4. The future of business – a diversity of models
In this Briefing we have traversed two different trends to explore how businesses are approaching their role in society, and how the ways that they organise themselves might change in future.
In our exploration of purpose-led business, we heard many examples of businesses that were challenging the prevailing role and function of business, driven by changing values from their employees, customers and investors, as well as a desire to be part of the solution to global challenges. Often these businesses do not readily fit conventional organisational models.
We were also given examples of businesses exploring the use of blockchain and other DLT to enable new business capabilities or forms, such as decentralised autonomous organisations (DAOs). A number of people mentioned ways in which technology generally, or blockchain/DLT, could support sustainable or purpose-led activities (Box 17).
Box 17: Purpose-led and blockchain — how could these trends converge?
Blockchain is and could be used by purpose-led business to:
- help with the ‘start-up’ of their business or enterprise, for example to raise finance
- enable networked organisational forms, such as a DAO, and through this support more inclusive governance, for example involving participants in decisions about the use of funds
- support supply chain transparency
- improve sustainability reporting through the ability to hold and use data on financial, social and environmental dimensions for investment or consumer decisions
- enable Māori-led solutions through decentralisation of information and governance ȓ support impact at scale by enabling replication of business models.
Data is at the core of sustainability practices, and encouraging responsible information sharing can assist in purpose-led business – Amazon Web Services
DAOs have given us a way to wrap an economic model around open source. We can now create incentives for people to start and invest time into growing purpose driven organisations or communities – The Wellbeing Protocol
These insights signalled to us that the future of business is likely to be made up of an increasingly diverse range of business models and organisational forms. Firm structures that are common today will persist, but there is likely to be more values-oriented, networked, open, peer-to-peer and decentralised organisational forms, as business responds to drivers such as changing values, environmental pressures, and technology (Figure 6). These can be categorised in many different ways, for example:
- ‘Sustainable business models’ which have been classified into 16 different types, such as exchange platforms and product use rather than ownership (Niessen & Bocken, 2021).
- ‘Decentralised business models’ which include collaborative business networks and partnerships, as well as newer technology-enabled platforms that allow peer-to-peer activity and include some purpose-led business and those enabled by blockchain/DLT (Barker & Chiu, 2021). The typically networked forms of decentralised models mean their practices often span traditional domains of business, community and government, use more ‘open’ approaches to participation, and can as a result require complex contractual or governance arrangements. Calls for new governance and regulatory frameworks for decentralised business models are being made to enable them to contribute to responsible value creation and social goals as well as to provide guard rails to avoid exploitative or unsustainable business risk-taking (Barker & Chiu, 2021).
Diversity in business models is not a new trend. As part of wider economic activity, business form has, over time, always been diverse and evolving to meet business objectives and support livelihoods. Research into diverse economies is bringing more understanding and visibility to this landscape, and, in capturing activities that are unpaid or volunteer, covers a more varied range of economic activities than we illustrate in figure 6 (Gibson-Graham and Dombroski, 2020).
Figure 6: Some examples of business models and organisational forms (centre of graphic) and global drivers (outer circle) that may be influencing their use or emergence.
Text of figure 6.
4.1. Now what? Choices for government around evolving business models
This diversity in business models and structures provides economic and social possibilities to help address the important challenges of our times. Government has choices around its role and intensity in engaging with this:
- Watching brief: this could involve maintaining an awareness of developments, potentially as part of a broader scanning function of government, to inform advice and decisions, as required.
- Exploring whether regulatory, governance and organisational settings are fit for purpose: this could involve assessing current settings under different future scenarios and considering whether these provide appropriate protections, as well as enabling the sort of innovation that contributes to a dynamic, inclusive and resilient economy and society. New Zealand research teams could contribute to this work.
- Actively shape the settings for new business models to enable them to meet society’s objectives: this could involve developing a more detailed understanding of the likely changes to come, and the development of a roadmap to guide direction.
New Zealand businesses and government are on similar journeys characterised by a greater focus on purpose, broader outcomes, and the long term, but with a lack of connection or effective working together between the two (Beatson, 2021).
Any work on business models is likely to benefit from effective government collaboration with business, communities and across agencies.
There are numerous models for working together, including partnership-based, collaborative or mission-oriented approaches between government, business and community. Aspects of these are covered in the Long-term Insights Briefings from the Public Service Commission on Enabling Active Citizenship and from the Department of Internal Affairs on How can community participation and decision-making be better enabled by technology? Their insights include suggestions to strengthen capability, recognising the critical role that participation has in building trust and addressing societal challenges.
From collaboration and collectivism, unique things can come – Pacific Business Trust
4.2. The last word from young people/rangatahi
In the longer term, with democracy evolving and decentralising in many forms and the role and form of business, government and community continuing to blur, it is likely that individuals or networks will lead certain social/economic movements. As citizens, employees, kaitiaki, consumers or shareholders, they will have a strong interest in ensuring that common goals in society are met, and are also drivers of much change.
We leave the last word in our Long-term Insights Briefing to young people (figure 7). They are our future decision makers, and their vision for the future of business will be the ultimate driver for any change to come.
Rangatahi are tech natives, who care about environment and society. The next generation will demand different approaches – Izzy Fenwick
Text of figure 7.