Beyond GDP: Day One, Part Three

Nearly done with my notes. Timo Mäkelä (Director, European Commission, DG Environment) chaired the next panel. Giulio Santagata, Minister for the Implementation of the Government Programme, Italy, spoke first. We need to assess the quality of the growth and the quality of the decisions we are making, which means not simply replacing GDP with another indicator. We need to have recognizable indicators for the environment and social capital. We need to think carefully about the selection of indicators and the number of indicators. We have more and more information coming in -- while we are open to this enriched information environment, we can get snowed under with all of this data.

Be parsimonius in the selection of indicators. Be rigorous in the selection. Be careful about saying "this is the state of the nation." We need the man in the street and the people involved in government to be able to understand and use the same indicators.

HE Chief Emeka Anyaoku, President of the WWF (World Wildlife Fund), began by saying that 12 years ago they co-hosted another conference called "Taking Nature into Account." At that time, they said that we needed new measurement tools to chart the path to sustainability. The call is the same now, only more urgent. We need to move beyond conventional economic accounting.

The Living Planet Index is like the Dow Jones Index of nature and reflects the health of the planet's ecosystems. The Global Footprint Network's Ecological Footprint shows the extent of human demand on these ecosystems. Ecological indicators alone do not measure sustainability; you need to include a measure of the quality of life. WWF is looking at both the Human Development Index and the Ecological Footprint together to see if we can have a high quality of life while living within the resources the earth provides. Living within the box of these two indicators is the single greatest challenge of the 21st century. We need to remember that economics are a means, not an end.

Pervenche Berès, Chair EP ECON committee, spoke next. We need measures that get at our use of nonrenewable resources and income distribution. We must begin with quality of life and well-being -- finding a shared definition of these terms is crucial. GDP must be supplemented by several progress indicators. We also need the conviction of policy makers that when they have the right data they will make the right decisions.

Pier Carlo Padoan, Deputy Secretary-General, OECD, added that the OECD saw in Italy and then in Istanbul a world movement around indicators. An essential factor for successful democracies is reliable information. Better information is an essential support of democratic governments. A set of key indicators is the best approach. We need comparability of indicators across countries. Early next year, OECD will publish a book on Measuring Progress and Practice. They are also trying to build an online network and information resource that will serve as a wikipedia for progress. We cannot enforce one single view of progress.

Questions/comments from the audience were:

• Cities, the civil society, and businesses are developing measures of progress. How can national governments pioneer alliances with the work already being done?
• The quantity of information is not an issue. We're shifting our discussion to the quality of the information. The is a shift in our notion of progress as we move toward a knowledge-based economy.

Pervenche Berès responded: The Lisbon Strategy tells us GDP is incomplete as a measure - GDP does not evaluate sustainability or the added value of a knowledge society. If we're going to be coherent we need measures that take into account externalities of spending, the environment; public goods, and distribution/social equity.

Chief Emeka Anyaoku added: intangible assets are not the same as public goods. We're discussing these new measures in the context of Europe and the developed world; Some of these theses can be challenged in the developing world. In trying to measure progress and well-being we should be careful in the selection of knowledge on which the indicators are based.

Pier Carlo Padoan said we need to pay attention to all the places where innovative information is being shared. We need to think micro to macro and vice versa; local to global and vice versa. We need to think not only beyond GDP but below GDP. The Lisbon Strategy tells us that knowledge is a powerful driver of growth. This should make us be careful in how we use information and concepts to scrutinize potential indicators.

If you were at the conference, what did I miss? If you weren't, what questions or comments do you have?