Growth! Growth! Growth!
Chris Croft
★ Writer and Keynote Speaker, Project Management and Time Management, Negotiation Skills ~ UK-based. Top 10 video trainer in the world - LinkedIn Learning and Udemy.
Growth Growth Growth – it’s the UK government’s “big idea”, the only way to balance the books and be able to afford all the extra spending that we need to fix everything and pay everyone what they want.
But is growth a good idea? And is it possible in the long term? Are we just squeezing out a bit more from a dying strategy?
Gone are the days when we (by which I mean mostly Europe and the USA) can make more and more stuff and sell it to the rest of the world. Everyone else is making their OWN stuff now - often better and cheaper than we can make it. And we can’t ALL grow, unless we fill the planet up with stuff.
Even carrying on as we are, without growing compared to last year, means filling the planet up with stuff that it really doesn’t need (much as I love my crocs and my iPhone 14). At some point all this growth will HAVE stop, ideally the sooner the better, and really we should be thinking NOW about how this might work.
On an individual level we could maybe just be happy staying as we are, as we were last year - ?? But what about the economy…. If companies aren't growing what happens to their share price? Will anybody invest in shares that don’t go up in value? Is making profit enough, do we have to get bigger as well? I’m not an economist so I don't know, but I would LIKE to know.
Thoughts anyone??
P.S. This is my personal view of the history of growth
Phase 1 - we sell loads to everyone else, we are the only people who can make it. This is easy! We can keep growing doing more and more of this! Population growth helps it even more.
Phase 2 - when phase 1 runs out: Sell to third world who still haven't caught up. Prices are lower selling to them but it's OK. (I remember when cigarettes were like this, unfortunately).
Buy components very cheaply from 3rd world, and sell complex things back to third world - a good markup! Cars were like this until recently.
("Oh dear": They start to catch us up on skill and quality)
4. Phase 4: we're all doing it: Every country makes more and more stuff including us - "fill the world up with stuff!"
5. The world is saturated with existing things like cars, but it's still OK because we can: Keep filling the world with NEW things to make - for example eScooters, EVs, virtual reality headsets, and crocs.
6. Things are now getting tight! - all the other countries are all making their own stuff, and usually more cheaply than us - just a few specialised niches left for us. Population growth across most of the world is slowing down which is making it even more difficult for us to grow our economy.
7. Nothing left for us to do. We are importing everything since it's cheaper (e.g. this has already happened to our coal industry, and our computer chip factories. Everything else will follow).
I think the UK is between numbers 5 and 6 for most things and already at 7 for some. No wonder we don't have as much money as we used to!
At the very least we need to learn to live without growth, just exist happily at a steady state, without regarding that as a failure.
The above is being mirrored by the slowing growth of the population. In many countries the population is now reducing. Clearly it couldn’t go on for ever, so this is good news for the planet, but not for the growth – merchants. Fewer consumers, fewer people to sell to…
On top of this, there's the question of A.I., which could reduce significantly the number of jobs. Output still might be okay, but what about distribution of wealth?? But I guess that’s a whole other subject.
The first question is: can we live without growth??
CC
★ Writer and Keynote Speaker, Project Management and Time Management, Negotiation Skills ~ UK-based. Top 10 video trainer in the world - LinkedIn Learning and Udemy.
6moChris Watson
Procurement Executive - Certified Purchasing and Supply Chain Manager, CPSCM.
6moGreat topic, Chris. "Faster, cheaper, better" has been the motto of every sensible government and corporation around the globe. It doesn't mean that for one person to gain, another must lose. Concerns about fair trade, decent working conditions, and the environment - to name the obvious ones - are growing as consumers become more aware and informed about what it takes to make the goods they buy (remember when Foxconn made headlines?). Since Adam Smith, we have discussed that work is one of the best ways to distribute wealth. To that end, governments must encourage entrepreneurship and competitiveness, reduce bureaucracy, and optimize the functions, size, and therefore the burden of the state. People are motivated by positive emotions. Not negative ones. Look at the electric car boom. Before Tesla, electric cars were boring. Tesla proved that EVs can be fun to drive. Now we even have EVs on the racetrack (Formula E)! I'm no economist, but it seems obvious that the focus needs to be on giving people benefits, not punishments. Carrots, not sticks. But governments love to create new taxes and fees to "motivate" citizens to use public transportation, for example. It needs to be better, not more expensive, to take the bus or the tube.
Helping business leaders accomplish the extraordinary.
6moCan we live without growth? A question which is not often posed but nonetheless worth considering. On an individual business level, not growing the top line (income) could amount to a business exit strategy. Expenditure tends to grow through inflationary pressures, so margins get squeezed. Efficiency improvements can stave off margin decline but probably not indefinitely. So if a business wants to stick around, that does mean it needs some growth. Perhaps another question to consider is 'what level of growth is appropriate?' There are businesses who are quite happy growing organically as being bigger does not necessarily equate to being better, and brings new challenges.
Leading and supporting the smooth implementation of MSP and RPO contracts across all industry sectors
6moThis is such a great subject to raise Chris Croft. The amount of 'stuff' being produced and the impact of over consumption on the planet should be central to growth plans. Climate change seems to have dropped down the agenda more recently. But there are such positive stories - Im thinking of the Earthshot prize and the smart people creating products that reduce our carbon footprint and help those in countries where climate impact is most deeply felt. Plenty of opportunities for growth here!
Fractional CTO/CDO | Innovation Expert (EIC, Eureka) | Startup Mentor | Deep Tech Strategist | Board-Ready Technologist
6moThere's a Postgrowth movement as well (not the same as Degrowth), which basically posits that 'profit extraction' should be avoided, while generating profit (revenue above costs) for the purposes of re-investing into a venture is of course good. This should limit taking profit out of the system for the purposes of wealth accumulation, driving wealth inequality and relentless 'need for growth'. Melanie Rieback is a great proponent of this concept as is her Nonprofit Ventures incubator