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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,

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

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And those indicators are as varied
as income inequality,

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the happiness of children,
access to green spaces,

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access to housing.

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None of these are captured
in GDP statistics,

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

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(Applause)

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

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where we give equal importance
to tackling inequality

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as we do to economic competitiveness.

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

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and well-paid.

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

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to guide our path
to a carbon zero economy.

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We know from economic
transformations of the past

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

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And as we face up to the challenges
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
is, I think, significant,

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but we have much, much to learn
from other countries.

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I mentioned a moment ago
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
to decide whether this is relevant or not,

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

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(Applause)

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They too are doing great work,

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New Zealand, in 2019,

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publishing its first wellbeing budget

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with mental health at its heart;

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Iceland leading the way on equal pay,
child care, and paternity rights,

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not policies that we immediately think of

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when we talk about
creating a wealthy economy

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but policies that are fundamental
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."

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In Adam Smith's earlier work,

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"The Theory of Moral Sentiments,"
which I think is just as important,

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he made the observation
that the value of any government

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is judged in proportion

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to the extent that it makes
its people happy.

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I think that is a good founding principle

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for any group of countries

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focused on promoting wellbeing.

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None of us have all of the answers,

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and not even Scotland,
the birthplace of Adam Smith,

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

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with disaffection and alienation,

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it is more important than ever

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that we ask and find the answers
to those questions

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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,
sunny capital city

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(Laughter)

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of the country that led the world
in the Enlightenment,

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the country that helped lead the world
into the Industrial Age,

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the country that right now
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,
that Scotland will also be the country

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that helps change the focus of countries
and governments across the world

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to put wellbeing at the heart
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
to the next generation

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and all those that come after us,

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

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then I think we create
a better, healthier, fairer,

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and happier society here at home,

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and we play our part in Scotland

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in building a fairer,
happier world as well.

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Thank you very much.

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(Applause)