The issue: The uptake of new economic metrics and models could provide many benefits in terms of sustainability and social justice. But if this uptake is uneven, key economic players may find effective coordination difficult.
As interest grows in alternative economic metrics such as the Happiness Index, the economic calculations and priorities of individuals, firms, and governments might shift.
New economic metrics such as the Happiness Index, and new models such as the zero-growth economy are becoming more mainstream. On the positive side, this could drive changes in consumption and investment habits that enhance sustainability and social justice. Improvements in employment equity, working conditions, and work-life balance could follow. So could an ethic of conscientious consumption that boosts sustainable and ethical businesses, leads people to embrace long-term thinking, or encourages them to prefer digital goods over material ones. On the downside, an uneven uptake of these new paradigms could introduce confusion by disrupting the shared frameworks that have supported economic planning and cooperation domestically and internationally. Similarly, major changes in the economic behaviour of individuals following the adoption of these new models could have a range of negative consequences. For instance, widespread rejection of material goods and real-life experiences in favour of digital alternatives could spark massive contractions in the manufacturing, transportation, tourism, and retail sectors.
Metaverses may drive growth as they become more popular sites of economic activity; but other economic sectors could suffer, as could governments’ ability to tax certain kinds of assets.
Shifts in recreational spending from “real” to digital spaces have been clear for some time. Video game platforms are branching out into other forms of entertainment such as movies and concerts. A similar shift in investment from real to digital assets is also underway, as seen in the widely publicized digital art and virtual real estate booms and busts. These patterns could accelerate as people spend more time in metaverses. As a result, these spaces could soon become major engines of growth. But they could also divert a lot of capital from the “real-world” economy—with implications for numerous sectors. The real estate market, which is increasingly out of reach for many people in Canada, could be especially hard hit. If a large number of people turn to digital real estate as an alternative, the value of physical real estate could decline, and with it the wealth of many households. Moreover, if these metaverses are foreign controlled, they may not be subject to tax treaties or financial regulation.