Might the future of capitalism lie in its roots from the seventh millennium BC? Damascus is said to be the birthplace of capitalism--with scores of famous empires taking advantage of its proximity to the Barada River to build a system of canals and tunnels still in use today. Although these empires were often feuding for control, their ingenuity is a true testament to entrepreneurship, and a shining example of the positive effects of people coming together for a common cause.
Flash forward to the 2008 World Economic Forum, when Bill Gates called for a new global economic system, one he called "creative capitalism." In Gates' vision, creative capitalism is an "approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world's inequities." Gates has earned our ear (and for many of us, our respect) largely because he succeeded so convincingly playing the game of market or shareholder capitalism. Given Gates' achievement, it is interesting that he laid down a gauntlet in which global capitalism directs itself toward social contribution as well as financial gain.
Viewed through the lens of history, there are several powerful forces working on the system of global capitalism in our moment, propelling it along a broad path toward a New Damascus in which solving public problems--from the increasing volatility of the world financial system to the ticking time bomb of the planet's environment--is as vital as maximizing return on equity.
Indeed, along this new road--a road broader than any market capitalism has previously traveled--the world's biggest challenges represent the biggest business opportunities--and not only for large corporations but also for all those entrepreneurs beavering away in garages around the world. In the not so distant future, dealing with crises like Greece's fiscal implosion or the oil spill in Louisiana will no longer be the sole or even primary purview of the nation state. Instead, business, large and small, will pour into the space previously crowded with government resources. Why? Because grappling with these kinds of problems will be part and parcel of how business delivers on (traditional) metrics like stock price and market valuation. At the same time, as the role and responsibilities of companies expand and older boundaries between business and society disintegrate, new metrics of performance, like employee engagement and customer loyalty, will emerge as equally important.
Consider the forces of transformation today pushing global capitalism toward a New Damascus:
The first is the issue of resources. Who has what to deal with the pressing challenges of our moment? If we think just about resources--people, innovation, traction, money, and execution--business is the most powerful force for change on the global stage right now. No other set of institutions--not religious organizations, not the nation-state, not individual NGOs--has the resources or the breadth and on-the-ground depth of knowledge of business to deal with what is in front of us today. Yes, all these other players matter, in some cases a great deal. But not as much as business does--in the form of both large, global corporations and small-scale entrepreneurial enterprises. This is not philosophy or politics, but the ineluctable reality of our moment.
A second force affecting the speed and direction of global capitalism comes from the demand side. There are millions--soon to be billions--of consumers, voters, and other actors, most obviously millenials or "Gen Yers", who want something new and different from business, who conceive of business and the "flywheel" of global capitalism in distinctive ways than their counterparts have in past moments (and indeed than many boomers today). And these actors will exert great power in the next two decades.
At the same time, the corporate form is changing very fast. New networks of companies and organizations are emerging; new ways of competing and collaborating are becoming more important. Old divisions are withering. The traditional widget-making company maximizing its own profit in a nationally defined space is evolving into something more complex and much more integrated into a broad, often global, web of relationships.
A fourth catalyst is transparency. Leaders and organizations of all kinds are increasingly operating in glass houses. The explosion in transparency wrought by a global media, great leaps in connectivity, a generation of global citizens who demand novel, authentic commitments from organizations are creating new standards of conduct for even those actors least willing to change.
Finally, though less obvious, there is a palpable thirst among people around the world for leadership that is not for sale, for individuals and organizations that are not solely defined by the transactional rhythms and white-hot speed of the marketplace. We can see this in the enduring popularity of entrepreneurial leaders such as Warren Buffett and Oprah Winfrey, individuals who have thrived in their respective industries partly because they consistently pursued something more than the next market-dictated score.
All of these forces are gaining strength now, helping lay the pavement along which global capitalism will travel, as is evident in the success of large corporations that are meeting the needs of a broader set of stakeholders than shareholders.
It is also evident in young enterprises now beginning to exert impact. Entrepreneurs and their creations have always been the sinews of capitalism. So we can look to an organization like RED, founded by Bono and Bobby Shriver, as an important example for where global capitalism is going. RED integrates the power of big business, new customer priorities, and the interconnected agents of social change, in the form of the Global Fund to Fight AIDS, Tuberculosis and Malaria. The animating mission of RED is to harness two of the most potent forces operating today, business and consumer spending, in service of eradicating deadly disease in Africa. Since its launch in 2006, RED has generated $150 million for the Global Fund. This money had helped reach more than five million people with testing, counseling, treatment and services while helping put more than 145,000 HIV-positive men, women and children on antiretroviral therapy.
This is creative; this is capitalism; and this is the future, a New Damascus right here on our doorstep.