Growth as part of change

There is little commitment to growth in Germany’s policy sector. We need a mental paradigm shift for our country and for Europe as a whole: more carrot and less stick, more entry strategies than exit ones.

Prosperity without growth.” “Rightsizing.” “Green growth only.” Anyone who has been following public debate in Germany in recent years about the right economic strategies might easily conclude that economic growth has outlived its usefulness as a necessary and desirable objective. That it is incompatible with efforts, both important and morally correct, toward greater climate action and resource conservation. That responsibility and growth are incompatible and even mutually exclusive. But is that actually the case? Has economic growth shaped our understanding of a modern economy for too long? Was it, and is it, the wrong benchmark for an economy’s performance and important decisions by investors, companies, and policymakers?

The answer is no. A growing economy remains an expression of economic success, increasing prosperity, social progress, and a society’s future viability, all of which is positive. For an economic area like Europe in general and an export-oriented economic powerhouse like Germany in particular, qualitative and quantitative growth remains a must.
What’s more, sustainable economic growth has arguably never before been so crucial in enabling the step-by-step transition across our industries and entire economies toward a way of doing business that is compatible with our climate goals while conserving resources.

For one thing, a growing company offers career opportunities and development prospects, making it more attractive to existing employees and new talent. And that is an increasingly important factor in light of the shortage of skilled workers and workers in general.

Growth is also fundamental to capital-intensive investment of all kinds, whether in new business models or exploration of new markets. Or even, most especially, in research and development for future technologies that will make more-sustainable business possible in the first place. And I’d like to point out that sustainable growth doesn’t come in just one color. It spans many different shades. Wind turbines, heat pumps, electric cars — all the products we think of as green are developed by technicians and engineers and then made in factories, by blue-collar workers.

That’s why sustainable growth, in all its many colors and aspects, needs to remain a key element of our economic and industrial policy. This belief, and the unmistakable public commitment to growth that goes with it, is sorely lacking in the political debate in this country.

We’re not talking about quarterly GDP figures here. It’s about the fundamental question of what role growth should play in Germany and the wider ramifications of this kind of decision. No investor will decide to put money into projects in a place that doesn’t have any stated growth ambitions. Instead, investments are made in more-promising economic areas, and in the worst case, there is a threat of spiraling deindustrialization.
A commitment to sustainable growth must be accompanied, including at the European level, by a mental paradigm shift. Instead of hastily slapping bans on things and mapping out exit strategies, we should put the same energy into entry strategies that set the stage for growth. Simply prohibiting and ending something doesn’t automatically mean something new and better will take its place.

In addition, growth no longer necessarily means increasing environmental impact, whether that is measured in carbon emissions or resource consumption. Where, if not in Germany as a high-tech hub, do we have the skill and talent to, for example, develop and apply innovative production methods that lead to greater efficiency in manufacturing processes?

Instead of constantly coming up with new bans, there should be positive incentives for a responsible path to growth with elements of a circular economy and carbon reduction. A path that reflects Germany’s strengths in research, science, and industry and promotes them as factors critical to success. Charting the right course for this is a fundamental task for our policymakers, and an urgent one.

Oliver Zipse

• became the CEO of BMW AG, which has more than 150,000 employees worldwide, in August 2019. His contract was just recently renewed for two years, until August 2026.
• “bucks the trend,” as the Frankfurter Allgemeine Zeitung recently wrote about him. Zipse is a staunch advocate of openness to technology. He opened his speech to the general meeting in May by saying, “Here at BMW, we are different.” BMW is continuing to build gasoline engines and forging ahead with research on hydrogen drives.
• joined BMW AG as a trainee in 1991 and has stayed with the group his entire career, in roles including Senior Vice President Technical Planning and, in 2012, Senior Vice President Corporate Planning and Product Strategy.
  studied computer science and mathematics at the University of Utah and went on to earn a Diplom degree in general mechanical engineering at the Technical University of Darmstadt. He has been an honorary professor at the Technical University of Munich since 2022.
• was born in Heidelberg, Germany, on February 7, 1964. Zipse is married and has two grown sons.