No alternative to growth

Luxembourg has enjoyed higher-than-average growth for some time now – attributable to a fast-growing population driven by our attractive economy. Lately, however, the word ‘growth’ seems to be acquiring increasingly negative connotations. Critics of growth point to undesirable consequences like the high cost of housing, daily traffic jams, the impact on our environment, and the associated pressure on living conditions.

They demand a societal model founded on reduced growth, in spite of which (or thanks to which) people ought to be able to lead happier lives. And it is true that growth is not synonymous with a society’s well-being. However, it is an important prerequisite for people to live peacefully together and thrive in a society. It is only through growth that financing can be secured for public health services and pensions, education, security, and infrastructure for social, cultural, and sports activities. It is growth that lets us combat joblessness and ensures a bright future for the younger generation.

Negative growth, or a recession like that recorded globally in 2008 and 2009, leads to social unrest, disgruntlement , and the rise of populism.

What this means is that growth is our only alternative. But without taking the appropriate measures, growth is also unsustainable.

At present, employment is growing by 250 people every week, and this alone has the potential to put 150 additional cars on our roads on a weekly basis.

But in our open and free society, for the government to dictate an abrupt halt to demographic or economic developments is unthinkable. Rather, a solution can be found in a concept that the Chamber of Commerce brought before the court of public opinion back in 2012: ‘qualitative growth’.

Not less, but better growth, founded on increased productivity. This economic concept simply means doing more with fewer resources, across society as a whole: at home, at work (in companies and in public administration) and elsewhere.

Through things like innovation, technological advancement, new processes, new work structures and new models of consumption, there is room for everyone to attain greater efficiency to achieve more with fewer resources, be it individuals, families, entrepreneurs, the government, or anyone else.

Luxembourg is a small and open society in an attractive location from an economic standpoint, but because it has to import all of its resources, it is highly dependent on other countries. This makes Luxembourg the perfect place to test new models for qualitative growth before applying them in a consistent manner.

And that is precisely what occurred during the most recent legislative period, when the Ministry of the Economy and the Chamber of Commerce jointly launched what is now known as the Rifkin Study. This study led to a number of plans for concrete action in various sectors. We’ll give you just a few examples.

Progress has been made on the systematic expansion of renewable energy and electromobility, and a bill is now on its way that will cover the forthcoming national energy Internet, which would allow decentralised energy production for personal consumption. Essentially, consumers could also become producers.

Further development in mobility as a service has been achieved through the use of an app. Residential zones are being built in both the city and the countryside, offering smart, modern, and sustainable housing. The High Performance Computing project is also a success that was highlighted in the Rifkin Study. Another important project is a new platform that can be used to find financing for sustainable projects intended to benefit society. Specifically, it’s a place where funds earmarked for a social impact can be linked to projects in the same spirit.

The Rifkin Study has also made the concept of a circular economy more accessible. Our industrial sector is making huge strides in this regard, not least in energy. The success story that is fintech has gained new momentum from the study, as has organic farming.

It is my sincere hope that this first push forward and the commitment of the many private and public players will not have been for nothing, and that new and innovative ideas and models will soon give qualitative growth fresh energy that will ultimately become a sustainable engine for the concept.

Through a smart mix of energy and new technologies, the aim is to enable consumers, companies and even the government to use online platforms to become more efficient and resource-friendly in their consumption, production, management, and organisation.

This will have a positive impact on our quality of life and the environment, without jeopardising short-term financing for much-needed measures to guide our growth – with the ultimate goal being to successfully uncouple it from our resource consumption.

Historically, increased productivity and efficiency through technological advancement has led not to lower, but to higher employment, especially in Luxembourg. This has put new kinds of jobs and profiles on the labour market, as indicated by the current dramatic developments we’re seeing thanks to digitalisation, artificial intelligence, and new information and communications technologies.

Existing skillsets will have to be adapted to changing needs, and new skills added. This mustn’t just come from abroad. It should also be swiftly and proactively mobilised here at home, on a large scale, using Luxembourg’s education system together with professional training and development programmes.

Here, too, growth is the only sustainable alternative.


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