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“New growth, not more old growth”


What is the relationship between economic growth, sustainability and well-being? This was the subject of an 850-page report released on April 15 by a German Bundestag study commission. Hans-Jörg Naumer, Global Head of Capital Markets and Thematic Research at Allianz Global Investors, talks about its findings.

Allianz Global Investors

Mr. Naumer, what was the purpose of the study issued by the Bundestag?

Hans-Jörg Naumer: The Enquete Commission report on ‘Growth, Wellbeing and Quality of Life’ examines complex issues surrounding how the demands of today’s generation are being satisfied and how this will continue in the future. Germans are pretty business-minded, but even they are questioning if well-being is more than just the pursuit of goods and services.

But Germany is very wealthy. Why is it worried about well-being?

Germany is one of the developed nations hardest hit by demographic change. We’re getting older. The population is aging and shrinking while the global population is still growing. You see the same thing in Japan and some European countries like Italy. That will definitely have implications for infrastructure and for future economic power, but what those are is an open question.

So this is more than just a German phenomenon...

This report is just one in a series of European initiatives that look at redefining the relationship between economic growth, sustainability and well-being. In 2009, a French Commission on the Measurement of Economic Performance and Social Progress, headed by noted economist Joseph Stiglitz, submitted its report. And then there’s the British government’s attempt, initiated by Prime Minister David Cameron, to measure the national happiness, and the OECD “Better Life Index”. All these reports assume that just focusing on GDP overlooks other aspects that make the lives of millions of citizens happy and satisfied.

Then why the sudden broad concern with satisfying lives?

The German report was released in a changing world. Emerging nations are shaking off their planned economies, and now, after a 50-year delay, they are fast catching up. That will have significant implications for the German economy and on many other wealthy economies. At the same time, industrialized nations are burdened by high sovereign debt. So they have to think about what kind of growth is possible when they’re tightening their belts as well. On top of that, they also face climate change.

What conclusions do you draw from these studies?

One thing is the recognition that new growth does not mean more old growth. Part of the solution to the growth question comes from the nature of what the economist Karl Popper calls open societies. By their nature, open societies contain the power of “creative destruction”, as Joseph Schumpeter described it.

The issue becomes not “whether” growth takes place, but rather “how” it takes place. Look, say, at investments against climate change. They’ll bring on a new wave of growth. In addition to a shift to renewable energies it, also means moving to new energy infrastructure and to a “recycling” of the economy.


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