Regenerative capitalism: a new era of economics - RSA

Regenerative capitalism: a new era of economics

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  • Economy

It’s time to move to a new flavour of capitalism that puts people, place and planet first. Andy Haldane and Alexa Clay discuss the benefits of regenerative capitalism.

Over the past ten years, we have been witnessing a growing migration of academics, businesses, entrepreneurs, journalists and financiers away from liberal market orthodoxy. They are provoking us to think differently about finance, capital, growth and place. And they are encouraging us to conceive of the economy as something embedded in social, cultural and natural systems.

This shift in thinking and practice is nothing new for many communities, especially those hardest hit by free market practices that have exacerbated economic, social and geographic disparities. There is an emerging consensus that the old systems of finance, business, government and civil society are ripe for reinvention.

John Fullerton’s journey began as a banker at JP Morgan. That experience led to a deep questioning of the dysfunction of the current financial system and, ultimately, led him to create the Capital Institute, which focused on building a movement for a new economy. Justin Rosenstein, co-founder of Asana, a darling of Silicon Valley, went on to create One Project, a nonprofit focused on scaling new forms of governance and economics. Entrepreneur Matthew Monahan founded Biome Trust after his company was lucratively acquired, investing his wealth to focus on planetary health and regeneration “transforming financial health into planetary health”.

The Hewlett Foundation is working to foster what they have coined a “new common sense” about how the economy works and the aims it should serve, suggesting that neoliberalism has “outlived whatever usefulness it once served”. The Omidyar Network, created by eBay founder Pierre Omidyar, has a “re-imagining capitalism” brief with a focus on seeding a new economic paradigm, strengthening worker power and curbing monopolies. The Omidyar Network is also working with a coalition of other funders through Partners for a New Economy.

At the RSA, we are part of this shift in the tectonic plates, working across businesses, communities and funders. This cross-sectoral approach is in our best traditions. But our mission is a new one. Our Design for Life mission aims to regenerate people, places and planet. Underpinning this and our practical work with citizens, places, companies and educational institutions are some core insights or ingredients that have shaped our approach to regenerative capitalism.

Ingredients for re-wiring the spirit of capitalism

The power of place

Liberal market orthodoxy, at its extremities, operates “place blind”, on the assumption wealth and technologies will trickle down from top to bottom. In San Francisco, a hub of innovation, technology and entrepreneurship, the city placed a big bet on tech giants. The enormous success and wealth generated by this hub of entrepreneurship has not, however, improved the social infrastructure enabling poorer communities to thrive: affordable housing, education, transit, healthcare, and public benefits. Companies have operated as walled gardens, not communal green spaces.

In 2017, at a time when we were supporting an Inclusive Growth Coalition in Chicago, cities across the US were in bidding wars to host Amazon's headquarters. This “hunting strategy” for wooing corporates with incentives is now falling out of fashion. Instead, we are seeing cities take on “regenerative” approaches to local development that focus on nurturing home-grown companies and local wealth building, honouring the culture, spirit, skills and heritage of a place.

The increasing localism or regionalism of supply chains is something financial journalist Rana Foroohar has brilliantly traced in her book Homecoming. At our Prosperity in a post-global world event in March 2023, she sketched out how the triumph of globalisation - the free movement of people, goods, and capital - meant that place no longer mattered. For Foroohar, we are entering a new era of more “human-centred” and “place-based economies”.

As part of our mission, we are running the UK Urban Futures Commission. This involves working with 11 core cities across the UK to unlock their potential, especially among people and within communities that have not benefitted from the economics of agglomeration. This means looking at new models of governance of urban spaces, straddling the public, private and civil society sectors. And it means exploring new means of financing city regeneration, with greater local ownership.

The quality of growth matters

As we concluded our Inclusive Growth Commission and published the final report, we identified a need to rethink the measures of economic progress and societal success. Not all economic growth is good when viewed through a social and environmental lens. Good growth is sustainable environmentally and inclusive societally. This means it is important to measure the quality, as well as quantity, of growth. For example, inclusive growth confers economic opportunity and security by design rather than by redistribution. That may mean focusing on the quality of jobs being created, at least as much as their number.

When it comes to sustainable growth, the key is to avoid stimulating economic activity which comes at the expense of an erosion of natural capital and the environment. Such a strategy cannot be sustained over the medium term. Indeed, given the extent of the loss of natural capital over a number of decades, the focus now should be on regenerative growth – that is to say, economic activity that replenishes, rather than diminishes, natural capital.

Broadening the definition of capital

There is growing recognition that even high-quality - sustainable, inclusive - economic growth may be far from sufficient for societal success. In a world of nested systems, societal and environmental metrics are equally important. While the focus of capitalism so far has been the accretion of physical and financial capital, the meaning of “capital” needs now to be broadened.

This includes human capital (the education and skills of people), social capital (trust and relationships) and natural capital (our climate and biosphere). These three forms of capital – and how we manage them – are increasingly being recognised as core ingredients of prosperity, wellbeing and health, human and planetary.

A study, for example, found that none of the world's top industries would be profitable if they paid for the natural capital they use. The total value of unpriced natural capital costs US $7.3 trillion or roughly 12% of all economic output.

Or look at social capital. At our event How our social connections impact our economic mobility in November 2022, economist Raj Chetty demonstrated the importance of social connections and social capital in driving levels of social mobility in the US. Yet social capital and connectivity tend to be far less focused on, measured and nurtured, policy-wise, than other economic capitals. We are filling this gap, working to develop measures of social capital and reimagine social networks as part of our Design for Life mission.

Stakeholders rather than shareholders

The traditional model of companies gave shareholders a position of primacy in shaping the decisions of a company. They were the “owners”. In fact, shareholders are only one of many possible “owners” of a company. A company is ultimately a social phenomenon, not a legal one. And the sets of social stakeholders with an interest in the performance of a company include a myriad of other stakeholders, from workers to customers and clients to wider society and the environment. Just as the economy is embedded in these wider systems, so too is a company.

The recognition of businesses’ wider role, and wider stakeholders, leads to a different model of stakeholder capitalism. Just as with the economy, it calls for different performance metrics beyond the bottom line when judging how well a business is serving its wider stakeholders. This is a growing movement of purposeful businesses seeking to make good on this different model of corporate governance.

For example, in the world of startups and entrepreneurship, there is a growing movement of ‘zebra’ companies that aim to maximise sustainable prosperity. These stand in contrast to venture capital-oriented companies, such as tech ‘unicorns’, looking simply for exponential growth in revenues and profits. Zebra companies are characterised by profit sharing, collaboration, dedication to societal advancement, and a deep commitment to serving customers and their communities.

The growing B corporation movement is another example of this shift in business practices. These models of stakeholder capitalism re-balance decision-making powers away from shareholders and corporate managers and towards a wider set of stakeholders (customers, workers, suppliers and the broader public). Part of the motivation here is to ensure wealth and jobs recirculate locally to support local economies and businesses in the supply chain.

Further afield is the emergence of the “rights of nature” doctrine meaning that natural ecosystems are entitled to legal personhood status, a policy innovation allowing the environment to be defended in court and extended the “rights to exist, thrive and regenerate,” which effectively strengthens nature as a key stakeholder.

By working in partnership with businesses through our Design for Life mission, we will be playing a prominent role in helping embed this model of purposeful business that respects broader stakeholder interests. One way we are doing so is by playing a prominent role in nurturing both the creative industries sector and, crucially, the role of creativity within all businesses. This includes us co-hosting the UK’s Creative Policy and Evidence Centre.

Creativity capabilities

The sets of skills that have made a success of the first three industrial revolutions will not be those that make a success of the fourth. Doing so will require a root and branch rethink and reform of our lifelong education and learning systems. These will need to become more granular, digital, experiential and team-based to nurture the new set of skills needed in the 21st century and to unlock the potential of those currently lost to learning due to the rigidity and homogeneity of the education system.

This new model of learning and skill-building forms a core part of our Design for Life mission. This includes a set of practical interventions to nurture creative skills in young people, from early years to entrepreneurs, recognised through digital badging – the Design for Life Awards. It also includes our Regenerative business enquiry; a programme working with businesses to nurture the capabilities of their staff, preparing them for the economic, social and environmental challenges of the 21st century. Today 78% of business leaders now view capability building as very or extremely critical to an organisation’s long-term growth. Again, human capital matters.

New flavour of capitalism

We are committed to fostering a regenerative capitalism that puts people, place and planet first. This means putting in place practical interventions, through our Design for Life mission, that is true to the core principles set out above and which contribute to the rising tide of thinking and practice towards regenerative economies. This is not an abandonment of capitalism. It is a recognition that capitalism always had many flavours and, given the challenges we now face economically, socially and environmentally, this is the moment to migrate to a new flavour of capitalism, a regenerative model.


Do you believe this new brand of capitalism can help people, places and planet to flourish in harmony? Can stakeholder capitalism contribute to more resilient, rebalanced and regenerative futures? Vote in our poll and let us know the rationale behind your choice in the comments below.

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  • While there is clearly a growing unease in many western societies about "the system" not working, there seems limited REAL willingness to make change happen. We seem content to "re-arrange the deck chairs on the Titanic." The economic system, including the role of business is there to serve society - it is a "construct" of society - not the other way around. So, if it's not working let's change the rules? Two key things must happen. First legislation and regulation must clearly establish boundaries. Many are out of touch or incapable in a global business environment. Second, we need to start "shaming" those organizations that are unethical and / or anti-social. Again, the press reports it - then we move on. Unless the change agenda permeates organizations like the WEF. It won't happen. Almost every country signed up to the UN Anti-bribery guidelines yet just a short time ago Airbus settled for over $2 billion for doing just that (admittedly with no acceptance of guilt). Nod, Nod, wink, wink. Do we REALLY want change so our grandchildren have a planet that is habitable and a society that is livable?

    • HI Nicholas, I couldn't agree more. One of the problems with Legislaation as one Law Lord explained to me, is that technology is now moving so fast, that by the time a Law is passed for a certain purpose or technology that technology or purpose is often not just out of date, but actually obsolete. For example he suggested you need to use AI to legislate for AI in real time - demonstrating our arcane and medieval processes just aren't fit for purpose anymore. The law makers don't know enough about the technoology to even ask the right questions either, as was pitifully demonstrated when Mark Zuckerberg was questioned by the Select Committee in UK parliament. And now Zucerberg of course, simply ignores us, as he's clearly above the laws of all countries, which he originially did in 2018. The other problem with the Internet is it's global. One country sets laws, then to avoid them a company simply moves their servers to a country that doesn't. The user experience remains totally uninterrupted. I know you're based in Canada but I've never known Britain on a precpice liike we are currently on, something we've never encountered in our history. The middle classes are about to get hit with a Tsunami of problems including inflation, falling property prices, mortgage hikes, increasing rent and an implosion of social cohesion. We are trialing Universal Basic Income all over the United Kingdon presently and battling to keep cash and prevent being entirely comodofied by Big Finance & Big Tech at the moment. Thankfully the youth market are dumping social media and corporate tech in their doves - there is an appetite for massive change here - but as ever, it's the people who hold the strings that are terrified of losing power, money and influece and until we take them out (by stop buying into the system - there's a new barter economy rising here) - it will be business as usual. If you've read my RSA Blog You're Living In The 21st Century But May Not Have Noticed - You'll know where the fights are coming from. Do stay in touch - believe we are kindred spirits on either side of the globe. Best Paul Atherton (FRSA)

  • We, as individuals, have responsbilities towards each other and other people and of course how we treat our planet. Otherwise, no stable society would exist. Likewise the business community has responsibilities towards people and planet as it has a responsibility to make an ethical profit. More specifically it is us, as employees, who have responsibilities towards people, planet and ethical profit. This article is bang on although we use the word responsibility rather than regenerative - we are essentially saying the same thing. Perhaps the most descriptive and accepted description of this movement for change is "stakeholder capitalism" where people, planet and profit issues are treated equally. More employee activism is what we need - responsible activism. .... AND QUICKLY TOO

    • How do you see Employee Activism rising when we've engendered a Live To Work (rather than Work To Live) Mentality in all Western Societies Jim? Diminishing Unions with fights against them at every turn (see Amazon), a Gig Economy (think Uber who've never made a profit since its existence) and a dog eat dog mentality when it comes to Welfare and fairness, just look at this fights from the working classes when Universal Basic Income was mentioned just last week and that was only when a Think Tank reached out to the media to try and raise the funds to test the idea in England? The notion of profit and loss is what drives consumption (as I mentioned in my reply below) and is the drive for damage. Look at our food industry... Or Clothing Or Technology For all these things to be turned ethical it will mean they'll be priced out of the hands of those that need them most. We need a new idea for society not a rehash of an old one that we've proven time and time again always lands us in the same place - which, as the Great Gordon Gekko said is: "GREED IS GOOD!"

  • I believe we have no choice but to take this direction to gain improvements with inclusivity. This said we need WEF supporting as it directly links with their priorities of Equity, Inclusion and Diversity.

  • This fundamentally misunderstands the power structures that have existed in Britain since the birth of Landownership with the Domesday Book, through the creation of the stock exchange and all the way through to Fiat money. The driving decisions since the time of William The Conqueror have always been the same - how does one individual make more money? Without addressing that core question of money generation in resolving our social problems, everything else will fail. We've seen it time and time again, from the world's first insurance claim here in London being refused, to all the financial Bubbles bursting, beginning with the Southsea through the Dotcom right up to the current insane property one. Capitalism requires unnecessary consumption. Unnecessary onsumption is the cause of all the failures on the planet, from the destruction of the Amazon Rainforest to slaves digging cobalt from Congolese mines. What's required is a total reboot in Social Thinking - but this can't be a Global approach. This has to be done from the UK and more specifically here in the Capital, London. It is of course from here where Adam Smith gave the world the Wealth of Nations & Karl Marx, Das Kapital, both RSA Fellows you'll note. It is also from here that we've given the planet computing, electricity generation, gas power, television, radio, arguably the internet (though Tim Berners-Lee another RSA Fellow developed HTML and thus the World Wide Web at Cern in Switzerland), the music industry and scientific revolutions of antibiotics, gravity, evolution and the discovery of the building blocks of life itself, DNA. To name just a few. The reason it should be UK focussed, is because we are an island, our capital city has a 2,000 year history and we've demonstrated time and time again what we do here influences the world. So start small, easy and contained. A small island can be experimented on. We can shut our borders, close the internet and become entirely self-sufficient. Nobody with our global influence could even think of such a provocation, let alone achieve it. And this change could begin with changing our currency from Money to Time. Instead of having money, make money from money; we revert back to using our currency purely as a means of exchange. And instead of a notional made up idea of pounds and pence we use our finite life in hours minutes and seconds instead? Are you prepared to give up an hour of your life to drink a beer? That's the opportunity cost of labouring to get an hour’s worth of money to buy one. It takes on a whole different meaning when you think about how much time you are sacrificing to achieve something and realise that, that time is finite. We all get just one life. We guestimate how long we are likely to be around but nobody knows. You could make it to 100 years old, you may only make it to 50 or less. But time is precious, irreplaceable and essential. It exists, whilst what we use to measure it is a concept, the actuality of longevity is a fact. So using time instead of money as a means of exchange, changes everything. We won't waste precious time doing non-jobs, or doing things just to create more of it, you can't, because it's finite. Changing our currency into time instead of money is just the first idea in a long list that I have on how we change the way we think and behave. Tweaking old broken systems like Capitalism just isn't going to cut it in the 21st Century, what's needed is radical new thinking, thinking that comes away from tired academic institutions and normative parameters. The kind of thinking the RSA has regularly produced over the last three centuries. Medals to persuade people to plant trees in the 1700s.... protecting buildings of importance with the Blue Plaque Scheme... changing how education works with our own exam systems and of course bringing free museums, galleries and concert halls to the masses, through the world's first trade fair, The Great Exhibition, which itself was crowdfunded and the tickets for entry sold to raise the funds to build Albertopolis (V&A, Science Museum, Natural History Museum & The Royal Albert Hall) Britain reinvented its currency from imperial to metric in the decimalisation process of the 1970's so there is absolutely no reason we can't do it again in the 2030's but this time from money to time - in doing so we eliminate the drive for consumption and thus the focus can then be upon just our needs and there will be no need to create our wants. And not creating wants is the answer to all our problems!

  • Always great to find the zebra vision in such great company with our fellow travelers in creating the businesses that are better for the world! For anyone interested, our direct URL is, and our OG manifesto is at

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