Walker Smith writes: Less is the future.
Some of what’s less is structural. We are facing natural limits of critical resources including key metals and minerals, water, land proximate to economic hubs, and cheap energy supplies. Threats to climate and biodiversity add to the urgency of lessening demand for these resources.
Additionally, we may be facing economic limits. Northwestern University economist Robert Gordon argued in a 2012 paper that we are at the end of an exceptional period of innovation and productivity growth. Decades of slowing productivity returns to innovation in combination with several economic headwinds mean that the U.S. (and other developed countries) face decades of slow growth. Breakthrough innovation will continue but not with the economic impact enjoyed during decades past, which came from one-time gains and for that reason, cannot be repeated. We explored some of the implications of this in our Future Perspective, Succeeding in Low Growth Markets.
Gordon’s thesis set off a spirited debate about whether or not there is something more to look forward to. But what’s not at issue is that there will be less of what used to be thought of as important, even if something more comes along in the future.
And over the near-term, at least, prospects for middle-class households certainly poit towards less. many are foaced with long-term unemployment. Labor force participation is down dramatically. Decades of stagnant wages could continue for decades more. Middle-income jobs are disappearing under pressure from technological change. And no matter how you look at it – income,wealth, employment – the next generation is struggling to get started.
Some in the Millennials cohort have taken an aspirational view of this daunting situation by embracing the idea that that living with less is acceptable, or even preferable. This is not the majority opinion, but it is a seriously held view, not the short-lived rebellion of earlier hippies and slackers.
Less is becoming aspirational in other ways as well, particularly owning less. The sharing economy of peer-to-peer, crowdfunding, renting, barter, loaning, gifting, swapping, collaboration and open source is taking hold as music sharing services like Pandora, Spotify, Rhapsody, Last.fm and Radio Paradise proliferate, established companies like Avis and Enterprise jump into car sharing, and startups like Airbnb or NeighborGoods or Rentiod gain traction.
We now drive less, even in the US. Annual miles driven peaked in the middle of the last decade. Young people, in particular, feel less connected to driving and cars, as reflected in declining percentages of those with a driver’s license.
While home square footage just hit a new high, there is now a parallel shift in the other direction of smaller families, higher density requirements for new developments and greater interest in more compact urban environments. And when we find a place, we are staying put, moving less than before.
So, whether by necessity or choice, less is the new engine of the economy. This is sure to be a challenge, and not just because less is a hard way to grow. Less has long been seen as counter to the American spirit, going back through Frederick Jackson Turner and his Frontier Thesis in the 19th century, to the criticism of President Jimmy Carter in the 1970s for his so-called “malaise” speech in which he called on people to use less energy and focus less on materialism.
Limits of all sorts have long been controversial, often rejected outright. Less has just never been on the table. Until now. In the next part of this post, I’ll explore what this means for brands and marketers.
A version of this post first appeared in Branding Strategy Insider, and is re-published here with our acknowledgments. The image at the top of the post is from Bristol IndyMedia, and is used with thanks.