Enlightened Economics

Economics for an Enlightened Age

Archive for the ‘Economic Measurement’ Category

• 2015 Sustainable Competitiveness Index

Posted by Ron Robins on December 10, 2015

“The Global Sustainable Competitiveness Ranking 2015 is topped by Iceland for a second year running, followed by the Scandinavian nations.

The Sustainable Competitiveness Index is based on a competitiveness model that tries to evaluate exactly this – the ability to sustain wealth creation by incorporating all relevant pillars of sustained growth and wealth creation: natural capital availability, resource efficiency, social cohesion, innovation and business capabilities, and government-led development direction. The Sustainable Competitiveness Index also integrates data trends over time to allow for a better expression of future development potential.

The results aim at serving as an alternative to the GDP, for academic, policy or investment decisions, based on current and future development prospects and risks of nations.”
Global Sustainable Competitiveness Index 2015  (PDF), November 2015, SOLABILITY, Switzerland.

Commentary: Ron Robins
This is a terrific index concept. It needs to get more exposure to encourage governments, corporations and others further engaged in the sustainable competitiveness of their economies.

It’s interesting that the U.S.A. and the U.K. rank 41st and 48th respectively on this index while the Scandinavian countries dominate the top spots. The Scandinavian countries lead most alternative GDP indices as they are not only exceedingly high-income countries — but are top-tier performers on most other component measures as well.

The unique contribution that this index makes is the combination and weighting of its various components in endeavoring to predict the future direction of countries with respect to their total sustainability. Many countries might perform well on income measures but the sustainability and potential growth of those incomes with respect to the depletion and replenishment of their natural resources, social cohesion, etc., is wanting.

Also, countries like the U.K. and U.S.A. do relatively badly on this index because there’s a belief by its designers that governments should lead in all areas related to sustainability. Something that is politically difficult and unacceptable to many in the U.K. and America. Hence, China and Japan lead on this measure. Even Russia is ahead of the U.S.A. and U.K. on this measure — which probably raises some questions.

Nonetheless, this index is a valuable addition to alternate GDP indices.

Posted in Economic Measurement, Economics, Environment, GDP Alternatives, News, Commentary | Tagged: , , , , , , | Leave a Comment »

• The Social Progress Index Seeks To Redefine Economic Success Measures

Posted by Ron Robins on April 30, 2015

“According to Deloitte Touche Tohmatsu Limited’s (Deloitte Global) Chairman, Steve Almond, the world is overly obsessed by GDP statistics as a defining measure of national progress or local progress.  And while the research behind the  Social Progress Index  has shown that there is a very strong correlation between growth in GDP per capita and enhancement in social progress at an early stage along the development line, the further you look at the richer a country gets, the greater there are diversions between GDP growth and social progress.”
The Social Progress Index Seeks To Redefine Economic Success Measures, by Bruce Rogers, April 28, 2015, Forbes, U.S.A.

Commentary: Ron Robins
The diversions in growth between GDP and alternative social progress measures are present in most developed countries. In part, it is due to greatly increased goods and service volumes in developed countries with a corresponding decrease in, most particularly, costs associated with environmental degradation, resource depletion and climate change. Furthermore, there comes a point — such as in public health where once good basic sanitation and clean water are universally available, only incremental gains in health might be had even with greatly increased public expenditures related to sanitation and water. Thus, significant gains in GDP may have only small benefits in many areas of society and perhaps benefiting a relative few.

However, as inferred in the Forbes article, public health measures focused on such issues as obesity and poor lifestyles that lead to considerable human suffering and hugely increased health care costs, could be very cost effective. And this is where indices such as the Social Progress Index are of tremendous value. They re-focus society’s attention on social, environmental and other areas where cost benefit gains can be huge, measurable — while greatly improving our quality of life. Furthermore, such measures help define our progress towards an enlightened era and economy.

Posted in Economic Measurement, Economics, Environment, GDP Alternatives, News, Commentary | Tagged: , , , , , , | Leave a Comment »

• If Success Was Measured in Social Progress, Which Nation Would Win?

Posted by Ron Robins on December 19, 2014

“So where, you may be wondering, does the United States fall in all of this? Spoiler alert: not among the top 10. The United States ranks 16th, just ahead of Belgium and just behind the Republic of Ireland. The report also notes that Canada, despite being neighbors with the U.S., and sharing several similar strengths, still significantly outpaces us in almost every measure.”
— If Success Was Measured in Social Progress, Which Nation Would Win? By Katey Troutman, Business CheapSheet, December 17, 2014, U.S.A.

Commentary: Ron Robins
The measure being used is the Social Progress Index (SPI). It attempts to measure basic human needs, foundations of well-being (health, education, etc.) and opportunity (in terms of personal rights, freedoms, and so forth). Performance on these measures forms the foundation for economic success and personal fulfillment. The fact that the U.S. is purportedly performing ‘well’ (on highly adulterated GDP numbers) does not diminish the fact that on measures associated with the SPI, it performs relatively poorly. The public perception of the value of GDP is totally illusory and misguided as measures such as the SPI illustrate. One interesting finding is that all the leading nations have small populations and as usual in these types of measures, are mostly from Scandinavia.

Posted in Economic Measurement, GDP Alternatives, News, Commentary | Tagged: , | Leave a Comment »

 
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