FIRST Minister Nicola Sturgeon’s big idea of a “wellbeing economy” caused a stir at her recent TED talks, where it seemed to hit a collective nerve. Her idea was to challenge the huge importance placed on Gross Domestic Product (GDP), a measure of the value of goods and services, and replace it with a set of quality of life metrics that paint a broader picture that better encompasses human wellbeing.

It was not a particularly new idea, although the manner and the arena in which it was delivered made people and policy-makers around the world sit up and take notice.

Sturgeon summed it up: “Growth in GDP should not be pursued at any and all cost … The goal of economic policy should be collective well-being: how happy and healthy a population is, not just how wealthy a population is.”

The idea has its roots in the 2007 economic crash which resulted in global economic turmoil.

READ MORE: Wellbeing economy in New Zealand paves the way for Scotland

In 2008, the then French president Nicolas Sarkozy commissioned world leading economists Joseph Stiglitz, who had emerged as a supporter of Scottish independence during the referendum campaign, Jean-Paul Fitoussi and Amartya Sen to look again at how to measure economic and social progress. Their conclusions went beyond GDP and recommended a broader measurement framework.

Scotland, however, was already ahead of the game and indeed has since been praised by Stiglitz for its approach.

One year earlier in 2007 the Scottish Government introduced the National Performance Framework (NPF) which was put into law in 2015. This covers health, education, justice, the environment and the economy in recognition that all of these contribute to the wellbeing of the nation.

Since it was updated last year the NPF now recognises enhancing wellbeing as a specific part of the Government’s purpose and Finance Secretary Derek MacKay confirmed in May that the contribution of policies to wellbeing is being considered in the Scottish Government’s forthcoming spending review.

Spurred on by Scotland a small group of countries has formed the Wellbeing Economy Alliance with the aim of putting wellbeing at the centre of their governments’ agenda so that they draw up their budgets accordingly. Working with them are Stiglitz and the Organisation for Economic Co-operation and Development (OECD).

READ MORE: Scotland's National Performance Framework explained

In establishing the alliance with Iceland and New Zealand and launching this in South Korea in 2018, the aim is to build a network of countries to collaborate and share policy and practice in enhancing wellbeing through better economic interventions.

At the first policy labs in Edinburgh in May 2018 discussions included inclusive growth and performance frameworks, including the planned New Zealand Wellbeing Budget, sustainable tourism and natural capital and how to address child poverty.

The Scottish Government has since expressed interest in the New Zealand Wellbeing Budget which was finally unveiled in May this year and is working with officials in the NZ government to understand how they decided to allocate funding in relation to wellbeing.

Iceland, meanwhile, is a world leader in gender and equality, regularly topping many of the indicators for social cohesion. Other countries are interested and involved in the network and these include Slovenia and Costa Rica.

A symposium on Inclusive Growth and Wellbeing will take place in Iceland in September and Scotland will take part in the Organisation for Economic Co-operation and Development (OECD) conference in Paris in October.

The OECD has already developed a Better Life Index which is built around three‌ distinct domains: material conditions, quality of life and sustainability, each with their relevant dimensions.

“These broader frameworks and approaches are now gaining traction,” said a Scottish Government spokesperson.

“New Zealand has the Living Standard Framework to represent what is important, similar to the Better Life Index developed by the OECD. In future, countries will be assessed in economic and wider performance using this broader approach, rather than just GDP.

“The Scottish Government is committed to this and recognise that we can learn and share with other countries.”

Stiglitz agrees better metrics will become an important diagnostic tool, helping countries both identify problems before matters spiral out of control and select the right tools to address them.

“Had the US, for example, focused more on health, rather than just on GDP, the decline in life expectancy among those without a college education, and especially among those in America’s deindustrialised regions, would have been apparent years ago,” he said.

“Likewise, metrics of equality of opportunity have only recently exposed the hypocrisy of the US’s claim to be a land of opportunity: yes, anyone can get ahead, so long as they are born of rich white parents.

‘‘The data reveals the US is riddled with so-called inequality traps and those born at the bottom are likely to remain there. If we are to eliminate these, we first have to know that they exist, and then ascertain what creates and sustains them.”

A spokesperson for the OECD said macro-economic statistics, such as GDP, do not provide a sufficiently detailed picture of the living conditions that ordinary people experience.

“While these concerns were already evident during the years of strong growth and good economic performance that characterised the early part of the decade, the financial and economic crisis has further amplified them,” he said.

“Addressing these perceptions is of crucial importance for the credibility and accountability of public policies but also for the very functioning of democracy. “Societal progress is about improvements in the well-being of people and households.

‘‘Assessing such progress requires looking not only at the functioning of the economic system but also at the diverse experiences and living conditions of people.”