“What if countries competed with each other to become the most socially innovative in the world ”
– Matthew Bishop, New York Bureau
Chief of The Economist and Social Progress Imperative advisory board member
What if they did? And what if they also competed to become the happiest or the most progressive? Wouldn’t that be nice? Wouldn’t that help to make the world a happy, more innovative and socially progressive place? Perhaps it would. But it’s kind of hard to say right now. Firstly, because such things are difficult to measure. And secondly, because most countries mainly compete to be the richest.
Historically, global development and standards of living have been sketched (quite sketchily) from the economic measure of Gross Domestic Product (GDP) per capita. Yes, more money can mean more services and better access to them. But, even in 1934 when economist Simon Kuznets first developed the GDP concept for a US Congress report, he wrote:
“No income measurement undertakes to estimate the reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income. The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.”
So there it is. If we want to improve social development, we need to start measuring it with a different-shaped tool. This means we need more nations to start asking different questions and paying attention to markers other than money. That’s the thinking behind the Social Progress Index, launched at the Oxford Skoll World Forum in April 2013. The idea – inspired by the Global Competitiveness Index – first came about at the World Economic Forum’s Global Agenda Council on Philanthropy and Social Investing in 2009, as a way to nudge nations into a race towards social innovation and not just economic growth. And also as a way to identify where change is needed and then make it happen.
“Let me emphasise that we’re measuring outcomes,” said Harvard Business School professor and Social Progress Imperative advisory board member Michael E Porter at the Oxford launch. “We’re not measuring how much you spend, how much you care, what your policies are. We’re measuring the actual outcomes as best as we can.”
Clearly making the right changes means measuring the right outcomes, which means asking the right questions before you even begin. Questions like, what actually matters to people and therefore furthers social progress? According to the Index, this is: 1) basic human needs; 2) foundations of wellbeing, such as information, communication, wellness, a healthy ecosystem; and 3) opportunity, including higher education, personal rights, freedom and choice. This is what they’ve been measuring in 50 countries so far.
Unsurprisingly, Sweden, the UK and Switzerland came out on top and Ethiopia, Nigeria and Uganda at the bottom, all of which correlates quite neatly with their places in the economic race. But there were surprises in the middle. Costa Rica and South Africa have roughly the same (lowish) GDP per capita, but while Costa Rica came 12th in terms of social progress, South Africa trailed at only 39th.
Clearly in some way Costa Rica is asking better questions about what the population needs – and doing rather well at answering them too. But the same applies to social progress itself. We need to ask the right questions about the process to make sure it’s answering real needs.
1 The first question is, do we really need to measure social change?
The answer is yes – it’s already being done in various countries, although not in a standardised way. Bhutan has been using its Gross National Happiness Index since the 1970s to “take a holistic approach towards notions of progress and give equal importance to non-economic aspects of wellbeing.” Similarly, the government of Paraguay has now adopted the new Social Progress Index as an official indicator of national performance.
| Source: Corr Analytics, www.canalyt.com |
2 But is the Social Progress Index the right-shaped tool?
The Index has made a good start, but there are still concerns around the data collection and methodology. And also some concerns about the results – for instance, why is Rwanda top of the environmental progress list? Perhaps not because it’s most innovative in this regard, but rather because it’s undeveloped and therefore less environmentally ravaged.
The Index also needs to go further. Much further – just look at the massive, unmeasured grey areas on the map (left) that span much of Eastern Europe and just about all of Central Africa and the Middle East. These need to be included for accurate context and comparison.
Of course this will take time. But there are plans to spread the Index into 120 countries, with the help of a network of partner institutions and organisations – particularly in areas with few research resources and for indicators that are often overlooked.
3 Do social and economic indices really diverge?
The answer to this is both yes and no. “The relationship between social progress as we’re measuring it and GDP per capita is non-linear,” says Porter. “You have very high improvements with earlier income growth, but as you get to high income it kind of goes flat.
“Part of the reason is that high-income countries are generating environmental unsustainability, and… when a country gets wealthy it often starts having problems with affordable housing for the whole population.”
According to further analysis by Corr Analytics, development funding does indeed cause the greatest social progress gains in the poorest countries (see the steep initial climb on the graph, above). But democracy also plays a role – Corr found that “democratic nations are better able to leverage GDP for basic necessities, probably because of effective voting coalitions of the economically disadvantaged.”
4 Finally, can we handle the results?
It’s a tough reality to face if economic advancement doesn’t correlate with social advancement. What do you do if, despite greater commercial success, people in your country still aren’t happy or content?
Well, if they’re not, you first have face it. Then you can start working out what’s missing and what to do about it.
This is why it’s so important to measure as many indicators of progress and development as possible – with whatever-shaped tools do the job best. It’s the only way to ensure that social efforts are worth the effort involved. It’s the only way to make real progress.