 Hyfnw'n gweithio. Yn ymlaen, maen nhw'n gweithio i gweithio. Gweithio i'r ffrindig? Gweithio'r bobl? Wifi? Gweithio? Roedd? Mae! Llywodraeth? Gweithio? Ffood? Gweithio? Ffood! First time holder, safety, optimism, friendship, nurturing, water, creativity, music. OK, we're getting there. Wow, yes, good. I think we really need to have a really clear picture for ourselves of what our well-being depend upon because as Marks, so clearly and devastatingly set out, this is what we're fighting for. I think we can express what our wellbeing depends upon so simply that I've actually got it in my pocket. So at one level our wellbeing depends upon this. It's a little bean, someone said food. Our wellbeing, the wellbeing of every single human being depends upon food, water, housing, healthcare, education, shelter, security. And this lies at the heart of what you could say is the 20th century human rights project. But that's only half of the story because the other half of our wellbeing depends upon this little blue marble on our extraordinary living world of which we only know there is one. It depends upon a stable climate and fertile soils and thriving biodiversity, a protective ozone layer, ample fresh water, healthy oceans. So it's the bean and the marble together that make our wellbeing. And of course they're deeply interdependent because without fertile soil there are no beans, without healthy oceans there are no fish, without rain there's no water, and without a stable climate there's no security. So these sit so closely together but we're only just beginning to realise the extent of their interdependence. And I know these are very tiny so you can't quite see them. We need to be able to draw them bigger and make ourselves a compass fit for the 21st century, which is exactly what I want to show you. There we go. And yes, it looks like a doughnut. I know it's too early in the morning and I know doughnuts aren't even good for you so health warning out of the way, don't eat them. This is the only one that might turn out to be good for us. So here's the doughnut. In the hole in the middle is a place where people are falling short on life's essentials. Food, water, healthcare, education, housing, wi-fi, look you've got networks, that's access to information. All these things and we want every person in the world to have access to those things. I've crowdsourced those social essentials from the global sustainable development goals so you could say they are the most contemporary statement of what governments and people worldwide agree that every person has a claim to so that we can all lead lives of dignity and opportunity and community. So we want to get everybody in the world out of that hole, nobody left falling short, into the green and lovely doughnut itself. But we can't overshoot its outer boundaries because there we begin to put so much pressure on this extraordinary living planet that we kick its fundamental systems out of kilter. We cause climate change, acidify the oceans, a hole in the ozone layer, destroy biodiversity. So these nine boundaries around the outside, these are the nine planetary boundaries you may have heard of created by Johan Rockstrom and a group of leading earth system scientists in 2009. They looked at the last 11,000 years of life on earth which has been extraordinarily stable and benevolent to humanity compared to the hundreds of thousands before it and they said what is it about these last 11,000 years that's been such a home sweet home for humanity and they boiled it down to what they think of these nine critical earth system processes that we mustn't put so much pressure on that we go over those boundaries and kick ourselves out of kilter. So they've got don't fall short on the beans and don't overshoot that marble in one picture. In the simplest way you could say we have to meet the needs of all within the means of the planet and I propose to you that this is a compass for the 21st century because this is our task to figure out how to meet the needs of all within the means of the planet. But if it's a compass well you want to know where the needles are pointing and it's not pretty. On every single one of those social dimensions millions or even billions of people are falling short so you can see for food that little red wedge goes 11% of the way towards the centre because 11% of people worldwide don't have enough food to eat every day. On water 9% of people have no access to clean water and one person in three has no access to what we would call a toilet. But on every one of those social dimensions billions of people fall short and yet we've already overshot at least four of these planetary boundaries. The boundary on climate change is a concentration of carbon dioxide in the atmosphere of 350 parts per million. If you've ever heard of that campaigning organisation 350.org it's that same 350. But in April this year we went over 410 parts per million so we were overshooting. But we're also massively over on excessive fertiliser use putting far too much nitrogen phosphorus into the soils. We're massively over on biodiversity loss in fact if those two were drawn fully they would easily hit the corners of this theatre. And we're over on land conversion and we don't even know where we are globally on air pollution and chemical pollution. So this is the state of humanity in our planetary home in these early days of the 21st century. And I believe that our challenge this century our generational challenge is to eradicate that red to meet the needs of all to get everybody out of that place of deprivation and simultaneously come back within the means of the planet. Generations before us never saw this picture. Last century's economists and policy makers they never saw this they didn't see the planetary boundaries. So it's no surprise at all that their economic theories and their policies are in no way fit for taking on this task. We have to come up with our own because we've got our own picture. And I believe this challenge is the challenge that our children's grandchildren will remember us for. Not for Trump not even for Brexit but for whether or not we began to put humanity on track into coming into this space. And of course that's the big question will we do it or not will we begin to turn this story around. I think many different things need to happen to turn this story around. And a lot of the my energy has gone into transforming the economics education that needs to happen today. Students deserve to be taught an economic mindset that actually gives them half a chance of taking this on. And yet they're still taught theories drawn in the textbooks of 1950 based on ideas actually drawn up in 1850. So there's a huge change that needs to happen there. But today I want to come to the question of what does it mean for business? Because I've presented this picture to hundreds of businesses over the past five years. And I've had fascinating conversations with them. I often show them this picture and say, you know, imagine if every business, every enterprise, big or small, drew up its strategy around this table. Wouldn't that change the conversation? And wouldn't you be asking yourselves is what we're doing is our core business actually helping bring humanity in this space, helping to meet the needs of all and doing it within the means of the planet? Or is the way that we're running our business actually driving humanity out of this space? And what's really fascinated me over these past five years and through all these conversations is the different responses I've heard. So I'm going to tell you about them. There's like five basic different responses I've heard from business. So the first one is the oldest and we're going to do nothing. You know Milton Friedman said the business of business is business. So they would look at that and say, well, that's a really sorry picture. But you know, everything we're doing is nearly legal. And we're just going to keep on doing it until someone catches us and until the fines are bigger than our profits. But that's not going to work anymore. That's not going to work. And even these companies are beginning to get hit. So then we go up a level. What are we going to do? Well, we're going to do what pays. If getting a green, you know, ethical stamp on our product means actually we'll reach a new niche consumer market. We'll get that green ethical stamp. If cutting our carbon emissions actually will cut our costs. Well, that will cut our carbon emissions. It's so incremental. It begins to pay but only in very short, narrow financial terms. And it's never going to get us to where we need to go. So we need to go up. So the next step up on this corporate to do list is, well, we'll do our fair share. And because of the rise of science measures and, you know, the world needs to cut its carbon emissions by 50% by whatever year, lots of companies are starting to say, ah, so if my country says it's going to cut its emissions by 20% in 20 years, we'll cut our emissions by 20% in 20 minutes. We'll do our fair share. I understand where that's coming from. But the trouble with it, if anyone's ever been out to a restaurant with a bunch of friends and everyone's chipped in what they think is their fair share, and you're the one picking up the bill at the end of the evening, it never quite adds up. And also, I'll do my fair share. Can quite quickly morph into what's my fair share to take. So I've been struck by the number of major oil, gas, steel companies that have come to me and said, oh, we like this doughnut now. What I want to know is how much of that global carbon budget is ours. To which, of course, the answer is none, because we already know too much. We can't afford to dole out the right to pollute anymore. So we need to go beyond this fair share-ism. So the next step up, and we're beginning to get transformational here. The next step is, well, we're going to do mission zero. We're going to have zero carbon emissions. We're going to be a net zero company. And that is transformational because it's beginning to realise that the cycles of the living world no longer have space for humanity to cut against them. But as in the words of the designer Bill McDonough, why do less bad when you can do good? Why not break through that ceiling of imagination? If you can do mission zero, why not aim to actually do something positive? So right at the top of the list is the idea of being generative. Now, let me tell you what I mean by being generative. A company whose mission, whose inspiration is to be generative, will seek to be distributive by design and regenerative by design in the way that it runs its business. And I think these two design principles actually are going to run throughout a 21st century economy if we're going to have a chance of pulling back in here and meeting the needs of all within the means of the planet. So let me tell you about each of these. Distributive by design, what do I mean? I mean an economy and enterprises within it in which value created is shared far more equitably with all who helped to create it. And that often means redistributing the sources of wealth creation. So some examples, rather than companies that are owned by shareholders who never actually step over the threshold of the factory or office door, but extract an increasing share of the returns as we've seen in all the news, and a company that's actually owned by its employees, whether it's an employee-owned enterprise or a cooperative. And this is the well-known example of John Lewis' partnership, where every employee is a partner and gets a share of the value that's created by all. But it doesn't have to be such a big company. Here's my rather favourite one, the Colchester Print Group, together as one. And of course, employee ownership and cooperative ownership is on the rise. It's a resurgent trend spreading that value far more equitably through changing the ownership of enterprise. What about through value chains, right? Through ethical supply chains, working with partners, sometimes their co-operatives themselves, to ensure that the value of their work remains with them, playing a living wage, investing back in their communities. But also, going beyond employee-owned and down the chain to thinking about research and development. Now, I know this looks like a rock concert. It's actually not a rock concert. This is a software developers conference, because Drupal is an open-source software for designing websites. It's the platform that sits behind a lot of website designs. And once a year, all of the people who use Drupal get together. I think what they're doing is making a little drop to say, if you add up all the little drops, you get an ocean. Because imagine no company in the world can afford an R&D team this big, this committed. But this is what happens when you have an open-source platform where everybody using it adds their ideas, and it's a creative commons that they all collectively share in. So these are just some of the ideas that are already happening to turn enterprise into a distributive design. What about regenerative design? Well, the 20th century linear degenerative economy is what runs through the middle of this diagram, right? We take out some materials, we make them into stuff, we won't use it for a while, and then we throw it away. And that take, make, use, lose cuts against the cycles of the living world and runs down this extraordinary planet on which we depend. So we have to bend those arrows around and create a circular or cyclical economy in which resources are never used up, but are always used again and again, and it runs on sunlight. So you have the biological materials, if we just get out of them away, this is what nature does, breaks materials back down into their fundamental building blocks of oxygen and hydrogen and nitrogen and carbon and uses them again and again. But also the technical materials, anything from this clicker to the monitor to this sofa, materials that we've made should never be landfill or burned. Our children will say, did you really throw plastic cups and just stick them in the ground? What were you thinking? Turn it into a cycle of reuse, refurbishment, redesign. And the thing about these two design principles is I think they have to work together, right? If we're going to have a regenerative economy, it has to be distributed by design as well, and I want to just show you. Let me see. It's amazing what you can find lying on the back of a stage, some hose pipes. So, just as a little example, let's imagine this is the linear degenerative economy, okay? We stuff in earth's resources and we use them and a product comes out at the end, but also lots of waste and pollution, and it just gets thrown away. It's a circle economy. Bend that loop around so that it's actually the materials. You know, you bought a mobile phone and you send it back to the company and they get it back in. Can I just give this to somebody? Could you hold that? That's it. There we go. Right, that's one mobile phone company, but then I've got another mobile phone company that says, well, we want our mobile phones back too, so we're going to close the loop and we want all of our mobile phone customers to send it back to us. Could you just hold that one? There we go. Got two little circle economy loops going. Now, I want everybody in this audience who's ever worked for any company that made anything to imagine that your arms are that linear economy and just put your hands over your head and make a little closed loop. Everybody who's ever worked for any company that made anything. Oh, you look gorgeous. You see, this is what we are at risk of doing, making a circular economy in which everybody has their own little closed loop and the products are coming back to me and I'm going to refurbish them. Because nature would say that was cute, guys. You can bring the loop now. Nature would say that was cute, but nature would laugh at us. She's laughing, can you hear? See, nature doesn't do that. Nature doesn't break. Nature doesn't turn a daffodil into a daffodil and a peacock into a peacock. It all comes back down and nature does this. Nature does this. Nature is an ecosystem of resources that get reused endlessly by whichever user picks them up and finds them. So if we're going to create circular economies, we can't be sending everything back to the people we bought it from. We Westerners own around 10,000 products. There ain't no way of sending 10,000 parcels back to the people you bought it from. It's got to be an ecosystem of material use. Let's say we have four basic plastics that we use and then whoever's hands that plastic ends up in can use it to make something new. Use it again and again and again. So that's why our circular economies also need to be regenerative by design. Let me give you a couple of examples of people who are creating circular economies that are regenerative and distributive. So this is fresh life toilets in the slums of Kenya, one of those places where there are no toilets. Some MBA students went in and they set up a microenterprise building clean toilets that actually had fresh clean water, toilet paper and soap. Imagine for the first time that people could use with dignity and they collected the waste and it was then turned into fertilizer to be used as organic fertilizer on fields, replenishing the soil for growing vegetables. So they're just simply closing the loop of nitrogen and distributively creating jobs all the way along that line for local people in that community. Regenerative and distributive design company, such basic technology. Houdini, Swedish sports clotheswear company, they only make clothes either from wool or tensil, which are organic fibres, or recycled nylon or recycled polyester. At the moment they are one of these closed loop because they have to bring it back because the open loop doesn't exist. But when I spoke to their CEO last month she said, if only there was an ecosystem of materials that we could draw upon, this would make so much more sense for us. So we need to create an overall environment in which companies like this, ambitious ones, can thrive with others. And lastly, the open source vehicle. If you buy an open source vehicle it arrives in a kind of IKEA flat-pack box looking a bit like this. And if you know what you're doing you can put it together in an hour. If you don't know what you're doing though, the beautiful thing is you can take it to somebody who does because it's open source. So the hardware design is freely available for anyone to see on the internet of how it's put together in all the parts. Which means that anyone can put it together, customise it, design new bits that go with it. It's modular so you can just take off the bit that needs repairing and just repair that. It runs on sunlight, it's 100% electric. This is the future of distributed manufacturing of cars. It's regenerative by design and distributive by design. So that's where we need to get to. I believe we need enterprises that have these as driving principles at their heart. And of course there are already many of them. And yet there's such a split between companies that already say yeah, yeah, yeah, this is what we're doing, this is it, this is exactly our business purpose in words. And others would say this is so lala land. And what is it that drives this split? I think we are in the middle of witnessing the most extraordinary psychological drama between what I think is the leftovers of a 20th century mindset and the emergence of a 21st century one. So in all the conversations I've had with amazing product designers, urban designers, enterprise creators, people who have that twinkling in their eyes about the new doing differently that they are doing. There's one overriding question that just seems to underlie everything that they're saying, which is how many benefits can we generate in the way we designed this? What else could this do for the community? And what else could we do that actually make this an environmentally better product? But when they want to get their products or their enterprises or their businesses or their city design actually built and funded, they have to go to 20th century finance, which still asks a very different question and the question that drove much of the 20th century, which is how much financial value can I extract from this? And so you just have this incredible psychological standoff between how much value can we generate, how much financial value can I extract? How is this going to play out? And when I even listen to individual companies, I listen like, where are you speaking from? Which mindset is ruling you? And to understand why some companies are still stuck in that 20th century one and others are just dancing in the 21st century one, we have to dive deeper into what I call corporate psychotherapy. So you know if people go to the psychotherapist and they say, oh I need to go see a psychotherapist, I have relations with all these really difficult people and you need to help me relate to these very difficult people. And the further they go into the psychotherapist and they're like, oh it's not them, it's me. It's how I think. So we need to go into the inner workings of the individual company. And for this I draw on the work of the brilliant Marjorie Kelly who drew up five criteria for understanding the DNA at the heart of the company. Purpose, governance, networks, ownership and finance. So you can ask any company and I really enjoy doing this. So purpose, what's your purpose? What's the mission? What's written there? What do you do? Is your purpose to be the biggest player and have increasing market share? Or is it to have a safe and prosperous Kenya which is the purpose of those fresh sliced toilets? Or democratise mobility which is the purpose of the open source vehicle? So that purpose just totally drives whether you're in the 20th or 21st mindset. But the governance, what incentives do your staff have when they're called to the weekly meeting? What are they supposed to show that they've achieved? These profits only? Or cutting costs, cutting carbon, cutting resources, cutting water use, improving community connection? What are the metrics by which we govern ourselves? The networks, are these companies networked with others who actually are really aligned with their values? Or still in networks with others who fight against their values and make them have to defend it at every meeting? How are they owned by employees as a co-operative or by shareholders? Because that, of course, has a huge question about the quality of finance, the voice of finance and the question that finance is bringing. Owned by shareholders and you're probably still drawn ultimately to that question of how much financial value can we extract from this? And I think some companies really exhibit what you could call this kind of corporate schizophrenia because they may have changed their purpose. We are a 21st century company. We have this visionary purpose for where we're going. But if you don't change the governance and the networks and the ownership and the finance pulled into, and I would say that this is what happened to Unilever, Paul Pullman has a clear vision for that company and even is trying to change the governance saying I won't give quarterly reports anymore because I don't want the kind of shareholders who want that quarterly return. I don't want them to be known predominantly by the stock market. Some investors who are going along with them but some very mainstream, no wonder in February this year Warren Buffett, 3G and Heinzcraft came along and think actually we think we could extract quite a lot more financial value from this quite quickly and you get that hostile takeover bid. So you have to get away from this corporate schizophrenia and align all of this DNA with the 21st century vision. We need to have governance that actually reinforces that to be networked with others who share those values to be owned and financed by those who actually believe in generating multiple benefits. To me this is the excitement of the 21st century enterprise adventure to create enterprises that align all of this DNA in the right way so that the entire enterprise can be dancing with that question. How many benefits can we layer into the way that we design this? What else can we generate for the community, for the planet and do good along the way? I know that this room is packed with people who think like this. So let me pull back and invite you to ask that question. If we had a donut table in our office in our meeting space and we sat around on it and by the way I can easily send you a PDF there are companies and hotels all over the world who have actually said I'm going to do that and they've put a giant donut picture on their corporate table and they meet at it and use it to talk about their engagement in the world. I'll send it to you if you want it. But imagine if you're doing that how does it change the way you think about what your enterprise is and is for? Is it bringing us into this compass for which our children's children will remember us? So I'll leave you with that compass. And if you like these pictures and if you think pictures, if you like me you think pictures and images really matter you might enjoy these. I've had the privilege of working with some of the world's best stop motion animators to make one minute animation for each of the seven ways to think like a 21st century economist in my book. You can see that they're silly, playful, irreverent which is exactly what they should be because we have to take economics out of the ivory towers, out of the equations and realise that economics is what we all do and think and live and create every day. So, don't eat donuts but this is the one that might actually turn out to be good for us and I really enjoy hearing from all of the other speakers and from you today how we're making this happen. Thank you very much.