For the longest time, governments, and private organisations, have prioritised measures of gross domestic product (GDP) to assess the growth of the economy. While this measure of economic growth is important, GDP fails to capture important complexities. Economic growth does not necessarily ensure the wellbeing of people and the planet. In some cases, economic growth is damaging to communities and the natural environment.
More and more, it is accepted that policy needs to move ‘beyond GDP’ to help communities thrive. This is to ensure that communities’ wellbeing is prioritised alongside economic indicators.
A thriving economy needs to include things like communities’ access to affordable housing, health and safety, and access to nature. Economic growth without regard for individual and community wellbeing is meaningless.”
In his 2019 speech at the Inclusive Growth and Well-Being Symposium, former OECD Secretary General Angel Gurría stressed the importance of the wellbeing economy, in which citizens’ wellbeing “drives economic prosperity, stability and resilience, and vice-versa, and that those good macroeconomic outcomes sustain wellbeing investments over time”. It is a cycle that puts people and the planet first, recognising that headline economic growth masks significant inequalities across time and space.
The argument is simple: prioritise the wellbeing of people and the planet and this will lead to sustainable economic growth. Healthy and resilient communities are better equipped to create growth that benefits them and the natural environment.
Both international and local organisations are making the case for wellbeing-centric economics. In recent years, the OCED has released the reports ‘Beyond GDP: Measuring what counts for economic and social performance’ and ‘For Good Measure: Advancing research on well-being metrics beyond GDP’. Both reports detail case studies showing the importance of wellbeing for policy.
In Australia, both government and private organisations are contributing to this space. The Australian government has released Measures of Australia’s Progress and Australian Treasury’s Well-being Framework. The Australian Institute of Health and Welfare collates data on Australia’s welfare and the Australian Unity Wellbeing Index is one of the leading sources of wellbeing research in the country. SGS’ first release of Australia's Wellbeing Index, launching in mid-April, will advance a common understanding of spatial trends in the wellbeing of our cities and regions.
All considered, wellbeing is difficult to measure. Not only is it a tricky concept to define, but often, wellbeing is subjective. However, as mentioned above, there is data-driven research that pins down both subjective and objective indicators of wellbeing to inform policy and practice.
The case for developing robust measures of wellbeing is increasingly clear. Economic growth fails to capture the complexities of our lives and the natural world we live in; we need measures that create an equitable and sustainable economy.
A version of this article was originally published on the LGIU website.
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