Close this search box.

Table of Contents

Uneconomic Growth


Uneconomic growth, in economics, refers to a situation where the costs of economic growth or the negative impacts associated with it, especially environmental degradation and social problems, outweigh the benefits. This implies that the growth makes society as a whole worse off by negatively affecting the quality of life or decreasing overall well-being. It challenges the idea that economic growth always signifies progress or improvement.


The phonetic pronunciation of “Uneconomic Growth” is: ʌn-i-kə-ˈnä-mik grōth

Key Takeaways

  1. Definition: Uneconomic Growth refers to the situation where the monetary worth arising from an increase in production outweighs its associated social and economic costs, such as environmental pollution, public health crises, income inequality, and more.
  2. Implications: Uneconomic growth can lead to a wide array of economic, social, and environmental dilemmas, including resource depletion, unfair wealth distribution, and ecological deterioration. Despite its immediate benefits such as enhanced GDP and increased employment opportunities, the long-term repercussions are often detrimental.
  3. Sustainable Alternatives: To avoid uneconomic growth, it’s crucial to transition towards more sustainable economic models that place equal importance on both growth and stewardship. This includes considering the environmental and social impacts of economic activity, introducing policies for equitable wealth distribution, and promoting the use of renewable resources.


Uneconomic growth is an important term in business and finance as it refers to a situation where economic growth is detrimental to the overall quality of life or well-being of a community. It is driven by a rise in output that leads to social or ecological harm outweighing the monetary gains of an increase in the Gross Domestic Product (GDP). Uneconomic growth can cause depletion of natural resources, pollution, wealth inequality, and social unrest. Understanding uneconomic growth helps businesses, policy makers, and economists to strive for sustainable development – an economic growth pattern that balances economic advancement with environmental protection and social equality. It forms a critical part of the ongoing discourse about the redefinition of prosperity, challenging the conventional wisdom that associates well-being solely with monetary wealth.


Uneconomic growth, often referred to in the context of sustainable economics, is a term to describe a scenario where the growth of an economy could actually lead to a decrease in the quality of life and overall societal wellbeing. It serves as a critique of the traditional model of economic growth, which measures success purely through Gross Domestic Product (GDP) increase, without considering potential negative impacts. Uneconomic growth acknowledges that not all economic growth positively contributes to society’s overall welfare, as it could sometimes result in environmental degradation, inequality, over-exhaustion of resources, and other detrimental effects.The purpose of focusing on uneconomic growth is in part to challenge the view that continuous economic expansion is always beneficial. The concept is used to promote sustainable and equitable economic practices that balance growth with resource conservation and fairness. It is also used as a censure against unchecked capitalistic expansion and to advocate for policy changes that not only consider GDP growth but also envelope social and environmental impacts in the evaluation of economic success. By understanding and recognizing uneconomic growth, it is envisioned that policymakers, businesses, and individuals can make more informed decisions that maximize societal welfare in the long run.


Uneconomic Growth occurs when the cost of growth (in terms of environmental damage, depletion of resources, social disruption) surpasses the benefits accrued.1. Unsustainable Fishing Industry: In many parts of the world, overfishing has led to the depletion of fish stocks in the oceans. While fishing companies may have short-term profits, these are offset by the long-term damage to the marine ecosystem and the livelihoods of future generations of fishermen. The cost of overfishing in terms of decreased biodiversity and long-term sustainability of the marine populations, in this case, outweighs the short-term profit associated with increased fishing activities.2. Deforestation for Agriculture: Countries with vast forest resources, like Brazil, often engage in mass deforestation to clear land for agriculture, such as soybean production or cattle ranching. While this may stimulate economic growth in the short run, the long-term effects include soil degradation, loss of biodiversity, and increased carbon emissions that contributes to climate change. The costs associated with these environmental damages can be considered higher than the benefits yielded by the agriculture industry.3. Unregulated Industrialization: Rapid industrialization in countries like China and India without adequate pollution prevention and control methods leads to significant environmental pollution and health problems. The costs associated with treating these health issues, not to mention the detriment to quality of life, often exceed the benefits from increased industrial output. Additionally, these nations face the future financial burden of cleaning up their polluted air, soil and water resources. In all these cases, the economic growth yielded negatively impacts the environment and quality of life, hence becoming uneconomic growth.

Frequently Asked Questions(FAQ)

What is Uneconomic Growth?

Uneconomic growth refers to economic growth that reflects or creates a decline in the quality of life or wellbeing, despite an increase in gross domestic product (GDP). It can occur when the cost of economic growth exceeds the benefits.

How can I recognize Uneconomic Growth?

Uneconomic growth is often characterized by increased environmental degradation, growing income inequality, higher unemployment rates, poor public health outcomes, and lower standards of living, despite a growing GDP.

Is Uneconomic Growth bad for the company?

Yes, uneconomic growth is generally deemed unhealthy for a company in the long run. It might bring about some immediate financial benefits but could lead to detrimental effects like resource depletion, environmental degradation, and worsening social inequalities, which would ultimately harm the company’s reputation and sustainability.

Can Uneconomic Growth be measured?

Measuring uneconomic growth can prove difficult as it requires taking into account not only economic measurements such as GDP but also social and environmental factors. Indicators such as Genuine Progress Indicator (GPI) and Human Development Index (HDI) can be useful.

What are the causes of Uneconomic Growth?

Uneconomic growth can be caused by a range of factors including overexploitation of natural resources, unsustainable business practices, poor regulation and government policies, and unchecked social inequalities.

Can Uneconomic Growth be avoided or mitigated?

Yes, uneconomic growth can be mitigated through sustainable business practices, responsible government regulation and policies, and socially responsible investing to ensure that growth does not come at the expense of the environment or social well-being.

What’s the relationship between GDP and Uneconomic Growth?

While GDP measures the economic output, it may not account for the social and environmental costs associated with economic growth. Thus, a rising GDP does not necessarily mean improved well-being and could lead to uneconomic growth if the costs of growth outweigh the benefits it brings.

Are Uneconomic Growth and Degrowth the same thing?

No, they are different concepts. While uneconomic growth refers to growth that reduces quality of life, degrowth is a deliberate, often policy-driven, reduction in the size of an economy to achieve social and environmental goals.

Related Finance Terms

  • Ecological Economics: A field of study that examines the relationship between the economy and the environment, typically a primary subject when discussing uneconomic growth.
  • Sustainability: A key concept in the discussion of uneconomic growth, sustainability pertains to the ability to maintain economic development without depleting natural resources.
  • Externalities: Costs or benefits that affect a party who did not choose to incur those costs or benefits, often associated with uneconomic growth due to the environmental impacts not accounted for in traditional economic models.
  • Overconsumption: Situation wherein the use of resources is excessively higher than the sustainable capacity of the ecosystem. Often leads to uneconomic growth.
  • Environmental Degradation: The deterioration of the environment brought about by depletion of resources. This can be a result of uneconomic growth.

Sources for More Information

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More