ORIGINS

Since the beginning of human history, we have developed countless ways of improving our quality of life and extending our lifespan. But about twelve thousand years ago, there was a major evolutionary leap forward. We began the transition from nomadic hunters and gatherers to farmers, cultivating land to provide more stable sources of food. We thus became agrarian, centering our prosperity and culture around our agricultural interests. As we learned to farm, we built better tools and established the early science of agriculture. And as the farms grew, so did the first villages and towns. This period also marked the beginning of land ownership, social classes, and slavery. Wealth and freedom were tied to owning land and the ability to optimize its output. 

The next major economic evolution, also tied to optimizing output, occurred more quickly. In 1712, British inventor Thomas Newcomen created the commercial steam engine in England. It was first used as a water pump and—despite its inefficiencies—was able to generate the power of twenty horses walking in a circle, a groundbreaking feat for that time. But even more impressive were the monumental gains in life expectancy that followed this first industrial boom. In 1796, the average person only lived to be 24, but just a hundred years later, that same person could live to be 48.

The new forms of transportation, communication, and mechanized goods invented during and since the Industrial Revolution have made life much more comfortable in many parts of the world. They have also created whole new classes of people and occupations. Many industries needed more and more specialized labor and saw education expand to develop the talent needed, and as people moved from farms to factories, vocational services were introduced, which supported migrants and youth in finding work. Men developed modern democracy. International trade boomed, connecting cultures around the world. As humans, our mental abilities were enabling us to make biological evolution de facto irrelevant—we had taken control of the process and produced unbelievable results. Of course, all this came at a great cost to the natural world, with pollution and the mass extinction of countless species. 

At the start of the 20th century, the name of the game was efficiency and output, which launched an obsession with building faster and more efficient means of production. By the middle of the 20th century, the marketplace was dominated by large corporations and institutions, which created a new kind of workplace built on hierarchy and development within an organization. Labor became increasingly segmented into narrow functional roles, and new vocational training and professional schools were created to respond to the need for more focused training within one specialization. The bigger the organizations grew and the more specialized they became, the greater their need for improved communication and information systems. Society needed better and more reliable information to engineer our lives and work.

At the turn of the last century, Braun and Marconi developed wireless telegraphy, which began the transition into the Information Economy. The telegraph would eventually be followed by the calculator, television, computer, and the Internet. We were now in the business of information, and it was the ability to create and manipulate information that ruled the day. The human race had done it again, but this time, we had actually used our minds, rather than our physical abilities, to increase our mental capacity. That is, we had developed ways to externalize and accelerate our mental functions.

With the advent of modern technology, the workforce has begun to change again. We no longer have a single lifetime employer that takes us under its wing for our entire career. The tenure in a given company has dropped precipitously, with the average employee staying at a job for a mere four and a half years.3 Work has become unstable, decreasingly tied to organizational structures, and the market for labor is now global and increasingly virtual. In some ways, we are becoming de facto freelancers, on our own and navigating great uncertainty in every direction.

The instability caused by these major structural changes and magnified by the economic recession brought with it a need to find stability and a future path within ourselves, rather than from an employer. This shift has placed meaning and purpose at the heart of the contemporary workforce—purpose, rather than career longevity, now provides the stability we need. As workplace researchers Paul Hartung and Brian Taber describe, “Rather than fitting self to jobs and readying self to develop a career, workers now must focus increasingly on constructing self in work rather than advancing self in an organization.”

This shift cascades beyond work. The broader instability, combined with globalization and other unsettling changes (including our climate), has prompted us to prioritize purpose in other aspects of our lives as well. It has inspired fundamentalism around the world as people seek new organizations and clear answers to help anchor their lives. And it has inspired the purpose generation, Millennials, who are increasingly constructing their identities around purpose to make sense of the rapidly evolving world and their equally fluctuating role in it.

The Purpose Economy describes the new context and set of ways in which people and organizations are focused on creating value, and it defines the organizing principle for innovation and growth. Each of the three previous economies were unique to the context and set of conditions of the day, all of which served as forces to impact the markets in each economy. The Purpose Economy is defined by the quest for people to have more purpose in their lives. It is an economy where value lies in establishing purpose for employees and customers—through serving needs greater than their own, enabling personal growth, and building community.