1. NEWECONOMYLAB
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James Slezak | @jslez
MIT Media Lab guest lecture

3. 1. Organizations making transformative social impact have
access to growth channels that others don’t
2. New Economy businesses must ask first what value they
can create, and only later how to capture a piece
3. This can be applied across production, consumption and
finance. Illustrations we will discuss:
§ Sharing Economy movement
§ Social innovation in large businesses
§ Financial innovation for good

4. The future used
to look so good

5. But it has failed
us as people

6. SOURCE:
Economic Policy Institute; New York Times
+10%
+80%
Labor productivity
Median wage
1973
2011
1.0
1.8

7. The world’s 300
richest people have the
same wealth as the
poorest 3 billion

8. Per capita income has tripled
since the 1940s yet average
happiness and life satisfaction
has fallen

9. 9
Production, control and wealth are largely centralized
Industrial Economy

10. Sharing Economy
We are beginning to see alternatives

12. 1
2

14. 14
Organizations making
transformative social impact
have access to growth channels
that others don’t
1

15. 25,000,000
3,000,000
0
Year
50
Amnesty
International

16. At the heart of these models is peer growth!

18. 18
New Economy businesses must
ask first what value they can
create, and only later how to
capture a piece
2

19. volume x (price-cost)
EVA =Not a formula for
wealth extraction Σproducts
(risk weighting)
The world is
dependent on polluting
forms of energy
$176 M
venture funding
Information is
hard to find
$225 Bn
created in 12 years
Staying connected to
people is difficult
$50 Bn
created in 8 years
Economic value creation flows from solving a
problem in society

20. $225 Bn
+$$
Direct cash value
created for others:
Consumer surplus
+$$$
Social value created:
Non-monetary value
Shareholder value
captured
The value captured by these social businesses is only
a fraction of the value they create for others

21. The other model

22. $228 Bn
Shareholder value
captured
(Chevron)
-$??? Bn
Social value destroyed:
Unaccounted, uncharged
externalities

24. Social innovation can be regarded as a search heuristic for the
space of new products
Conventional approaches that
are not social innovation:
1. Incremental product
improvement based on
market research (e.g. next
year’s car model)
2. Auteur intuition-driven
product innovation (Apple)
3. Fast followship (Samsung)
4. Raw exertion of market
power (monopolists)
There are infinite products you could create.
Searching any infinite space requires a heuristic, that
is, a strategy that simplifies what you’re looking for

25. CITIZEN
Economic
power
CONSUMER
PRODUCER
INVESTOR
LEVERS OF POWER

26. 26
Social innovation and collective
action are beginning to be
applied to consumption and
production
3

27. SOURCE: http://bit.ly/186vwhc

30. 30

33. !!
MEMBERS WIN LEGALIZED RIDE SHARING THROUGHOUT CALIFORNIA
SEPTEMBER 19, 2013CAMPAIGN EXAMPLE

34. !!
MEMBERS TURN OUT IN SILVERLAKE TO DEFEAT A BAN ON HOME SHARING
SEPTEMBER 9, 2013CAMPAIGN EXAMPLE

35. 35
We now need to
transform finance

42. Funds 50
World net wealth $500 Trillion (6 x GDP)
All financial assets 200
HNW 10
Retirement 40
SRI 0.1
Alternatives 5
Impact investing 0.005
NEWECONOMYLAB
Source: NEL analysis, public reports

45. NEWECONOMYLAB ///