The traditional view in economics throughout history has been that the Gross Domestic Product has generally been used as the primary measure of a country’s economic progress and success. However, post-COVID realities have suggested that there are more complex yet accurate ways to measure economic success, based on a combination of several factors taken into account. The new metric developed by the Forum outperforms the simple use of GDP in the following ways: economic contextuality, focus on the future of the planet, recognition of the importance of human capital.
According to the World Economic Forum, in order to really judge the success of a country and its economic future, four factors must be taken into account. Prosperity, planet, people, and institutions, these are the four pillars of a successful state that must be in mutual support with each other (World Economic Forum, 2021). The metric of prosperity has the characteristics of economic contextuality, as it contains, in addition to GDP, the presence or absence of problems of wealth distribution and social mobility. Taking care of the planet is proof that a country has the time and energy to pay attention the environment. As a rule, a first world country can be identified by its ability to allocate natural resources and avoid toxic emissions. It is also necessary to evaluate the country in terms of human capital, which is a two-sided characteristic. On the one hand, people are valuable in the state as specialists and trained talents, on the other hand, the country’s gene pool and the level of public health are important.
It is this completeness of the context that allows one to speak about the reliability of this assessment system and its relevance. Touching upon the environmental aspect puts any country in a situation of the need to take care of the planet, which is especially valuable in the current situation of global warming. Taking into account the importance of the human resource speaks of the human-centricity of any economy, which is unthinkable without human diligence and professional skills. Thus, the new scheme of the World Economic Forum makes one look at the economy as a complex set of aspects of life, which makes it superior to the simple GDP arithmetic.
Reference
World Economic Forum. (2021). GDP is no longer an accurate measure of growth. So what can take its place?World Economic Forum.