This article in the International Herald Tribune (slowly becoming the “global edition of the New York Times”) gives an overview of why gross domestic product (GDP) is an inadequate measure of a country’s success.
There are some interesting parallels with corporate KPIs and the use of profit as an indicator of corporate success:
“The panel, chaired by two Nobel economists, Joseph E. Stiglitz of Columbia University and Amartya Sen of Harvard University, concluded that G.D.P. was insufficient and that measures of sustainability and human well-being should be included.”
“There isn’t a single indicator that can encompass everything,” said Enrico Giovannini, the chairman of the Italian national statistics agency, Istat. “It’s not a question of replacing G.D.P. It’s a question of complementing it with other indicators that can provide other measures of well-being.”
“What we measure affects what we do; and if our measurements are flawed, decisions may be distorted,”