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Beyond GDP: New Social Progress Index Tracks Well-Being

Economic growth doesn’t necessarily lead to social progress, but social progress appears to be a powerful driver of economic prosperity.

Those are among the early findings of the new Social Progress Index, a new measure of human wellbeing in which the U.S. comes in only sixth, while Sweden and the United Kingdom are ranked first and second.

The Index was introduced at the Skoll World Forum, underway in Oxford, UK, by Michael Porter, the Harvard Business School global competitiveness guru, who worked with the Social Progress Imperative to design the 50-country index.

“We’ve long understood that while economic development is beneficial for social progress, generally, it’s not sufficient,” Porter said. “Separating business and competition from social progress and social issues was a big mistake. Some of the biggest opportunities for business are in tackling social issues and social challenges.”

The index uses data from the World Bank, the World Health Organization and other sources to rank countries on 50 indicators, including nutrition, sanitation, ecosystem sustainability and personal freedom.

It is intended to provide a way to identify specific gaps in areas that affect the everyday lives of citizens. Low scores on environmental sustainability, for example, pulled down the rankings of many rich countries, especially resource-rich countries such as Australia (46th), Canada (47th), and the United States (48th).

Costa Rica, ranked 12th overall, delivered the highest social progress at the lowest average income level. China, at 31, fell down on opportunity, while Russia, at 32, got low marks on meeting basic needs. Low marks on safety hurt countries such as Mexico and South Africa.

“We expect some surprising transfers of knowledge in the next few years, as standout performers – among government, civil society, and business – document and share their approaches,” said Michael Green, who heads the Social Progress Imperative.

The Social Progress Index is not the first effort to track social dimensions rather than standard economic indicators such as Gross Domestic Product. Backers say the Social Progress Index improves on earlier efforts such as United Nations Human Development Index, the Legatum Prosperity Index and the OECD’s Better Life Index. For one, the new index separates economic growth from human well-being, treating prosperity as a means to social progress, not an end in itself. For another, the new index counts only social outcomes, or results, rather than inputs, such as health care spending or public policy.

Health spending, for example, didn’t have a strong correlation with health outcomes. The U.S., which has the highest per capital spending on health care, ranked only 11th on health and wellness, behind Canada, which ranked 4th overall.

The data reveals some surprising outliers. Rwanda, ranked 46th, with No. 9 in primary school enrollment. Mozambique, No. 47, ranked 14th in equality and inclusion. India ranked lowest (43) of all Asian countries and is one of only two in the bottom 10, along with Bangladesh, not in Africa.

Porter earlier served as co-chair of the World Economic Forum’s Global Competitiveness Report, which he said had had a major impact in catalyzing change in countries’ economic policies. “I’m confident given that experience…that we can see the same kind of step-up in progress here.”

The Skoll Foundation is among the backers of the initiative, along with Cisco, Deloitte, Compartamos Banco, and Fundación Avina.

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