Beyond growth - why we need to agree on an alternative to GDP now

"Gross domestic product (GDP) was never designed to be a measure of societal well-being. It tracks only market transactions, conflates costs and benefits, and ignores the distribution of income, the contributions of household labour and volunteer work, and social and environmental costs and benefits. In the decades after the Second World War, GDP growth functioned as a reasonable proxy for well-being when rebuilding economies and increasing production and consumption were the main priorities."

"Measuring and modelling what truly matters, not just market transactions, is now essential. Processes are under way to develop indicators that move beyond GDP. In May, the United Nations secretary-general António Guterres appointed a High-Level Expert Group to develop such measures, with a focus on balancing economic, social and environmental dimensions of well-being. This initiative builds on the 2015 Sustainable Development Goals (SDGs): target 19 of SDG17 commits governments to adopt beyond-GDP metrics by 2030."

"Yet progress remains slow. Overcoming decades of structures built around GDP is difficult. Nonetheless, several governments, including those of New Zealand, Scotland, Wales and Bhutan, have experimented with alternatives to GDP (see also go.nature.com/3ktuvhv). Others should follow suit, but it will be a steep climb. Shifting all societies from a narrow focus on GDP growth to a comprehensive understanding of the multiple factors that support well-being and prosperity, and of how these factors interact over space and time, demands consensus on another approach."

GDP tracks market transactions, conflates costs and benefits, and omits income distribution, household labour, volunteer work, and social and environmental costs and benefits. Post-Second World War GDP growth served as a proxy for well-being while rebuilding economies and expanding production and consumption. Since about 1950, ecological limits, rising inequality and declining social cohesion have constrained further well-being gains, while rapid development of artificial intelligence brings new opportunities and challenges. Indicators that go beyond GDP are being developed, including a UN High-Level Expert Group and SDG target 19 aiming for beyond-GDP metrics by 2030, but progress remains slow and broader consensus is required.

Read at Nature