What? At the 2016 World Economic Forum, the International Monetary Fund’s Christine Lagarde, Massachusetts Institute of Technology’s Erik Brynjolfsson, and Nobel-winning economist Joseph Stiglitz publicly stated that the digital age has made gross domestic product (GDP) ‘a poor way of assessing the health of our economies’. Most egregiously, GDP does not capture the social impacts of technology. ‘We urgently need to find a new measure,’ they concluded.
So what? The problems with GDP are well-known. The role of emerging technologies in compounding these inadequacies is new. Alternatives to GDP offer different paradigms of what ‘wellbeing’ means. Models like the Genuine Progress Index and GreenGDP incorporate the social effects of inequality and pollution. Others models, like Bhutan’s Gross National Happiness, shift from objective to subjective metrics. New models continue emerging, like neurobiological measurements of wellbeing based on a Dignity Scale. Fundamentally, a shift away from GDP presents a bold new question: how do we measure large-scale wellbeing in the digital age?
Source: CBS Money Watch - ‘Why GDP fails as a measure of well-being’