Growth. Business demands it. Consultants promise it. GDP growth, productivity growth, sales growth. Where would we be without it? That question hit me when I read a recent pronouncement from global business consultancy, McKinsey.
On the surface, you could map their ideas on ours.
We say PEOPLE – PLANET – PROFIT. They write about INCLUSION – SUSTAINABILITY – GROWTH
Let’s see what McKinsey means by each of these words.
- Inclusion = the opportunity for productive work and life satisfaction for all citizens
- Sustainability = a future in which we do not deplete the planet’s resources past breaking point
- Growth = (not really defined by McKinsey but by implication) the means to prosperity
Their circular thesis is that each of these elements is interdependent and has both positive and negative impacts on the others.
- Without inclusion, how will we secure the demand that propels growth?
- Without sustainability, how can we have a long-term, tenable view on growth for this generation and the next?
- If we don’t have growth, how will we achieve prosperity, well-being and pay for the transitions needed for a sustainable and inclusive global economy?
The ethical dilemma starts from the basis that INCLUSION is a good thing. How do we meet the demands for inclusion in a sustainable way? McKinsey’s solution is through growth which pays for it.
What sort of economic growth do we want?
Demanding more and more is generally seen as a completely unsustainable way forward for the environment, but also for economies, leading to boom and bust.
Additionally, is this growth to be equal around the world or should some parts grow while others stabilise? I mean, if inclusion means prosperity, then the developing world demands growth – end to hunger, more money in people’s pockets so they can buy stuff, get education, etc. Raising income levels is the best way to get a more stable society.
But if that growth is to be sustainable, do richer nations need to take a back seat, have less growth, buy less stuff and see a fall in demand? Something like that was the plea of those developing nations who fear their voices were not heard at COP26. They ask developed nations to cut back on activity and hence emissions, but their own people want, indeed need, more growth and a share of what the west has already benefited from – cheap, reliable power and water, consumer electronics, food choices, good healthcare and education, and so forth.
Is the developed world ready for that? The Capitol riots, gilets jaunes and levelling up suggest not.
On the other hand, if current inequalities persist, the lack of inclusion will likely lead to more mass migration as people try to flee both poverty and increasingly unsurvivable environmental conditions.
In her book Doughnut Economics, economist Kate Raworth writes that we need to be agnostic about growth. She recognises the paradox: “No country has ever ended human deprivation without a growing economy. And no country has ever ended ecological deprivation with one.”
Can we design a human economy which promotes human prosperity whatever the stage of its GDP?
The pursuit of Enough
Growth takes many different forms. In The Hungry Spirit, Charles Handy writes, “Growth does not have to mean more of the same. It can mean better rather than bigger. It can mean leaner or deeper, both of which might improve rather than expand the current position.”
Handy’s entire book is a hymn to the philosophy of ‘enough’. Enough. Maybe growth is the pursuit of enough for all?
I remain struck by a line in Raworth’s book which says that hunger could be solved using just 10% of the food which is currently wasted. That may be an over-estimate but the World Food Programme says that the food produced but never eaten would feed two billion people – twice the number of undernourished people there are in the world.
Now I have hit 60, I see friends retiring and devoting some of their time to passing on the skills they have acquired. They receive their reward through the pleasure of mentoring, through the satisfaction of seeing their successors fly or younger people establish new businesses.
Economies could take a similar role. As developed nations seek to ease back on consumption and recognise that maintaining their standard of living is ‘enough’, can they find satisfaction in helping less well-developed neighbours thrive? Not as empire builders or colonialists, and certainly not out of a sense of paternalism, but out of fairness. To embed those low carbon technologies we need to unlock the wealth that is still tied up to a massive extent in property assets and invest in green growth.
And to do this while we recognise and address deprivation and inequality in our own society. For example, businesses like Tesco and NatWest have come together with DEFRA to build electric vehicle charging infrastructure across the UK. Let’s extend that collaborative mentality across the world.
People expect business to lead
The issue with my theory is, of course, trust. We have lost it to such a degree by our shameful behaviour over centuries. Ripping the economic and cultural heart out of nations. Dominating and enslaving the people we met on our travels. Why would others trust us now?
The Chinese ‘Belt and Road’ initiative seems like just more colonialism, only dressed up rather differently from the military conquests of the past. Mortgaging your country’s assets for the sake of investment does not strike me as a wise thing to do. It is certainly not a charitable thing to demand.
Can growth look different? As a rule, we feel more than ever that we are being lied to by our leaders. The most recent Edelman Trust Barometer survey shows that all stakeholders hold business accountable for their beliefs and values. There is a growing expectation that business and NGOs must act as stabilising forces because government and media are seen as neither competent or ethical.
Which seems to indicate that inclusion and sustainability might best be served if growth were judged as an increase in competent and ethical actions to show more leadership on society’s issues. Is business up to the challenge? We will see.