A Changing World

There are two schools of thought about economic growth. Strongly desired by some as a means of righting the debt-laden ship of state, others regard it as a deluded notion from which we must free ourselves as quickly as possible. Forty years after the Club of Rome's study The Limits to Growth became the manifesto of the environmental movement, antipathy to economic growth is making a comeback. The unsustainable burden it places on the environment, modern civilization's insatiable appetite for energy and the growing discrepancy between resource consumption and limited reserves of raw materials are fueling calls for a postgrowth society. Other commonly encountered motifs include weariness with a life devoted to consumption, laments over permanent pressure to perform and the ubiquitous acceleration of life, a feeling of helplessness toward financial markets gone wild and growing middle-class uncertainty in the face of a new period of economic hardship that demands more effort in return for less security. Recent surveys show that the majority of Germans do not connect the term "prosperity" with material improvements in their standard of living, but with a life free from worries about unemployment, old age and illness. The more uncertain the future appears, the more important qualities such as certainty and security become. Fewer and fewer people still believe that future generations will be better off. When the idea of progress through growth loses traction, questions of distribution take center stage.

Does the crisis raging in the financial markets prove right all those who predict that growth has had its day? Growth financed by debt, i.e. the constant debt-based expansion of government spending and credit-funded housing booms such as those that have had such an impact on the US and Spanish economies, has certainly hit the wall. The idea that we can maintain perpetual income and job growth by taking on more and more debt has proven to be insane. Throughout much of Europe a slowing economy and reductions in state benefits are having a negative impact on the standard of living of broad sections of the population. Demographic change is further strengthening this trend: a dwindling number of working-age citizens is having to bear increasing health care costs. So will growth soon be a thing of the past? Is the seemingly interminable effort to squeeze more and more from evanescent resources coming to an end? Is the oversaturation of the markets causing capitalism to flag? Is the global Monopoly game winding up as more and more people refuse to join in?

It seems unlikely. There is no end to growth in sight. On the contrary. We must not let the financial crises of recent years obscure the fact that the global economy is in the middle of a historic growth phase driven by four basic factors:

• Firstly, the global population is expected to grow from just over seven billion today to at least nine billion by the middle of this century. Even though rising prosperity, better education and greater self-determination for women are causing demographic growth to level out, this increase is inevitable thanks to the high birthrates of generations that have already come into the world. At present the global population is growing by an amount equivalent to the population of Germany — a little over eighty million people — every year, with the greatest demographic growth taking place in Africa: by 2050 there will be more than twice as many people living there as there are today. That alone will drive up demand for food, goods and services of all kinds.

• Secondly, the global labor force, which today amounts to around three billion people, is set to almost double by the middle of the century: every year umpteen million young, energetic people are crowding into the job market, looking for productive work. To put it another way, the growing demand for goods is being accompanied by increased manpower potential. In China alone the working population is going to increase by approximately two hundred and fifty million people over the next two decades — an increase greater than Europe's total current manpower potential.

• Thirdly, we are at present witnessing billions of people strive with all their might for a share in the spoils of modern civilization: homes with running water and electricity, a plentiful supply of food, household appliances, medical care, education, computers, cell phones and transportation. They aren't concerned with the question of how much is enough; they work hard and invest in their children's education in order to escape poverty and gain access to things we take for granted. The momentum of billions of people playing catch-up is a powerful force for growth capable of transcending any economic crisis. The global middle class is going to grow rapidly in the course of this trend. By the middle of the century the number of people with purchasing power of between $10 and $100 per day is expected to rise from around one billion to four billion. Demand for high-end consumer goods and services will grow to many times the current level as a result.

• Last but not least, the pace of innovation is increasing at a breathtaking rate. While the most recent groundbreaking innovation — the digital revolution — is still in full swing, new waves of innovation are already breaking: renewable energy, electromobility, biotechnology, materials engineering, robotics, nanotechnology and medical engineering — a wide range of new technologies, products and services are making themselves felt. The capabilities of computers are growing rapidly, facilitating research projects on an entirely new scale. High-powered search engines and information networks allow worldwide access to all the data anyone could want. The boundaries between scientific disciplines are becoming blurred; new knowledge is being generated in interdisciplinary networks and the production of knowledge is being globalized. Never before have there been so many scientists working on new ideas and projects in so many countries. The Asian emerging nations in particular are constantly expanding their capacity for innovation. Within the last five years Chinese applications to the European Patent Office have increased fivefold. According to the president of the Patent Office, Benoît Battistelli, at this rate China will oust Germany from third place within a few years (the United States currently holds the top spot, followed at some distance by Japan and Germany): "We can no longer say that China is merely the world's factory: it is positioning itself to become the world's research laboratory too."

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