The new economy is about unlimited opportunity, democracy in the workplace, and a commitment to link financial rewards to individual contribution and effort.
Increasingly, though, the new economy is also about economic inequality, rampant opportunism in the marketplace, and a troubling disconnect between unreal financial rewards and any individual’s real contribution and effort.
The promise of the new economy speaks to our fundamental sense of economic fairness, social equity, and personal freedom. But there is also a danger underlying the new economy: Excess and exploitation can undermine even the most robust period of economic growth and wealth creation.
What will the impact of the new economy ultimately be? Will it come to represent a better, smarter, fairer, and more humane version of democratic capitalism? Will it create opportunity for people who were previously unable to participate in our economic life? Will companies be built to last and built to work — or will we be satisfied with companies that are built to flip? More to the point, what responsibility do those who are flourishing in the new economy have toward those who are not? What can we do, what should we do, to ensure that the promise of the new economy will be kept — and that the danger of the new economy will be averted?
There are some hopeful signs. Men and women throughout the country — entrepreneurs and venture capitalists, wealth creators and investors — are coming to see that the future of the new economy depends on finding ways to share wealth, to extend the benefits of financial success, and to promote a sense of equal opportunity. And many of those people are realizing that they don’t need to wait for their millions to come in before they act on that imperative. Here are a few noteworthy examples.
The Austin Entrepreneurs Foundation, in Austin, Texas, has received pledges of pre-IPO stock from several local companies, with the understanding that the money will go toward community-oriented purposes. As of January, eight Austin-area companies had made such pledges.
The Entrepreneurs’ Foundation, in Menlo Park, California, has 61 member companies that have each donated roughly $100,000 worth of stock for the purpose of addressing the needs of people in their community. (The value of each donation is based on a company’s most recent round of venture financing.) As of January, 8 of the 61 companies had gone public.
Mayfield Fund, a venture-capital firm located in Menlo Park, California, often donates a portion of its post-IPO gains to local nonprofit organizations. (Last year, six of its portfolio companies went public, and it donated $500,000 of the resulting profits to 14 community organizations.)
The Triangle Community Foundation, in Research Triangle Park, North Carolina, has enlisted 43 entrepreneurs (representing 25 companies) to commit $10,000 or more in stock to the cause of addressing community needs.
This list is far from exhaustive — yet it is suggestive of an important trend: Across the country, entrepreneurs, leaders of startups, and