Wellbeing economy toolkit: supporting place based economic strategy and policy development

Annex A - Wellbeing Economy Monitor – national level

Traditional economic metrics such as Gross Domestic Product (GDP), Gross Value Added (GVA), productivity and headline employment rates continue to be important indicators of how our economy is functioning and contributing to economic objectives. They will continue to feature prominently in Scotland’s economic monitoring and reporting.

However, it has long been widely acknowledged that these metrics do not provide a full picture of the whole economy, as they do not recognise unpaid work, and do not distinguish between economic activity which contributes positively to the health and wellbeing of people and the natural environment, and that which has negative impacts on wellbeing outcomes.

To look beyond such traditional metrics, the Scottish Government published a national-level Wellbeing Economy Monitor in June 2022. Based on the National Outcomes within the NPF, and complementing traditional economic metrics, the Monitor provides a basket of indicators (for example, child poverty, greenhouse gas emissions, the gender pay gap and community ownership) against which to track and assess Scotland’s economic success in delivering a broader range of outcomes that more holistically demonstrate collective wellbeing.

In order to build economic, social and environmental resilience to future shocks, the wellbeing economy approach emphasises the importance of investing in the protection, restoration and maintenance of our ‘four capitals’ (natural, social, human and produced/financial). These can be described as the assets or resources upon which our future wellbeing depends, all of which are interlinked and embedded within the natural environment. That means investing in nature (e.g. soils, forests, water, air, etc), people (e.g., health, capacity, skills), communities (e.g., civic and cultural engagement, personal relationships, support networks, trust) and in the physical, intellectual and financial assets used to provide a flow of goods and services (e.g., buildings, infrastructure, research and development).

The four capitals provide a useful framework for taking a broad view of the economy and its relationship to resilience and wellbeing. For this reason, the indicators in the Wellbeing Economy Monitor are grouped in this way. (Further information on the four capitals approach is available in this Scottish Government report.)