In an infinite channel world, not-for-profit may just be the new normal
We were recently invited to attend Professor Donnie Maclurcan’s talk in Islington, London entitled “Not-for-profit enterprise will be at the heart of the global economy by 2050”.
We were unfortunately unable to attend Donnie’s talk, and haven’t yet read the book, but on first glance the forecast seems a little optimistic.
For one thing, the claim appears to be unsupported by current evidence. Donnie’s media release states that “In Canada … not-for-profit institutions now contribute 8% of the country’s gross domestic product.” In other words, a relatively small share of the Canadian economy. Hardly the ground swell of support that would foreshadow a not-for-profit world by 2050.
The other thing is that the claim appears to fly in the face of current economic thinking. Adam Smith, the founder of modern free market economics, is credited with the idea that many individuals working in their own self interest will produce a socially beneficial outcome (as though guided by an invisible hand).
Unless something dramatic has changed in the way that people respond to incentives, it is not clear why the world would shift from a free market system (dominated by for-profit enterprises) to one comprised predominantly of non-profits.
What could have changed?
It must be something big.
While people still respond to incentives in the same way they always have, the Internet completely changes the playing field.
In the pre-Internet world it was costly to communicate with large groups of people, you needed to own a printing press or a television station. It was also costly to form and build communities, since you needed to be able to build large and beautiful buildings where people would be happy to spend time (think religions and universities).
The Internet changes both of these things.
It is now possible for anyone to share ideas with the whole world instantly, and for anyone to build an online community where people can connect and spend time.
The full implications of this change are yet to be fully understood, but one thing jumps out at us.
An established online community can be self sustaining.
Loyal community members can provide the financial capital to keep the community going through donations and by buying products and services. If all profits from the community are then funneled back into maintaining and building the community, then the community may never produce any taxable accounting profits.
In other words, communities are by their nature not-for-profit (regardless of whether they are registered as such for tax purposes).
In an infinite channel world, where the cost of connecting with people is now zero, everyone has the opportunity to connect with people who care about the same things that they do, and build a community in the process.
Not every community will become financially viable, and of course some communities will produce taxable profits, but the implications should be clear enough.
We are moving towards a world with more connection and less profit. At least, less financial profit in the way that we have always been taught to think of it.
Donnie is definitely on to something, and we look forward to reading his book. It will be published in April 2015, and if this topic interests you then you can place a pre-publication order here.