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Cities Are Pointing The Way To A Post-GDP World

04/10/2016 13:44

For generations, governments across the world have regarded economic growth as the primary driver of better living standards for their people.

Increasingly, however, there's an acceptance that raw increases in GDP alone can no longer be seen as a proxy for prosperity.

As long ago as 1968, Robert F. Kennedy got to the heart of the matter when he said that GDP "measures everything except that which makes life worthwhile". Yet persistence with the valuation of economic growth above all else has led to a world of stunning inequality, growing disillusionment with mainstream politics, and a worsening climate change problem.

This matters hugely in a world undergoing ever faster change.

Our myopic focus on GDP growth has brainwashed us into quantifying 'success' and 'failure' in purely monetary terms.

Rapid urbanisation is a case in point. Three million people move to cities each week, with current projections suggesting 2.5 billion people will be added to urban populations globally by 2050. As hubs of entrepreneurship and innovation, cities will play a huge role in bridging the disconnect between GDP growth and more holistic definitions of prosperity that take account of people's wellbeing and ability to thrive whatever their context.

Indeed, some cities are already beginning to harness this creativity not for conventional economic reasons, but to solve problems of sustainability and come up with people-led initiatives that create social value.

One American local government organisation called New Urban Mechanics is working towards what they call "participatory urbanism". Its premise is that citizens can diagnose and solve problems better than government alone. So they've opened a network of three "civic innovation offices" in Boston, Philadelphia and Utah to give citizens the resources to change their cities as they want to. Citizens or organisations whose ideas are 'liked', Facebook-style, can partner with a publicly-funded research and development group to execute their ideas. Success stories so far include the use of a digital platform to make it easy for citizens to report litter, vandalism or service problems to municipal governments, as well as another social media inspired platform for local government workers and citizens to communicate with each other digitally. Although this may sound modest, the founders point to its potential to "shift the way government serves its constituents". In an age of disillusionment, empowering citizens like this is compelling.

Amsterdam is home to another great example of urban-focussed innovation. Through its AMS Institute (Advanced Metropolitan Solutions), it brings together agents of change from public, private and civic groups to create a laser-sharp focus on meeting sustainability challenges, while benefiting citizens and being commercially self-sustaining. Their current research concerns how to convert the existing energy grid into a smart system which will host renewable energy more robustly, and also create broader market opportunities for ordinary people. The institute is also researching and testing the effectiveness of planting carbon-hungry plants, known as 'Green Junkie' in metropolitan areas to improve air quality.

In London, the Institute of Global Prosperity has partnered with the London Legacy Development Corporation to ensure that communities in East London see real benefits from the 2012 Olympics. The partnership has brought together researchers, local people and businesses to examine how to get the most out of the Queen Elizabeth Olympic Park as a community space. Using principles of human-centred design, researchers and volunteers took time to consult local residents. They came to understand their needs, hopes and expectations of the park, enabling a transition towards something truly valued by the community.

This also includes cooperating with a spectrum of community groups including R-Urban, a group aiming to create networks of local businesses and initiatives that enhance the capacity of urban resilience. This means creating more robust localised economies that are not dependent on flows of global capital. It aims to make sure communities can look after themselves, as opposed to relying on jobs from multinational companies that don't have the same stake in seeing the area flourish. Another group, Lend & Tend has set up a platform for people to share garden space in order to grow food. This push towards a localised sharing economy aims to put wellbeing at the heart of a revitalised community.

All of these developments are encouraging because they demonstrate a shift in focus. Gradually, initiatives such as those above are defying the dogma of economic growth at any cost. Instead, a growing social alliance is finding new ways to meet the problems in front of them, looking to creativity and cooperation instead of simply seeing their 'economy' as something remote, in which they can only ever be passive participants.

At the IGP, one of our big concerns is to understand how these tangible expressions of new ideas can go mainstream. There's never going to be one 'big bang' when it comes to wider adoption. But though small-scale experimentations like this, combined with a willingness to learn and sometimes even fail, we might just build a new approach to our economic models that puts direct democracy, socially-responsible business and partnership between people first.

Our myopic focus on GDP growth has brainwashed us into quantifying 'success' and 'failure' in purely monetary terms. But if we want to live in prosperous societies, not simply economies, that mindset must change. In a finite world, the old way of viewing things has already run out of road.

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