From Output to Impact Economy
Gross domestic product has long been considered the measure of prosperity in society. Today, however, we know that it does not reflect important factors. A shift to a broader base of socio-economic parameters would be relevant.
Economics helps solve a fundamental human problem: how do we best use our limited resources to fulfill our unlimited desires? The available resources are measurable, but our desires cannot be narrowed down. In the last 75 years, the focus of economics has been on the production, even mass production, of goods and services with the primary goal of achieving the highest possible economic growth and thus raising the standard of living. To determine whether the objective of this output economy has been achieved, there is a simple measure, the gross domestic product (GDP). Economists, politicians, media professionals and society as a whole regularly use this figure, which is usually available on a quarterly basis, as a guide. While GDP focuses on the amount produced, it ignores how efficiently the products are made and what the long-term production costs are for people's happiness and the health of the planet.
In recent decades, the problems with this approach have become increasingly apparent. Environmental pollution has increased, the gap in social inequality has widened in many countries, and climate change is threatening our planet. As a result, the output economy cannot keep pace with the changing priorities of today's society. The economy needs to evolve. The fundamental problem remains, but the solution and measurement must take into account long-term impacts, biodiversity, equity and other factors so that future generations can benefit from the same tangible and intangible benefits of our planet.
