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In a post-growth economy quality matters

Christiane Kliemann / pad
March 24, 2015

If the financial crisis taught us one thing, it's that economic growth is not a given. Still, businesses opting out of the expansion race are often belittled. That's a shame, because they have a lot to teach us.


Be it artisan furniture, IT services or craft beer, for growth-neutral firms high quality, durable goods and close customer relationships are considered more rewarding than increasing sales. For a new generation of companies putting the environment over profits, competing on price alone is no longer considered a sustainable business model. Some of them are even out to shake up the foundation of our economy.

Setting examples

To show that that is possible, the Institute for Ecological Economy Research (IEER) in Berlin has collected #link:http://www.ioew.de/news/article/ioew-stellt-elf-unternehmen-vor-die-sich-vom-wachstumspfad-loesen/:eleven inspiring examples# as part of its project "Post Growth Pioneers." What unites these companies is not just a robust balance sheet, it's, above all, a thriving working environment.

For the #link:http://www.lammsbraeu.de/:Neumarkter Lammsbräu brewery#, located in Germany's Upper Palatinate region, the wellbeing of its 110 employees is just as important as maintaining a good relationship with its customers and suppliers.

Even in Germany's increasingly growth-based beer market, where competition is cut-throat, the company was able to convince its customers that high-quality beer brewed with regional organic ingredients is worth the extra cents. This is not only good for the family-run firm and its staff, but also for the regional farmers who have gone organic to supply Lammsbräu with the necessary ingredients.

In return, the close cooperation has secured both sides stable long-term working conditions. This has allowed the brewery to skirt the expansionary pressures haunting conventional producers, while at the same time bringing added value to the whole region.

In nearby Kirchensittenbach, the #link:http://www.die-moebelmacher.de/:Möbelmacher carpentry company# follows a similar concept. At a time of globalized supply chains and mass production, the classic crafts enterprise is focusing on custom-made furniture made from regional, organic wood. Rather than using pre-manufactured plans, all their products are sculptured from whole logs harvested from the surrounding woodlands.

Even then, the furniture doesn't cost more than comparable quality products, says Möbelbacher co-founder Herwig Danzer, who also counts customization among the company's successes.

Long-term stability

Considering our current economic system, such models require much creativity and courage. However, when successful, they have a key advantage: They are often more crisis-proof, since they're built on robust structures rather than an expansion-at-any-cost model. They work in an anti-cyclic manner and build up savings for harder times.

#link:http://blog.postwachstum.de/author/danieldeimling:Daniel Deimling#, who focused on #link:http://blog.postwachstum.de/unternehmen-in-einer-wirtschaft-ohne-wachstum-20140721:post-growth enterprises for his thesis#, provides a special case.

"I have analyzed an enterprise that went from being mainly a producer to a product-based service provider. Previously, its focus was on producing durable goods. Now, it mainly focuses on maintaining its products. The founder told me that particularly in times of crisis, such services remain stable, given that it is much cheaper to refurbish than to buy new items."

Businesses lead the way

Extending the life cycle of a product, rather than simply manufacturing a new one, also plays a key role in the debate about the sustainability of an economy obsessed with growth, as the current system places an unprecedented strain on our environment.

This is why more and more experts are calling for new modes of production that are both ecologically sustainable, while also being able to survive in a stagnant, or even shrinking, economy.

Dirk Posse, who was one of the first researchers on #link:http://www.voeoe.de/2015/03/posse-unternehmen-postwachstumsgesellschaft-erschienen/:enterprises in a post-growth economy at the University of Oldenburg#, puts it this way:

"Because our current economic and social structures are strongly shaped by enterprises, it is absolutely critical that businesses lead the way and show that there's another way - that it is possible to do business in line with ecological and social boundaries, so that politicians are encouraged to enact rules and laws that force everyone to do business that way."

A different kind of growth

But without steady growth, how can innovative ideas make the jump from niche to mainstream so they can revolutionize markets and supply chains and offer sustainable alternatives?

Heike Mewes of the IEER has observed two approaches: "Companies achieve this through very consciously directing their own growth, while at the same time working with others. This cooperation includes inspiring others to develop similar business models, or supporting them financially or through consulting work."

Post-growth is good for business

But as most experts agree, enterprises alone cannot bring about the change required to create a sustainability-based society that's no longer a slave to economic growth. To achieve this would involve fundamentally changing our economical and political foundation.

But according to Mewes, it would be well worth it. She says a shift towards a post-growth economy would not just benefit sustainable companies, it would also be a boon to small- and mid-sized businesses.

"They would benefit from a discourse freed of the expectation that in order to be a real business, they must grow - and if they don't, they're not a real business."

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