An event organised by the European Economic and Social Committee (EESC) investigated what measures other than gross domestic product (GDP) could help the EU recover successfully and build a sustainable and resilient economy.
The European Union needs indicators that can complement GDP to address and assess 21st century global challenges such as climate change, poverty and resource depletion, while at the same time promote health and a better quality of life. These indicators should be instruments for both the present and the future: they should be used to not only monitor and measure the state of play, but also to advise policy-making, improve communication and stimulate target-setting.
At the hearing held by the Section for Economic and Monetary Union and Economic and Social Cohesion (ECO) on 3 November 2021, experts from organised civil society and academia, as well as decision-makers, discussed what indicators on well-being and development should be considered to complement the classic economic ones.
Setting the tone of the event, Stefano Palmieri, ECO president, referred to the need for new indicators to be better integrated into the policy-making process at European and national level to allow the EU to emerge stronger from the COVID-19 crisis, while facing future shocks with improved resilience:
The new European priorities that emerged over the past year, such as the digital and climate transition and the need to integrate environmental, social and governance criteria into all levels of decision-making, have already underlined the need for "beyond GDP" indicators. The COVID-19 crisis and the recovery efforts make this even more urgent in order to build a resilient and sustainable European future.
GDP is the main measure of macro-economic activity in the world and has been used by political and social decision-makers in public debates for years. However, it was not designed to be a comprehensive measure of prosperity and well-being.
Mentioning the new challenges ahead and the need to build resilience against new crises and threats, Janusz Pietkiewicz, president of the study group of the EESC opinion that is currently being drafted on this subject, said:
In today's world, with a broad access to digital instruments in social communication, new indicators are essential in order to better pursue the ambitious UN Sustainable Development Goals, assess the impact of the economy on the environment and on combating climate change. They are also crucial for digitising and greening the economy, and planning fundamental changes in social cohesion for well-being and better quality of life.
In a nutshell, new indicators could help the EU make a successful recovery, and a sustainable and resilient EU economy possible. In this respect, Petru Sorin Dandea, rapporteur for the EESC opinion, pointed out:
Investments in social cohesion, sustainable development, human and social capital and quality of life will be paramount in creating opportunities for modern businesses and boosting employment, wealth and sustainable growth in the future. This means that indicators that look beyond GDP must be able to do more than merely monitor and measure: they must inform policy development, improve communication and promote target-setting.
Speaking on behalf of the European Commission's DG ECFIN, Alessio Terzi said that shifting away from an intensive use of resources on our planet was key and that new indicators were needed to measure the quality of growth, which had to be a green one.
In the same vein, Romina Boarini, from the Centre on Well-being, Inclusion, Sustainability and Equal Opportunity of the Organisation for Economic Co-operation and Development (OECD), underlined that prosperity beyond GDP meant measuring what really mattered: apart from economic performance, it had to encompass well-being and social progress, inclusion, people-centred policies and, ultimately, sustainability.
On the social partners' side, Malthe Munkøe, of BusinessEurope, pointed to the need of having a range of indicators that matched our priorities and really reflected what we were interested in: the state of the world, but without forgetting that GDP measured the important capacity of an economy to create added value.
Liina Carr, representing the European Trade Union Confederation (ETUC), noted that while many Beyond GDP indicators existed, these were not yet truly embedded in current policies and therefore it was important to include an agreed set of Beyond GDP indicators in the new architecture of the EU's economic and social governance.
Jonathan Barth, from the ZOE-Institute for Future-Fit Economies, added that the Beyond GDP mission was about shaping a regenerative and resilient well-being economy and offered, on the basis of the Doughnut economics model, a possible framework that could incorporate sustainability, well-being and resilience with the priorities of economic progress.
Finally, Ester Asin, from the WWF European Policy Office, highlighted that GDP-only measurements had limitations and that in re-building in a better way after the pandemic, we had to make sure not to go back to business as usual, but rather head towards a fundamental change in our lifestyles. As the social and environmental levels were strictly interconnected, progress and success were not only about producing but also valuing what we treasured in society: quality of life and well-being.
The findings and conclusions of the hearing will now feed into the EESC opinion and its recommendations will also be channelled into the Europe-wide discussion held in the framework of the Conference on the Future of Europe.