Wellbeing Economy Alliance conference: First Minister's speech

It is a pleasure to be here. Thank you to WeAll Scotland for organising today’s extremely important and significant event.

It’s great to see people here from so many different sectors in Scotland, which to me underlines firstly the importance of this event but secondly and perhaps even more fundamentally, it signifies the growing interest that there is in the idea of a wellbeing economy.

That idea of course at its heart is really quite a simple one. It holds that an economy is only truly successful insofar as it enhances peoples wellbeing and it flows from that, that GDP (Gross Domestic Product) is not and cannot be, should not be, the only measure of national progress.

And when you take a step back from that statement and think about why that should be the case it becomes really obvious.

If GDP attaches a value, for example to an activity that boosts economic growth in the short term even although it might contribute to making our planet uninhabitable in the longer term. It attaches a value to, for example, illegal drug consumption but attaches no value whatsoever to unpaid care. It becomes obvious why, although it has a role to play, it cannot and must not be the sole measure of our country’s success.

It holds I think that we must have a wider view of what it means to be a successful country and I am very proud that Scotland is playing, not just a part, but I think a leading part, in redefining exactly what it does mean, and what it should mean, to be a successful economy, a successful society and a successful country overall.

And I think the whole concept of a wellbeing economy is summed up really well in WeAll’s vision document.

It states that the wellbeing economy puts people at the centre of a new economic purpose. Now as I said a few moments ago that’s a concept that Scotland has helped to pioneer over the past decade, or actually even more than that.

In 2007 we launched our National Performance Framework which brings together the indicators that we use to chart Scotland’s progress as a country.

It measures a whole range of issues that affect people’s wellbeing whether its directly, from employment or unemployment, to the performance of our care system, through to access to green spaces in our communities.

The scope of the framework reflects our focus not just on the wealth of our nation but on its wellbeing in the very broadest sense. When we published the revised version of the framework in 2018 we made wellbeing at that time an explicit part of our national purpose as a country.

Today I want to talk about some of the practical action that we are taking to promote wellbeing because Scotland, like every other country, is on a journey here and we have significant roads still to travel.

I’ll start this morning by talking about the spending decisions we make, I’ll move on to talk about the issue of climate change which is so important in this whole debate and finally I’ll say something not so much about what we are doing but how we are seeking to do it.

I’ll talk in that context about the importance we attach to working with organisations across Scotland and indeed with other countries across the world.

My first point though is about how we allocate resources, something that increasing numbers of countries are really grappling with. How do we do that in a way that promotes wellbeing.

Last year of course the Scottish Government confirmed that we would be undertaking a Spending Review a process by which we identify our long-term spending priorities. We also announced that wellbeing would, for this review, for the first time, be a specific overarching theme of that review.

Now that might not sound too significant in and of itself but it is hugely important and it is extremely significant. It means that for the first time all areas of government had to consider their spending from a wellbeing perspective and it will help to ensure that the spending decisions that we take now, and into the future, contribute to those national wellbeing outcomes.

Now of course delays to the UK Governments own Spending Review have meant that we have not yet been able to complete that process but in the meantime we’ve ensured nevertheless that that same focus on wellbeing is guiding the preparation for our Budget next year, which we will publish over the next couple of weeks.

And that represents a significant change in the way that spending decisions are made. Perhaps it comes as a surprise to members of the general public that wellbeing hasn’t explicitly been part of how we allocate and spend resources but it is a significant change that we are putting it absolutely at the centre.

And I think it does help to send a very strong message and a very strong statement of intent about what we value as a country and what it is important to value in the years ahead.

The second issue I want to talk about, not surprisingly, concerns our approach to tackling climate change.

Last week of course we learned that 2019 was the second hottest year on record.

That of course confirms what we already know, that the world is facing a climate emergency, and indeed we only need to look at the bush fires in Australia to see and understand the consequences of that.

Climate change poses a fundamental, existential in many parts of the world, threat to peoples wellbeing and to the future of our planet.

It also poses really fundamental questions about traditional notions of economic success.

It is becoming more and more obvious that, as I alluded to a couple of moments ago, it makes no sense to focus purely on growth when some measures undoubtedly boost economic growth in the short term and make our GDP figures look better but that activity is going to do real damage to the planet in the longer term and make it more difficult to face up to and address that climate emergency.

In Scotland we have already legislated for targets that will see Scotland become a net zero emitter of greenhouse gases by 2045, while targeting a 75% reduction by 2030.

These are the most ambitious statutory targets anywhere in the world, not just in terms of the headline commitment but in terms of how we measure and the sources of emissions that we take into account.

And also as everybody here knows later this year Glasgow will play host to COP26.

That will attract tens of thousands people from around the world and undoubtedly is the most important climate change conference since Paris in 2015. Arguably more important even than Paris was when you consider the scale of the challenge and the urgency of the challenge that confronts us.

And I am determined, and the Scottish Government is determined, that when people come to Scotland later this year they will see that we are not just welcoming people from around the world but they will also see tangible evidence that we are a country leading the world in the fight against climate change.

Just as Scotland partly led the world into the industrial age we have a moral obligation to play that same leading role as the world moves into a zero carbon age.

And doing that is, as I said, firstly and foremost a moral imperative but it’s also a massive opportunity.

Many of the profound changes to every aspect of our lives that we need to make will not just help us reduce emissions and meet those climate change targets in the process, we’ll reduce our energy use, we’ll improve our natural environment which will also improve our public health.

If we get it right we will potentially transform our economy and create high-skilled, highly paid jobs in the process.

And all of that, if we do it right, will contribute to peoples wellbeing.

But of course as with any economic or social change there is also a risk attached to that and the risk is not doing it right, and in particular we risk doing it in a way that leaves communities and individuals behind, that undermines our individual and collective wellbeing rather than enhancing it.

That is one of the reasons why back in 2018 the Scottish Government, and I think we are the first country in the world to do this formally, established the Just Transition Commission.

It’s role is to advise government on the move to net zero and in particular to advise us on how we make that transition in a way that doesn’t leave people behind, in a way that spreads the benefits and the opportunities so that the efforts that we are making to decarbonise our economy also contribute to our goal of a more equal society.

A society that has greater wellbeing, happiness and health absolutely at its heart.

There is also a very strong parallel here with the issue of automation.

As we move to increased use of technologies such as artificial intelligence there is again better potential for real economic benefits particularly for a country like Scotland, for a city like Edinburgh, with already a very strong vibrant growing tech sector.

But there’s also a range of ethical questions to confront and a real risk that, as we make that transition individuals and communities are left behind, so we must work now to make sure that doesn’t happen.

It's why, for example, we are working with the STUC on looking at the impact of automation. And again, as with decarbonisation, if we focus solely on increasing overall output we might actually reduce the living standards of happiness and wellbeing of individuals and communities who lose out or who feel like they are losing out.

But by looking at wellbeing, by putting wellbeing at the heart of what we are doing, we can increase the chances that major technological and economic changes bring benefits to the greatest number of people across our country.

Now I think it’s fair to say I am proud of the work that Scotland is doing here, we don’t have all the answers, we are as I said a moment ago, like everybody else. on a journey.

But we are, I think, in the vanguard of the countries that are really facing up to this and thinking hard about how to turn this rhetoric into reality, as we tackle some of these big defining challenges that the world faces.

We know we have in that process a lot to learn from other countries across the world which is why in 2018 we established the Wellbeing Economy Government initiative or WeGo as its known.

The three founding countries of that alliance are Scotland, New Zealand and Iceland, as I say perhaps incidentally, perhaps not, three countries that are currently led by women. You can draw your own conclusions from that.

But those three countries I hope, and actually expect, will be joined by one or two new members in the year ahead and the purpose of that is to bring together likeminded countries with a commitment to wellbeing.

Countries that have a lot of similarities but also face lots of different challenges. It provides a forum to exchange ideas on our shared priorities.

For example one of the things that we discussed at the WeGo Policy Labs in May was wellbeing budgeting. New Zealand’s experience of that has already informed Scotland’s work on the Spending Review that I spoke about at the start of my remarks.

Sustainable tourism is another key focus. All three of the WeGo countries benefit hugely from tourism – partly of course because of their natural beauty. We therefore face many of the same challenges of balancing economic growth with the urgent need to protect natural capital. So it makes sense for us to exchange experiences and expertise on this issue.

We’re also working closely together on climate change and the Just Transition. I can confirm that these issues will be a key focus of the WeGo Policy Labs that take place in Edinburgh in May.

We also intend to hold a further series of WeGo meetings to coincide with COP26 at the end of the year.

And on a broader scale we plan to convene an international business summit later this year, that would seek to promote the principles of the wellbeing economy and explore the role that business can play in achieving that. Because there is a big obligation on businesses to think about this, and focus on this, in the way that many governments already are and I know that is something you will be discussing here shortly.

That conference, like so much of what we do reflects, I think, a key point. Building a wellbeing economy is not, and cannot be, a task for government alone. Although I do think governments have a responsibility to show leadership and to lead by example individuals and organisations across our society have a big role to play.

That’s one reason why when we revised the National Performance Framework we engaged representatives from across different sectors, and I’m sure some of the organisations represented here today were part of that process.

It’s also why I do believe that the work of this organisation is so important. Because by building the case for change, and we shouldn’t yet assume that that case for change has been won, being evangelists for that case is very important. Also in demonstrating the benefits you are making a hugely positive difference.

As today shows you’re helping more and more people to learn about the idea of the wellbeing economy and what it means in practice and you’re helping to inspire ideas and action which will make it a reality.

So what you do in all of that is something the Scottish Government and I personally appreciate and I am really delighted to be here today. Thank you for giving me the opportunity and thank you for your commitment to this cause. The Scottish Government is absolutely committed to working with you and I hope it continues to advance the concept and the reality of a wellbeing economy now and in the years ahead.