Opinion: There’s more to life than gross domestic product

Martin Sime
Martin Sime

Martin Sime is director of the Scottish Council for Voluntary Organisations, and writes a monthly column for The Caledonian Mercury.

For too long, policymakers have viewed gross domestic product (GDP) as the sole measure of our success, but GDP growth does not necessarily indicate progress. It cannot tell us how happy we are, how fulfilled we are in our work or how much time we get to spend with our friends and families.

GDP does not capture what is most worthwhile in our lives or the valuable impact that people can make on their own lives, communities and the wider economy.

It is time to think differently about the economy and how it relates to our people and communities. Quality of life should take precedence over economic indicators, and the third sector is well placed to promote this alternative view of progress through its involvement in building and connecting society. It can drive economic growth based on people and well-being.

It is by helping young people at risk of long-term unemployment that the sector can make the most immediate impact. Investing public money in subsidising salaried jobs for young people within third sector organisations allows them to develop the skills, experience and confidence they require to contribute to their communities in a meaningful way, boosting their employment prospects in the process.

This approach sees all investment directed back to supporting civic society and offers young people the chance to develop positive social values which they will take with them wherever their career leads them. The Scottish government-funded Community Jobs Scotland initiative, delivered by SCVO through 500 third sector organisations, has already placed 929 young people in jobs in just 15 weeks, so we have proof that this model works. What we need to see now is the replication of this scheme on a larger scale for people of all ages, at least until the economy recovers.

Credit unions, co-operatives, social enterprises and third sector organisations are real engines of prosperity that can lift people out of the poverty trap and give them a renewed sense of hope in the face of a fragile economy. Investing in strengthening the self-help and mutual support that these co-operatives can offer, rather than pouring billions of borrowed pounds into the big banks, could make a radical difference to our most vulnerable communities.

Initiatives such as SCVO and Unity Trust Bank’s £50m loan fund scheme announced last week will help third sector organisations access affordable financing to purchase their own premises across Scotland. It will allow participating organisations to focus on delivering vital services to the people of Scotland safe in the knowledge that they are building up an asset base, improving the financial sustainability of the sector and boosting the wider economy.

The potential gains of community-led renewable energy initiatives are also very exciting, and could even outpace all the large corporate projects combined. Crucially, they also bring communities together, act as an anchor for community activity and help to regenerate communities. The proceeds generated could even be redirected towards tackling fuel poverty.

We all have something to offer and this should be acknowledged by our work and welfare programmes. Older people, people with disabilities and hard-to-reach groups all contribute to the economy, whether it is through work and volunteering or community building. It is vital that we see them as part of the solution for our economy and not the problem.

From campaigns to promote sustainable living to developing new measures of progress, the third sector and wider civic society are already rethinking the economy from the perspective of people and their communities.

The appointment of economics Nobel Prize laureate Joseph Stiglitz to the government’s Council of Economic Advisers in Scotland is a welcome move. He is well known for his work advocating a shift in focus from economic production to well-being.

SCVO has called for alternative measures of progress based on well-being to be built into the government’s refresh of its National Performance Framework. As we await the announcement of the refreshed framework, a real opportunity exists to open up the sector’s offer to the wider economy. Let’s not miss it.

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