Beyond GDP or GDP and Beyond

Dr. Žiga Turk

“Beyond GDP” or“GDP and Beyond”

Round Table on the Measurement and Use of Data on Social Progress and People’s Well-Being

Conference Centre Brdo, Slovenia,29 November 2010

Contents

• The 5 “ABCDE” global transformations are a challenge for policy makers.– Abundance makes us think that money (GDP) isn’t

everything

• There are reasons to look beyond GDP– and see why Slovenia was overtaken by Czech

Republic

• There are reasons to keep GDP– it is the GDP Euros that pay for many things

ABCDE of grand transformations

• Automation and abundance

• BRICs and globalization

• Climate change and energy

• Demography

• E-everything

A detailed look at A: abundance

Our industrial model: people work

… so that they can buy a car.

The idea worked for a long time!

But now some can produce but do not spend

Leading to abundance of products and information in the developed world

Solution: to those who already have a car also sell a motorbike!

“What we sell is the ability for a 43-year-old accountantto dress in black leather, ride through small towns

and have people be afraid of him”.

Actually they are not in a business of selling bikes!

Plain Design Award

Few are in a business of selling function.They sell meaning!

Plain Fair-traded

Some sell coffee, some sell a good feeling.

Some sell cleaners and some let us do something for the environment.

Can we measure the economy of meaning with GDP?

Some would say money does not make you more happy (and life more meaningful)andmove beyondGDP

Source: Economist

But some say a dollar is worth more to the poor than to the rich.

log($) doesmakes people happy.

Source: Economist

But we do not have money!

So there are reasons to look at GDP and beyond

• economy, consumers are looking beyond the functional and the material

• when you are reasonably well of it takes a lot more money to be a little happier

• because of the crisis right now we do not have the money

And there are good reasons not to look only beyond GDP

• we have a crisis because the GDP is down,not because people are unhappy!

• we can define:

– good times “joy-less outnumber the job-less”

– bad times “job-less outnumber the joy-less”

• which would you rather have?

In Slovenia we always thought we are better than any of the former communist countries

So this was a shock:

Where?

0,828

0,931

0,782 0,780,841

0,9010,87

0,76

HDI Health Education Income

Slovenia Czech Rep.

So there are messages for policymakers beyond the GDP, but

• your % of GDP for healthcare are GDP Euros.

• your % of GDP for education are GDP Euros.

• your % of GDP for research and development are GDP Euros.

• you will be paying off your debt with GDP Euros

THE END

Credits & Inspiration

• Images:– Google Picture Search

– Flickr

– Wikipedia

– Economist

• Inspiration– Reflection Group on the Future of Europe

– Stephane Garelli

– Daniel Pink