Financial wealth does not indicate true well-being

One of the speakers at the Central Alberta Economic Partnership (CAEP) annual general meeting has a different way to value

One of the speakers at the Central Alberta Economic Partnership (CAEP) annual general meeting has a different way to value a community’s wealth.

Gross domestic product and genuine wealth are two separate things and City of Leduc Ald. Dominic Mishio believes looking at the financial wealth of a community or business does not give an accurate account of its well-being. Other factors such as family strength and a healthy environment need to be included. Society and municipalities need to change their focus, he explained. “Maybe we’re trying to go to the wrong end zone.”

He feels it is important for municipalities to consider not only financial and built capital but also natural capital, “the environment as an asset.” Human capital can be assessed by people’s competencies, motivations and health. Social capital is seen in relationships and networks with others. “You must take a look at them holistically.”

As Mishio campaigned to become an alderman, one of the processes he followed was sitting down with voters and having a serious discussion about what is important to a community and individuals. The dialogue was based on the values of “genuine wealth.”

He used those different indicators, rather than strictly the gross domestic product, as a guide. This is not an original idea.

“Bhutan has taken the notion that they are being governed by genuine wealth,” he said.

Mishio has taken these principles into his own business and developed a “well-being return on investment.”

“What is the value actually being attributed when we make capital decisions or decisions in our community in understanding where actual value is being brought to the people?” Mishio asked.

City officials consider not only the cost of a major capital project but how it may benefit residents. They also use a community engagement process to find what other values they can assign to a project.

“To see whether this is actually something the community wants to be done or whether this is just seen as a problem in the community,” he explained.

He believes there are global financial challenges such as in the European Union and Mishio suggests there are organizations making the challenge an opportunity. They are asking themselves if their actions make sense.

“Because the scarcity of dollars and the scarcity of the ability to actually raise any revenue has made sure that any time that you are doing it is directly linked to things that people will value in an economy,” said Mishio.

Assets have changed as well compared to the 1940s. The economy is based on customer equity, social networks, digital data, patents and software are some of the intangible assets driving the economy, he said. “These are all things that exist in our economy and definitely trade in value.”

He believes these assets drive 80 per cent of the economy but the only way to measure their value is by putting a value to each asset on whether it has capital or industrial value. He suggests the way to stick to these philosophies is to follow the principle of a carpet company called Interface, which worked to reduce its waste, CEO Ray Anderson lived by the principle of, “Do well by doing good.”

Mishio closed by asking communities to consider whether they are pushing the economy for financial growth or giving it true value.

It’s the latter he feels will create a long-term benefit.