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Just over a mile away from here

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in Edinburgh's old town

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is Panmure House.

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Panmure House

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was the home of the world-renowned
Scottish economist Adam Smith.

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In his important work
"The Wealth of Nations,"

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Adam Smith argued,
amongst many other things,

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that the measurement of a country's wealth

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was not just its gold and silver reserves.

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It was the totality of the country's
production and commerce.

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I guess it was one of the earliest
descriptions of what we now know today

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as Gross Domestic Product, GDP.

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Now, in the years since, of course,

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that measurement
of production and commerce,

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GDP, has become ever more important,

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to the point that today,

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and I don't believe that this
is what Adam Smith would have intended,

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that it is often seen as
the most important measurement

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of a country's overall success.

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And my argument today

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is that it is time for that to change.

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You know, what we choose to measure
as a country matters.

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It really matters, because
it drives political focus,

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it drives at public activity,

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and against that context,

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I think the limitations of GDP
as a measurement of a country's success

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is all too obvious.

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You know, GDP measures
the output of all of our work,

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but it says nothing about
the nature of that work,

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about whether that work
is worthwhile or fulfilling.

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It puts a value, for example,

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on illegal drug consumption,

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but not on unpaid care.

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It values activity in the short term
that boosts the economy

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even if that activity is hugely damaging

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to the sustainability of our planet

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in the longer term.

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And when we reflect on the past decade
of political and economic upheaval,

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of growing inequalities,

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and when we look ahead to the challenges
of the climate emergency,

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increasing automation,

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an aging population,

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then I think the argument for the case
for a much broader definition

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of what it means to be successful
as a country, as a society,

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is compelling, and increasingly so.

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And that is why Scotland in 2018

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took the lead, took the initiative
in establishing a new network

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called the Wellbeing Economy
Governments group,

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bringing together as founding members

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the countries of Scotland, Iceland,
and New Zealand for obvious reasons.

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We're sometimes called the SIN countries,

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although our focus is very much
on the common good.

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And the purpose of this group
is to challenge that focus

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on the narrow measurement of GDP,

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to say that, yes, economic growth matters.

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It is important.

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But it is not all that is important.

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And growth in GDP should not be pursued

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at any or all cost.

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In fact, the argument of that group

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is that the goal, the objective
of economic policy

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should be collective wellbeing:

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how happy and healthy a population is,

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not just how wealthy a population is.

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And I will touch on the policy
implications of that in a moment,

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but I think particularly
in the world we live in today

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it has a deeper resonance.

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You know, when we focus on wellbeing,

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we start a conversation

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that provokes profound
and fundamental questions.

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What really matters to us in our lives?

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What do we value in
the communities we live in?

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What kind of country,
what kind of society,

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do we really want to be?

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And when we engage people
in those questions,

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in finding the answers to those questions,

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then I believe that we have
a much better chance

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of addressing the alienation
and disaffection from politics

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that is so prevalent in so many countries

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across the developed world today.

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In policy terms, this journey
for Scotland started back in 2007

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when we published what we call
our National Performance Framework,