What is Flywheel Economics? 

The concept of the flywheel, a large wheel that gains momentum with initial effort, is well-established in both automotive engineering and business. Flywheel Economics applies this idea to economies. The goal is to get economies into a self-sustaining state of growth and improved livelihoods, achieved through a small initial effort and sustainable practices. Flywheel Economics will explore real-world examples where this flywheel effect is present, asking “how” and “why” it happened, and how these lessons can be applied elsewhere. 

The company Uber is a prime example of the flywheel effect at work. When they began, the company needed to be convenient for customers and have available drivers, but without sufficient numbers of customers it wasn’t viable for drivers to join the platform.  To get that initial momentum going, they paid drivers to be in key locations that would be convenient for customers. Eventually, as it was convenient, customers joined the platform and with the initial effort, Uber was able to get into a flywheel effect with more customers and more drivers joining.

In nature, we also see the flywheel effect at work through ecosystems that have self-supporting elements.  

Why Flywheel Economics? 

Richard Ough, an economist with experience working for governments and intergovernmental organisations, observed a common issue: economic policy makers often struggle to see economies as ecosystems. They view them as linear systems which the policy maker can design straight into. However, Ough’s experience suggests economies behave more like natural ecosystems, resisting overly controlled approaches. Flywheel Economics was motivated by a desire to understand the difference between successful and unsuccessful economic policies. Inspired by observing the interactions within a natural ecosystem in his garden, Ough realised that policymakers should act more like gardeners, nurturing existing growth potential within the economic system, rather than architects imposing grand designs. 

What does Flywheel Economics hope to accomplish? 

Traditional economic principles are valid but can be limited in considering the bigger picture of the interconnectedness of our economies. It is important that a wider approach be taken. 

Flywheel Economics is not just setting-out its principles but also helping people to understand what these principles could look like in practice. Flywheel Economics will develop a practical tool kit with an active and engaged community to help strengthen a sustainable and beneficial approach to economic policy making. Improving prospects for communities, livelihoods and the environment.  

The approach will use real life case studies ranging from the organically formed Yaba tech cluster in Lagos, Nigeria to how businesses in Sialkot, Pakistan through a public-private partnership built an airport that helped establish Sialkot as a football manufacturing hub. 

We believe the more we can dissect these examples, the more we can bring out practical approaches that can be adopted in other regions and sectors. Eventually, we hope to have an established toolkit that can be used by practitioners. 

Conclusion 

What is the Flywheel Economy? At its core, it means treating economies as ecosystems. But for us, it is beyond a slogan, it’s about helping the world build a more resilient economy for all countries of the world. 

Flywheel Economics offers a new perspective on economic development and aims to shift the economic policy mindset to nurturing the natural growth potential within an economy.