Growth or progress – that is the question.
We are in interesting times again. The bulls are claiming a restart of growth, there is a prediction of 2% global GDP growth in 2014 and the talk around town is 2014 is the start of the next 5 years of growth. But we have many (non-australian) political leaders around the world stating climate change as one of our biggest risks in the near future. It creates an interesting dilemma for all of us. Here is my dilemma, is it yours and is it real?
I recently gave a presentation to a senior management team in Sydney about what the trends we are seeing in ‘sustainability’ and what I believed the future opportunities were sustainable property development.
I believe that the trends we are seeing in impact investing, the sixth wave of innovation and the resource constraints of one planet are driving challenges and opportunities for all sectors and in particular property.
To highlight the collision of these three trends I used collaborative consumption as an example of resource productivity – rather than one person using the resources of one drill you share it among 10 people and you therefore only have 1/10th of the resources per person.
A very good statement was made by one of participants , “that’s all very good but that would mean we need to make 9 less drills and if drill manufacturing makes up part of our GDP growth then our GDP won’t grow”.
Exactly. And that’s bad. Oh wait, no that’s good for the planet. Oh hang on no that’s bad for business.
As a treehugger my reaction is that’s a good thing. GDP isn’t a measure of progress and we should be looking at genuine progress (GPI) not GDP. If we used genuine progress then we would see a positive from collaborative consumption because we would take into account the positive ecological impact of using 9/10ths less resources. And also the positive social impact of the relationship / community building involved in sharing and collaboration.
As a business man I have to keep an eye on GDP as I and probably all business men, have been engrained with the assumption that – negative GDP = bad, positive GDP = good.
It isn’t always the case but in my limited 20 years experience it seems to correlate pretty well.
So when we talk about collaboration, sharing, reducing resource use and resource productivity the immediate engrained response is ‘that equals bad’.
When we talk about maybe not knocking down buildings to build new ones, maybe sharing buildings, maybe dual using buildings our immediate engrained response is ‘that equals bad’ for business.
It’s a dilemma and it’s potential barrier to continued business progress.
Maybe if we chose Genuine Progress or something like that as an indicator then our reaction to resource productivity would be completely different.
I know a lot of people have been calling for this change for a while. Particularly when you look at things like Healthcare, healthcare is part of our GDP so the more sick we get the more progress we make? Prisons and the justice system is part of our GDP so the more our social fabric breaks down the more progress we make?
The problem of GDP as progress indicator in a social sense has been known for a while but what we are now seeing is the need for change at a more granular level, at the level where our measure of progress is actually accelerating our use of our planets finite resources not protecting it. And when it comes to finite resources progress is slowing down the use not speeding up the use. If you are spending all your savings and you don’t want to run out of money then making progress is not spending so much.
We need to retrain and reprogram everyone to see GDP as a measure of how quickly we are going down the pan and not how we are progressing. Businesses need to be valued by the genuine progress they are making not by how quickly they are spending their savings. Governments need to share the potential societal savings that businesses can create through their ecological and social impacts.
On ABC24 this morning the presenters were having a conversation about meeting emission reduction targets and discussing the reduction in emissions due to a declining manufacturing sector in Australia. The commentator on the newspapers said “if only we could entirely collapse as economy”. Oh my god, that’s terrible. That means that the only way we can meet emission targets is to collapse our economy. Hhhmmm.
If we saw GDP as a measure of how quickly we are going down the pan the his comment would have been accepted as a positive truth rather than a threat to a fake reality of GDP being a measure of progress.
It is good to be back 🙂