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ECONOMIC GROWTH

Measuring success is more than just boosting GDP

The past decade in local government has been dominated by pushing forward local economies, with subtle shifts in focus, but tirelessly chasing GDP, says Heather Jameson. But is there a new way?

But what happens if growth is not the right answer? In the relentless pursuit of improved productivity, local and central Government may just be measuring the wrong thing.

At last week's Collaborate summer reception, economist Kate Raworth explained her theory of Doughnut Economics. We are, she says, financially, politically and socially addicted to growth. The pursuit of more money coming into the national economy, to avoid raising taxes, has become a political obsession.

According to Ms Raworth, we need to shift away from the materialism, consumerism and a Gordon Gekko-style greed that is damaging the eco-system in the constant pursuit of growth. Forget the idea raising the GDP will create a trickle-down effect – it is just not working, she suggests.

While this may just be left-wing economics pushing back at consumerism and austerity, it raises a question – if not growth, where next for local government?

Much of the sector has already recognised the shortcomings of chasing GDP alone and shifted towards inclusive growth as a measure – but is that enough?

In New Zealand, Prime Minister Jacinda Ardern has launched the country's first wellbeing budget. It will measure the country's performance on mental health, child poverty and domestic violence, rather than straight growth. While there is much scepticism, the real test will be if it pays off in terms of savings in public spending on picking up the pieces of social issues.

What does all this mean for local government and its role in economic growth? According to Ms Raworth and the other speakers at the Collaborate event, it means recognising people's lives are more than just consumer and producer; it means recognising they have families and communities; it's about sharing power, and working with local groups – all bread and butter to local government, but on steroids.

For now, local government will still need to promote growth, to work with partners to attract investment, boost jobs and increase the life chances of local people. But, as we shift into the third industrial revolution, we are seeing a massive change in the way people work, live and organise into communities.

Should we now consider a new way to measure success?

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