For the past 40 years, GDP has dominated as the single most important metric for shaping how our economy is managed, setting economic growth as the primary means of providing prosperity and wellbeing. Yet it misses out on a huge amount of what actually occurs within our economy, being unable to differentiate between transactions which are societally beneficial, environmentally sustainable and socially just, from those that aren’t.

But what if we measured our economy on the things which actually matter? What if we could take wellbeing, social justice and environmental sustainability as the primary focus, and measure the success of our economies through metrics that put these at their heart? In response to these questions, many people have proposed that we abandon GDP and use better measures. Yet, despite numerous attempts, and the development of many innovative new metrics, none have been able to unseat GDP from its throne.

This report, produced by a cross-European partnership, BRAINPOoL, asks why. Combining case studies and interviews undertaken in seven European countries over two and half years, we ask what makes Beyond GDP indicators successful, what the barriers are, and what we need to do next.

Understanding Indicators

Metrics to measure the success of an economy are designed and built with policy makers in mind, with the specific intent to shape and influence policy. Unfortunately, political demand for new indicators is low, and tends to come when they support the status quo or incremental change. In contrast, support at the grass-roots remains strong.

Making a metric successful

Successful metrics, in terms of their ability to be mainstreamed and influence policy, are found to be those which:

  • Allow for comparison, with one catch-all easy to understand figure.
  • Measure things that policy makers feel they can influence.
  • Be easily embedded into existing measures of success and failure.
  • Remain politically neutral.
  • Use high quality data and appear scientific rather than subjective.

Examples include the Index of Sustainable Economic Welfare, which has influenced policy in the UK at both a national and local level, and the Ecological Footprint, shaping environmental impact targets in several countries.

Barriers

Research with seven different groups across the European Union identified a range of barriers to the implementation of alternatives to GDP. These include:

  • A lack of democratic process in deciding which factors to include and a failure to connect with the public, resulting in low
  • Belief in economic growth’s ability to bring about shared prosperity
  • Lack of readily available data creating a lag-time an indicator’s regularity.
  • Multiple, competing indicators creating confusion.
  • No single metric with the salience of GDP.
  • Disagreement whether subjective wellbeing measures should be incorporated.
  • Methodological disagreements over the use of composite metrics.

Going Forward

From the work with our seven different groups, the report presents six recommendations for the Beyond GDP movement:

  1. Develop processes to engage citizens and establish the democratic legitimacy of Beyond GDP indicators.
  2. Develop a strong Beyond GDP narrative, and demonstrate the difference that use of Beyond GDP indicators will make to policies and outcomes.
  3. Continue work on the technical and theoretical foundations of alternative indicators, with particular focus on standard setting and harmonisation, and paying attention to the need for engagement by politicians as well as experts.
  4. Improve processes for integrated and innovative policy making.
  5. Develop strategies for overcoming institutional resistance.
  6. Strengthen the indicator entrepreneur’ role – encouraging statisticians to work with government representatives to promote alternative indicators

Click the button below to download the full report or click the links below to access additional research materials.

Full report
Vision report
Action plan 

Case studies

The German National Welfare Index and the BMU
The British Business Bank
The Welsh Government Sustainable Indicator Set
Sustainable Development in Midi-Pyrenees
The Rotterdam Sustainability Profile
Healthy City Indicators in Chrudim in the Czech Republic
Alternative Indicators in the OECD