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Bounded growth is when a growth rate is constantly decreasing. The result is that growth approaches a fixed value. In other words, when your growth rate is constantly decreasing it eventually becomes so small that you're essentially sitting still. Technically you may forever approach a bound without ever touching it.
ExampleA startup company with 100 million in sales and a 100% growth rate initially looks like it might achieve exponential growth. However, with each quarter its growth rate falls by 50%. As a result the company never reaches 500 million in revenue as its growth rate becomes extremely small with time: |
Growth Rate | Revenue | 100% | 100 Million | 50% | 200 Million | 25% | 300 Million | 12.5% | 375 Million | 6.25% | 421 Million | 3.13% | 448 Million | 1.56% | 462 Million | 0.78% | 469 Million | 0.39% | 472 Million |
Bounded growth is reasonably common as big things tend to have trouble growing, a phenomena known as Diseconomies Of Scale. It is common for a period of exponential growth to be followed by either bounded growth or a period of decline.|
Type | | Definition | A growth rate that is constantly decreasing meaning that results approach an upward bound that is never passed. | Related Concepts | |
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