What would a wellbeing economy look like in Scotland?

As a founding member of the Wellbeing Economy Governments group – a partnership of national and regional governments who share expertise and policy practices in order to build their individual wellbeing economies – the Scottish Government has stated that this transition is among its priorities.

Yet, while it has repeatedly been mentioned during debates amongst the SNP leadership candidates, it is perhaps unclear exactly what a wellbeing economy means – and how it would change the lives of people in Scotland.

What is a wellbeing economy?

Currently, the most common way of measuring economic success is through the growth of a nation’s Gross Domestic Product (GDP).

Viewed purely through the prism of GDP, a nation is considered to be economically successful if businesses are expanding and people are spending more money.

However, a wellbeing economy seeks to incorporate other measures and shift away from purely utilising GDP figures as a barometer of success.

For example, the Wellbeing Economy Alliance states that measuring the comfort, safety and happiness of a population should also inform calculations about economic success.

This doesn’t mean that GDP growth wouldn’t be considered at all – only that it would no longer be looked to as the only assessment of a nation’s economy.

The Scottish Government defines it as “an economic system operating within safe environmental limits, that serves the collective wellbeing of current and future generations first and foremost".

Why bother transitioning from GDP to wellbeing?

Because GDP is a gross number it doesn’t discriminate between the kinds of economic value produced, regardless of how harmful they may be in other respects.

So, while GDP counts the profits made by a successful small business like a café or a clothes shop, it also includes the monetary value of burning coal, producing single-use plastic and selling weapons.

Indeed, according to a briefing from Public Health Scotland, “economic growth, as measured by GDP, is not a good measure of population wellbeing.”

READ MORE: Boris Johnson partygate defence: Five ridiculous parts of document

This is because as well there being tensions between untethered economic growth and the need for all nations to reduce their carbon emissions, GDP also fails to account for the value and necessity of actions that can’t be measured monetarily.

For example, a nation’s GDP could be plummeting while an unpaid carer works flat out.

Yet the essential work and value of that person aren’t calculated. Furthermore, GDP only accounts for spending; it doesn’t consider exactly who the wealth belongs to or in what proportion. That means that an increase in a country’s GDP could still mask an enormous amount of inequality if the majority of that wealth is held by a small percentage of the people (as is the case within the UK).

What will it mean for people in Scotland?

Following its commitment to transitioning to a wellbeing economy, last year the Scottish Government launched its Wellbeing Economy Monitor.

This monitor will measure how Scotland’s economy contributes to improving outcomes in areas including health, employment, and environmental sustainability.

At the time of its launch, Finance Secretary Kate Forbes said that, going forward, it would be used alongside GDP to guide future economic decision-making in Scotland.

In practice, that could mean a variety of changes to how the country operates.

In 2019, for example, New Zealand delivered its first “wellbeing budget” – that is, a financial budget guided by aspirations that would improve overall population wellbeing and not so strictly concerned with GDP growth.

Within that budget, the government prioritised spending that would accelerate the transition to a low-emissions economy as well as measures that would support the mental wellbeing of under 24-year-olds.

Depending on the findings of the Wellbeing Economy Monitor, Scotland could target its future budget spending in a similar fashion.

The Wellbeing Economy Alliance also highlights more employee-owned businesses, citizen assemblies and common ownership of land as practices that could be rolled out in pursuit of a wellbeing economy.

When is the debate?

MSPs are set to discuss Scotland’s transition to a wellbeing economy on Wednesday afternoon (March 22).

The whole debate will be available to watch on the Scottish Parliament’s website.