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5 Big Ideas For A New Economy

In the aftermath of the recession, we have the opportunity to truly change the system. From replacing outsourcing with insourcing to untying well-being from GDP, here is what the economy of the future might look like.

An exciting moment is upon us, where some of the assumptions that have long governed our economy are beginning to unravel. There is the possibility that we could come out of this recession with a new concept of what the economy is, who it serves, and how it works.

Reflecting on history, we know that moments for truly re-thinking the economy are scarce. The replacement of mercantilism with liberal economic theory was such a moment. The Keynesian revolution was another. But where will this current moment of crisis take us? Will we succeed in powering a new economy? What ideas and solutions will enable our transition to a new economic paradigm? And what exactly would a new economy look like?

The truth is that it is actually up to us to decide what is to be on the menu of new economic thinking; what ideas take hold, what solutions gain staying power. In an effort to further stimulate this kind of discussion, we’ve synthesized the top five ideas that we believe are primed to catalyze new economic approaches. We’ll be exploring these ideas in more depth in the next few months on Co.Exist and look forward to sparking debate and discussion.

Shift from outsourcing to insourcing

A few weeks ago, the White House hosted a forum on "insourcing"—the idea of keeping jobs that would normally go overseas in America—with an aim to bring jobs back to the United States and stimulate local and regional economies. It was an interesting tweak, seeing insourcing and local production being emphasized over the logic of comparative advantage (that it’s better to pay someone overseas to do something which isn’t worth the time of an American worker), which has for so long justified outsourcing practices. Now, it seems, we’re beginning to wake up to the advantages of local production. But how do we stimulate local economies without undermining global trade? By investing locally, are we minimizing economic interdependence and creating artificial tradeoffs between local and foreign communities?

Access the wealth of the (hyper) local

The Internet has provided a new local, one that is based around markets and themes instead of geographies. Your Etsy purchase or Kickstarter investment may not be going to your own community, but it is likely going to an entrepreneur who is building a small business in another community. It decentralizes even the concept of community resilience, allowing entrepreneurs to tap into larger markets, reviving their own local economies.

Adopt flexible and alternative currency

Bitcoin has enabled an explosion of interest in alternative currency. But what can Bitcoin’s approach and scale teach us about the future of such currencies? While Bitcoin has been successful, local currency movements have never truly taken hold. BerkShares or the Bristol Pound, for example, remain important as symbolic illustrations of alternative currencies, but how practical are such approaches? Meanwhile, social currency movements like time banking (quite literally, people exchanging time rather than monetary goods or services) also show potential for transitioning society into communities of service.

Do-it-yourself (DIY) job creation

Frustrated with the inability of large corporations or governments to create jobs, many people are finding ways of applying a DIY spirit to job creation, by creatively exploring ways of bringing economic improvement to their lives. So, for example, rather than suffer unemployment, many young people are becoming entrepreneurs, investing in jobs for themselves and others. Or look at Starbucks’s partnership with the Opportunity Finance Network where they are leveraging customer donations into microfinance investments for job creation. With every $3,000 donated, one job is either created or maintained.

Focus on well-being, not growth

The recognition that countries have not grown happier as they have gotten richer has caused many to question the idea of "growth for the sake of growth." In fact, our dogged pursuit of economic growth has undermined our ability to use natural resources sustainably, as well as the resilience and prosperity of communities across the globe. In the words of Paul Hawken, "We have an economy where we steal from the future, sell it in the present, and call it GDP."