- 1 May 2019
I want to thank all of you for being here, for the first session of these Policy Labs.
It is wonderful to be here on this occasion but particularly to be in this venue, the beautifully restored Panmure House, which I think is the ideal location for discussions that will be taking place in the Policy Labs later on.
It is an honour to welcome such a fine array of experts here today – from Iceland, New Zealand and the OECD. And it is a particular honour to welcome Prime Minister Katrin Jakobsdóttir. Your presence demonstrates the importance of this event – and your commitment to the Wellbeing Economy Governments initiative. You are very welcome here, your first visit to Edinburgh and hopefully not your last.
It is very appropriate that we’re gathered here in Panmure House – the home of Adam Smith. In his most famous work, ‘The Wealth of Nations’, Smith argued – among many other things – that a nation’s wealth should not be measured by its gold and silver reserves – but by the total of its production and commerce.
That was an early description of the measure we now know as GDP. In the years since then – contrary I think to Smith’s intentions – GDP has too often come to be seen not just as an indicator of a country’s wealth, but as the main measure of its success.
Yet – following a decade of global economic turmoil – the limitations of that view have become increasingly clear. In countries around the world, there is a growing realisation that growth is not the only measure of a successful economy, in fact in some respects it might not be the best measure of a successful economy. And there is a growing realisation that we must give much greater priority to the wellbeing – and the quality of life - of people living in a country.
The OECD has been hugely influential in mainstreaming that concept – for example, through its support for the work developing the Better Life Index. Here in Scotland, we have tried to embed a much broader understanding of economic success – and for the concept of ‘wellbeing’ – in the work of government.
Back in 2007 we launched Scotland’s first National Performance Framework. That set out the specific the government’s specific purpose – and the outcomes we are striving to achieve. It also listed the social, economic and environmental indicators against which we would judge our progress, as a country.
For example, the indicators measure our performance on issues as varied as income inequality; the wellbeing and happiness of children; people’s access to green and blue spaces; and their satisfaction with housing.
The scope of the Framework also reflects our understanding that government must focus not just on the wealth of our nation, but on its wellbeing – in the broadest sense.
In fact, last year – when we published our revised version of the framework – we made ‘wellbeing’ explicitly a core part of the Scottish Government’s purpose. Later this month we will publish a report that – for the first time – will assess how Scotland is performing against the Framework’s specific wellbeing outcomes.
That focus on the broader definition of success is also evident in Scotland’s Economic Strategy. It has now evolved to the point where it places equal importance on addressing inequality, as it does on increasing competitiveness of the economy.
To that end, I’ve ensured that wellbeing is a major focus for our Council of Economic Advisers. In fact the Council is meeting tomorrow, here in Panmure House, and among other things, it will be discussing the ‘Beyond GDP report’ – which Professor Joseph Stiglitz – one of the Council members – and the OECD’s Martine Durand have produced.
Now we think the work we’re doing here in Scotland is significant – and we strongly, passionately believe it will in the long-term benefit if the people here in Scotland.
But we know that we don’t have all the answers. We know that we have got a lot to learn – and a lot to gain – from working with other like-minded countries.
That’s why the Scottish Government established the Wellbeing Economy Governments initiative and it’s why we’re so pleased to be hosting the first of these Policy Labs. And it’s why we’re delighted to have such a wealth expertise represented here today.
This event is an opportunity to exchange ideas on how we improve the lives of our people, which is what government should be all about, and - in improving the lives of our people - how we also improve the success of our countries overall. So I hope this event will be the first of many – as we work together to advance the concept of the wellbeing economy.
I mentioned earlier Adam Smith’s ‘The Wealth of Nations’. In fact of course, Smith had written an earlier and to my mind equally significant work – ‘The Theory of Moral Sentiments’, in which he sets out the foundations for his moral philosophy.
As part of that, Smith sets out his belief that happiness is achieved when ‘all the different ranks of life are nearly upon a level.'
He also states that, 'All constitutions of government are valued only in proportion as they tend to promote the happiness of those who live under them. This is their sole end and use.'
So I think it’s fair to say that Adam Smith was an early advocate of the wellbeing approach to the economy and indeed that is the belief that underpins the work of this group.
As governments, we see the promotion of sustainable and inclusive growth as a vital way of raising living standards for all. But we also understand that growth is only of any real value if it makes people’s lives better, it is not, and never should be seen, as an end in itself. We have to test whether we are creating a fairer, healthier, happier nation in the process.
This event today represents an important step in helping us to achieve that aim – for the benefit of all our citizens.
So let me end by thank you all again for being here at this important event today. I very much look forward to hearing the outcomes of the discussions that will take place in the Policy Labs.
So without further ado, it is now my enormous pleasure to invite the Prime Minister of Iceland to say a few words.
Thank you very much.