As a business community, we like to think we’re mavericks of innovation and change. We explore, we push boundaries, we move the world forward. But peek behind the curtains and beneath the novel technologies and massive companies we idolize and what you find is that despite being 250 years out from the beginning of the Industrial Revolution, the substrate principles of our modern economy look much the same as they did then.
Think about it. We innovate for efficiency and profit, we measure input and output, we tweak for improvements and repeat. At a foundational level, not much has changed.
Industrialization gave us machine-thinking and that’s exactly how we still operate. We see business as an engine for economic output and only when that output has produced a surplus do we even begin to think about the wider societal impact.
It’s no wonder the negative costs of this machine-based economics have been the health, sustainability and well-being of our people, places and planet. They weren’t included in the math. And so here we are, in a social, political, economic and environmental polycrisis made of two-and-a-half centuries of degenerative economic principles.
We desperately need to change the calculus. Business plays a central role in every single crisis issue facing us today. Therefore, the need for innovation isn’t in the products, services or business models we use to advance our economy, but in the very foundation of how we define business.
It’s time to think beyond the machine, beyond the shareholder and beyond the marketplace as we know it. It’s time for a paradigm shift — it’s time to think regeneratively.
Unlearning to learn
All paradigm shifts begin with letting go of the old ways of doing things. So that’s where we have to start. Machine-thinking — which brought us rampant consumption, monopoly, quarterly short-termism, one-size-fits-all first principles and environmental destruction — needs to be left behind. And it needs to be left behind now.
In the industrial model of business, there is no consideration for negative impacts on our communities, our culture, our environment; and there’s no mention of ethics or morality. But the good news is those blind spots provide us with a framework for how we might do better. And it’s this framework that is the basis of regenerative economics.
Instead of a consumption-first machine model, picture instead a model based on life-centred principles. A regenerative business doesn’t ask, “How will this profit us?” It asks, “How will we create value that supports environmentally flourishing, socially just and inclusive economies?”
These are the contextual considerations that ensure the construction of an economy that works for everyone, everywhere. The identity of business must shift from resource exploitation to resource stewardship. From shareholder value creation to value creation for the planet, the populations we employ and the future generations for whom we’re building a foundation. In this identity shift, net-zero is no longer enough, net-positive is the goal.
Brands like Patagonia are already making strides in this direction. It is a co-founding member of the Regenerative Organic Certified™ Program, which has built a holistic agriculture certification that encompasses pasture-based animal welfare, fairness for farmers and workers and robust requirements for soil health and land management.
Rather than becoming a sacrifice of a mechanistic “it’s just business” mentality, people, place and planet are all accounted for here in the regenerative math. In fact, they’re integral to its economic success.
So where do we begin?
Despite prevalent narratives, the Amazons, Apples, Facebooks and Googles — those massive companies we venerate as the linchpins of our economic prosperity — are not where the actual economy exists, especially in Canada. They’re extreme outliers; the culmination of the last two-and-a-half centuries of machine-based economics. And if we’re going to activate a regenerative transition, the real beating heart of the Canadian economy is where we need to focus.
In 2021, Statistics Canada found that 98.1 per cent of Canada’s workforce was employed by small and medium-sized enterprises (SMEs). That’s where Canada’s economy truly lives, and that’s where the shift to regeneration must occur. The next decade will see the largest transfer of wealth in history with a massive number of SMEs changing hands due to sale or retirement in what has been dubbed the “silver tsunami.” We can surf this wave and evolve these businesses to become regenerative. Imagine the Canadian economy that would exist on the other side of that opportunity.
We have before us an exciting path to social, environmental and economic prosperity. But only if we let go of our machine-thinking past and step into a regenerative future. It’s a chance for business leaders to do what we claim to do best: innovate, adapt, evolve.
Only this time, we get to evolve the nature of business itself.
Cordell Jacks is CEO, co-founder, and general partner at Regenerative Capital Group, a Canadian social investment fund currently recruiting impact entrepreneurs to acquire and transform small businesses.
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