Building A Wellbeing Economy
Building a Wellbeing Economy requires rethinking institutions and laws to promote a new drive in activities to support the wellbeing of people and planet. We aim to catalyse ideas and solutions with people informed enough to influence governments to act to address this imbalance. We do this by creating spaces to bring together and connect stakeholders from different work areas and geographies to jointly, build a new development model that will balance the system.
The next decade will be a decisive period in the transition to the Wellbeing Economy, to a society that focuses on human and environmental wellbeing. In the reunion of Man with his nature.
Setting measurable goals for society, companies and countries is an important part of that development. Why? If exclusively financial metrics continue to define the success of governments and businesses, optimising financial metrics will be the focus of public policy only. A crucial step towards a wellbeing economy is to ensure that we know how to measure it and that its metrics impact human development.
Fortunately, there is no need to start from scratch. Over the past 50 years, many academics, influential scientific institutes, NGOs and constructive citizens have proposed alternatives to GDP and thought about how these changes could guide government policy or change narratives around economic success.
Wellbeing Economics
The ultimate goal of wellbeing-oriented metrics is to replace GDP as the 'key performance indicator' with new metrics that measure performance in terms of contribution to wellbeing, sustainability and equity. These alternative metrics would guide governments, businesses, citizens and organisations to "manage" their respective activities differently.
That is, implementing a new type of policies, replacing policies that focus narrowly on economic growth. These alternative metrics will also contribute to changing the dominant social narratives of "economic growth is good", to narratives that reinforce the goals of economic wellbeing.
Despite 50 years of developing metrics beyond GDP and hundreds of initiatives, GDP remains the most influential indicator in society and none of the alternatives come close to influencing and driving global economic policy. There are three areas where GDP is still superior. Each of these areas must be addressed by the Beyond-GDP community.
Harmonisation
GDP is governed by a globally harmonised accounting framework, the System of Accounts, which is a co-production of international institutes and a globally organised group of national statistical institutes that provide a dictionary of terminology used by macroeconomists around the world. It is a symbol of global cooperation.
In the case of measures beyond GDP, there is no global standard. Rather, there are hundreds of different measurement systems, each using a distinct terminology. As a result, the definition of key concepts in this community - such as wellbeing, happiness, sustainable development, etc. - are not defined globally and there is confusion about their meaning. We need to create a global, harmonised accounting framework that defines the relevant terms of the Wellbeing Economy and provides globally harmonised indicators.
Policy tools
The greatest success of economists has probably been to shift the public narrative in their direction, instilling in post-World War II society the idea that growth is good and that GDP growth is the key goal of governments. Economic terms such as 'economic growth', 'consumption', 'consumers' and 'productivity' are now common and frequently used in our media and daily conversations. As a result, the "economy" is seen as an objective phenomenon by the general public, while "wellbeing" and "sustainability" are often labelled as "vague".
Given the diversity of proposals and terminologies beyond GDP, this is not surprising; this hinders the ability to shape the public narrative. Indicators beyond GDP should contribute to shifting the social narrative towards the Wellbeing Economy away from economic growth. For each of these three areas: Harmonisation, Policy and Social Narratives. Here is the current state of discussions on GDP and an overview of some initiatives beyond GDP.
Harmonisation should therefore be a top priority for the Beyond-GDP community. While the current diversity in Beyond-GDP initiatives reflects the energy, innovation and passion of the people driving these initiatives, it is detrimental to the overarching goal of replacing GDP. National governments and international institutes (UN, OECD, World Bank and IMF) should begin the process of harmonising Beyond-GDP measures.
How can this work? Harmonisation starts by understanding how the different approaches are similar and how they are different. While there are hundreds of measures beyond GDP, they can be divided into four different methodological categories.
Some initiatives propose a single index to replace GDP. The idea is to capture, in a single number, all dimensions related to human wellbeing and sustainability. From a communication point of view, it is a clear benefit to have a single index. However, the indicators underline that wellbeing and sustainability are multidimensional phenomena that encompass health, education, social relations, economy, climate change and biodiversity, all phenomena that cannot be captured in a common unit.