Purpose-driven Innovation: A New Movement
Have you heard of the quote ‘tech is the answer, but what was the question?’ from Cedric Price. Although from a tech perspective, it’s core meaning can be translated into the entrepreneurial context. We know that innovative entrepreneurship is the way forward, but what is the question it’s trying to answer. What is its purpose?
If innovation is the process of improving an existing reality, or creating a new one, purpose-driven innovation is the idea that we can create this ‘new normal’ thinking about a collective good. That is why now more companies than ever, both large corporates and startups, will start using their purpose to create positive change.
What does a purpose-driven business look like?
Businesses that embrace purpose-driven innovation have a focus on generating social impact. They will be born or reinvented under a socio-conscious capitalist model. This means the goal is not solely financial gain, but also doing good by people. Whether their focus is social or environmental impact, society will be at the core of the business model. This is a trend which has been developing for a few years now. In 2018, in Europe alone, 1 in 4 new start-ups was a social business.
5 characteristics of purpose-driven businesses
1.Not one, two-steps ahead
Not only will these companies embrace digitisation, for example, we have seen online education platforms explode as a result of Covid-19, but there will also be a focus on morale, productivity and mental health. Alongside the expansion of digital, there will be a new understanding of the importance of emotional intelligence.
Hundreds of thousands of jobs will be lost within and after the crisis. And with this in mind, saving the economy will not only be seen from a merge and acquisition point of view but from a partnership model. Partnership models can increase skills, experience and contacts, leading to more meaningful collaborations and increased social impact.
Think glocal. Entrepreneurs will start at a local level, but will maintain a global mentality, expanding to the community world-wide, in terms of both sustainability and social impact.
4.A purpose-driven team
Successful entrepreneurs will surround themselves with a team who believe in the company’s purpose. Studies show that employees that have a strong connection to that purpose are more likely to stay with the company in the long run and feel more fulfilled professionally.
Price will no longer be such a strong decision making factor when purchasing a product or service. Instead, customers will look to buy products that also have a positive impact on people or the environment. So, purpose-driven companies will recognise this and incorporate it into their business models.
3 trends we’re already seeing
The revolution has already started. Here are three trends booming as a result of purpose-driven innovation.
Inclusivity is intrinsically connected to solidarity. Entrepreneurs are starting to notice the gap between their direct impact and that of broader scale society and opting to consider both. Focusing on real and meaningful pains of their direct community of consumers, employees and stakeholders. Understanding the importance of collective well-being and never losing focus on vulnerable groups facing marginalisation.
Examples: Bizgees who are transforming refugees into entrepreneurs using fintech and Mogl a startup who has developed a loyalty scheme to support local restaurant owners whilst being on a mission to solve hunger within the local community.
2.Sustainability is not ‘trendy’ anymore
Sustainability is not ‘trendy’ anymore, it’s a must. With the world facing the climate change crisis, purpose innovation driven companies are considering it their responsibility to authentically build sustainability into their business model.
Examples: startup EKOMODO currently participating in Mondragon Team Academy’s ‘Up and Fly’ program in collaboration with Bridge for Billions, is recycling over 5 million plastic bottles a day and using them to create sustinable products. Whilst RecirCup,an integrated tech solution (IoT + Cloud), is encouraging collaborative recycling, driving circular economy, and promoting sustainable consumption.
The online space is developing faster than ever as digitisation of platforms increases. This has left consumers asking what happens to my own data and where can I go to find data I can trust.
Example: Bridge alumni startup Eirene is providing organizations with reliable data associated with impact risk on a global level and Right of Reply, a London based startup which aims to combat fakenews. Another great example is Bridge alumni HumanITcare, providing reliable healthcare data in real-time.
So, what does the future look like?
A future with purpose-driven innovation is more focused on collective values. It overcomes barriers: there’s less talk of North or South, developed or undeveloped and more talk of the earth as a shared space and an understanding of the responsibility we have to protect it. A place where we create a ‘new normal’ through solidarity and joint purpose.