The Industrial Strategy Council has published its new success metrics. One of the six 'headline outcomes' is social capital - a measure developed by the Wealth Economy team at the Bennett Institute.
The Industrial Strategy Council has set out one of the ways it will measure the success of the UK Government’s Industrial Strategy in making the economy more productive. Whilst measures such as GDP, productivity and earnings are still valuable and will be examined, the Council will also look at welfare outcomes more widely including social and natural capital, wellbeing impacts, and the distribution of wealth. This marks a shift away from conventional measures of the economy, and headline measures such as productivity.
The metrics have been drawn up based on extensive consultation and stakeholder engagement to ensure they are useful tools. The Council recognises that its approach to evaluation should be live and dynamic. This means that metrics may be updated over time as new research is developed or higher quality data collected. Further research on productivity drivers that are more difficult to measure will complement the success metrics.
These metrics have been developed to capture headline outcomes for the whole of the UK in many cases, but will also enable the Council to make distributional comparisons across places and sectors as well as international comparisons. To complement the metrics, the Council’s approach to evaluation will also include in-depth ‘Insight Projects’, which will provide more evidence on the link between Industrial Strategy policies and outcomes.
The Council has also highlighted areas where it believes that data is missing, such as on the adoption of artificial intelligence and more robust data on self-employed earnings. Stakeholders have been invited to share advice and views on how best to fill these data gaps, building on the Council’s year-long programme of collaborative work with a wide range of communities.
Andy Haldane, Chair of the Industrial Strategy Council said:
Evaluation of the Industrial Strategy is key to understanding what is working and how, and what is not and why. The real test of a successful Industrial Strategy is the consequences it has for the lives of UK citizens. Today the Industrial Strategy Council has outlined a comprehensive set of success metrics to measure the impact of the Industrial Strategy over time.
Another part of the Council’s remit is to challenge and improve how government evaluates progress. To that end, our set of success metrics moves ”beyond GDP”, to measures of social, human and natural capital. These are the means through which a successful Industrial Strategy will touch people’s lives. We have also identified some data gaps as part of developing our metrics and will seek to fill these gaps working in collaboration with stakeholders and statistics agencies.
This article was originally posted on the Industrial Strategy Council’s website here.
The Wealth Economy project at the Bennett Institute asks how we can move to a world beyond GDP? Our measurement of economic success has evolved to include diverse critical assets: physical, financial, intangible, human, natural and social capitals. Could there be a radical replacement of GDP with a small dashboard recording access to these six key assets?
You can read about the work done by the wealth economy team in the interim report: Measuring Wealth, Delivering Prosperity.
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.