New Economic Model – Next Economy

The state of economy plays a major role in our individual and collective lives. Many of our decisions, actions, lifestyle choices and organizational policies are guided by the economic situation. Appropriate compensation and fair economic distribution is a critical ingredient for a vibrant and thriving business organization, society and nation. Motivating and inspiring employees and stakeholders of business organizations and citizens of a country to perform and produce to their fullest potential is tied to the “perceived fairness” of individual compensation and collective economic distribution. The perceived fairness in turn is linked to hierarchy of human needs and the state of human consciousness.

As human needs and human consciousness evolve, the economic models have to evolve and adjust accordingly. I believe there is a major positive shift taking place in the collective consciousness in the US and the democratic and developing world. This shift has a far reaching impact on businesses, organizations, economic models and life styles of people.

We will explore an economic model that incorporates the transformation in collective consciousness. For the sake of convenience let us divide the time frame in to three Eras and the geography of nations covers the industrialized and developing economies. Eras I, II and III represent a progression of timeline. This model is not meant to be black and white or comprehensive. There might in fact be an overlap between Eras but there is clearly a predominant system that belongs to a particular Era.

Era I: Basic Human Needs

• This Era is characterized by a focus on basic needs of existence – food, air, water, security, stability, law and order.
• General aspirations were relatively simple – livelihood and security were the primary drivers for people and economies.
• It does not mean that people were happier and more contented. The economic opportunity and possibility was just not there. It also does not mean that they were less greedy and less selfish. Within the economic landscape of the time (livelihood and security) they were equally greedy and selfish as we are now.
• People were more narrow-minded and less tolerant of diversity and minorities than we are now.
• An early stage of relatively slow growth characterized by increasing prosperity but wealth is concentrated with a few, not very democratic.
• Leadership style and Governance is top-down and hierarchical in public and private sector industries and organizations.
• Some nations are autocratic; some other nations struggling with democracy. Economy was generally characterized by protectionism.
• Some countries followed socialistic model which stifled creativity, innovation and did not adequately reward and incentivize hard work. The collective consciousness was not ready for higher ideals of caring, sharing, personal growth and fulfillment, etc. The focus was on more basic needs and the implementers themselves did not practice what they preached.

Era II: Consumerism and Materialism – Luxury and status needs

• We are now coming to the end of this era which has been characterized by unprecedented growth and prosperity. An era marked by pursuit of achievement, status, luxury and reputation. Aspirations are sky high – growth, status and achievement have been the primary drivers for people and economies.
• Wealth and money is pursued with unprecedented zeal and enthusiasm, with no apparent end to growth and opportunity. Wealth is distributed among a larger population.
• While the gap between the rich and not-so-rich has increased, we have also witnessed a rising middle class. Many people joined the middle class thereby achieving and affording material comforts that they could only dream of. This has also given hope and increased aspirations for a large population around the globe.
• People are lot more open, broadminded and accepting of managing diversity and minorities. Pursuit of wealth and material comforts is the mantra and the common bond.
• Leadership and governance is a lot more transparent and democratic. High profile scandals and business collapses do not mean degradation of values and ethics. We are now more aware, less tolerant and our systems demand more transparency and accountability.
• Democracy is on the rise. More countries become democratic and existing democracies become smoother and more efficient.
• Free market economy characterized by liberalization and globalization. This has been a period of great innovation and improvement in productivity.
• However the growth at any cost mantra has caused stress and loss of balance in life. Without adequate checks and balances to punish greed and prevent exorbitant compensation for a few, the system is cracking with the need to tweak our economic model.
• This period has also been characterized by record high debt levels and cycle of false economies based on financial reengineering, which got progressively worse after a series of bubbles and crashes.
• Consumerism was the primary growth engine. It is proving to be unsustainable as the rise in collective consciousness is shifting away from consumerism. We are discovering that acquiring more and bigger “things” is not giving us lasting happiness and fulfillment. We have been liberated by prosperity not fulfilled by it – but liberation is essential for fulfillment to begin.

Era III: From Liberation to Fulfillment

• We are on the verge of a kinder, gentler era with a shift from consumerism to contentment. We are shifting our focus from pursuing material luxuries to personal growth and fulfillment. There is a genuine and deep desire for service and universal wellbeing among a sizeable section of population.
• We no longer believe that (1) people are motivated by money alone and (2) acquiring and consuming more is the key to happiness
• This Era will be characterized by a deep desire and collective will to resolve serious global issues – Global Warming, Ecological Imbalance, Energy Crisis, Quality & Cost effective Healthcare, HIV/AIDS, Employment Insecurity, Social Inequity, Extremism and Terrorism.
• People from all walks of life are actively participating through financial contribution and voluntary efforts towards alleviating these serious issues for the sake of universal wellbeing. We are also working on our personal (emotional and spiritual) development to bring more peace and contentment in their own lives.
• This shift in consciousness is a spiritual awakening, a genuine desire to do good and contribute towards personal and universal wellbeing. While it is not always necessary (there are several exceptions to this rule) to experience spiritual awakening after Material and Emotional needs are met, it certainly helps that there has been a steady growth in economic prosperity, the current global financial crisis not withstanding.
• In fact the global financial crisis is forcing us to revisit our economic and business valuation models. There is more introspection than ever before on the role of material prosperity and luxuries for a fulfilling and contented life.
• The focus will be to create economies with services and goods that provide sustainable benefits to mankind. We will seriously examine what is valuable to the world and build economic systems that reward people and companies for creating that value.
• The new economy will be driven by solutions to resolve the above global issues and conflicts. Moving away from consumerism will not result in a drop in “economic flow” as some fear but will be a shift. Ex: Instead of buying an extra fancy vehicle that I cannot afford I may decide to hire a wellness coach and change my life style. I am still spending money but differently. It may be on (1) more expensive organic food (2) a new hybrid car to do my part for the environment (3) contribute to solving health care crisis (4) go on a wellness retreat and get recharged.
• While Era I was about tolerating diversity and Era II is managing diversity, this Era is characterized by being completely comfortable with it and thriving in diversity. This is also the key to resolving global conflicts based on religion, culture, ethnicity and national barriers. These differences and conflicts have been plaguing us for centuries with no apparent solution, till now.
• Recognizing universal connectedness and common human aspirations for professional excellence and personal fulfillment comes with spiritual growth and rise in consciousness. This is obvious in higher states of consciousness. We are better positioned than ever before in our history to overcome the superficial barriers and conflicts and ring in an Era of deeper understanding that is in tune with human nature.
• The new economy will have more checks and balances to prevent exorbitant compensation and excessive income disparity. Liberalization, globalization and free markets will continue to thrive. Need for tweaking but no overhaul or transformation of economic model or system is necessary.
• The global economic crisis will not last too long. It could be short if the general population can overcome the fear and confusion it is under. Government and business leadership has to instill confidence, security and provide clarity.
• When we get our collective act together, we can turn this around and start a new cycle of growth and prosperity but this time we will be pursuing more meaningful and purposeful growth and we will be a lot more inclusive.