‘We need a holistic understanding of the concept of prosperity.’

  - Dr Katharina Lima de Miranda, Economist
 

Prosperity – for a long time, most of us associated the term with material prosperity first and foremost. But (latest) the pandemic and climate crisis have brought about a profound change. Scientists as well as society have come to wonder whether our definition of prosperity is still appropriate.

In many countries around the world, economic and social prosperity have decoupled, resulting in a growing sense of disempowerment and social alienation in society. This makes it imperative to establish new definitions of prosperity which account for social as well as economic indicators, allowing us to draw conclusions about people’s quality of life and experiences in their own country. 

Economist Dr Katharina Lima de Miranda conducts research at the Kiel Institute for the World Economy and, together with Dennis Snower, Professor at the Hertie School of Governance in Berlin and President of the Global Solutions Initiative, has developed such a measurement method: the Recoupling Dashboard. In this interview, we spoke to her about the connection between empowerment and prosperity – and why young entrepreneurs give her hope.

Dr Lima de Miranda, how have we defined prosperity up until now? And why is that no longer appropriate?

Katharina Lima de Miranda: In common parlance, prosperity is defined in material terms. Ownership plays a major role. But we are increasingly realising that this does not make us happy. What we need, in my opinion, is a holistic view of prosperity. There is a discrepancy between material and social well-being, and we wanted to shed light on this. The Recoupling Dashboard was born from this idea.
 

Where does the Recoupling Dashboard come in? 

Katharina Lima de Miranda: Our index consists of four dimensions. Firstly, material prosperity. Secondly, the feeling of being a fully fledged member of society. Thirdly, opportunities to take control of one's own life, and fourthly, the state of the environment. The social component plays the biggest role for us. We look closely at how people experience their social situation.
 

What exactly does this mean and why is it important? 

Katharina Lima de Miranda: Many people currently feel a strong sense of powerlessness, especially when it comes to climate change. They don't have the feeling that they can do anything themselves. But this feeling of empowerment is very important. Studies show that people get involved when they feel they can make a difference, and this is very important not just for the individual but for society as a whole. The Recoupling Dashboard measures how people in a country rate their own empowerment, which gives us insights into society and the mood of the country.
 

Who or what influences this feeling of empowerment? 

Katharina Lima de Miranda: You may be surprised to hear that my appeal is primarily directed at businesses. Many of them still have room for improvement when it comes to social matters. Companies should ask themselves how their actions affect their employees: do they feel empowered to do their work well? Do they feel they have a say? Is there social cohesion within the workforce?

That would be a first step. The second step would be to quantify this and set external goals: how could the company work towards greater social cohesion or enable people to get involved and act in an inclusive and sustainable way?  
 

Do you see any possibility of politicians and companies paying more attention to this social dimension in the near future? 

Katharina Lima de Miranda: I am an optimist by nature. I believe that there is an awareness that something needs to change and that we need to treat each other differently. Nevertheless, it requires a certain amount of courage, especially at the political level. But young entrepreneurs give me hope, because I have the feeling that the younger generation has a different focus. The need for more part-time work is growing, as is the desire for a work-life balance, awareness of the climate and the extent to which ecological and social factors are taken for granted. If we succeed in supporting young decision-makers, a lot could happen very quickly.
 

How would you like the Recoupling Dashboard to be used politically?

Katharina Lima de Miranda: The dashboard's indices should be incorporated into actual political decisions, especially when it comes to planning for the future. It should become second nature for politicians to consider the social dimensions and their impact from the outset when planning measures or laws.

Dr Lima de Miranda, thank you very much for the interview!