When we think of prosperity, we think about the future as well as the present. Is today’s standard of living, way of life, sustainable? Most households and business leaders answer this by thinking about their assets such as pensions, savings, or their skills and experience. Most people think about prosperity in terms of their ability to access a broad range of goods and services including, not just material consumption but also access to finance, opportunities, healthcare and justice and perhaps the degree to which they are insured against risks of social upheaval, conflict and insecurity. The Wealth Economy project aims to understand and measure the wide range of assets required for sustainable prosperity.
Forward-looking economic policy requires the management of a portfolio of assets that a country possesses, or can access, to ensure that citizens enjoy a sustainable flow of benefits into the indefinite future. This project asks: how we can move to a world beyond GDP? What is true, sustainable prosperity? Our measurement of economic success has evolved to include diverse critical assets: physical, financial, intangible, human, natural and social capitals. For example, could there be a radical replacement of GDP with a small dashboard recording access to these six key assets?
The Wealth Economy team, Matthew Agarwala, Saite Lu and Dimitri Zenghelis are focusing on social, natural and human capital as key determinants of the wealth economy.
Recent years have seen little progress on measuring (or even defining) social capital or trust, despite broad ranging evidence (not to mention experience) for its importance in economic outcomes. The first stage of our research confirmed its importance for productivity. We are currently exploring the interaction between social capital, or a community’s assets, and human capital, the term used for an individual’s skills, know-how and health.
Natural capital has an international definition (in the System of Environmental Economic Accounts), and a few statistical agencies including the UK’s Office for National Statistics have begun developing natural capital estimates – although they are a work in progress, with data gaps, and some difficult conceptual challenges because of the inter-connections, non-linearities and potential irreversible thresholds in natural systems.
These assets offer different types of opportunity to have an impact on statistics, policy and ultimately all of our well-being.
This research is exploring the potential of the whole range of assets required for a sustainable, prosperous economy. The team is actively engaging with policymakers around the world, and national and international statistical agencies.
- Measuring Wealth, Delivering Prosperity
- Valuing Wealth, Building Prosperity
- Building Forward: Investing in a Resilient Recovery
This project is funded by LetterOne.