Why grow?

Many things in life are just simple facts. Some things we accept because we are told that they are true; for many others we see overwhelming evidence which leads us to acceptance. For example: the Sun will rise each morning; the Earth is more or less spherical and orbits around the Sun; man first set foot on the Moon in 1969; the sky is blue; water is always wet. Hopefully you will not want to argue too much with those.

But there are other aspects of life that we accept, but where I cannot see clear evidence to persuade me …

I have written before about the annual fiasco where most countries (except a few enlightened nations and states) put their clocks forward or back by an hour once a year. Everyone (well, almost everyone) accepts that this is a good idea. I do not. And I live in country with a government that thinks that moving our time zone one hour ahead would be good too. Why? Noon is a physical phenomenon, not simply another name for 12:00 on the clock.

Having got that off my chest, I want to muse about something else, the understanding of which eludes me. I have been wondering about a fundamental characteristic of western businesses: the need to grow. It is accepted wisdom that a successful business (or country/economy) needs to grow over time. For a company to be considered healthy, there may be periods of limited growth or even contraction, but the trend must be to increase turnover, profit etc. If a firm stops growing, it tends to dwindle and go out of business or is acquired by another company.

Why is this? Why cannot a company just stay at a steady state with a certain level of income/turnover, which, inflation aside, is unchanged. The firm could still employ the same number of people, pay the same taxes and service the same customers. What confuses me is that we live in a finite world, so growth cannot continue indefinitely. Even with increases in efficiency and productivity, there is ultimately a limited supply of raw materials and no market can keep growing forever.

So, what am I missing? Why is the steady state so bad? Where will it all end?

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  • I get your point about growth seening strange as a perpetual and automatic objective. The answer may lie in trying to conceive an alternative, like a mathematical proof. Suppose we have a company that tries to stay the same (size, products, market, methods of working). In time, it would be destroyed by competitors, unless it operated without competitors in an infinite market. Let me know if you know if one like that, so you and I can get rich by piling in quick.

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This article first appeared on the Siemens Digital Industries Software blog at https://blogs.sw.siemens.com/embedded-software/2010/12/09/why-grow/