Doughnut Economics: from a radical idea to transformative action

by Rob Shorter & Carlota Sanz

Originally published in STIR Magazine Issue 31, Autumn 2020

Say the words ‘Doughnut Economics’ and you may still get a puzzled look. “What on earth has economics got to do with doughnuts?” might be a very reasonable response. But since the birth of the idea of the Doughnut in 2012, by Kate Raworth (then of Oxfam), and the later publication of the book, Doughnut Economics: Seven ways to be a 21st century economist, in 2017, those two words have been gaining increasing recognition and interest, in communities, classrooms, cities, businesses, and even governments around the world as an idea whose time has come to be put into action. And with the founding of the Doughnut Economics Action Lab, or DEAL, and the launch of the DEAL Community Platform, the time for action has arrived, and the invitation for you to join is here.

The Doughnut brings together both social and ecological thinking into one core concept, that of meeting the needs of all people, within the means of the living planet.

For those new to Doughnut Economics, the central model is the Doughnut, which brings together both social and ecological thinking into one core concept, that of meeting the needs of all people, within the means of the living planet. It consists of two concentric rings: a social foundation of 12 dimensions, derived from the 2015 UN Sustainable Development Goals, to ensure that no one is left falling short on life’s essentials; and an ecological ceiling of nine planetary boundaries from earth-system scientists, to ensure that humanity does not collectively overshoot these critical planetary systems. And between these two boundaries lies a doughnut-shaped space that is both ecologically safe and socially just.

The safe and just space of the Doughnut can be thought of as a compass for the 21st century. A compass that calls for a systematic rethink of the tools we’ll need to navigate to this, as yet, uncharted space. Tools that will help to create economies that are fundamentally regenerative and distributive by design. Economies that recognise that people are imaginative, co-operative and caring, that the systems of life are dynamic and complex, and that the economy is deeply embedded within and supported by our relationships with each other and with earth’s life-supporting systems.

A starting point of Doughnut Economics is that 21st century economics is likely to be practiced first and theorised later.

A starting point of Doughnut Economics is that 21st century economics is likely to be practiced first and theorised later. And so, inspired by the spontaneous uptake of these core concepts, Doughnut Economics Action Lab was founded in March 2019 to support and connect the emerging community of changemakers worldwide who are already turning these ideas into irresistible practice.

This is a community that, since the global pandemic, is growing faster than ever, and one of the most exciting qualities of the community is that it is organically emerging from multiple diverse fields of practice, from teachers to policymakers, community organisers to consultants. As such, DEAL is going where the energy is, initially working across five key themes: Communities, Cities & Places, Education & Research, Business & Enterprise and Government & Policy; but with interest extending beyond these clusters, such as in the arts and technology, there’s no knowing how this might look a year from now.

Downscaling the Doughnut to place

Ever since the Doughnut was first published in 2012 people have asked: can we downscale the Doughnut so that we can apply it here – in our town, our region, our country? And over the past eight years there have been many innovative initiatives exploring different approaches to scale, including a region in China, the nations of South Africa, Wales and the UK, and for a comparison of 150 countries. But in April 2020, the City of Amsterdam took the leap and published the first ever City Doughnut, a ‘Public Portrait’ of the global Doughnut downscaled to the city-level. At its centre lies the fundamental question: how can our city be a home to thriving people in a thriving place, while respecting the wellbeing of all people and the health of the whole planet? The result of this inquiry is a holistic four-lens snapshot of the city’s many complex interconnections with the world in which it is embedded.

The creation of the Amsterdam City Doughnut started as and continues to be a process of collaboration. Initiated by a conceptual collaboration between Kate Raworth and biomimicry thinker Janine Benyus, translated into the ‘Public Portrait’ by the Thriving Cities Initiative (C40 Cities, Circle Economy, and DEAL with Biomimicry 3.8), it is now being put into action by city policy makers along with the Amsterdam Donut Coalitie, a network of residents and city-based organisations, in order to shape policy and chart a new path of collective action.

Its publication immediately sparked interest internationally, perhaps because it was a ray of hope in an otherwise dark April 2020. Within a few weeks it had gone on to inspire over 500 expressions of interest globally, at all scales from neighbourhood, to village, town, city, region, and whole nations. Some of these early expressions of interest have already started their own initiatives in downscaling the Doughnut, from Birmingham, Brussels, and Berlin to Copenhagen, Costa Rica, and Curaçao.

People are so often inspired by people like themselves doing something they hadn’t considered or thought was possible.

This explosion of interest has confirmed one of DEAL’s approaches to how change happens: people are so often inspired by people like themselves doing something they hadn’t considered or thought was possible. Mayors are inspired by mayors, teachers by teachers, community organisers by community organisers, neighbourhoods by neighbourhoods, businesses by businesses. When in June, the city council of Copenhagen voted (with a huge majority) to explore the implications of becoming a Doughnut City, they explicitly acknowledged that their decision had been directly inspired by what was happening in Amsterdam.

Whilst downscaling the Doughnut to cities and places has gained widespread attention, there is enormous energy and interest coming from communities and education. At the community scale, Cafe Disruptif’s ‘Doughnut Hack’ in Cornwall dived into creating a local Doughnut to explore the holistic interconnections of the county. In Birmingham, Civic Square are bringing the four-lens thinking to the under-served neighbourhoods of central Birmingham, and in Barking and Dagenham, Participatory City are incorporating Doughnut thinking into the next phase of its Every One Every Day initiative. And within education, more and more teachers – and a few pioneering curriculum writers – are introducing the ideas of Doughnut Economics to students in classrooms around the world in many creative ways.

When business meets the Doughnut

The Doughnut has drawn interest from a wide spectrum of the business community, too, prompting the question: if the goal is to live in the Doughnut’s safe and just space, what kind of enterprises could be part of making that happen?

At the heart of every business there are five key design traits that profoundly shape what it can be and do in the world: its purpose, governance, networks, ownership, and finance.

Over the past five years, Kate Raworth and more recently the DEAL team, have run workshops for businesses that are ready to explore what it means to be regenerative and distributive by design and so help humanity move into the Doughnut. We playfully call these corporate psychotherapy workshops because we invite businesses to look not just at the design of their products but at the design of the company itself. As described by the corporate analyst Marjorie Kelly, at the heart of every business there are five key design traits that profoundly shape what it can be and do in the world: its purpose, governance, networks, ownership, and finance.

Firstly, what purpose does the company serve? Does it exist mostly to maximise the financial profits it generates, or does it serve a greater living purpose, one that contributes to a thriving world? Purpose is key, but it’s not enough: it must be backed up by the other four traits of enterprise design.

Second, what are the company’s networks? Who are its customers, its suppliers, its allies and partners? Are they aligned with the business’s purpose and values, or are they caught in a business culture that undermines and works against them?

Third, how is the company governed? Who is in the room when decisions are made? What are the incentives given to middle managers, and what metrics are used to assess company and employee performance? Do they focus on short-term financial returns or do they drive for long-term transformative action?

Fourth, who owns the company? Is it owned by an entrepreneur, by its employees, by a founding family, by values-based investors, or by shareholders in the stock market? This is a crucial question because how a business is owned ultimately determines the last – and deepest – design trait.

Fifth, how is the company financed? The source of finance will profoundly shape its character and its expectations. Do the funders demand high and fast financial returns or are they committed to generating social and ecological benefits along with a fair financial return?

Together these five design traits profoundly shape a company’s prospects of doing business in the Doughnut. Many mainstream businesses would have to transform to do the Doughnut: their current design traits, particularly around ownership and finance, pull sharply against their desire for a more progressive purpose. But some enterprises are, as it were, ‘born to do the Doughnut’: they are founded for a living purpose and they choose enterprise as the vehicle to achieve it, so from the outset they intentionally align all five of their design traits to be in service of this end. At DEAL we believe that these enterprises are pioneering the practice of 21st century business, and we aim to amplify their work and share their stories so that they inspire others, too.

Building community: a place to connect, share, and be inspired

Launched in September, the DEAL Community Platform is a place for the emerging community of changemakers worldwide who are turning the ideas of Doughnut Economics into practice.

The platform contains open-access and free-to-use tools and stories created both by the DEAL team and community, to equip and inspire community members – from teachers, facilitators, and activists to policymakers and entrepreneurs – with tools including workshops, lesson plans, things to watch, make, play and explore, and stories of how others are adapting the ideas and principles of Doughnut Economics to their own context.

The platform contains open-access and free-to-use tools and stories created both by the DEAL team and community, to equip and inspire community members.

A key challenge for DEAL is to balance this openness with ensuring integrity in how the concepts of Doughnut Economics are put into practice. This is why we have developed the Doughnut Economics Principles of Practice that we ask are placed at the heart of any initiative that uses the Doughnut. In building community we also promote reciprocity: we share our tools and ask that community members share back their learning and their own innovations, thus amplifying the creativity of the crowd. And we have designed the platform to encourage experiments, adaptation, learning, and feedback.

We hope, over time, that the emerging community will start to manage itself in this spirit. From this perspective the platform, its content, and the community can be thought of as a commons of concepts, knowledge and practice, managing itself around a shared set of principles, responding to issues as they arise and finding ways to stay true to the intention of the work.

We welcome you to join us as we start this journey. Simply visit doughnuteconomics.org and sign up to connect with others, explore what’s on offer, and become part of the community that is turning Doughnut Economics from a radical idea into transformative action.

Rob Shorter is communities & art lead for Doughnut Economics Action Lab, working with communities of place and purpose that are drawing on Doughnut Economics to respond to ecological emergency and social inequality.

Carlota Sanz leads the development of DEAL’s strategy. Her corporate experience and passion for regenerative economics contribute to making deal truly future-fit. She also leads deal’s work with business and enterprise.

Photo by Josh Power