Cultivating an economy of wellbeing

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Cultivating an economy of wellbeing

In the past two decades, there were various attempts to create new metrics that determine tangible ways how to translate macro-economic wellbeing into an improved quality of life. While the tools for measuring economic progress are well-established, it is becoming ever more evident that they do not necessarily equate to better welfare.

The discussion about quality of life may take a subjective turn, so determining the components that lead to it are generally less straightforward. Definitions as to what constitutes quality of life are also relative to the broader circumstances and the uncertainty driven by the pandemic is challenging many of the notions that we may have held until very recently.

In 2007, the OECD and the EU Commission co-hosted a high-level conference to clarify which indices are most appropriate to measure progress and how these can best be integrated into the decisionmaking process led by public debate.

In October 2019, the EU Council adopted conclusions on the discussion and invited member states and the EC to include an economy of wellbeing perspective horizontally in national and EU policies and to put people and their wellbeing at the centre of policy design.

The main focus was that, while people’s wellbeing is a value in itself, it is also vital for the EU’s economic growth, productivity, long-term fiscal sustainability, and social stability. In this sense, the economy and wellbeing nurture a symbiotic relationship that asks more of development than just an increase in the material value of goods and services.

Many proponents of the economy of wellbeing make the case that productivity and GDP are but one dimension of a more complex understanding of the human condition. A fuller sense of the quality of life includes non-tangible aspirations such as personal fulfilment, satisfaction, opportunity, health and security, environmental integrity.

So, what is the economy of wellbeing? How do we calculate it? Are we too lost calculating ‘success’ that we have failed to question how to calculate poverty?

To be able to balance economic growth with quality of life we need to consider the elements that contribute to an economy of wellbeing. These include opportunities for upward social mobility; the extension of such opportunities to all segments of society, including those at the bottom of the distribution system; the reduction of inequalities; and environmental and social sustainability.

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An economy of wellbeing is not the competence of governments alone and the private sector has an important role to play.

In essence, we must establish a virtuous circle by which sustainable economic growth and wellbeing work together for the benefit of communities. In real life, however, these two elements tend to be brought into conflict with one another. The pandemic, for example, illustrated this clash every time we debated the order of precedence between economic activity and public health.

In his third encyclical Fratelli Tutti, Pope Francis, made direct reference to the current economic rules and their ineffectiveness in measuring integral human development. Francis’ challenge is also our challenge and the criteria we traditionally use to assess economic development does not correspond to today’s expectations.

A year ago, Ci Consulta through Ci Next launched an ongoing policy process to survey the pathway for tomorrow so that the companies and institutions we assist can anticipate the next lap of their journey and prepare for it. By establishing purpose as one of the key components, organisations combine societal wellbeing and quality of life in their offering.

An economy of wellbeing is not the competence of governments alone and the private sector has an important role to play. Businesses contribute with their active participation in policy-building and implementation as well as in the adoption of business practices that reflect the economy of wellbeing.

The recently debated Social Enterprise Bill is an opportunity for the private sector to be an integral player in the long-term sustainability of society, taking social responsibility beyond acts of charity. The need to balance wellbeing and economic development is becoming ever more urgent and the business community cannot simply wait for the state to find an answer. We need a multistakeholder approach to design the solutions that make sense for our particular context and the private sector is in a good position to lead the way.