The reasons the growth age is over are:
- the unprecedented population growth has come to an end
- there are no more ‘new worlds’
- further improvements to travel time will have little impact on trade
Unprecedented Population Growth is Over
I have more detailed posts on this topic already, but in summary, the rate of population growth has already changed as has the source of population growth. Families in the developed world simply have less children now so the developed world the main driver of economic consumption, is actually no longer growing in population. There is still growth as I said in the introduction, but this change reduces the rate of market growth for products.
How do markets still continue to grow? The sources of growth that continue is by increased consumption in less developed markets as the markets progress to being developed and through immigration into developed markets. While previously immigration to the ‘new world’ countries was from the ‘old world’ and actually driven by population growth within developed countries, immigration is necessarily shifting to the remaining source of population increase: less developed countries. This immigration will still drive some growth but also comes at an economic cost.
There are no more ‘New Worlds’.
The growth age extended the ‘economic zone’ into whole new continents (North America, South America and Australia) previously not participating in the ‘world economy’ of the day. Vast areas of land previously in its natural state was progressively converted to agriculture, for farming, or for mining. This was a process of tapping natural resources from areas previously unexploited where those natural resources were abundant and easily tapped.
But where are the new areas of the globe to repeat that process? We can still further exploit areas it is true, but generally at ecological cost and for diminishing economic return.
There is simply no way to repeat this process until/unless mankind can expand to other planets around other stars.
Further Improvements to Travel will have little impact on New Trade Opportunities.
The rise of the East India company was a huge component towards the growth at the start of the growth era. This company produced enormous wealth based on improved transport opening up previously inaccessible areas to trade.
Transport has continued to improve to the point where even perishable food can be delivered from any part of the globe to any other.
Perhaps we can improve the speed things move even further, but basically is already aware of everybody else and logistics are not a barrier blocking trade.
These factors all combine to produce a strong constraint that blocks ‘growth’ in the manner we saw during the growth era from around the start of the industrial revolution.
Economic growth may find ways to continue and perhaps at a similar per capita level which should mean as individuals we could continue to see the same rate of improvement. However other factors mean those in many developed countries feel they have ceased seeing improvement and discontent is growing. A key factor here is that our economic system evolved during the growth era, with absolute growth, not per capita growth, as a key metric.