Economic Doesn’t Automatically Mean Progress

Recently a new alternative has been proposed. Harvard Business professor Michael Porter is on a mission to turn current thinking on its head. Porter has designed the Social Progress Index (SPI) with the help of the Social Progress Imperative. SPI is a new way to measure social progress that goes beyond the dominant metric of development- gross domestic product.[i]

For many years the powers that be thought that economic indicators were able to tell the whole story. However, the general happiness of a country doesn’t always correlate with its wealth.[ii] Porter explains that it is quite ridiculous to be measuring success purely on the idea of growth at a time when countries are facing massive social upheavals, and the welfare of a nation can scarcely be inferred from a measurement of the national income.[iii] Michael Green, the head of Social Progress Imperative, agrees with Porter’s sentiment. Green explains that GDP is simply too one-dimensional to provide a complete measure to a nation’s progress. He also takes it a step further by highlighting that while Nigeria has a higher GDP than Ghana, Nigeria has had a slower social progress while Ghana ranks higher on the SPI.[iv]

Currently as the index stands, it includes 52 indicators in three dimensions: 1) Basic human needs, which looks at nutrition, air, water, sanitation, shelter, and personal safety, 2) Foundations of well-being which focuses on access to basic knowledge, health and wellness, and ecosystem sustainability, 3) Opportunity which targets personal rights, access to higher education, equity, and inclusion.[v]  Porter has tested out SPI in 50 countries within the confines of the 52 indicators related to the three dimensions of the index. Based on this examination of 50 countries many of the wealthiest countries apart of the sample were some of the lowest ranked while some of the small and medium size countries, in terms of GDP, were among the higher ranking. This ultimately highlights three overarching findings; 1) economic development is necessary but not necessarily sufficient for social progress or indicating social progress, 2) a country’s development masks social and environmental strengths and challenges, and 3) SPI shows areas of underperformance and

success for countries at all income levels.[vi]

Based on the findings from the SPI, it is evident that there is some ability to provide policy makers and businesses a better assessment of countries and the improvement of their overall well-being. The SPI is very interesting as it provides a spin and a shaking up of the ways in which we process social well-being in this society. But this has left me wondering what now should happen to the current system, while yes it does have flaws there are systems that currently operate based on this process. Would this index best serve as a component of the GDP process in order to develop a mutually beneficial situation where the countries that are wealthy but perform poorly can develop ways to become better at providing services and have the reverse impact on countries that perform well on the index, have them develop ways to use their well-being status to improve their GDP.

I think it is important that as different indices and metrics start to appear we cannot just do away with the foundations that have kept what little part of our society left together. We must get into the habit of absorbing no innovations into the already current structures in order to create strong impact and reform.

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[i] Social Progress: Beyond GDP. The Economist. 

[ii] Forget GDP: The Social Progress Index Measures National Well-Being. www.fastcompany.com

[iii] Michael Porter Presents New Alternative to GDP: The Social Progress Index (SPI). Godelnik, Raz.

[iv] Social Progress: Beyond GDP. The Economist. 

[v] Michael Porter Presents New Alternative to GDP: The Social Progress Index (SPI). Godelnik, Raz.

[vi] Michael Porter Presents New Alternative to GDP: The Social Progress Index (SPI). Godelnik, Raz.