0:00:00.733,0:00:06.665
Just over a mile away from here,[br]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

0:00:17.629,0:00:18.779
Adam Smith.

0:00:19.761,0:00:25.169
In his important work[br]"The Wealth of Nations,"

0:00:25.193,0:00:29.016
Adam Smith argued,[br]amongst many other things,

0:00:29.040,0:00:32.017
that the measurement of a country's wealth

0:00:32.041,0:00:36.459
was not just its gold and silver reserves.

0:00:36.483,0:00:42.236
It was the totality of the country's[br]production and commerce.

0:00:42.260,0:00:48.529
I guess it was one of the earliest[br]descriptions of what we now know today

0:00:48.553,0:00:52.363
as Gross Domestic Product, GDP.

0:00:53.176,0:00:56.278
Now, in the years since, of course,

0:00:56.302,0:01:01.715
that measurement[br]of production and commerce, GDP,

0:01:01.739,0:01:04.680
has become ever more important,

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to the point that today --

0:01:06.009,0:01:09.946
and I don't believe this[br]is what Adam Smith would have intended --

0:01:09.970,0:01:15.165
that it is often seen as[br]the most important measurement

0:01:15.189,0:01:17.644
of a country's overall success.

0:01:18.242,0:01:23.686
And my argument today[br]is that it is time for that to change.

0:01:24.853,0:01:29.830
You know, what we choose to measure[br]as a country matters.

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It really matters,[br]because it drives political focus,

0:01:34.369,0:01:38.371
it drives public activity,

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and against that context,

0:01:40.497,0:01:47.013
I think the limitations of GDP[br]as a measurement of a country's success

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are all too obvious.

0:01:50.300,0:01:55.487
You know, GDP measures[br]the output of all of our work,

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but it says nothing[br]about 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,[br]on illegal drug consumption,

0:02:09.980,0:02:12.592
but not on unpaid care.

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It values activity in the short term

0:02:18.422,0:02:25.067
that boosts the economy[br]even if that activity is hugely damaging

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to the sustainability of our planet[br]in the longer term.

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And we reflect on the past decade

0:02:34.249,0:02:37.657
of political and economic upheaval,

0:02:37.681,0:02:40.684
of growing inequalities,

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

0:02:46.084,0:02:48.350
increasing automation,

0:02:48.374,0:02:51.663
an aging population,

0:02:51.687,0:02:58.687
then I think the argument for the case[br]for a much broader definition

0:02:58.711,0:03:03.346
of what it means to be successful[br]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,

0:03:10.103,0:03:14.984
took the lead, took the initiative[br]in establishing a new network

0:03:15.008,0:03:20.912
called the Wellbeing Economy[br]Governments group,

0:03:20.936,0:03:23.216
bringing together as founding members

0:03:23.240,0:03:29.812
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,

0:03:44.520,0:03:48.250
to say that, yes, economic growth matters.

0:03:48.274,0:03:50.171
It is important.

0:03:50.195,0:03:53.916
But it is not all that is important.

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And growth in GDP should not be pursued[br]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

0:04:08.332,0:04:11.441
should be collective well-being:

0:04:11.465,0:04:15.353
how happy and healthy a population is,

0:04:15.377,0:04:18.743
not just how wealthy a population is.

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And I'll 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,

0:04:25.319,0:04:27.501
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

0:04:32.948,0:04:36.909
that provokes profound[br]and fundamental questions.

0:04:36.933,0:04:40.197
What really matters to us in our lives?

0:04:40.935,0:04:45.317
What do we value[br]in 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

0:05:01.226,0:05:06.622
of addressing the alienation[br]and disaffection from politics

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that is so prevalent in so many countries

0:05:09.150,0:05:11.567
across the developed world today.

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

0:05:16.186,0:05:20.063
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[br]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[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

0:05:57.223,0:06:00.471
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[br]is fulfilling and well-paid.

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It's behind our decision to establish[br]a Just Transition Commission

0:06:09.425,0:06:13.403
to guide our path[br]to a carbon zero economy.

0:06:13.427,0:06:16.792
We know from economic[br]transformations of the past

0:06:16.816,0:06:20.553
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,

0:06:24.569,0:06:27.926
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 partner nations

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in the Wellbeing network,

0:06:40.839,0:06:42.697
Iceland and New Zealand.

0:06:42.721,0:06:46.904
So I'm noting, and I will leave it to you[br]to decide whether this is relevant or not,

0:06:46.928,0:06:50.698
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.

0:07:03.954,0:07:08.781
New Zealand, in 2019,[br]publishing its first Wellbeing Budget,

0:07:08.805,0:07:11.407
with mental health at its heart;

0:07:11.431,0:07:16.684
Iceland leading the way on equal pay,[br]childcare and paternity rights --

0:07:16.708,0:07:20.169
not policies that we immediately think of

0:07:20.193,0:07:23.018
when we talk about[br]creating a wealthy economy,

0:07:23.042,0:07:27.620
but policies that are fundamental[br]to a healthy economy

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and a happy society.

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

0:07:35.137,0:07:40.332
In Adam Smith's earlier work,[br]"The Theory of Moral Sentiments,"

0:07:40.356,0:07:42.910
which I think is just as important,

0:07:42.934,0:07:47.463
he made the observation[br]that the value of any government

0:07:47.487,0:07:49.345
is judged in proportion

0:07:49.369,0:07:52.098
to the extent that it makes[br]its people happy.

0:07:52.830,0:07:56.497
I think that is a good founding principle

0:07:56.521,0:08:02.379
for any group of countries[br]focused on promoting well-being.

0:08:02.403,0:08:04.991
None of us have all of the answers,

0:08:05.015,0:08:08.692
and not even Scotland,[br]the birthplace of Adam Smith,

0:08:08.716,0:08:13.448
but in the world we live in today,[br]with growing divides and inequalities,

0:08:13.472,0:08:16.036
with disaffection and alienation,

0:08:16.060,0:08:17.830
it is more important than ever

0:08:17.854,0:08:21.924
that we ask and find the answers[br]to those questions

0:08:21.948,0:08:25.568
and promote a vision of society

0:08:25.592,0:08:32.323
that has well-being,[br]not just wealth, 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,

0:08:50.477,0:08:53.509
the country that helped lead the world[br]into the industrial age,

0:08:53.533,0:08:56.358
the country that right now[br]is helping to lead the world

0:08:56.382,0:08:58.636
into the low carbon age.

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

0:09:04.094,0:09:09.091
that helps change the focus of countries[br]and governments across the world

0:09:09.115,0:09:13.600
to put well-being at the heart[br]of everything that we do.

0:09:13.624,0:09:17.506
I think we owe that to this generation.

0:09:17.530,0:09:21.340
I certainly believe we owe that[br]to the next generation

0:09:21.364,0:09:23.578
and all those that come after us,

0:09:23.602,0:09:27.467
and if we do that right here,[br]from the country of the Enlightenment,

0:09:27.491,0:09:31.785
then I think we create[br]a better, healthier, fairer

0:09:31.809,0:09:34.240
and happier society here at home,

0:09:34.264,0:09:36.294
and we play our part in Scotland

0:09:36.318,0:09:40.532
in building a fairer,[br]happier world as well.

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Thank you very much.

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(Applause)