The Sweet Spot of Sustainability: Embracing Doughnut Economics in the 21st Century

Picture a doughnut – a flawless ring with an empty core. Now, reimagine this doughnut not merely as a sugary delight, but as a symbol for a transformative economic paradigm. This is the essence of Doughnut Economics, a groundbreaking and inventive concept birthed by Oxford economist Kate Raworth. It’s a unique approach to economic thinking, yet so instinctively resonant that we immediately grasp its fundamental truth. This model holds the potential to reshape our understanding of economic prosperity in the 21st century, offering a path towards a sustainable and equitable future.

Stories and models shape our realities and drive our future. They provide a framework through which we understand the world and guide our actions. The Doughnut Economics model is one such story that has the potential to reshape our understanding of economic development and guide us towards a more sustainable and inclusive future.

At its core, Doughnut Economics is a fresh take on economic development. It’s a visual framework that challenges us to meet everyone’s essential needs (the inner ring of the doughnut) without exceeding our planet’s ecological limits (the outer ring of the doughnut).

The Doughnut’s inner ring represents a social foundation of wellbeing that includes aspects like food security, health, education, income, and work. The outer ring, on the other hand, represents the ecological ceiling drawn by earth system scientists. It highlights the planetary boundaries that life on Earth depends on, including climate change, ozone layer depletion, ocean acidification, and biodiversity loss.

The sweet spot – the doughnut itself – is the ‘safe and just’ space where humanity should aim to exist. It’s a space where we meet the needs of all within the means of the planet, a space in which we can thrive. This is the story that the Doughnut model tells us about the kind of world we could live in.

The Doughnut model is not just a theoretical concept; it’s a practical tool that can guide decision-making and strategy in various sectors. For instance, when developing a new product or service, businesses can use the Doughnut model to ensure that their offerings not only meet customer needs but also contribute to social wellbeing and environmental sustainability.

One of the most notable examples of the Doughnut Economics model being put into practice is in the city of Amsterdam. In the wake of the economic disruption caused by the COVID-19 pandemic, Amsterdam decided to formally embrace the Doughnut model as the starting point for public policy decisions, making it the first city in the world to make such a commitment.

The city worked with Kate Raworth and her team to create a “city portrait” that showed where basic needs were not being met and where “planetary boundaries” were being overshot. This portrait showed how these issues were interlinked and provided a guide for the city’s post-pandemic recovery plan.

For instance, the city faced a housing crisis, with almost 20% of city tenants unable to cover their basic needs after paying their rent. The Doughnut model encouraged policymakers to not only consider building more homes but also to consider the environmental impact of construction and the broader economic forces driving up housing prices.

The port of Amsterdam, the world’s single largest importer of cocoa beans, is another example. The Doughnut model prompted a wider debate about the port’s role in the global economy and its dependence on products produced through exploitative labor practices.

These examples demonstrate how the Doughnut model can be used to guide policy decisions and create a more sustainable and inclusive economy. It’s not just about meeting the immediate needs of the present, but also about considering the broader social and environmental impacts of our actions and planning for a more sustainable future.

The Doughnut model is not about abandoning the pursuit of wealth and income; rather, it calls for a shift in how we view and practice cooperation within our economic systems. It’s about balancing the pursuit of individual interests with the collective good, and recognizing that our actions have impacts beyond our own immediate interests.

In a world facing unprecedented social and environmental challenges, the Doughnut model offers a compelling vision for a more sustainable and inclusive economy. It’s a model that recognizes the interconnectedness of our world and the need for a more holistic approach to economic development. As we move forward, embracing this model could be key to creating a more sustainable and inclusive future for all.

In her insightful article, “How to do business with doughnuts,” published by the World Economic Forum, Raworth delves deeper into how businesses can align their operations with the principles of Doughnut Economics. Here are the key insights from her piece:

1. Understanding the Doughnut Model: The Doughnut model is a powerful tool for envisioning a world where no one falls short on life’s essentials, and human activity doesn’t overshoot the planet’s ecological limits. It’s a bold vision that acknowledges our current shortcomings and challenges us to strive for a more equitable and sustainable future.
2. Navigating the Corporate To-Do List: Raworth identifies five potential responses from businesses when introduced to the Doughnut model. These range from doing nothing to becoming a generative enterprise that actively contributes to societal and environmental well-being. The goal is to move businesses towards the latter end of this spectrum.
3. The Power of Design Traits: The ability of a business to align with the Doughnut model is largely determined by five key design traits: purpose, governance, networks, ownership, and finance. These traits shape a company’s actions and potential impact on the world.
4. Addressing Corporate Schizophrenia: Many companies aspire to do good but find themselves pulled in different directions due to conflicting priorities. For instance, a company might have a purpose aligned with the Doughnut model, but if its ownership and finance are not in sync, it may struggle to fully embody its purpose.
5. The Journey to Becoming a Doughnut Enterprise: To truly embrace the Doughnut model, companies need to align all five design traits. This requires ongoing innovation and a willingness to challenge traditional business norms.

Raworth’s article is a clarion call for businesses to reassess their operations and align themselves with the principles of Doughnut Economics. It’s a journey that requires courage, innovation, and a deep commitment to creating a better world. But as more businesses rise to this challenge, we move closer to a future where the needs of all are met within the means of our planet.

The human metrics in Doughnut Economics

As a psychometrician, I see a unique intersection between my field and the Doughnut Economics model. Psychometrics, the science of measuring mental capacities and processes, can play a pivotal role in the practical application of this model.

1. Assessing Social Well-being: The inner ring of the Doughnut model represents a social foundation of well-being, encompassing aspects such as health, education, income, and work. Psychometric tools can provide a quantitative basis for assessing these aspects, offering a more nuanced understanding of social well-being. For example, we can use psychometric tests to measure educational attainment, job satisfaction, and mental health.
2. Understanding Behavioral Change: The Doughnut model necessitates a shift in behavior, from individual wealth accumulation to collective well-being and environmental sustainability. Psychometrics can help us understand the psychological factors that drive behavior and identify ways to encourage behavior change. By using psychometric assessments, we can identify individuals’ values, attitudes, and motivations, which can then be used to design interventions promoting sustainable behaviors.
3. Evaluating Impact: Psychometrics can also play a role in evaluating the impact of policies or interventions based on the Doughnut model. For instance, we can use psychometric tools to measure changes in well-being, attitudes towards the environment, or community cohesion following the implementation of a Doughnut-based policy or program.
4. Informing Policy and Decision Making: The data gathered through psychometric assessments can inform policy and decision-making, helping to ensure that actions taken align with the goals of the Doughnut model. Understanding the factors that contribute to well-being can help policymakers prioritize actions that will have the most significant impact on improving social outcomes.

In conclusion, as a psychometrician, I believe that our tools and techniques can provide valuable insights into the psychological aspects of the Doughnut model. By measuring social well-being, understanding behavioral change, evaluating impact, and informing policy, we can contribute to the practical application of this model, guiding us towards a more sustainable and inclusive future.

References:

Boffey, D. (2020). Amsterdam to embrace ‘doughnut’ model to mend post-coronavirus economy. The Guardian. [Link](https://www.theguardian.com/world/2020/apr/08/amsterdam-doughnut-model-mend-post-coronavirus-economy)

Raworth, K. (2018). How to do business with doughnuts. World Economic Forum. [Link](https://www.weforum.org/agenda/2018/01/how-to-do-business-with-doughnuts/)

Raworth, K. (2017). Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist. Chelsea Green Publishing.

Raworth, K. (2012). A Safe and Just Space for Humanity: Can we live within the doughnut? Oxfam Discussion Papers.