There’s A New Index In Town….


About five years ago, the World Economic Forum’s Global Agenda Council proposed a new index be developed, one that would “increase the impact that social entrepreneurs, business leaders, and policy makers can have in the world.” The general idea was the new index would measure social progress and spur competition between nations to improve the environment for social innovation in much the way the Global Competitiveness Index assesses the drivers of economic productivity and prosperity and identifies nations that are most competitive.

Just 48 months later, the Social Progress Index (SPI) was born. The beta version of the index debuted in 2013 and focused on measuring the extent to which 50 countries met the non-economic needs of their citizens. The 2014 SPI gauged 54 social, health, and environmental factors across 132 countries, considering only outputs (like literacy) and not inputs (like spending on education). When the numbers were tallied, New Zealand was number one – even though it’s in 25th place when measured by GDP per person (SPI, pg 62).

According to The Economist, when the results of the SPI are compared with a country’s GDP per person, its value truly becomes apparent. The publication quoted Michael Porter, a professor at HarvardBusinessSchool, who said, “There is a view that economic development and social progress go hand in hand. That’s true on average, but not in particular.” For example, Costa Rica and Iran have similar GDPs, but Iran falls far lower on the scale of social progress. Brazil and Kuwait are about equal in terms of social progress, although Kuwait’s GDP per person is multiples greater than that of Brazil.

So, how did the U.K. do? The top rank of the SPI is dominated by relatively small, advanced Western nations. New Zealand tops the ranking, followed by Switzerland and Iceland. The UK is ranked at 13th in the world, ahead of Japan (14th) and the US (16th), but behind Germany (12th) and Canada (7th).

Like most other rich nations, the UK scores well on factors such as nutrition and basic medical care, as well as water and sanitation and access to education. It ranks lower than one might expect, given its GDP per capita, in the areas of personal safety (which includes levels of perceived criminality) and health and wellness (including factors such as obesity rates and life expectancy).

Richer countries tend to score more highly on many indicators of social progress than poor countries, but the relationship is not linear. At lower levels of income small gains in GDP are associated with large improvements in social progress; at higher levels of income increases in GDP can have a diminishing effect on social progress.