GoKawiilUnpaid work, such as volunteering at a food bank, does not typically count towards gross domestic product. Credit: Getty
For decades, economists have known that using gross domestic product (GDP) alone to guide policy is problematic. The metric is mainly a measure of market production, albeit one with strong marketing and branding, and misses key elements of what makes a good life. Nevertheless, failure to agree on alternatives has held back the debate over what should replace it.
Beyond growth — why we need to agree on an alternative to GDP now
This year will be pivotal for changing how policymakers use data to guide decision-making. In May 2025, the United Nations secretary-general António Guterres commissioned a High-Level Expert Group to consider alternatives to GDP. The group’s final report is expected by the end of April and will stimulate great debate about how countries will use its proposed alternatives.
While the world awaits those recommendations, it is worth reflecting on three questions: why is GDP a poor metric, do the data exist to deliver improvements and how could better metrics provoke better policies?
Here, we offer insights from UK efforts to build on GDP to measure economic welfare using readily available national statistics and standard economic tools1. These inclusive metrics show, for example, how UK consumers are more dependent than previously thought on goods and services that are excluded from GDP, and they highlight the importance of social and environmental capitals for national resilience.
Challenges with GDP
GDP faces two main criticisms. First, its methodology means that it is slow to update and reflect the rapidly changing structure of modern economies. All countries need to agree updates to the methodology through a formal UN process: the System of National Accounts (SNA). This is designed to provide a comprehensive, comparable, consistent and standardized accounting system for measuring economic activity across countries and is revised on a cycle of roughly 15 years — the last revision concluded in 2025. Thus, rapidly emerging issues, such as artificial intelligence, can reach a state of maturity before the relevant manuals are refreshed.
The second criticism concerns the SNA’s definition of economic activity. For goods or services to be counted by the SNA as production, and feature in GDP, a person must have been involved in producing them. This can be achieved directly (by using labour to create value) or indirectly (by using capital, which itself must have been created by labour or capital). Ultimately, all production results from current or previous labour by humans.
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