Dream Your Way to Economic Growth

Emerging economies beat mature ones when it comes to the rate of economic growth, according to the World Bank. The bank projects an average 4.7% growth rate for the former between 2011 and 2025 compared with 2.3% for the latter during the same period. What gives? Why the disparity?

Dreams, according to Rolf Jensen and Mika Aaltonen, authors of The Renaissance Society: How the Shift from Dream Society to the Age of Individual Control Will Change the Way You Do Business (2013).  “Economic growth is dream-driven,” they wrote, and emerging economies, such as those of China and India, are driven by people who dream for material wealth and higher incomes. Mature economies, such as those of North America, Western Europe, and Japan have mostly fulfilled their people’s material dreams and now they’re working on the next ones. 

Source: Strategos

And what could those dreams be? Nonmaterial ones. Here, Jensen’s and Aaltonen’s argument is reminiscent of Abraham Maslow’s hierarchy of needs (from Psy. 101). After satisfying the basic physical needs (i.e., food, shelter, and physical safety), Maslow argued that individuals work to satisfy other, less physical needs, such as friendship, recognition, and personal fulfillment. 

Well, people living in mature economies “want to own their lives and to choose a path in life themselves.” If that’s the case, then mature economies face five big challenges, according to Jensen and Aaltonen:

1. developing products and services that appeal to people’s hearts as well as their wallets;
2. treating customers as individuals, giving them a say in designing products and services (i.e., co-creation);
3. decentralizing decision-making and shrinking work units, thus giving employees more say in designing, making, and delivering products and services;
4. factoring in people’s emotions and feelings when promoting innovative thinking; and
5. developing a workplace where people work together as teammates.

The emerging economies have their challenges too, including getting ready for the next dream, developing basic infrastructure, educating more people for knowledge jobs, getting ready to manufacture complex goods, and coping with the effects of automation (after it is introduced to reduce rising labor costs).