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Just over a mile away from here,
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

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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, GDP,

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has become ever more important,

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to the point that today --

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and I don't believe 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
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 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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are 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,
on illegal drug consumption,

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but not on unpaid care.

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It values activity in the short term

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that boosts the economy
even if that activity is hugely damaging

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to the sustainability of our planet
in the longer term.

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And we reflect on the past decade

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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
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 well-being:

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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'll 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 well-being,

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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,

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access to green spaces, 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,

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making sure that work
is fulfilling 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 partner 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,
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,
childcare 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 healthy economy

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and a happy society.

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I started with Adam Smith
and "The Wealth of Nations."

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In Adam Smith's earlier work,
"The Theory of Moral Sentiments,"

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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
focused on promoting well-being.

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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 well-being,
not just wealth, 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 well-being 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)