Clegg said employees needed to be enfranchised by being given a stake in their company. He was speaking at an event at Mansion House, which was hosted by liberal think tank Centre Forum.
He said: "We don’t believe our problem is too much capitalism – we think it's that too few people have capital. We need more individuals to have a real stake in their firms. More of a John Lewis economy, if you like."
Clegg claimed the coalition Government would work with businesses to make sure incentives were provided to allow firms to follow the John Lewis model, in which the business is owned by a trust that distributes profits back to its employees.
The Government will consider cutting red tape and look at providing tax breaks in order to allow the John Lewis business model to flourish.
Clegg's speech has been welcomed by John Lewis Partnership chairman Charlie Mayfield, who believes the policy of giving employees a stake in the company should be actively encouraged.
Mayfield said: "We have learnt from its application in Waitrose and John Lewis shops that employee ownership can also help fulfil the increasing desire we have for more influence in our work, so as to unleash our potential and productivity.
"That is why we support the Employee Ownership Association's call to Government in providing incentives and removing barriers to the growth of the sector."
Follow Matthew Chapman at @mattchapmanUK