Wednesday, May 6, 2015

Social Progress

Michael Porter on social progress (excerpt):

Why Social Progress Matters

Economic growth has lifted hundreds of millions of people out of poverty and improved the lives of many more over the last half-century. Yet it is increasingly evident that a model of human development based on economic progress alone is incomplete. A society which fails to address basic human needs, equip citizens to improve their quality of life, protect the environment, and provide opportunity for many of its citizens is not succeeding. Inclusive growth requires both economic and social progress.

The pitfalls of focusing on GDP alone are evident in the findings of the 2015 Social Progress Index, launched on April 9. The SPI, created in collaboration with Scott Stern of MIT and the nonprofit Social Progress Imperative, measures the performance of 133 countries on various dimensions of social and environmental performance. It is the most comprehensive framework developed for measuring social progress, and the first to measure social progress independently of GDP….

…The data reveal that many aspects of social progress, not surprisingly, tend to improve with income growth. Wealthier countries, such as Norway (which holds the top spot on this year’s SPI), generally deliver better social outcomes than lower-income countries.

But a striking finding is that GDP is far from being the sole determinant of social progress. Costa Rica, for example, has achieved a higher level of social progress than Italy, with barely a third of Italy’s per capita GDP. And Costa Rica is not an isolated case…

GDP is an important measure of progress – you need to meet basic requirements before thinking of anything else. Given the low levels of wages and unequal distribution of wealth and income in Malaysia, we’re not exactly in the clear just yet, but the non-monetary aspects of social progress will take on greater importance as the economy grows.

The good news is that on the Social Progress Index, we’re well above the median on meeting basic human needs (ranked 38th) and having the foundations of well being (ranked 37th). The bad news is that we’re well below average on opportunity, which includes measures of personal freedom and choice, tolerance and inclusion, and access to advanced education.

More work needs to be done, obviously.


  1. It is very sad to see that Malaysia is sacrificing the environment in order to achieve GDP growth. Economist only see figures and money but not the whole picture.

    1. @anon10.40

      You haven't met many environmental economists, have you? I had a discusion once with one at UM a few years back on river sustainability in Malaysia.

      The problem is that only financial economists get featured in the media. There are good economists out there working on environmental issues.