Poverty and the New Economy
Despite periods of robust economic growth over the past two decades, the share of low-paying jobs in the Canadian economy has risen steadily. This has led to increasing concern about the quality of employment in Canada as wage growth has not kept pace with productivity increases, and informal employment arrangements are increasingly the norm. These trends are contributing to growing income inequality between the upper and lower ends of the income spectrum. More importantly, disparities are growing between population groups such as recent immigrants, indigenous persons, persons with disabilities, women and youth who experience persistent un / under-employment and poverty.
In light of these trends, there is some optimism for the emergence of a new economy where new inclusive business practices or forms of economic activity generate quality employment that provide greater opportunity for those at the margins of society. This emerging new economy has 3 important streams:
Shared value
The shared value approach to business focusses on the importance of traditional business generating social (community) value as well shareholder value. This is accomplished through inclusive business practices such as social / ethical procurement, living wage policies, diversity-focused human resource practices, etc… This includes the emergence of the B-Corporation which provides certification of adherence to strict social and environmental standards.
Social enterprise
Social enterprise includes both for-profit social purpose businesses and non-profit entrepreneurial activities that create quality employment that contributes to reducing poverty and inequality. Cooperative enterprises, including worker cooperatives, are also included in the social enterprise universe and can be powerful engines for poverty reduction.
Sharing economy
The sharing economy includes sharing enterprises in the formal economy as well as informal economic activities that may or may not generate monetary income but provide material benefit, particularly for those at the margins of the economy and society. Examples of informal activities include tool libraries or the development of local currencies or barter systems.
While knowledge is emerging in these inter-related fields, there is little synthesis of such knowledge, particularly in Canada. Neither is there a coherent understanding of the concepts or a clear strategy to mobilize the emerging knowledge in public or private policy or practice. Further, there is little understanding of the potential impact of such practice on poverty reduction.
To understand the potential impact of the new economy on poverty reduction, the Canadian Poverty Institute is undertaking a review of the adoption of inclusive business practices and emerging economic business models in Ontario. The purpose of this research is to address the following questions:
What is the state of understanding of the new economy and how are these concepts being operationalized in Ontario and across Canada?
Who are the key stakeholders engaged in knowledge development and practice in the new economy in Ontario and across Canada?
What is the emerging policy agenda at the federal and provincial government and corporate level?
What is the potential impact of these emerging practices for poverty reduction in Ontario and elsewhere?
Read the project final report.
NEXT STEPS
Following the release of the final report, a Steering Committee has been working on the establishment of the New Economy Roundtable, a network of public, private and non-profit stakeholders dedicated to bridging the gap between research and practice in order to increase the adoption of inclusive business practices that will create better quality employment for equity seeking communities.
This project has been made possible by the generous support of the Ontario Trillium Foundation and the McConnell Foundation.
For more information, email povertyinstitute@ambrose.edu.