I’ve been reading up on the call for the switch from GDP (Gross Domestic Product) to GPI (Genuine Progress Indicator) lately. I’m interested in this mostly due to my self-proclaimed role of a consumer advocate first, but also in regards to the research we are undertaking with Citizen Agency on how to measure the health of communities.
I won’t try to masquerade as someone who understands the depth of these economics debates, but years ago in one of my university classes, we were assigned a book that changed my way of thinking forever, Counting for Nothing, by Marilyn Waring. Her basic premise in this book was that by measuring GDP as the sole indicator of progress, governments would continue to prioritize economic growth at any cost: human, environment, social, etc. Previous to reading Warings book, I had no idea that something like the Exxon Valdez oil spill was considered progress. Furthermore, Waring discusses how the drug trade, child pornography, war, clear cutting, terrorism, and many other horrifying things are not only counted towards the GDP, but sometimes they are the most profitable industries (for example, there is selling drugs, which counts as economic growth, then there is the cost of rehabilitation, which counts as economic growth, not to mention the cost of policing for drugs…).
Thus, while general social wellness takes a plunge, the GDP gets healthier and healthier. Marilyn Waring argued that the cost of this is too great to continue down this path, that this is not a long term or sustainable measure for looking at things and that we needed to rethink our measures to make us accountable for the long term. In fact, even employing basic business accounting practices would account for the depletion of our natural resources (oil & gas companies get to write off their resource depletions for long-term hedging).
What is really interesting to me is the ‘proof’ of how that has played out over the years. Redefining Progress, a California non-profit organization commissioned a study years ago to measure a comparison between GDP and GPI since the 1950’s and found that, yes, the GDP showed a healthy and steady growth while the GPI not only stagnated, but it actually fell after a minor growth to the 70’s as indicated here:
Some even said their measurements were conservative and predicted a 45% reduction in the GPI from 1970-1999. Since then, we’ve seen 9/11, the war on Iraq, a further spread between the rich and poor and devestation of our natural resources.
Months earlier on my blog, I asked the question, “Is purchasing power the only power we have left?” It isn’t. Not if we change the way we measure ‘progress’. The issue today is that policy is influenced by these indicators. No, not influenced…set. And it ‘trickles down’ – it also influences what we value as a society. When success is measured by pure $$ coming and going, everything else becomes noise. Instead of taking diversity of interests for granted, we have to fight for policies to protect human rights, the environment, the arts, and everything else that isn’t considered part of economic growth (although some arts are, it’s not an influential sector in this measure) under a system that values ‘the bottom line’ above all else.
But rant aside…I’m actually looking at the GPI as a potential model for the way to think about how customer interests become core indicators on the success of a web service. Currently, it is measured by ‘growth’ or ‘new customer acquisition’ – especially in the cases of web apps as abandoned accounts still count for ‘members’ in many cases. As I’ve indicated before, I don’t think raw numbers have much to do with the health of anything, and I want to go beyond ‘gut’ instinct so that we can get some more leverage in adoption of this.
I’m actually going to be looking for grants or other alternative revenue sources so that I can hire a research assistant or two over the next while on this and, hopefully, turn it into an e-book or even publish it in the future. If anyone has any hints or help in that area, I’d love to hear them.
January 27th, 2007 at 7:51 pm
This is a brilliant post Tara. The jokes about economists are all true – don’t become an economist.
The truism ‘What gets measured gets done’ needs the balance of ‘maybe what was done, is not what was expected’.
There were threads about Marketing ROI, and Blog ROI, on my blog recently. Somehow there is a desire to single those costs out and perform analysis, yet other costs such as technology, that are used to develop the product are ignored in such calculations.
Yes there is a need to understand cause and effect with regard to customer interests.
January 27th, 2007 at 8:08 pm
You are dead on.Unless we get some sort of handle on the true cost of our whole society then we are running headlong to the edge of the cliff. If a 78 year old can do anything to help feel free to call on me.I’ve time if no special skills, in any case blessings on your endeavor.
Roger
January 27th, 2007 at 8:12 pm
@Roger – personally, I think you could give me an amazing perspective. I’d love to chat at your experience with online apps, etc. and how you think digital communities change things.
@Colin – thanks. Great quote: What gets measured, gets done. I’ll have to catch up on my blog reading. You are there…I am just light years behind.
January 28th, 2007 at 1:31 pm
Hi Tara,
This is a great post and something that I have been reading up on for awhile now. My interests lie more with behaviour, but are nonetheless closely linked with what you are saying.
Some questions I am grappling with are; how do you measure behaviour? How is one’s behaviour on a web app or site affect their life ‘offline’? etc. I have had some progress in this area but have nothing down pact as to what works and what doesn’t…still in early stages of measuring behaviour.
January 28th, 2007 at 1:35 pm
@Mish – awesome. Behaviour would be tough…maybe thinking about it in archetypes would help? As in different roles needed in each system? I don’t know. That sounds really interesting.
January 28th, 2007 at 1:44 pm
You are right, behaviour can be tough. But I have been noticing some connections when you use data in the whole mix. For example, you write a blog post that has a call-to-action. Someone in the community responds to that call and lands on a site or a community page. Where do they go from there? are we letting the person come in and shape their experience? What is their experience and what do they take away? What is of value in the whole experience? The answers that arise from there can potentially lead to product enhancements making the community and site more and more valuable…
Yikes – hope this all makes sense.
January 29th, 2007 at 8:04 pm
Thanks for your comments on my originalcomment. A short answer on On Linepps little or no experience with them. On line communities I’m only involved in one I find that I learn so much from it that I often fail to contribute. iI learn somethinf and want to try it out not respond makes mea lurker rather than an active member?
Further comment on measuring, to arrive at a general standard of life i.e. G.P.I. we could examin the availability of Potable Water neither life nor industry can function without drinking water perhaps some one knows how mucha human needs to be able to live a good life. I’m involved as a Dowser in searching for water thus it interests me. Any comments?
Roger
January 29th, 2007 at 8:24 pm
@Roger – gosh. Potable water. I don’t know. Anyone? I think there are some international organizations that are measuring this. Or at least, they go where the water is most needed and install clean wells.
The only issue with just concentrating on the really undeveloped countries, though, is that we tend to forget that, even though developed, we are measuring the wrong things. Water is good, but if we measured it here, I think we would mostly be in ship-shop shape.
February 7th, 2007 at 10:36 pm
May be what’s needed is a whole new money which can give measures closer to GPI than GDP. My invention is salmoney, a combination currency and guareenteed basic income. While not addressing every issue involved, it removes the zero position. It gives every person a negotiating position of independance which may remove some of the powerlessness that the exploitive situations described depend upon. This position applies to the third world’s poor, and potentially unemployed disgruntled employees. Whistle blowers and persons of conscience could not be reduced to penury for speaking out.
Well all for now, these are excellent points, I look forward to reading more.