How We Measure Progress is a Question of Evolution

By Lise Pretorius, member of the St. Gallen Symposium's global Leaders of Tomorrow community

We are in an age of extreme risk and incredible opportunity. On the one hand we are seeing radical breakthroughs in exponential technologies like 3D printing, robotics and artificial intelligence, giving us the sense that we have never been more advanced. At the same time, the majority of global citizens are excluded from the fruits of growth while the side-effects of growth have piled up to critical levels - we are crossing irrevocable ecological limits, entering an age of water risk and extreme climate risk, and seeing a continuous and untenable rise in the gap between the have's and the have-nots.

How do we measure our progress in this context? If I were to suggest that we sum the market values of things extracted and produced within a country - counting equally the likes of missiles, cigarettes, and educational technology - you might think I was mad. Yet this is what we are doing.

The dominant measure of progress used today is still Gross Domestic Product (GDP), a measure invented in the 1930s when the United States was pulling itself out of the Great Depression. The solution lay in boosting the economy; in maximizing economic growth. But today's global context could not be more different or more complex, not least because many of our global challenges are exactly a result of historic growth. In this context, GDP is not only an ill suited proxy for progress; it is also a dangerous one.

Consider Africa. The continent is home to a wealth of natural and untapped human capital. But it is also home to some of the world's most crippling social challenges and is extremely vulnerable to the effects of climate change. Consider then what a typical GDP-enhancing investment would look like: a foreign entity sets up shop, enjoys cheap labour and limited environmental regulation, and extracts African natural resources to produce something. Because anything produced (or even extracted - think mining) inside the boarders of a country gets counted in that country's GDP, this will boost GDP. But the profits leave the country, mostly to fill the pockets of foreign shareholders, and what remains is often only enjoyed by a minority elite. Most of the actual resources and products also leave the country. Furthermore, because GDP doesn't take into account the depletion of natural resources, countries do not account for rapid depreciation of their most critical assets.

It is clear that this model suits only a handful of interest groups. Countries can achieve a boost in GDP per capita, enjoy a sense of progress, while achieving little, none, or even negative growth in wellbeing of average citizens. As long as we pay sole tribute to increases in GDP, this model of growth will continue to be justified.

Instead, developing countries - especially in Africa - have an opportunity to do things differently from the start. We have the opportunity to imagine what an economy based on African principles of Ubuntu (human kindness and connectedness), clean technology, and inclusive social systems might look like. And while we still lack a clear roadmap of how to get there, what we do have is a map of paths to avoid. The last 200 years are an encyclopedia of lessons in what works and what doesn't, for what causes financial instability, unhappiness, distrust, and environmental collapse.

We also have lessons to learn from the pioneers who braved to do things differently. In 1972, the Fourth King of Bhutan took the lead in critically rejecting a GDP based model, stating that the country would focus instead on policies that increase the Gross National Happiness (GNH) of its people. This leadership from Bhutan - at the time just philosophical - subsequently inspired a range of new global indices based on more holistic measures of growth and progress. Since 2008 Bhutan has actively been measuring GNH through an index via a national survey. The aim is to detect where, why and for whom wellbeing is high or low so that policy can be adjusted accordingly.

What can we learn from Bhutan?

At the very least, that the path is not straightforward. In the six months I spent in Bhutan in 2014, I talked to people from all walks of life about GNH in practice. At one conference where topics included "Imagine what a GNH economy might look like", and "Is Gross National Happiness thinking applied in economic policies and activities?", there was a sense of uncertainty regarding how to imagine, create, and achieve a GNH economy on the ground.

For starters, the ingredients that are needed are not always easy to achieve. For example, countries need accurate data on all natural and social capital (which do not have market values) to optimize tradeoffs between these and economic capital.

Secondly, they need buy-in from society. While there is no lack of political will for GNH in Bhutan, the country is now also a democratic constitutional monarchy, meaning that the wants of the people tend to sway governance priorities. For example, many of the urban youth, who spend weekends in bars and clubs, want to experience the life of Western-type consumerism but face realities of unemployment and limited economic opportunities. It is clear, in other words, that the country has not totally escaped the pressure to pursue a GDP-based development policy, even if it is carefully trying to strike the right balance.

I would like to see African nations deciding for themselves what progress looks like. I would like to see this translated into policy, and then into action. It will mean pursuing a specific type of growth as a means to achieving things like inclusive technologies, sustainable energy systems, and circular, ecologically regenerative business models. It will also mean forgoing the types of growth that undermine these ends, and agreeing on a measure of progress that will, without exaggeration, guide the evolution of the human race.

Growth - The good, the bad, and the ugly will be debated in the light of the 46th&nbspSt.&nbspGallen Symposium&nbsp(11-13&nbspMay&nbsp2016).