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American capitalism poised for evolution

December 03, 2020
By: Kevin Michel

For many innovators, entrepreneurs, investors, and corporations, American capitalism has been a boon. But there is another side to the story. A recent report published by McKinsey & Company questions whether the American model of capitalism is on the brink of change. The report details the unequal and disparate economic outcomes of the current model of capitalism in the U.S., which has been compounded by the effects of the COVID-19 pandemic. Current challenges to capitalism include the potential for market disruption triggered by climate change and the rise of countries with other economic systems like China.

A change to the American model would not be new, the report points out. Time and time again, American capitalism has evolved to adapt to economic conditions around the world. While the American model of capitalism possesses the capacity to change, how it will evolve is another question. How to ensure capitalism is inclusive, how to evolve market mechanisms, where to apply them, and the role of corporations in the 21st century in addressing societal challenges are some of the defining questions for American capitalism, the report notes.

There have been indications of the role innovation will play in reshaping American capitalism. In particular, the science community’s response to the COVID-19 pandemic has led to a flurry of advances in biological science, automation, and artificial intelligence. Harnessing these sorts of innovations for societal benefit and the interactions of business leaders, policy makers, social institutions, and individuals will all play a role in shaping the evolution of American capitalism in the future.