In a recent event in London, during the Thinkers50 Gala night, a number of Big Ideas and concepts were celebrated. While we need to take it more as a mundane event than anything else, Thinkers50 can gather some of the most acute business minds of the planet into one event at one venue in one night on a usual rainy day in London.
What was celebrated during the event, among the ideas put forward by many brilliant thinkers, was the concept of Fast Expanding Markets. This concept is now almost 3 years old and its main foundation lies on the detection of growth at the most micro level that we can possibly imagine. This idea is not founded to become an alternative to traditional growth model, but instead driven by the research conducted so far, either by direct or indirect exposure is a proxy, that truly suggests that growth is a behavioral response to needs that become new demands, sparked by social trends, business opportunities and entrepreneurs. In fact, there is no novelty in this. And there is also no real distancing from free markets theory, free movement of people and goods and open government policies. This is still capitalism and liberal market society at its very best.
And let us be clear. No matter how deconstructionist of the current growth model we are, or happen to come across, we are still apologetic for the capitalist system, which continues to be the only economic model seemingly working. There is ample evidence that those countries that liberalize increase opportunities for their citizens to have a life worth living and to fulfill potential. While many aspects of capitalism are still flawed and self-directed to a very small numbers of privileged, the ideals are still foundational to what modern societies should aspire.
What we have become skeptics of instead is the application of the growth model to the current needs and how most of what used to work in the past has simply stopped working today because of the inevitable aging of frameworks and their ideas. This should not be a surprise. Frameworks are created in the mindset of the time, with expectations and issues that are molded by the context in which events take place.
If growth has historically been a concept exclusively measurable in the form of aggregate supply and demand, it is because it was the only way we could possibly make sense of disorganized and complex reality. It is not hard to see that GDP — and its macro lens of analysis — is an instrument that was created as an aftermath of the 1929’s Great Depression. In those years, governments were still the largest shareholders and countries were fighting to gain federal attributes, emerging from divisive fragmentation of territories. Our political and economic geography was hardly comparable to the one of today and the old western model of colonial dominance was still a state of play in those days in a number of countries. The world was more monotonous than the limitless shades of colors, it presents today.
Concepts of aggregations were fantastic new levels of analysis, as progress, scientific and medical inventions and basic human needs were at the very beginning of their journey. Long have we emancipated our civilizations from it, as we have embraced the second half of the 20th century and moved our societies to ideals of co-existence, acceptance, multiculturalism and liberalism.
Today the world is very different and while we recognize it, we don’t want to fall in the obvious. What we want to acknowledge is that growth has now largely moved from government to private sector for decades now. We know by now that corporations are the largest drivers for growth and governments have morphed into minor but cumbersome actors, with limited capacity to create progress and an inadvertent capacity to garner debt.
Corporations are unmatched in their contribution to wealth. There is no public spending, not for profit or NGOs who can come close to rivaling what companies do. Governments can facilitate, ban, promote, but they can’t create wealth. At least not in any fundamental sense. On the other hand, micro players such as firms, consumers and businesses can do so, because growth occurs as the exchange currency of taking risks and succeeding by scaling up. This is why we celebrate markets that grow at the grassroots level, since it is where growth is ultimately meant to originate.
So in light of this, our concept of growth and its detection need to be updated. We think that growth is everywhere and it permeates the wrinkles of society, in ways unknown to the economists of the past century. Growth is by definition organic and it grows from the bottom. It is wired and predisposed to aspire to new heights, but growth does not necessarily always ‘verticalize’. It can also expand in ways in which it never reaches a critical mass or a hierarchy and it can be hardly synthesized by binary models or mathematically ordered assumptions. Measuring growth needs to follow growth in the first place and its evolution. It is like following a kite in the sky. Regardless of expected trajectory, it will be winds that will determine its movements.
Dancing with growth is the story behind fast expanding markets and why this idea is now becoming visible to many. It is about reorganizing our thinking and action to support the trends that emerge from the real economy in shapes and sizes that characterize how societies move on. Fast expanding markets are a non-scientific elevation to a sense of progress which is not cognitive per se’, but simply put, human-centric. We think it is time to put people at the center of the process and not just linear abstractions and this is how we want to speak of growth and other things…