What's right: Redefining economic growth

ARA City Radio

The UK’s Office for National Statistics (ONS) is adopting a new measure, Gross Inclusive Income (GII), to redefine economic growth beyond GDP. Unlike GDP, which measures only monetary transactions and often misrepresents harmful activities as economic progress, GII includes non-monetary factors like renewable energy benefits and voluntary care. GDP, originally a wartime tool, fails to account for wellbeing, sustainability, and social value, ignoring crucial aspects of life such as peace, environmental health, and relationships. Alternative metrics like the Human Development Index, Better Life Index, Positive Peace Index, and Genuine Progress Indicator offer broader views of societal progress by emphasizing health, education, environmental costs, and community wellbeing. Advocates suggest combining such measures for a comprehensive understanding of progress. The ONS is integrating these ideas, using data from 2005 to develop GII. During the COVID-19 pandemic, GII grew faster than GDP, driven by renewable energy’s positive impact on emissions and pollution. Economist Diane Coyle lauds this as "pioneering work," hoping other nations follow suit.