Road to recovery: digital living in the doughnut economy

Amid the pandemic, companies and individuals alike are embracing digital services as never before. Can a doughnut economy model support a more equitable recovery?

In recent months, most of the world has implemented social distancing measures that have the effect of accelerating the digitalisation of our daily activities. As our ability to move from one place to another is restricted, we find ourselves relying even more on digital devices, such as smartphones, TVs, laptops, tablets, smart speakers and smart watches. Social distancing is widening and deepening our embrace of digital living.

Before the Covid-19 pandemic, some companies were still reluctant to allow employees to work remotely or have flexible working hours. Now, most companies are willing to support employees to work regularly from home and provide flexible hours so that they can care of children who are not yet able to return to school. Microsoft trialled a four-day working week last year in Japan which was judged to be successful in terms of employee feedback and productivity.

Reductions in office space?

In the medium term, there are cost savings to be made from reductions in office space, and the switch to home working is likely to improve the work-life balance for many people. There are some employers who want to go even further and follow Twitter in making work from home as a permanent option. It’s hardly fantasy to think that our future work environment is going be very different as a result of these changes and that buildings with thousands of workers might become a thing of the past.

Employees can reduce their commuting time and spend more time with their families, which includes older family members as well as children. And as we know, more contact between younger and older generations improves well-being and mental health for both young and old.

Massive boost to online

The closure of many shops, restaurants, bars, cinemas, fitness centres and football stadiums has given a massive boost to online shopping and entertainment. Older generations are following in the footsteps of Generation Z by increasingly adapting their retail behaviour to an environment shaped by e-commerce. Digital beauty and contact-less self-care are replacing traditional beauty stands in department stores, shopping malls and wellness centres.

Online movies, gaming and e-sport have also experienced explosive growth. In April, Airbnb started to offer its customers virtual travel experiences which include a range of interactive activities that mimic some of the things that tourists seek out.  Meanwhile, policymakers are accelerating the implementation of telemedicine, which is predicted to grow exponentially.

‘The restrictions of movements reduce the pressure to our planet…’

The restrictions of movements not only channel people into digital living but also reduce the pressure to our planet. Air pollution and CO2 emission have significantly dropped, and nature has returned to urban environment. Many people are hopeful that post Covid-19 recovery will provide opportunities to design new communities and build more sustainable ecosystems. It might even help lever reductions in inequalities.

The model of a doughnut economy has attracted many think tanks and policy makers to construct new kinds of roadmaps for recovery. The idea is to move towards an economic system which would be more sensitive to ecological constraints while doing better at satisfying everyone’s essential needs. There would be more redistribution and more regeneration.  As the right kind of  constraints are good for innovations, we might hope that this new economic model would nurture rather dampen innovation.

Of course, we can see some challenges for these substantial social transformations. Change – especially if it is rapid change – won’t be easy, and some aspects of it may well be harder for the older population. The big international management consultancies and business schools are mapping out some of the adaptive changes that will be needed to make the desired transformations work. There are now various tools available, such as inclusive design for digital devices and digital communities, that can facilitate a smoother transition.

Digital trade wars

Digital space, moreover, is becoming the centre of international competition. US and China have escalated the trade war, especially in the high-tech areas across semiconductors sectors, 5G networks and digital platforms. More and more countries also recognise the need to secure the data and the value chains they have created in localised regions. If countries can balance collaboration and competition, more localised digital infrastructures can actually be more energy efficient and more people can enjoy the benefits of innovations. On the other hand, high hostility and lack of trust between countries can potentially lead to economic turbulence and slow down technology innovations.

We should also bear in mind the warnings that have been issued by some thinktanks on the negative impact of previous pandemics on income inequality. It has become a commonplace to see the growth of the digital economy as a driver of inequality. If businesses and policy makers cannot find ways to share the economics benefits more evenly, we might see more social unrest, political turmoil and weakening of democracy in the new digital living era.

‘It has become commonplace to see the digital economy as a driver of inequality…’

Digital living is already here, and it is being embraced by businesses, communities and individuals in most parts of the globe. There is good reason to think that the widening and deepening of our adoption of digital living could help smooth the path towards a more sustainable global economy model.

At the same time, we need to overcome some challenges to make the transition smoothly, and we need to think hard about how to ensure that digital living does not exclude older people but can work effectively to enhance their wellbeing. Innovation, collaboration and the doughnut economy model might just help us to build the thriving societies for this and future generations.

Luc Yao is a Visiting Fellow at the Oxford Institute of Population Ageing (OIPA), Oxford University. Luc is based in Darmstadt, Germany, and is responsible for a number of innovation projects at Merck, a leading science and technology company in healthcare, life science and performance materials. This article was first published as an OIPA Blog.
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