0:00:00.948,0:00:03.835
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[br]Scottish economist Adam Smith.

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In his important work[br]"The Wealth of Nations,"

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Adam Smith argued,[br]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[br]production and commerce.

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

0:00:48.708,0:00:53.416
as Gross Domestic Product, GDP.

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Now, in the years since, of course,

0:00:56.114,0:01:00.840
that measurement[br]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[br]is what Adam Smith would have intended,

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that it is often seen as[br]the most important measurement

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of a country's overall success.

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And my argument today

0:01:20.220,0:01:23.886
is that it is time for that to change.

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

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It really matters, because[br]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[br]as a measurement of a country's success

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is all too obvious.

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You know, GDP measures[br]the output of all of our work,

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but it says nothing about[br]the nature of that work,

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about whether that work[br]is worthwhile or fulfilling.

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It puts a value, for example,

0:02:06.355,0:02:09.852
on illegal drug consumption,

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but not on unpaid care.

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It values activity in the short term[br]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[br]of political and economic upheaval,

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of growing inequalities,

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and when we look ahead to the challenges[br]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[br]for a much broader definition

0:02:58.674,0:03:03.673
of what it means to be successful[br]as a country, as a society,

0:03:03.673,0:03:06.985
is compelling, and increasingly so.

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And that is why Scotland in 2018

0:03:10.432,0:03:15.552
took the lead, took the initiative[br]in establishing a new network

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called the Wellbeing Economy[br]Governments group,

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bringing together as founding members

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the countries of Scotland, Iceland,[br]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[br]on the common good.

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And the purpose of this group[br]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

0:03:58.568,0:04:01.278
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[br]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[br]implications of that in a moment,

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but I think particularly[br]in the world we live in today

0:04:25.916,0:04:28.114
it has a deeper resonance.

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You know, when we focus on wellbeing,

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we start a conversation

0:04:32.827,0:04:37.196
that provokes profound[br]and fundamental questions.

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What really matters to us in our lives?

0:04:40.580,0:04:45.652
What do we value in[br]the communities we live in?

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What kind of country,[br]what kind of society,

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do we really want to be?

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And when we engage people[br]in those questions,

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in finding the answers to those questions,

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then I believe that we have[br]a much better chance

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of addressing the alienation[br]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[br]for Scotland started back in 2007

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when we published what we call[br]our National Performance Framework,

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looking at the range of indicators[br]that we measure ourselves against.

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And those indicators are as varied[br]as income inequality,

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the happiness of children,[br]access to green spaces,

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access to housing.

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None of these are captured[br]in GDP statistics,

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but they are all fundamental[br]to a healthy and a happy society.

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(Applause)

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And that broader approach is at the heart[br]of our economic strategy,

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where we give equal importance[br]to tackling inequality

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as we do to economic competitiveness.

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It drives our commitment to fair work,[br]making sure that work is fulfilling

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and well-paid.

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It's behind our decision to establish[br]a just transition commission

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to guide our path[br]to a carbon zero economy.

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We know from economic[br]transformations of the past

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that if we're not careful,[br]there are more losers than winners.

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And as we face up to the challenges[br]of climate change and automation,

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we must not make those mistakes again.

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The work we're doing here in Scotland[br]is, I think, significant,

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but we have much, much to learn[br]from other countries.

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I mentioned a moment ago[br]our partners at nations

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in the wellbeing network,

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Iceland and New Zealand.

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So I'm noting, and I will leave it to you[br]to decide whether this is relevant or not,

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that all three of these countries[br]are currently led by women.

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(Applause)

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They too are doing great work,

0:07:04.334,0:07:06.932
New Zealand, in 2019,

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publishing its first wellbeing budget

0:07:09.005,0:07:11.631
with mental health at its heart;

0:07:11.631,0:07:15.604
Iceland leading the way on equal pay,[br]child care, and paternity rights,

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not policies that we immediately think of

0:07:20.936,0:07:23.349
when we talk about[br]creating a wealthy economy

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but policies that are fundamental[br]to a health economy

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and a happy society.

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I started with Adam Smith

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and "The Wealth of Nations."

0:07:36.254,0:07:38.285
In Adam Smith's earlier work,

0:07:38.285,0:07:43.236
"The Theory of Moral Sentiments,"[br]which I think is just as important,

0:07:43.236,0:07:47.687
he made the observation[br]that the value of any government

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is judged in proportion

0:07:49.875,0:07:53.078
to the extent that it makes[br]its people happy.

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I think that is a good founding principle

0:07:56.745,0:08:00.467
for any group of countries

0:08:00.467,0:08:02.796
focused on promoting wellbeing.

0:08:02.796,0:08:05.215
None of us have all of the answers,

0:08:05.215,0:08:08.916
and not even Scotland,[br]the birthplace of Adam Smith,

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but in the world we live in today,[br]with growing divides and inequalities,

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with disaffection and alienation,

0:08:16.416,0:08:18.165
it is more important than ever

0:08:18.165,0:08:22.148
that we ask and find the answers[br]to those questions

0:08:22.148,0:08:25.839
and promote a vision of society

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that has wellbeing,

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not just wealth,

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at its very heart.

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(Applause)

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You are right now in the beautiful,[br]sunny capital city

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(Laughter)

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of the country that led the world[br]in the Enlightenment,

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the country that helped lead the world[br]into the Industrial Age,

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the country that right now[br]is helping to lead the world

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into the low carbon age.

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I want, and I'm determined,[br]that Scotland will also be the country

0:09:04.443,0:09:09.463
that helps change the focus of countries[br]and governments across the world

0:09:09.463,0:09:13.904
to put wellbeing at the heart[br]of everything that we do.

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I think we owe that to this generation.

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I certainly believe we owe that[br]to the next generation

0:09:21.928,0:09:24.099
and all those that come after us,

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and if we do that right here[br]from the country of the Enlightenment,

0:09:27.791,0:09:32.661
then I think we create[br]a better, healthier, fairer,

0:09:32.661,0:09:34.536
and happier society here at home,

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and we play our part in Scotland

0:09:36.518,0:09:40.834
in building a fairer,[br]happier world as well.

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Thank you very much.

0:09:42.817,0:09:47.430
(Applause)