There is an emerging agreement among politicians, social actors and businesses worldwide, that economic growth alone cannot provide an accurate indication for prosperity. Relying on economic growth as a sole measurement for social progress provides an incomplete picture.

Traditional measurements such as gross domestic product (GDP) measure only how much money is generated within the system, however not the social, environmental and even long-term economic costs of generating these gains. Purely economic measurements also fail to represent how the money within the system is distributed, how it is used and who gets to enjoy it. All of these factors are taken into account when estimating social progress, equality and quality of life throughout societies and countries.

Yet economic "bads" such as pollution are not included in any GDP measures. Absurdly enough, even war spendings or recovery from a natural disaster have a positive effect within the GDP matrix, while obviously a negative impact on the living quality of the people affected. In addition, economic growth without social progress does not translate into greater wellbeing and stability. On the contrary, it might actually contribute to growing social gaps and discontent, which can eventually threaten the entire system. Clearly, such a system cannot continue to be used as a measurement for progress and wellbeing.

For all these reasons, over the past years there have been many attempts to come up with new, more holistic indicators to replace or supplement the problematic traditional GDP. Measurements such as GDI, GINI coefficient and the Human Development Index, have been trying to offer an alternative, but are often criticized for leaving out important components such as ecological considerations, or for being socially, culturally or contextually biased.

ALTERNATIVE MEASURES

To respond to this criticism, the Social Progress Imperative was founded in 2012. A year later they published their first research product - The Social Progress Index (SPI), in its beta version. In April 2014, the first official SPI was introduced, gathering and comparing information from 132 countries around the world. The Social Progress Imperative Foundation was created in cooperation between academia, global corporations, and civil organizations. Chaired by Professor Michael Porter (the creator of the Shared Value concept), with partners such as Deloitte and the Skoll Foundation, the organization established a new groundbreaking measurement, which incorporates 54 indicators, addressing many of the flaws of the previous measurements. It provides the most holistic and accurate representation of reality so far.

The Social Progress Index aims to meet the growing needs for a wellbeing measurement, which will address the issues mentioned above, and provide a useful tool for governments, societies and businesses to obtain a better understanding of a country’s performance, highlight challenges and catalyze action.

The authors of the report define Social Progress as “the capacity of a society to meet the basic human needs of its citizens, establish the building blocks that allow citizens and communities to enhance and sustain the quality of their lives, and create the conditions for all individuals to reach their full potential”.

The remarkably innovative feature of the index, which distinguishes it from previous metrics, is that it doesn’t look into economical factors. It measures results rather than spendings and investments. The index consist of 54 indicators, which are broken down into 3 main categories – Basic human rights, Foundation of wellbeing, and Opportunity, trying to account for the features that answer the question of what a successful country looks like.

Breaking down the matrix into separable indicators helps to highlight the positive and negative factors within the overall score. It assists the quality of the discussion on national and social priorities, which should be addressed in the efforts of improvement.

(UN)USUAL RESULTS

By a superficial look, the SPI scores put the “usual suspects” at the top, the countries that are known for their high standards of life quality, such as New Zealand, Switzerland and Iceland and the rest of Scandinavia, while the sub-Sarahran African states are at the bottom. However, when looking closer and reading into the indicators, quite interesting facts are revealed.

While ranked 2nd in total score, Switzerland scores only at 12th place in the Opportunity measurements, with the lowest score referring to Tolerance and Inclusion. While Iceland placed 3rd in the overall ranking, it is not leading in any of the 54 individual dimensions.

While the western and developed countries perform very high on wealth and social wellbeing, the scores on ecosystem sustainability are indicating rather poor performances – Canada and Australia at 46th and 47th places respectively.

Such insights help point out the specific issues that should be addressed by governments, social, and business society, in a much more accurate way than what was offered by previous measurements.

Comparing the scores of the SPI to the GDP per capita data of countries shows that the rate of economic growth often does not reflect wellbeing and prosperity. Iceland and New Zealand top the SPI index, but have a much lower GDP/capita – ranked at 14th and 30th places. Meanwhile Russia and Croatia, both having very similar GDP rates, score very differently on the SPI. Croatia is positioned at 36th place, leaving Russia way behind at 80th place. Such results draw a clear picture of how economic growth cannot be nearly sufficient to represent life quality or point out social shortcomings.

The publication of the Social Progress Index this April has already led to furor and headlines worldwide, sparking a debate and generating a wide range of reactions throughout different countries. In the US the index findings have opened a major public debate over the fact that the country’s overall score positions it at 16th place, with the health and wellness score leaving it far down at 70th(!) place. Other countries such as Paraguay have announced that they will adopt the Social Progress Index as the official measurement of their national performance.

The innovative value of the SPI is in trying to reflect the actual state of wellbeing in a country, rather than looking at the economic ability to achieve certain aspects of wellbeing. Hopefully this measurement will provide a better understanding on the quality of decision making in the future, and help to facilitate a better utilization of resources.