You might have heard of economic growth measured by GDP, stock indexes, or trade volumes. Each of these highlights certain aspects of prosperity but overlooks many others. Kate Raworth’s Doughnut Economics offers a different lens—one placing human wellbeing and ecological boundaries at the center. Picture a circular band—a “doughnut”—that marks the outer edge of environmental limits and an inner edge representing life’s essentials. In this post, we’ll explore this framework and what it means for society and business.
The Doughnut Explained
Kate Raworth, an Oxford economist, introduced the concept in her book Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist (2017). She visualizes a doughnut shape with:
- Inner Circle (Social Foundation): Food, water, healthcare, education, and income. These are fundamental human rights that must be met.
- Outer Circle (Ecological Ceiling): Climate change, biodiversity loss, ocean acidification, and pollution. Crossing these edges harms the planet and endangers future generations.
The goal is to live in the safe and just space between these boundaries—securing everyone’s basic needs without overshooting the earth’s limits.
Why It Matters
Traditional economic models often chase perpetual growth. That works until natural resources become strained. Doughnut Economics reframes the question: How can we thrive while respecting the planet’s boundaries? This perspective brings three key insights:
- Focus on Wellbeing: Growth alone doesn’t solve housing shortages, wage gaps, or mental health issues. The Doughnut places daily wellbeing and equity at the forefront.
- Collaborative Systems Thinking: Climate change, resource depletion, and social inequality are interconnected. Visualizing them in one model helps policymakers see the big picture.
- Resilience Over Growth: Instead of expanding endlessly, economies adapt to natural rhythms and focus on resilience in production, distribution, and governance.
Amsterdam’s Take
Amsterdam offers a notable example. In 2020, the city partnered with Kate Raworth’s Doughnut Economics Action Lab to shape its post-pandemic blueprint. Officials wanted to address housing affordability, equitable healthcare access, and carbon reduction.
A practical story centers on a neighborhood pilot: stakeholders evaluated building renovations for cost-effectiveness, energy use, community spaces, and local job creation. By measuring success from multiple angles, the pilot reported tangible carbon cuts—and a surprising rise in neighborly connections. Residents frequently commented on feeling safer, more included, and more engaged with civic life.
Applying the Framework to Organizations
Private and public sectors alike have adopted Doughnut thinking in various ways:
- Sustainable Supply Chains: Firms reduce waste, address emissions, and ensure ethical labor practices. These steps meet both ecological limits and social foundations.
- Circular Product Design: Products are designed to be reused or repaired, reducing the need for constant raw material extraction.
- Transparent Metrics: Rather than treating CO₂ output or worker wellbeing as afterthoughts, companies integrate these measures into everyday decisions—helping them see broader impacts.
Critiques and Challenges
Skeptics worry that turning away from GDP-led systems could slow innovation or reduce competition. Some say the Doughnut lacks strict policy enforcement mechanisms. Still, the framework doesn’t claim to be a fully codified solution—its strength lies in rethinking priorities. Early adopters in places like Cornwall, the city of Copenhagen, and other pilot regions are actively testing Doughnut-inspired policies, hoping to refine best practices along the way.
Further Readings and References
- Raworth, K. (2017). Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist. Random House.
- Doughnut Economics Action Lab: https://www.doughnuteconomics.org/
- Sharpe, E. (2020). “Amsterdam’s Post-Pandemic Vision Based on Doughnut Economics” in The Guardian.
- Raworth, K. (2018). TED Talk: “A Healthy Economy Should Be Designed to Thrive, Not Grow.”
Doughnut Economics is about shifting priorities. Instead of measuring success purely by GDP, it nudges us to consider whether we are meeting everyone’s needs and respecting ecological boundaries. It’s a blueprint for tackling planetary challenges—one city, one neighborhood, or one organization at a time.
