The current economic logic says that if somewhere is making money, it’s doing well. But here at Happy City we’ve always been clear that that’s only part of the story. GDP is a measure of wealth, not wellbeing and using it as a sole metric to measure societal progress misses out so much of what really matters to people: fair, healthy, sustainable places to live.

Not only does GDP miss out so much of what’s important for communities to thrive – it also doesn’t reflect differences and inequalities at a more local level. National metrics don’t give any nuance or understanding into the fact that economic growth does not benefit all areas of the country equally. That’s why we created the Thriving Places Index – a new way to understand the strengths and challenges of places at local authority level. 

Earlier this month, the ONS released experimental statistics on regional GDP. Whilst it’s important to note that these are these are only experimental and aren’t completely authoritative we thought it might be interesting to compare these results with the data behind the Thriving Places Index to see if there are any connections between regional GDP and the conditions for people to thrive. 

The first thing to note is that regions that have done better i.e. have higher regional GDP don’t necessarily do better at creating the conditions for wellbeing when we look at their local conditions scores (which indicate the conditions which support wellbeing). There is also no correlation between annual regional GDP and overall self-reported wellbeing (these overall wellbeing scores are made up of local authority averages for four personal wellbeing measures created by the ONS (the ONS4), and an indicator of childhood wellbeing). 

Interestingly, there is a significant negative correlation between annual regional GDP and scores on the sustainability headline element, although the correlation is weak. This may suggest that greater regional GDP is related to poorer sustainability.

The same results were found when looking at percentage change in GDP over time between 2017 and 2018: places where GDP had increased had slightly lower sustainability scores on the TPI, and weren’t related to local conditions scores or subjective wellbeing scores. Overall our analysis underlines the point that GDP isn’t a good proxy for wellbeing – higher GDP isn’t equivalent to greater wellbeing or sustainability either at national or regional level. 

As Joseph Stiglitz said, if we measure the wrong things, we strive for the wrong things. For too long our collective societal efforts have been put into chasing growth at any cost – without any clear understanding of who is winning and who is losing from this focus. With new approaches to data and measurement emerging all the time we’re hopeful that we’ve now got the tools to create place-based wellbeing economies that work for everyone. 

Find out more about the Thriving Places Index at www.thrivingplacesindex.org.

The caveat of this analysis is that the GDP estimates used are at a regional level, not at local authority level. Therefore we can’t be certain whether regional GDP is correlated with Thriving Places Index scores. However, we think that ONS release indicates the clear need for more data at the sub-national level.