Press Release: Cross-party call to rethink how we define economic progress and the good life

Going beyond GDP, CPP has developed a measure that brings together the priorities of inclusive growth into a single figure on the country level.

In divisive political times, co-Chairs of the APPG on Inclusive Growth, Rt. Hon Liam Byrne MP and George Freeman MP, and the Centre for Progressive Policy (CPP), join forces to call for an overhaul of how we define economic progress.

CPP and the All-Party Parliamentary Group (APPG) on Inclusive Growth have today launched the first of its measures of inclusive growth that respond to the need to rethink how we define and measure economic progress.

The CPP Inclusive Growth Country Index has been launched at an event with the Club de Madrid grouping of former world leaders and UK thought leaders in Parliament.

The CPP Inclusive Growth Country Index combines data on consumption, life expectancy, leisure, inequality and unemployment to create a simple metric for more than 150 countries for all years between 2000 and 2017. The results suggest key differences between our measure of inclusive growth and GDP per capita – particularly for developed countries. The Index will be followed by a community and a company index later in the year.

This presents a critical step towards an economy that measures its success based on broad-based economic prosperity and away from a preoccupation with overall output (GDP).

The report, The Good Life, looks at five key indicators at the country level to produce the CPP Inclusive Growth Country Index score for each country:

  • life expectancy,
  • consumption,
  • leisure,
  • inequality and
  • unemployment.

The measure developed in this report adds to the growing body of evidence that inclusive growth metrics can bring the depth of economic insight required to shift policymaking in this country and across the world – away from ‘grow now, redistribute later’ to a model that tackles inequality and poverty as part of achieving broad-based growth.

Co-Chair of the APPG on Inclusive Growth Rt. Hon Liam Byrne MP said:

“We can't rebuild the moral economy where the wealth created is wealth that is fairly shared, unless we change the way we measure 'good growth'.

“That’s why these new indices look beyond ‘GDP as usual' and start taking into account factors like life expectancy, inequality and leisure time.

“Unless we take action now, the top 1% will control not only half but two thirds of global wealth and achieving equality this century will simply become impossible. This work is a vital contribution to building a dashboard that helps us steer a new course towards a radically new economic model."

Co-chair of the APPG on Inclusive Growth George Freeman MP added:

“For inclusive growth to be taken seriously and adopted meaningfully by mainstream business and policy makers it needs to be better defined and measurable.

"That’s why we have adopted and are launching our Inclusive Growth Index for the “three C’s”: Country, Community and Company - so that we can help highlight best practice and take mainstream the policies we know work.

"As we build a new economy in the UK and support a rapidly developing economy globally - we have a chance to ensure growth that genuinely creates a “commonwealth” of shared values as well as share value.”

Report author and CPP research analyst Andrew Norman said:

“Dissatisfaction with conventional measures of economic performance is growing. Too often the quantity of growth is prioritised, with scant regard for its inclusiveness. We need a new measure of performance that offers a truer reflection of the economic realities people face in their day-to-day lives. Only then can we move towards an economic model with inclusive growth as its driving force.”

Key findings of The Good Life:

  1. GDP per capita masks important variations in the level and growth of shared prosperity across countries. Iceland and Luxembourg have similar IG scores despite Luxembourg’s GDP per capita being almost twice that of Iceland’s. Indeed, there are countries with a ratio of IG score to GDP per capita as low as 0.29 and as high as 1.51. GDP per capita is thus an inadequate proxy for economic progress.
  2. The richer a country is, the less relevant GDP per capita is for inclusive growth. The relationship between GDP per capita and IG score is stronger for countries with a GDP per capita below 50% of the US level. For richer countries, GDP per capita provides less of an indication of IG score.
  3. Inclusive growth is closely related to – but distinct from – other measures of welfare. There is a strong correlation between the UN Human Development Index (HDI) and the CPP Inclusive Growth Country Index. Yet there are important deviations, reflecting that – at its core – IG is an economic concept.
  4. Central and Eastern European countries are catching up fast. Amongst OECD countries, those in eastern and central Europe experienced the fastest growth in their IG scores between 2000 and 2017. Five of the top six fastest growing countries joined the EU in 2004.
  5. The UK has a relatively high IG score but suffers from sluggish improvement. The UK’s IG score places it 12th out of 36 OECD countries. Our index implies for the UK that a 1% increase in consumption is equivalent in terms of inclusive growth to a 0.5% decrease in the unemployment rate, each person working one hour fewer per week, a reduction in inequality of 3% or an increase in life expectancy of just over two months. The growth in its IG score is relatively slow, however, leaving it 22nd in the OECD rankings.

Notes to the editor:

  1. The report can be downloaded here when it goes live.
  2. The next metric of inclusive growth will be focusing on inclusive growth at community level in the UK, while in the third we will develop a company level inclusive growth metric.
  3. For more information or for interviews, please contact Andrew Norman: or 020 7070 3366.