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Is the relentless pursuit of growth the only way for business to progress?

One of the lynchpins of progress—whether after crises or in regular times, whether in the world at large, or in the world of business—is the pursuit of growth. Isn't it?

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When you think about it, this is quite a storm we’re in the midst of. This feels – emphasis added on feels – unprecedented in living memory, at least. And yet, if there’s one thing history can teach us, it is that dark times have periodically fallen upon the world and we have somehow prevailed and moved forward. And one of the lynchpins of progress—whether after crises or in regular times, whether in the world at large, or in the world of business—is the pursuit of growth. In fact, one might go so far as to say that without growth as a target, progress would have been impossible. The advancements we see in the world today in any field—from technology to industry to agriculture to markets and platforms—all owe their progress to the relentless pursuit of growth. Right now, obviously we’re seeing the opposite of growth. Economies are depressed, financial markets are down, consumer sentiment is gloomy, businesses are scared. But that’s seems like all the more reason to revert to the norm—in this case, the unwavering pursuit of growth. 

Now, on the face of it, that feels like a compelling argument, but this might well be the best opportunity to pause and reflect on this norm. Is the continual, never-ending pursuit of growth the only way for business to progress? 

The question itself is, perhaps, worth questioning in this moment. What’s apparent is that we probably have an opportunity to see if we are even defining progress appropriately. The question of whether pursuing growth is the right means to the end will come after we define what end we are pursuing in the first place. 

One of the most telling pieces of commentary on this comes from a defining trope of our times, the internet wisecrack. This particularly one succinctly captures the relevant zeitgeist most tellingly.

“It says something about the state of the world that markets are collapsing because we’re now buying and consuming only what we need.”

It’s clear that we have been growing, yes, but at what cost? 

Our growth has come at the cost of planet, our culture and value systems, deepening fault lines across society, especially on ideological grounds. The divide between the rich and the poor is even more stark. This growth has increased the debt burden on society and country as a whole. 

And all this is happening because we have[Office1] built consumption-based economies around the world by creating products, services and experiences that cater to higher and higher levels of needs on Maslow’s Hierarchy. What this pandemic has forced us to do is to revert to satisfying and being satisfied by the lowest level of needs[Office2]. We are rediscovering the value of a wholesome home cooked meal, of family time around board games and conversations that do not involve screens, and some that involve screens but not staring at them in isolation. 

But even there, in this rediscovery in the joys of simpler living, things are not quite that simple.

It is highly doubtful Maslow would have imagined the day would when Zoom and Netflix would become core physiological needs, but we are in that day right now.

But the reason it’s not so simple is because this view is still looking only at a small sliver of society who would identify with that. Across the world and especially in countries like India, we are seeing that the original physiological needs of hunger, shelter, clothing and sleep are inaccessible to millions amidst this crisis. Zoom and Netflix, basic as they seem to many people, are markers of privilege, markers that the minority middle class urban elite are unlikely to acknowledge as privilege. And there’s a diverse spectrum in between with varying degrees of needs and access to things that fulfill those needs. It makes one wonder in the middle of this all—is the relentless pursuit of economic growth truly the panacea the world needs right now?

Edward Abbey’s quote from the 1980s seems apt in this context. 

“Growth for the sake of growth is the motto of the cancer cell.” 

A remorselessly consumerist society driven by the engine of capitalism in its present form may or may not be akin to cancer but it’s hard to dismiss the similarities. 

When pursuing growth is the norm—a deeply ingrained, inviolable norm at that—how can we get businesses to pursue de-growth as a strategy and an agenda? 

As always, context is critical. Consider the following.

In many economies, consumer spending accounts for more than 65% of economic activity. Consumption-led growth can lead to a slowing down of future growth if it entails growing imbalances due to limits to capacity creation and rising debt burdens, first at a country level, and then trickling right down to last household. 

In the specific case of India, our savings rate has dipped to a 15-year low and the past couple of decades have been marked by a collapse of real savings, fueled by artificially easy credit from the banks to the consuming class. This has brought about a debt-induced spending binge, with disastrous consequences[Office3]. So, not only are we consuming more than we need but we are also borrowing to do so. 

The impact is even greater on businesses, because growth requires capital infusion.

At a time like this, when capital is scarce and a business has wafer-thin profit margins, a rupee of sales growth may well use more cash than it generates. When this is the case, companies are faced with a decision to either obtain external financing or limit growth to a rate that the business can sustain through its own internal cash generation. When a business is throwing off sufficient cash for it to achieve its growth objectives, many organizations will decide not to incur the additional risk associated with further growth[Office4]. [Office4]

But if, in this situation, they don’t plan for it and ensure responsible, cost efficient growth, even if that means de-growth in top-line, they will put their very financial stability at risk.

Not just that, they will then have to slow down growth to achieve more in the long run. And that is very contrarian to what businesses are used to because in today’s business world, we’re told that slowing down growth is not an option. 

So how do you realistically create a de-growth strategy when business defines growth as progress?

Let’s start with the specific macro-economic case of India.

We need a production-based economy, much more than a consumption-based economy

If we want India to come out stronger beyond the current Covid-19 crisis, we need consumer spending to become less important to the economy, not more. Depending on a demand-driven economy to create progress is no longer a prudent option when there is no cash flow. We need policies that enable savings and greater investments. Because more savings implies our financial institutions can lend more for more investments. In turn, more investments mean more production and capacity creation. And the crux of it is that real savings and investment would be the engine that drives it all forward and not artificially induced consumption. 

Clearly, both the means (pursuit of growth) and the ends (progress) will have to change, and what we probably need to see emerging is what one might call Equitable Capitalism. The trick will be to make it practicable for business. Here are some small measures that can go a long way in creating a more balanced economic activity.

The first one revolves around the idea of Equitable Redistribution.

Every democracy around the world has the core values of social justice, liberty, freedom of speech and equality enshrined in its constitution. And while business may not be able to contribute directly to the first three, equality of opportunity and distribution of the fruits of economic activity is certainly possible. That’s not to say every country becomes a socialist economy. But we can certainly improve upon the extremely disbalanced scenario now. How can businesses do it in a way that removes the need for CSR, for example?

During this crisis, the likes of Zomato and Swiggy have created funds to ensure food supplies to daily wagers and those who don’t have the luxury of working from home. Perfume and liquor manufacturers have diverted their manufacturing and supply chains to the production and distribution of hand sanitizers. It’s taken a pandemic for these efforts to spring up. What if these were to be integral parts of how businesses operate so that existing competencies lead to equitable redistribution of resources and output?


The second strategy revolves around Cooperative Rejuvenation. 

Beyond the climate crisis fueled by the fossil fuel industry, there is likely an agrarian crisis staring at many economies around the world. The common thread to both is to make mainstream practices that are regenerative to the planet. This is the opportunity for commodities giants such as ITC and Monsanto to enable a cooperative framework that benefits the agrarian economy, fulfils consumer needs and yet enables planet rejuvenation also.


The third strategy, perhaps the one most directly affecting businesses coming out of this crisis, is Valuable Consumption.

The question it stems from is this: can business actually advocate decreased consumption? It seems like a self-defeating proposition, an own goal. And yet, maybe the answer lies not in thinking of it in volume terms but in value terms. As the global lockdown caused by the pandemic has shown, we seem to be able to perfectly make do with the basics, but we do want the best of the basics. Un-monotonous, tasty food (and the recipes to experiment with them), uninterrupted internet access (and the bandwidth to enjoy the entertainment we can pipe through it), ways to connect and play with our loved ones in this time of social distancing. Clearly, what we are seeking—and probably willing to pay a premium for—are the things that bring meaningful value to our lives. How business can deliver this value in sustainable ways will define business success in the coming time.


The fourth strategy is made up of a clutch of linked tactical moves that will become critical choices for businesses.

In short, this strategy is about Simplification & letting go to gain more. 

The principles of sacrifice and focus have never been more important than now. 

a) It can begin with trimming the long tail & focusing on top of the demand curve by aggressively culling the low margin / low value SKUs. 

Long tails thrive on the economics of abundance when everything is available to everyone. Nothing could be further from the truth in the post Covid world.

b) Divest noncore assets to further invest in the core business or explore new ownership models in typically capital-intensive industries.

c) Target non-consumption by transforming complicated and expensive products into products that are simple and affordable so many more people in society can access them. 

A crisis of the proportion that confronts the world right now demands that businesses ask big questions of themselves. And so, if businesses are to succeed in the face of this disruption, they must storm the norm of believing that the relentless pursuit of growth is the only way for them to progress. 

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Narayan Devanathan anisha motwani

Anisha Motwani

CEO & Founder, StormTheNorm Ventures

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Narayan Devanathan

Chief Executive Officer, DAN Solutions | Chairperson, Creative Line of Business at Dentsu Aegis Network India

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