “The Chair of the Investment Committee's protests about the ‘risk’ of altering the investment strategy away from the conventional approach will ring hollow when the group discovers that “risk” in his mental frame relates only to the backward looking volatility of monthly returns in a portfolio of securities, an abstraction entirely divorced from the very real forward looking risk of climate change threatening unimaginable disruption of civilization itself in the lifetimes of the students in the room.”

The idea here is not to simply not invest in the current structure and its profit extracting machines, I mean corporations, but to look forward and figure out how much money could and should instead be invested in building a sustainable future. This is tricky as I have talked about in prior blogs, however, if you really dig into risk, I agree that funding the transition to renewable energy, local food, and sustainable local manufacturing is much less risky (especially for young people) than funding the current dismal selection of multi-national corporations on the easy-to-invest-in docket.

Moving forward we must create the local intermediaries necessary to aid in the movement of capital from the extraction economy to the new localized generative economy, and then the calls for divestment can rain down like fire to fuel the New Economy!

Slow Money and Local Investment

I attended the Slow Money national gathering this week which catalyzed much thought about local investment, or perhaps more properly, the lack of local investment. I attended a break-out session called "where should slow money fit into your portfolio?" hosted by 4 asset managers from four large wealth management funds. The panel was made up of: Steve Schueth, President, First Affirmative Financial Network; David Wolf, Chief Investment Officer, BSW Wealth Partners; Matt Patsky, Chief Executive Officer, Trillium Asset Management, LLC; Joel Solomon, Chairman, Renewal Funds. The panelists all had very interesting things to say about what they do and how they are slowly transforming the wealth management industry towards more of a values-based investment and triple-bottom-line investment industry. However, much of the conversation really just moved the audience towards asking the question related to the title of the session, how does slow money fit into the investment strategy of these firms and their clients? The answer was basically that it currently doesn't. Very interesting.

The problem is one of scale. These wealth management firms can only afford to invest in and complete due diligence on other large securities or funds. They are not doing targeted local investments in building the new economy, local food business startups, or local revolving loan funds. The problem is really two-fold. One, as I mentioned, they cannot afford to complete the due diligence on many small local projects and it would most likely be more expensive to have many small projects (each with different returns and timelines) than several large projects. Two, the current expectations for returns on these investments by the clients are still completely out of sync with what is truly sustainable. Even when the wealth management firms can invest in local revolving loan funds for local projects, the returns they expect are not something the local funds can produce. Part of building a new economy and also part of the Slow Money movement for alternative finance is about bringing our expectations for financial returns into sync with the reality that only fairly extractive businesses can produce 10, 15, 20% returns, which is exactly the kind of structure and behavior we must eradicate if we are to become sustainable as a society.

One of these problems can be tackled by the wealth management firms themselves, and the other cannot. The issue of our mental models and expectations around investments and returns can and is being changed by the wealth managers of these more progressive firms. They work with their clients to help them realize that good investments can have multiple returns, some financial, some social and some environmental. This helps the clients change their understanding of money and the purpose of investment, and thereby their expectations for financial returns and the desired impact of their investments in the world.

The issue of scale is not a problem that will likely be solved by the existing firms in the industry. This leads to an exciting opportunity and challenge however. Small, local investment intermediaries need to be created which can connect small local projects with the capital they need to be successful. These local intermediaries could invest funds from individuals and institutions into new or exisiting local triple-bottom-line businesses because they could build the relationships needed to provide quantitative and qualitative due diligence. Just like we need local banks and credit unions again which will actually invest their assets in the local community, we also need investment intermediaries which can put local money to work building the local economy. I believe that it will also be easier to change the mental models about returns, the purpose of money, ect. on the local scale where social and environmental returns are more tangible to the investor. Destroying your own community to gain a larger financial return on your investments seems harder to do than destroying someone elses community for those outrages returns.

The new economy is all about slow, place-based, social purpose enterprises in all industries becoming the norm so as to preserve and enhance spaceship earth to facilitate life and happiness instead of destroying it in the pursuit of ever growing financial returns. Thus this is both an opportunity and a challenge.

Business with a purpose

I have been thinking very hard about the "purpose" of business lately. This is because my team has been thinking and working through what we want our business model to look like for a food hub in Spokane. We keep getting intrigued by some of the contemporary business ideas such as, technological solutions, creating the leanest business you can which still solves the problem identified, and efficiency. We are trying to solve the problem of missing infrastructure in the Spokane food system which makes connecting small and medium sized local farmers to large food service institutions very difficult. This is a problem faced by most cities and towns around the country as our food system has been built into one of very large corporate farms which mostly export commodity crops while local towns and cities then import most of their food. 

Our struggle then, has to do with finding solutions to this problem which are still in line with our core values and stated purpose of this particular business; which is to maximize happiness. First, we thought that maybe we could just create a virtual food hub which is basically just an online platform for connecting farmers with those who wish to purchase their products. This seemed attractive for our technological age, but does it achieve our purpose? No, it does not. Part of maximizing happiness for us is creating good paying jobs in Spokane, which needs them. Another aspect of our purpose is ensuring that farmers receive the value that their products deserve. Yet another is building the market for local food which is healthier, has a lower carbon footprint and adds to the economic multiplier effect in our area by keeping dollars and wealth local. 

Then we started thinking that our business could just facilitate the distribution of local produce to local buyers without actually owning the produce (inventory) and with a minimal need for a facility. This was also combined with our notion that to be a competitive contemporary business you need to be ultra efficient. So, we would have the minimum services necessary to solve our problem, and therefore the minimum amount of employees necessary. We again asked if this model would achieve our core purpose and again the answer was no. 

It turns out that achieving our purpose necessitates a more complex business model. We need a building so that we can aggregate the local produce, grade it, pack it to meet the large volume orders from food service customers (B2B), and ensure high quality products. We also want to create jobs, build the local food system and maximize value for farmers. This necessitates not just aggregation and distribution, but also value-added processing equipment and perhaps a commercial kitchen where farmers and food entrepreneurs can turn raw produce into non-seasonal value-added products. 

We also determined early on that in order for us to achieve our purpose we need to choose the right business structure. As my friend and colleague Lauren Fruge noted in a recent post about private vs. publicly held companies, ownership and structure really matter and can strengthen or inhibit the ability of your business to live its values. We are building our model as a worker and farmer owned cooperative. This way the key stakeholders are in ownership and governance positions instead of those who simply contribute large sums of money to the venture. 

So, keeping the deep purpose of your business in the forefront of business model generation is of the utmost importance as your team iterates the model to solve the problem you have identified as a business opportunity. Sometimes the quickest, leanest, most efficient and technologically sexy model will not be that which most effectively achieves your purpose. We are a community of humans embedded in a natural system after all, so if we don't set and live out a purpose deeper than that of a machine, we will not create very desirable systems let alone maximize happiness. 

Stakeholder Start-up Strategy

I am always interested in how stakeholder engagement or analysis changes so much depending on your position and therefore your literal perspective. Much of stakeholder analysis and engagement literature is written for the large corporate audience. For instance, a great piece by Neil Jeffery called "Stakeholder Engagement: A Roadmap to Meaningful Engagement," is very helpful, yet pointedly aimed at the large corporate audience. Jeffery says, "It is particularly important in the context of running an organisation responsibly and is integral to the concept of Corporate Responsibility. An organisation cannot be serious about Corporate Responsibility unless it is serious about stakeholder engagement – and vice versa." I agree wholeheartedly with this statement, yet it is not something you would need to say to an enterprise that is embedded in its local context already. This statement would be like a resident of Cleveland that the city has the second lowest median income ( $18,500) among American Cities; the resident would know this fact well as it is part of their daily reality.

I was thinking about how we got to the place where businesses need to be taught how to successfully engage with stakeholders, versus it being the starting place in their business plan development and execution. It largely has to do with the scale of economic entities in our current system, in that many corporations are larger than many national governments and have revenues sizing in multiples of third world country's GDPs.

For an alternative example, lets look at Green City Growers (GCG) in Cleveland Ohio. They are one of 3 new worker-owned cooperatives which are part of the Evergreen Cooperatives, a community wealth building strategy to create jobs, build wealth, and stabilize neighborhoods. For starters, here are Evergreen's community engagement goals:

• Create a shared sense of ownership and responsibility based on the concept of partnership and co-investment between grassroots and institutional stakeholders.
• Build cross-neighborhood connections to promote a unified identity among stakeholders in the neighborhoods.
• Identify, develop, and support local leadership within local residents, groups and community organizations.
• Deconstruct historical barriers between stakeholders, enabling residents to the access the social capital opportunities provided by local anchor institutions, and helping the institutions to be more responsive to the community needs, interests, and priorities.

The Evergreen Cooperative Corporation (ECC) started with a robust stakeholder and community engagement strategy before they were even an operational network of worker-owned cooperative businesses. So, for Evergreen and Green City Growers, stakeholder engagement is the strategy for both launching and sustaining viable enterprises. As you can most likely tell from the goals above, this strategy is also place based or rooted in a particular context. I will now lay out some of my GCG stakeholder analysis, which will also help tell their story. 

ECC is the central organization in this strategy, in its operational phase. To start at the beginning though, The Cleveland Foundation is central. In 2005, the Cleveland Foundation was seeking to develop a "Greater University Circle Initiative" which would revitalize the Greater University Circle (GUC) part of Cleveland. This is a grouping of very poor and diverse neighborhoods surrounding what they termed the "Anchor Institutions" of the City. Those being large institutions, with significant economic impact, that are unlikely to offshore their operations. Among these Anchor Institutions were the Cleveland Clinic, University Hospital and Case Western Reserve University. These three institutions represented $3 billion in annual procurement of goods and services. The majority of this $3 billion was sourced from outside the Cleveland City limits, let alone the GUC.

So, the GUC Initiative was launched to address the issue of poverty and take advantage of the $3 billion anchor institution procurement stream opportunity. They quickly partnered with The Democracy Collaborative (TDC) who had expertise in community wealth building strategies. TDC lead a series of community roundtables and events to learn more about the GUC issues from the residents themselves and to gather community leaders to talk about solutions. The key conversations were of course with the anchor institutions. TDC then partnered with Towards Employment, a non-profit which connects low-income folks in Cleveland with jobs and training, thus acquiring a workforce from the GUC. They also partnered with the Ohio Employee Ownership Center (OEOC) for their expertise in creating business plans for worker-owned cooperatives along with specialized training in democratic ownership for worker owners.

The Evergreen Cooperative Corporation was created as the 501c3 that would oversee and hold together all of the pieces and parts of this strategy. The Cleveland Foundation, along with the anchor institutions, invested a hefty sum with Enterprise Cleveland, a community development financial institution (CDFI), to create the Evergreen Cooperative Development Fund. The fund would act as some low cost start-up capital for enterprises such as GCG. Also, as the cooperative enterprises under the umbrella of ECC become profitable, they will return 10% of their annual profit to the fund. This will allow the network of cooperatives to self-replicate by creating their own pool of capital to loan from.

The City of Cleveland was also important in this strategy. They are committed to improving the quality of life in the City of Cleveland by strengthening our neighborhoods, delivering superior services, embracing the diversity of our citizens, and making Cleveland a desirable, safe city in which to live, work, raise a family, shop, study, play and grow old. The City was able to help leverage New Markets Tax Credits as well as HUD Section 108 loans and grants to capitalize GCG.

GCG is a 3.25 acre hydroponic greenhouse operation in the heart of Cleveland. They will produce 3 million heads of organic lettuce and 300,000 pounds of herbs annually. Their key customers are the anchor institutions, which agreed to purchase the majority of their products. Another key stakeholder of GCG, are the worker-owners themselves. This enterprise has no employees as such, because everyone who works at GCG quickly becomes vested as a full owner.

To wrap this all up, stakeholder analysis and engagement can be used not only to achieve buy-in or legitimacy with certain groups, but as the key strategy for successful business incubation and operation as well.

The New Economy

There has been more and more attention focussed on this idea of the New Economy lately, and rightly so. Things in our economic system are not going so well for the majority of folks who rely on it for their livelihoods. We love to think that we are all lone rangers of the west here in the US, but the truth is that we are all necessarily linked to the economic system both in our country and now globally with the effective foothold of globalization, or the New Imperialism, firmly established. The interesting thing, however, is that things have not been going really well for the majority of folks since the begginning of our time here on this continent. There have been times of better and worse, but not good, healthy and equitable times. So, this idea that perhaps we should finally get radical (to the roots) about creating a New Economy is very refreshing!

So what is the idea of the New Economy all about and how do we get there concretely? First I will talk about the idea, then the possible set of tools or strategies to get there. A recent article in Yes! magazine by David Korten called, "What would a down-to-earth economy look like?," sums it up nicely. Korten is basically arguing that we should (perhaps now we must) organize our economy more like nature organizes ecosystems. He states, "An economy is nothing more than a system for allocating resources to productive activity—presumably in support of life. In fact, nature is an economy, with material and information exchange, saving, investment, production, and consumption—all functions we associate with economic activity." And...nature organizes itself in a way that sustains all life and in many circumstances allows it to flourish. Our economic system is supposed to be about sustaining life, but instead has the majority enslaved to the minority as wealth generating machines, all the while poisoning those it is supposed to support and destroying the very ecosystem we all rely on to function at all.

Korten lays out a matrix to help differentiate the charicteristics of nature vs. the Wall Street economy which I find very helpful:

Wall Street vs. Nature:
Defining value: Money vs. Life
Primary performance indicators: Growth, financial returns, flows, and assets vs. Life's abundance, health, resilience, and creative potential
Primary dynamic: Competition to maximize self-interest vs. Cooperation to optimize self- and community interest
Decision-making power: Global, top-down, centralized, and concentrated vs. Local, bottom-up, and distributed
Time frame: Immediate return vs. Sustained yield
Local character: Uniform vs. Diverse
Resource control: Monopolized vs. Shared
Resource flows: Global, linear, one-time use from mine to dump vs. Local, circular, perpetual use, zero waste
Deficits of concern: Financial vs. Social and environmental
Measure of efficiency: Returns to financial capital vs. Returns to social and natural capital
Growth: Infinite growth of money and material consumption vs. A stage in life's endless regenerative cycles of birth, growth, death, and rebirth

We talk alot about using bio-mimicry in manufacturing and process design for more sustainable business, but we do not talk much about bio-mimicry in terms of how to structure the very economic system within which all business operates.

Now, how do we go about doing any of this? I am going to highlight several strategies of the New Economy which are being called Community Wealth Building strategies. The Evergreen Toolkit provides some great literature about both community wealth building and the model of the Evergreen Cooperatives in Cleveland Ohio. The toolkit was authored by the Democracy Collaborative, also in Cleveland Ohio. I want to highlight four of the key community wealth building strategies and then talk to the strength not of any one strategy, but of all four of them when taken together. I would argue that re-developing the economy in each locality, by each locality, along the lines of the following community wealth building strategies, is a powerful and effective way to move towards the New Economy and the "down-to-earth economy Korten layed out.

The first strategy is called Anchor Institutions. It is a term for key institutions in a community. Anchor institutions not only include universities and hospitals, but a broader range of place-based institutions, including cultural and arts centers such as museums, libraries, community foundations and other locally-focused philanthropies, faith-based institutions (such as churches, mosques, and synagogues) and community colleges. In many places, these anchor institutions have surpassed traditional manufacturing corporations to become their region's leading employers, and leading spenders in terms of procurement. This community wealth building strategy is really about building new businesses and infrastructure around the needs of the core anchor institutions in your community. This is important both because the anchor institutions are large, unlikely to pick up and leave, and generally already have a social mission. These institutions currently procure and do business with the business as usual mega corporations which generally do not reside in the same community, do not pay living wages, do not have a social mission, and do not truly build community wealth, but instead extract wealth from local communities and efficiently funnel it up to the few.

The second strategy is about Social Enterprises. Social enterprise refers to non-profits that operate businesses both to raise revenue and to further the social missions of their organizations. These businesses build locally controlled wealth, which helps stabilize community economies, and represents a shift in non-profit operation toward a model of collaborating with ‘client’ populations in community-building efforts. As of 2005, social enterprise businesses in the Social Enterprise Alliance trade association generated $525 million in business-revenue, helping support $1.6 billion worth of mission-related work. These enterprises are on the cutting edge of social entrepreneurship and the creation of new and hybrid structures which will make up the New Economy.

The third strategy is about Worker-Owned cooperatives. A cooperative is any business that is governed on the principle of one member, one vote. The first modern cooperative was a retail co-op founded by 28 people in Rochdale, England in 1844. Originally selling butter, sugar, flour, oatmeal, and tallow candles, business expanded rapidly in scope and scale as the co-op succeeded in elevating food standards — rejecting then- common tactics such as watering down milk. Co-ops today exist in many sectors of the American economy, including banking (credit unions), agriculture, electricity, housing, and grocery stores. All told, over 130 million Americans are members of at least one cooperative or credit union. Credit unions alone have assets exceeding $600 billion. Non-financial cooperatives are also growing. Retail food cooperatives, if grouped together, would constitute the fourth largest chain in the natural- foods industry. Worker-Owned cooperatives are businesses like those above, but they further differ in that they have no employees. Every person that labors to create value for the business, is also an owner of the surplus created by that labor and has substantial powers of governance. The Evergreen Cooperatives are a great example of this type of business.

The fourth strategy is about Community Development Financial Institutions or CDFI's. First formed to combat red-lining in the 1970s (a practice whereby banks would refuse to make loans to minority neighborhoods and would literally draw a red line circling the proscribed area on a map), CDFI's have grown to include a variety of community-focused banks, credit unions, micro-enterprise funds, loan funds, and venture capital funds that have assets of $20 billion, which they use to provide loans and technical assistance to meet the credit and finance needs of low-income individuals, community development corporations, and other community entities. CDFI's are banks run as social enterprises, and have been playing an important role in financing the New Economy.

So, how does this all fit together into an effective and exciting New Economy strategy to build community wealth and mimic natural systems? Korten says, "We would favor local, cooperative ownership and control. Organizing from the bottom up in support of bioregional self-reliance, our economic institutions would support local decision-making in response to local needs and opportunities. Cultural and biological diversity and sharing within and between local communities would support local and global resilience and facilitate life-serving system innovation." By harnessing the green and entreprenurial benefits of social enterprises, organized structurally as Worker-Owned Cooperatives to democratize decision making and the creation of wealth, the functional units of the economy, businesses, take on a more local, resilient and equitable nature. Then, as with Evergreen, if you center new worker-owned cooperatives around a CDFI like financial institution, the enterprises can be creatively and more democratically funded, and you can "entrap capital" produced and stored by these businesses for future use in funding new cooperatives. This capital becomes community capital controlled by the very enterprises that created it and store it (by storing I simply mean when you have capital in a short or long term account in a bank) for the community to use in democratic and sustainable development. The Anchor Institution peice comes in at the very heart and begginning of this strategy as initial worker-owned cooperatives can be created to better provide the materials, supplies and services which the anchor institutions are currently sourcing from extractive corporations outside of their community.

This was a whirlwind tour of what the New Economy can look like both theoretically and on the ground. More to follow in due time.

Are we asking the right questions?

Only once in a while will I return to what I think is the central conundrum of business and economics today, growth. The vast majority of our society is probably only subcontiously aware of growth as the major driving factor of our current economic system. Those in the business and economics world are very aware that our system is about and demands growth. Then there is the very small group of progressive folks like those of us at BGI that want to create a truly sustainable world so that we, our relatives, kids and grand kids can actually have any sort of future at all, let alone one that is happy and hopefully equitable. However, I would say that even among us BGI types, growth is not something we are centrally concerned about. 

We must realize that the human race is already living far beyond the carrying capacity of the island called earth that we all live on. Our population is scheduled to reach at least 9 billion by 2050, and if our economies and consumption/affluence levels continue to grow at their current pace or faster, we will be looking at needing, not the current 1.5 earths minimally required to keep us going presently, but more like 6 to 9 earths depending on who is calculating. If all 9 billion people of earth from 2050 wish to live at the same levels of affluence of the developed world, which is a legitimate desire, then we would actually need 20 times the energy and resources that we currently use! Ted Trainer says, "The problem of Third World deprivation cannot be solved unless the rich world reduces its consumption dramatically and lives on something like its fair share of world resource wealth.  Yet its supreme goal is to increase its levels of production, consumption and GDP," in his paper titled "The radical implications of a zero growth economy." 

So, the problem is that our economic system, which we have spread to almost the entire globe at this point, requires growth. Growth is how we try to solve problems like unemployment, poverty, ect. Growth is the goal we aim for. Growth is what is required by our financial system which is structured to extract ever increasing levels of ROI, which is what Marjorie Kelly says, "puts the squeeze on public corporations." Growth is the result of a system which magically creates wealth when a bank makes a loan using the fractional reserve system. 

What should an economy strive for and measure and maximize? Purpose is definitely the right answer here (see Jill Bamburg's presentation at the recent BGI TEDx event), but even if our society was made up entirely of quadruple bottom line businesses, I think growth would still be an issue; capitalism requires it, our financial system requires it. In a recent book entitled "Enough is Enough" by Rob Dietz and Dan O’Neill, Herman Daly writes in the foreword, "Enough should be the central concept in economics. Enough means 'sufficient for a good life.'"

A system which is truly "steady state" or "no growth" will require radical changes. If we go back to Ted Trainer, he notes, "In the coming conditions of intense resource scarcity, viable communities will have to be mostly small, self-sufficient local economies using local resources to produce what local people need." I think that much of the "New Economy" movement has been driving in this direction if not explicitly for the reason of our little living way beyond the carrying capacity of the island earth problem. The movement recommends strategies such as place-based businesses which are truly rooted in a community and of an appropriate scale. Another strategy is in regards to finance; slow money, patient capital, and localized wealth creation and entrapment are reccomended. The strategy which my project team is most interested in is that of networks of mutually supporting worker owned cooperatives centered around a worker owned financial institution. 

We are currently researching the Evergreen Cooperatives in Cleveland Ohio. The lens through which we arrived at this decision was actually that of income and wealth inequality, something our current economic structure creates with high efficiency. This strategy of building multiple worker owned cooperatives in a local community, serving industry sectors which can benefit from import substitution and are centered around the community's anchor institutions, is a promising one both from the social and economic standpoint. More in depth information about the Evergreen Cooperatives can be found at www.EvergreenToolkit.org. 

I do not know if this strategy completely helps us to get to a steady state economy, but it is the best closest thing I have seen proposed and tried so far. Trainer says that in a new economy, "At least the main economic decisions would have to be made by deliberate social discussion, debate and planning...because this is the only logical alternative to leaving them to “free markets” and the owners of capital competing to gain." The network of mutually supporting worker owned cooperatives (also called Sustainable Community Economic Development) provides the infrastructure to create this kind of system made by "deliberate social discussion" and provides every member of the wealth producing mechanism ownership, governance and voice. I believe that this kind of radically democratic economic structure will have to be intentionally developed to suceed and displace the current system if we are to have any hope at acheiving real social and economic sustainability for the sake of the world. 

Its also super exciting!