Nobel prize winner Amartya Sen describes economic wellbeing as the ‘capabilities’ of persons to lead the kinds of lives they value –and have reason to value.’[i] A range of material and non-material factors act either to enhance or to block people’s capabilities, increasing or reducing their chance of experiencing wellbeing.
A person’s capability to meet their material needs depends on their own resources and the resources of the wider community of which they are a part. The primary resources of an individual or a community are the skills and knowledge (human capital) they can deploy to gain access to secondary resources (income and wealth) which can be exchanged for the goods and services that provide for a person’s economic wellbeing.
Individuals and communities are actors within an economic ecosystem consisting of raw materials, land and buildings, transport and communications infrastructure and organisations in the public, private and voluntary sector. This economic ecosystem plays a major role in determining opportunities for the individuals and communities within.
[i] Amartya Sen, Development as Freedom