Why growth matters
It’s not always popular to say you believe in growth. Environmental and social activists have rightly called into question the desirability of pursuing economic growth at all costs, while others have pointed out that raising GDP is a poor policy objective, because it fails to account for social inequality or quality of life.
Individual businesses face a concurrent critique over claims that rapid scaling frequently hollows out labour markets, reduces competition and over-concentrates wealth. Yet only seeing the negatives misses the big picture.
Since 1770, global life expectancy has risen from 29 to 70 years. Since 1990, the proportion of people in developing regions living in extreme poverty – less than $1.25 a day – has fallen from around 50% to 14%.
Economic growth has powered a radical improvement in the quality of life for billions of people, and remains the engine of progress and common prosperity. Not least at a time when living standards are falling, we abandon its pursuit at our peril.
This does not mean we have to accept that all growth is good. Some companies expand through the exploitation of people and finite resources, and whilst they might see ephemeral gains, their days could be numbered: surely society will not extend the licence to operate to such businesses whilst the median standard of living stagnates and the climate heats to dangerous levels?
The good news is that good growth – growth that is profitable (and ultimately profit is required), ethical, sustainable and socially conscious – is possible, and we see it all around us.
It is a model rooted in enlightened self-interest. It enriches society as well as the business and its owners and investors – providing good jobs, funding vital public services and creating the dynamism to solve major problems like climate change and poverty.
It is a model of growth based on doing better, not just using more. It recognises that lasting success is to be found in shared value, strengthening labour markets, communities and local economies rather than exploiting them. A capitalist model of enlightened self-interest is one that we can proudly say we believe in.
Companies and the leaders of companies are at the very heart of this, because good growth is an active choice. When faced with hard economic times, when there is a risk that ethical considerations give way to survival instinct, this is doubly important.
As our recent Growth Index shows, doing good business and doing business well often go hand in hand – we note that many of the firms listed among the UK’s fastest-growing over the turbulent Covid years exemplify and/or aspire to a socially conscious, sustainable approach.
We hope and expect that this is a trend that will continue.