Rob van der Rijt & Felix van Hoften: Conditions for degrowth necessary for future-proof innovations

October 29, 2025

^{This article was originally written in Dutch. This is an English translation.}

In a capitalist market system focused on economic growth, innovations are driven by efficiency and profit maximisation. However, this drive contributes to greater ecological destruction and social inequality. Innovation can be radically different.

By Rob van der Rijt and Felix van Hoften

Within current market thinking, innovation is often described as the development of new products, markets, production methods or organisational forms with the aim of creating economic growth. The prevailing view is that this development has only positive consequences for society. It is believed to contribute to prosperity, well-being and positive progress. However, it is now indisputably clear that economic growth, driven by this conventional form of innovation, leads to ecological destruction, economic inequality and injustice.

Ecological destruction takes place in various ways. It is not only about the loss of biodiversity as a result of climate change. It also concerns, for example, the chemical contamination of soil, water and air (think of pollution by micro and nanoplastics), or the acidification of the oceans, resulting in the death of coral. There are now also shortages of fresh water to sustain global nature, and the disruption of the nitrogen cycle is leading to the degradation of healthy agriculture and ecosystems.

Researchers have unequivocally demonstrated that economic growth leads to increased energy and material consumption, a phenomenon known as coupling. The extraction, consumption and post-use processing of energy and materials leads to the aforementioned fundamental ecological problems, with major consequences for human livelihoods and health.

Global citizens who have contributed least to the current ecological destruction are experiencing the most disadvantages. Flooding, unbearable heat, biodiversity loss and drought are leading to failed harvests in areas around the equator. Some 600 million people currently live in climate-risk areas, the majority of them in the global South. A global economic contraction of around 19% is predicted as a result of the current ecological decline, and that contraction will also take place for the most part in poor countries.

Despite all the negative consequences of decades of misguided investment policy, management teams and shareholders of large companies continue to make short-term decisions: turnover today, problems tomorrow. Capital continues to be invested in innovations and growth that accelerate further decline. It is therefore time to allow other stakeholders to have a democratic and decisive say in determining the direction in which companies are taking our living environment.

We have previously argued in the renowned academic journal RealWorld Economics Review for a radically different approach to innovation. An approach based on the principles of degrowth. This involves the fair downscaling of production and consumption in order to increase human well-being and repair ecological damage, locally and globally, now and in the future. As the renowned economist John Stuart Mill stated at the end of the 19th century, we need an economy that is in harmony with nature. Decoupling society from growth leads to lower emissions, less material consumption and less pollution. The Intergovernmental Panel on Climate Change (IPCC, 2022) also confirms that degrowth is a highly effective way of reducing raw material use and emissions.
  

Physical limits must be integrated into the design of our economic system.

 
Four conditions for developing innovations based on degrowth are crucial:

1. Entropic reality: Physical limits must be integrated into the design of our economic system. If everyone lived as we do in the Netherlands, we would need four Earths to produce all the natural materials for our consumption. Global energy and raw material consumption must remain within safe ecological limits. This means that the Earth must be able to recover from the destruction and pollution of its ecosystems.
2. Social and economic justice: Redistribution of resources, giving the global South and the poor in the North greater access to sustainable development, and reducing consumption in the global North, particularly among the rich. Fair prices play a role in this: “true pricing” takes environmental pollution into account and ensures liveable wages worldwide.
3. Well-being for all life: Not only humans, but also animals and ecosystems must be central. Everything that lives must benefit from innovations because everything that lives is interconnected and keeps each other healthy. Costa Rica demonstrates that low emissions and high well-being can go hand in hand. The secret? A lifestyle focused on balance and simplicity (“pura vida”) supported by policy. Cities such as Barcelona are also taking the lead with initiatives such as “Superblocks”, which green and redistribute urban space.
4. Strengthening democracy: Innovation should not be determined solely by markets and capital; it must arise from democratic decision-making. This should involve capital owners, employees, local residents and natural stakeholders, as advocated by the rights-based nature movement. In the Netherlands, the zoo-operating movement is already putting this into practice. Cooperatives and companies focused on general welfare are also better able to produce in a socially just and ecologically responsible manner.

We are not technophobic. On the contrary, technological innovations can and will contribute to the restoration of ecosystems and the reduction of inequality, provided they meet the above conditions. And this often does not require complex technology – we can start right away.

Some examples of such innovations are: easy-to-repair and biodegradable products with a long lifespan, mobility solutions that encourage public transport, electric shared mobility and cycling, agricultural innovations that reduce emissions in both production and consumption while improving soil quality, energy and housing cooperatives in public hands, and local sharing platforms where appliances, energy and mobility can be exchanged.

At present, hundreds, if not thousands, of citizen initiatives in the Netherlands are already working to implement the above examples. This is also referred to as the “Undercurrent”. Dutch authorities should give these kinds of initiatives every opportunity to flourish, create the right conditions for success and also provide financial support. This can be done, for example, by only allowing innovations on the market that meet the above conditions.

Without innovations based on degrowth conditions, we cannot stop social and ecological decline. Innovation that only pursues efficiency and growth is not future-proof. Genuine sustainable innovation contributes to a safe living environment within planetary boundaries and to the well-being of all life forms. The first seeds for this have been planted and have sprouted; now it is important to roll this out on a large scale and with urgency.