Alternate measure for Economic Performance

Topics: Gross domestic product, Sustainability, National accounts Pages: 4 (1198 words) Published: September 16, 2014
Business Sustainability
Alternate measure for Economic Performance
Jayant Kumar

Preface
An indicator is something that helps one to understand inclusive position, the path and how far one is from the point they want to be. A good indicator gives the alert about the problem before it gets too bad and helps to recognize things to do in-order to fix it. Indicators of sustainable community point to areas where the links between the economy, environment and society are weak. It allows one to identify the problematic area and helps the ways to fix restore it.

GDP and profit currently dominate society’s discussions of economic performance. They shape the way people think about the economy and business, affecting their behavior and the actual outcomes of economic activity.

So what is economic success? Going beyond GDP and profit will explore what we mean by economic success, the role that GDP and profit play in this, and the potential for broader measures of economic success to help us balance our economic priorities, our social goals, and the constraints imposed on us by the natural environment we live in.

1

Current measure of Performance
Right measurement is a powerful instrument for social progress; wrong or imprecise measurement a source of hazard and even havoc. Two main measure of economic success are currently are GDP at the national level and profit at the Organizational level. GDP is the value added measure that is broader than Profit. GDP and profit are contested concepts that are subject to ongoing refinement. They are defined and calculated using extensive rules, processes and practices, including the system of national accounts and financial reporting standards.

What do we mean by Economic success? To assess the suitability of measures of economic success, we first need to clarify what we are trying to measure. What does a ‘successful’ economy look like and how do individual organizations contribute to success. Well over half a century, the...
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