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Is exponential growth a good idea?

Updated: Nov 25, 2022

In the previous post, I mentioned pandemics as a typical example of a phenomenon showing exponential behaviour. The monetary value of final goods and services produced yearly on our planet, the World's Gross Domestic Product (GDP), also displays exponential behaviour. The figure to the right shows World GDP over the last 2 millennia. Historical values were negligible until the First Industrial Revolution compared to today's level. Over the last few decades, World GDP values have skyrocketed off the chart. This happened because all governments aim to maintain a steady increase in the economy, resulting in a non-negligible annual percentage growth of GDP. In advanced economies, this results in a gain of 1 or 2 per cent annually. If the per cent growth is somewhat constant, the increase in absolute terms every year is a bit larger than the previous one. We have a reinforcing feedback loop: the more significant the economy, the faster it grows in absolute terms.

In most systems, there is some limiting factor that eventually slows or halts the exponential growth of some elements. In some cases, the limitation is smooth; in others, it is due to something breaking down. Epidemics stop growing once a sufficiently large fraction of the population is infected; Lilypads stop expanding in a pond once the whole surface is covered; the king stops delivering growing amounts of rice to the inventor of the chess game once the kingdom runs out of rice; your car will stop accelerating once the engine reaches its maximum power, or you find yourself in a ditch. For some reason, our economic system is designed on the assumption that there is no limiting factor to economic growth and that GDP can increase at a substantial rate forever. Governments that do not deliver some economic growth for a while lose their job. This has worked fine so far as long as the impact of human activities on environmental resources is bearable. It's changing.

Of course, wealth and development have brought enormous human benefits, and one would not compare them to viruses. Thanks to economic development, literacy rates, good health, and life expectancy have never been so high. The problem we are increasingly faced with is that GDP growth demands equivalent growth in energy production. The fossil-based energy mix used throughout the industrial revolutions generated growing greenhouse gas emissions, particularly C02. Excessive CO2 density in the atmosphere causes the earth's surface temperature to rise. This will eventually provide the negative feedback reaction that will prevent unlimited growth, even before we run out of fossil fuels. If nothing is done, the earth's system will respond by becoming unliveable for the human specie.

Interestingly, the link between the concentration of CO2 ( Carbon Dioxide) and the temperature of the earth's surface has been known since 1896, thanks to Eunice Foote, an American scientist and women's rights campaigner(Dee 2021). The Swedish scientist Arrhenius then calculated that the human emissions of CO2 would eventually lead to global warming, connecting the final dots between economic growth and climate change(Wikipedia contributors 2021). He was wrong in his estimation that it would take centuries to reach noticeable warming. He could not foresee the exponential behaviour of global economic development.

It's easy to blame the world powers that be, but I suspect most of us would not perform much better if we were in command. After all, the mechanistic worldview that worked so well to create the production and consumption society we live in is deeply ingrained in our institutions and how we live, work and structure our organizations. A mechanic-based worldview is not suited to capture the dynamics of exponential phenomena emerging in a complex web of interconnected actors. We need new approaches to understand the complexity around us and let new, innovative solutions emerge.

A new approach is needed to understand the surrounding complexity. A good start is to realize how deeply the mechanic-based approach is reductionist and deterministic. It builds upon the assumption that we can understand the behaviour of a system by breaking it down into its elementary parts, which are assumed to follow simple rules. The system's behaviour is then considered a mere consequence of simple interactions between its elements, ignoring the complexity of the feedback loops.

On the contrary, the systems thinking approach proposed by Peter Senge in his book "The Fifth Discipline" is a framework that helps us account for the interconnectedness of our world. Systems thinking helps us see how things influence each other as a whole. In systems thinking, identifying key feedback loops allows us to see how a change in one part of a system can affect other parts. This approach can help us see the unintended consequences of our actions and find new solutions to problems. System thinking can be applied at the individual, organizational and global levels. Only a holistic approach will help us understand the system's complexity and manage our companies, careers, and lives while solving our planet's challenges.

I am still looking for an out-of-the-box solution to address what I described before; actually, hoping to identify trivial solutions to today's problem is probably delusional. . It may even create additional issues, especially if the solution proposed is based on the same mindset responsible for the emergence of the problem. All this must change: in particular, organizational structures must evolve to adapt to a society where constant growth cannot be the central imperative anymore. An isolated commercial company, however, cannot ignore the competitive environment: forfeiting the growth and profit race would likely mean bankruptcy. Does this mean that we all have to wait for a global change of the legal framework with rules that impose the same environmental constraints equitably to all economic players? We have learned from the outcomes of the past 27 COPs that this will likely result in an unlivable planet. The path lies in the middle, with each organization searching for its best approach. In the following chapters, I will dive more deeply into areas I believe organizations can explore to set their own course to contribute to a healthy planet for a striving humanity.

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