Aaron Hurst on the Purpose Economy | Big Think

A year or so ago, I came across my uncle's thesis when he was an economist at Stanford. He coined the term "information economy" and wrote his dissertation on how the economy was shifting from an industrial economy to an information economy. It was fascinating to go through his nine-volume dissertation and start to understand how the economy has evolved over time.

I sort of always assumed the economy was more or less the way it is, but what I came to realize was that we started off as hunters and gatherers, and that's how we were able to survive. Then, we learned how to use the land and animals and to settle down and create an agrarian economy. This lasted thousands of years, but then we turned into an industrial economy.

We started learning how to make machines, and we began to create assembly lines, which radically changed our whole economy, our society, et cetera. What happened in the 1960s was an actual shift; we moved from this industrial economy, where the focus was on how we made things and manufacturing, into this information economy. This is about everything from TV and radio to technology and, eventually, the Internet. It became the dominant part of the economy.

What was interesting in looking at his research was not only had the economy shifted, but each of these economies had gotten shorter and shorter. The agrarian economy lasted thousands of years; the industrial was just a few hundred. It seemed likely that the information economy wouldn't last long and would be much shorter than the industrial economy.

As I looked for indications that the economy was shifting to this information economy, I started to realize there were similar things happening today. There may be signs that the economy's changing again, and we may be entering the fourth economy in our history. A fourth economy based on advances in where we are as a society and what our needs are.

I started looking around, trying to figure out what all these different pieces added up to. Books and articles showing up everywhere discussed sharing and the maker economy—how people are making their own products. People are shopping and doing more around experiences. All these different trends were happening throughout society, and I began drawing all these trends on a whiteboard, showing where they existed and how they connected to each other.

When I took a step back, something emerged: they were all fundamentally about purpose and people's quest for purpose. They were about enhancing relationships, doing something greater than yourself, and personal growth and experience. When looked at in totality, they started to really indicate that we were on the way to our fourth economy.

We are likely to be living in this new economy within the next ten years, as millennials become the majority of our workforce. This economy will make purpose the primary driver of economic output. We're already seeing this in the top innovations coming out of finance, education, healthcare, and retail. All the top innovations are related to this need for purpose.

In the workplace, all the changes we're trying to make—what Google is doing, what top companies are doing—are because the millennial generation is demanding purpose in their work at a level never seen before. That's why I believe we're in the early days of our fourth economy, a purpose economy.

A lot of people ask, "What is the purpose economy?" I think it's something that I'm honestly still continuing to define and understand. Every city I visit, I find new examples. But there are some common threads that bring it together. I think one is community.

With technology and the industrial revolution and cars, we've reached a point where many traditional communities have been pulled apart. A lot of the innovation going into this new economy focuses on getting back to neighborhoods, local businesses, and relating to your neighbors, with schools truly embedded in your neighborhood. It's a much more localized economy.

The second aspect is a move away from consumption to creation and experience. Previous generations were very focused on conspicuous consumption and consumption as a form of entertainment. We're seeing, especially among millennials, a desire to have experiences and a more conspicuous consumption of experiences. There’s an increasing desire to create.

You see things like Etsy or new venues in neighborhoods where you can go in and not just buy things but make things—you can build things yourself. More and more, people are doing this in their homes. There are magazines and websites centered on do-it-yourself projects.

The other major piece is disintermediation. We’ve reached a point where huge organizations have made us far removed from each other in marketplaces. This is seen in finance, where borrowing money used to be from our neighbors but became a complicated algorithm in an anonymous business.

Now, we're starting to see peer-to-peer lending appear again, removing the intermediary. In healthcare, numerous intermediaries have come between the doctor and the patient. Top healthcare providers are now moving towards goals of making sure that medicine resembles what it was like a hundred years ago—where house visits from doctors were the norm.

It’s about removing these intermediaries in institutions and bringing us closer together. These are just some of the trends we see in this new economy.