TEDGlobal 2014 · 14:56 · Filmed Oct 2014
Influencing Powerful Institutions
On October 29, 2015, Social Progress Imperative Advisory Board Chair Professor Michael E. Porter presented the Social Progress Index to a packed room at an event hosted by the World Bank's Chief Economist Kaushik Basu.
There have been recent and impressive reductions in the percentages of people living in crushing poverty in many countries, but progress in improving people’s lives has been uneven at best. Between 2005 and 2010, global poverty fell by 30%, according to the Brookings Institution. Yet as countries move from low to middle income, their citizens are not enjoying uniform progress. According to the Institute for Development Studies, roughly 75% of the poor now live in middle income countries. Additionally, the economic growth that has lifted so many out of poverty has often depended on industrial, agricultural, and economic processes that are not environmentally sustainable and in many cases exacerbate social disruption and inequity. While it was once assumed that economic growth would solve most problems, it is now clear that social and environmental improvements do not necessarily accompany economic growth. Rather, these challenges need to be addressed directly, and the success of social innovators in addressing these challenges has shown that collaboration among innovators and leaders in politics, business, and civil society is critically important.
There is growing awareness that economic measures alone do not fully capture social progress. Many thoughtful observers have highlighted the limits of economic success as a proxy for wellbeing. The ‘Arab Spring’ of 2011, and the challenges in Mexico over the last decade, are just two examples of the shortcomings of economic growth as a proxy for social progress. Economic development is beneficial, but not sufficient, for social progress. We must measure social progress directly in order to fully assess a country’s success in improving overall wellbeing.
More than 40 years after Robert Kennedy articulated the limitations of economic measures, many decision-makers still defer to calculations such as GDP per capita without hesitation as the primary measure of national progress. Yet the Arab Spring, response to the euro crisis and Occupy movement show widespread dissatisfaction with the continued use of economic indicators as the chief measures of human progress. Increasingly governments, leading academics, and development officers are recognizing that GDP per capita is an insufficient measure of a country’s well-being. Leaders in France, the U.K., the OECD, the United Nations, and elsewhere are supporting efforts to develop more meaningful measures of national performance.
Our model shows that economic growth is strongly correlated with social progress, but the direction of causality can go from social to economic and other factors are important too. Hence economic development alone is an incomplete development strategy.