We need a new model of economic growth

Sitting here on a beautiful day in London with all the newspaper headlines saying the feel-good factor is coming back, it’s very easy to think that everything that’s happened since 2008 was just a terrible nightmare and now we can all relax.

But I do not believe that is the case. This week the Sunday Times Rich List quoted the largest ever annual growth in wealth of the richest people in the UK and the recent OECD report put inequality at the highest rate for several decades. If you look at the American figures, from 1976 to 2007, 1% of the population in the USA took 40% of the income.

So in a bold bid to uncover an alternative to what I believe is the current failed model of economic growth, I am joining UCL this summer to launch the world’s first Global Prosperity Institute to try to tackle this issue.

There has been a lot of talk over the years of different ways of measuring prosperity. The Bhutanese talk about gross domestic happiness, the United Nations Development Programme has its own measure, the Happy Planet index. But they are not easy to sell to ordinary people and as yet we’ve failed to build a recognisable way of measuring how happy and prosperous we are outside of cash terms.

Currently, if you don’t put a monetary value on prosperity then it’s very hard to measure it accurately and comparatively. If you look at Nigeria, for example, its GDP has recently gone up by 89%. But the fact of the matter is that most of its 170 million citizens live on less than 1.25 dollars a day. So clearly, that upwards growth of GDP is not making anyone richer. It’s becoming a more unequal society. The problem with economic inequality is that it is not only unjust but it costs money; it costs economies dearly.

Beyond capitalism, the Global Prosperity Institute is also going to be tackling environmental challenges. For example, Africa is going to take the brunt of climate change, leading to more migration, that will lead to more conflict. This is not just a matter of economics: it’s a matter of the consequences of not attending to alternative forms of prosperity.

There are plenty of conversations going on about this topic already, from climate change conferences to Davos, but what we need is a robust set of research evidence to support global leaders to make impactful changes together.

The Global Prosperity Institute will bring together the resources of one of the world’s leading universities to work on the topic of prosperity. From UCL’s medics, to our climate change team, energy, transport and social scientists, economists, labour market specialists and people who work, like me, on Africa.

The research we develop together is then going to delivered to people who make decisions, policymakers on the ground with a global reach.

We’re all living now in an interconnected global society so we can’t just make one bit of it prosperous and not attend to the consequences for others.

Examining what sustainable lifestyles will involve for societies across the globe and how they can be developed and maintained in the face of environmental pressures, economic crises and social conflicts will be the institute’s number one priority. We will seek to understand how local, national and global institutions can be transformed to promote the efficient use and sharing of our resources, technologies, knowledge and capital at all levels.

Initial research units are planned in London and Africa to bring policymakers and practitioners together alongside world class researchers, future business, civil society and government leaders, entrepreneurs, civil society activists and ordinary citizens to stimulate original debate on new models for economic, social and cultural prosperity.

We will also be working closely with civil society organisations and local communities to co-design and co-produce research into how to begin to make change at a local level. The expertise and creative inputs of local authorities is much needed by the Institute.

Together, we want to rethink and re-model the evidence base that is needed, and reappraise the measurements used to understand global societal change. We aim to develop radical new starting points to deal with the challenges of sustainable global prosperity.

Ultimately we will aim to map out what future prosperity might look like and how it might be guaranteed for people across the globe by exploring new models and measurements aimed at developing new forms of social, economic and political valuation for communities and individuals.

Global prosperity is the biggest challenge of our age. We have unsustainable levels of inequality, causing contrasting damage in different parts of the world. It is urgent that universities address this problem in radically new ways, as they are the only ones who have the capacity and the full range of resources to do so. Through the Global Prosperity Institute we will take the lead to urgently ramp up the necessary level of debate and action.