Tuesday, June 24, 2014

Radical Economics : Business in a non-growth world

     The big picture of the ever expanding population, the climate change, the shortage of water, the ever increasing solid waste problem, and the limits of the earth size makes for incredible problems for those who spend time thinking about them.
      There have been a few efforts to get our attention and works like "Small is Beautiful" have pushed the idea  of living and having smaller things.  But the radical reality for all business, cities, countries and economies is that we are going to have to stop the constant and demanding pressure to grow larger.  Businesses, cities, economies of nations are going to have to start pushing for this years business to be less than last years. That this years sales are equal to or less than last years sales. That the population of our community is 2 % smaller now than it was five years ago.  Henderson, where I live, is dealing with a community whose population is stagnant and there is no growth.  This world cannot survive if population growth continues, there will not be water enough, there will not be enough of anything for India and China and Japan and Africa to become roaring economies like the USA and Europe.
       The standard for business leaders will be how to manage a company that is not focused on growth. In Vance County we have had a number of companies close their stores because the growth in our outlets did not meet the corporate goals of a certain level of growth.  But they were profitable and people were working in them. They were just doing the same level of business year in and year out.  That will have to become the new target. How to maintain a business without focusing on growing the business.  Or even better if we can begin to lower the population and reduce the demands on the earth, it may be that businesses will have to focus on how to remain profitable in a steady decline of sales.
        The idea that there will be constant growth and that there will never be a time or a place where there is an end to that growth is delusional.   It seems to me from what I read that Business leaders in graduate school need to start thinking about how to teach new leaders to manage companies in a non-growth manner.

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