Published on 4 March 2020
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The hidden capital in our economy – report preview ‘Valuing Wealth, Building Prosperity’

Julia Wdowin explores the missing capitals in our economy highlighted in a new report launched by the Wealth Economy project.

The winter months took their toll on the Bennett Institute office ivy plant, or maybe, more specifically, it was the miscommunication between office colleagues as to who would water it most regularly.

Immersed in work aiming to conceptualise the input of different capitals that go into making up the Wealth Economy, a stream of countless office conversations had reflected on the plant’s role in building our office’s social and natural capital. For it had been a source of striking up conversations with visitors, smoothing office life, and building colleagues’ trust.

Yet few mainstream indicators of economic progress take the positive effects of office greenery into account. Almost nowhere is this kind of natural and social capital, capital that is propitious to economic prosperity, directly accounted for in mainstream indicators of growth. Similarly with the capital generated by having an office chessboard, and what this can do for social capital levels and economic well-being.

It is not just the economic benefits from things so modest as ivy plants and chessboards that are omitted from measurements of economic progress. These things are not accounted for, not measured in the mainstream– they are part of the “missing capitals” that are being increasingly acknowledged as important to the measurement of our economic well-being, which includes for example, our productivity levels and social welfare. These missing capitals are what have constituted the central focus of the Bennett Institute’s Wealth Economy team’s last year of work.

At the roots of the Wealth Economy project stands the idea that the economy is built around multiple similarly important capitals, and so to measure its strength and potential we must be able to account for the levels of these different capitals. This requires understanding the capitals and measuring their stock. During this first year of the project, research by the team so far has concentrated on two fundamental stocks of capital: natural and social.

The Bennett Institute’s latest report, bringing together the work done over the last year, shows that measurement of natural or intangible capitals, precisely such as social capital, is tricky. Yet, our work also shows that environmental accounting, based on taking stock of natural capital, is already being used effectively around the world, and that measurement of social capital is possible and operational. Our efforts to operationalise the measurement of intangible capitals stem from the steady confidence that some idea of size and quality of them will lead to the better overall quality of information and statistics, and improve on the damaging current reality of a constant zero input of these capitals in measures of economic progress.

Social capital

Social capital is needed for any economy to function, this is widely agreed upon. In fact, the World Bank has estimated that intangible capital, which consists primarily of human, social and institutional capital, may make up between 60% and 80% of total wealth in most developed countries. Outputs featured in the newest Wealth Economy report include work that approaches the measurement of social capital, analysing survey questions that capture levels of different aspects of trust, and also asks what are the drivers of social capital? Another piece of research looks into the empirical relationship between trust and macroeconomic growth, more specifically at its links to total factor productivity levels.

Natural capital

A substantial amount of research over the last year has been dedicated towards exploring novel ways to measure natural capital with the aim of innovating how we understand the global distribution of consequences of climate change and of resource depletion. One featured piece of research looks into research depletion impacts along different stages of the supply chain, going beyond static domestic accounting of natural capital. Another research strand investigates how different accounting perspectives such as production-based and consumption-based accounting can give us different information about how countries stand to gain and lose from global emissions.


Building wealth is a way of taking responsibility for our shared future prosperity. While looking at its individual capital components, the report also brings light to the question of how to cultivate wealth. Investment and innovation are the building blocks for strong and sustainable wealth cultivation. The report makes clear that there are things that we can do to grow wealth; essentially, progress in cultivating wealth depends on our actions and how effectively we invest and innovate now. Changing social norms and expectations is another thing that lies in our hands for managing the growth of wealth.

The effect of this first wave of research at the Bennett Institute has been far-reaching in academic and policy spheres. But this is the beginning, and the team plan to take this work further. While continuing to look at social and natural capital, research will expand to a third capital -human-, and look further to how these three interact.

Clear from the outset of the Wealth Economy project was that defining and measuring intangible and natural capitals would be challenging. The forthcoming report, however, which brings together a year’s worth of research, shows that significant steps can and are being taken in this direction, and this first year of work forges the path to thinking of wealth as a framework for measurement of economic prosperity.

The Wealth Economy: Natural and Social Capital is funded by LetterOne.


Julia Wdowin

Julia Wdowin

PhD student

Julia Wdowin is a PhD student at the Bennett Institute for Public Policy. She has previously worked with Professor Diane Coyle on the ‘Wellbeing, progress and public policy’ programme. Her...

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