Beyond GDP: Social Progress Index vs. Happy Planet Index

Michael Porter Skoll Social Progress IndexThis week Michael Porter launched the Social Progress Index (SPI) at the Skoll World Forum in Oxford. Michael Porter – by many – considered the world’s leading thinker on competitive strategy, now follows up his 2011 idea on Creating Shared Value.

The Social Progress Index ranks 50 countries and places Sweden as #1. The UK is ranked second, above Germany, which ranks fifth, the United States #6. See the list below.

A new organisation, the Social Progress Imperative, has been created to support the development of the SPI and help to integrate it into corporate and governmental thinking.

 

The Social Progress Index

The Social Progress index is interesting and in many ways trying to crack the challenge that former French president, Nicolas Sarkozy, commissioned Joseph Stiglitz to do in the work to get beyond GDP as a measure of prosperity. Stiglitz never came up with the new wonder metric or formula to replace GDP though, rather he came up with a number of recommendations going forward.

Harvard Business School professor, Michael Porter, now tries to nail it and introduces a new platform for measuring progress in a hope to bring environmental and social considerations to the top of the policy and corporate agenda. In this way the SPI has some similarities with The Happy Planet Index (HPI), introduced by Nic Marks, but it puts more emphasis on Basic Human Needs.

Introduction to The Social Progress Index

The Social Progress Index is based on three dimensions of social progress:

1. Basic Human Needs: Does a country provide for its people’s most essential needs?
2. Foundations of Well-being: Are the building blocks in place for individuals and communities to enhance and sustain well-being?
3. Opportunity: Is there opportunity for all individuals to reach their full potential?

 

The Social Progress Index with its components:

Social Progress Index

 

The Social Progress Index score:

Social Progress Index

The Happy Planet Index is based in three dimensions:

1. Experienced well-being
2. Life expectancy
3. Ecological footprint

Compared to the Social Progress Index the Happy Planet Index emphasises Experienced well-being instead of indicators/foundation for Well-being – and it places more weight on the Ecological footprint.

Happy Planet Index

Social Progress Index vs. Happy Planet Index

The scores of both Costa Rica and Sweden illustrate the difference between The Happy Planet Index and The Social Progress Index. In The Happy Planet Index Costa Rica has been rated the “happiest country in the world” for two years running. In the Social Progress Index, Costa Rica ranks only #12 among the sample of 50 countries, due to poverty and lack of other ‘Basic Human Needs’. In the Social Progress Index Sweden ranks #1 – but only #52 in the Happy Planet Index due to heavy Ecological Footprint.

Sweden’s Happy Planet Index Score:

Happy Planet Index Sweden

 

Getting Beyond GDP

Both Index’s and methodologies have – and will continue to generate – critique on the scores they put out. The Happy Planet Index has been criticised for putting too much emphasis of the ecological footprint and too little on ‘basic human needs’. And as you can see the Social Progress Index is based more on normative indicators of what creates well-being and happiness compared to The Happy Planet Index that ask directly to well-being. No doubt that the Social Progress Index is more compelling to western thinking politicians. The questions is if Michael Porter and his team got it right.

It will be interesting to follow the further development of measures and methodologies that will bring us beyond GDP as a measure of prosperity. It will continue to be a battleground – illustrating conflicting ideologies on what prosperity and progress really is.

An idea could be to integrate the methodology behind the Net Promoter Score, used in evaluation of companies products and services, in the rating of nations. Roughly translated a Net Promoter Scores Question on nations would be: Would you recommend a friend from abroad to move to and live in your country? (0-10 – 0 Lowest 10 Highest). But also this approach comes with some challenges when you try to transfer it from the commercial domain to the ranking of nations.

Nic Marks Happy Planet Index

Nic Marks joins Rebuild21 May 22 – and you Michael Porter?

We look forward to discuss this further when the Founder of the Happy Planet Index, Nic Marks joins Rebuild21 May 22, 2013. See the programme for this years Rebuild21 Conference

Nic Marks founder of the Happy Planet Index and Happiness Works will kick-start Rebuild21

Nic Marks Happy Planet Index

Nic Marks founder of the Happy Planet Index and Happiness Works will kick-start the Rebuild21 conference on the 22nd of May, with an alternative view of the Nordic Model, which he thinks has delivered high levels of well-being but ultimately in an unsustainable way.

To mark his case, Nic will draw upon a variety of data from the Happy Planet Index  and National Accounts of well-being and happiness.

The criticism will be followed by constructive feedback on the Nordic way, where the Nordic countries have all the opportunities to shift towards a more “Happy” and “Sustainable” way with their highly egalitarian and pioneering spirit.

For more information on the Rebuild21 programme, please go here.

 

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