Rethink the Growth Imperative

Questioning the idea that businesses must continually grow can expose new paths to resilience and sustainability.

- By Andrew J. Hoffman

KARL-JOHAN PERRSON, THE chairman and former CEO of H&M, once asked, “What would it mean if we all consumed 20% less? I believe it would be catastrophic. It would mean 20% less jobs, 20% less taxes, 20% less money for schools, doctors, roads. The global economy would collapse. I’m firmly convinced that growth has made the world a better place today than it was 20 years ago. And it will be better in 20 years than it is today.”

Is this true? If it is, we face what writer J.B. Mac-Kinnon calls the “consumer’s dilemma.” In his book The Day the World Stops Shopping, he writes that “the planet says we consume too much: In North America, we burn the earth’s resources at a rate five times faster than they can regenerate. And despite our efforts to ‘green’ our consumption — by recycling, increasing energy efficiency, or using solar power — we have yet to see a decline in global carbon emissions. The economy says we must always consume more [but] ... the 21st century has brought a critical dilemma into sharp relief: We must stop shopping.”

The rub is that business education is predicated on a belief that the economy can and must continue to grow — a belief that manifests in corporate strategy as an imperative that companies, too, must continually grow or risk becoming irrelevant. The problem is that perpetual economic growth is not possible, and the shibboleth that growth is essential for human flourishing creates a trap that many see no way out of. Paul Farrell writes in The Wall Street Journal that “we are addicted to the myth of perpetual economic growth” and it is “killing America.” We must begin to teach about limits to growth and different kinds of growth.

Limits to Growth