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TEDGlobal 2014

Michael Green: What the Social Progress Index can reveal about your country

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The term Gross Domestic Product is often talked about as if it were “handed down from god on tablets of stone.” But this concept was invented by an economist in the 1930s. We need a more effective measurement tool to match 21st century needs, says Michael Green: the Social Progress Index. With charm and wit, he shows how this tool measures societies across the three dimensions that actually matter. And reveals the dramatic reordering of nations that occurs when you use it.

- Social progress expert
Michael Green is part of the team that has created the Social Progress Index, a standard to rank societies based on how they meet the needs of citizens. Full bio

On January 4, 1934,
00:12
a young man delivered a report
00:16
to the United States Congress
00:19
that 80 years on,
00:21
still shapes the lives of
everyone in this room today,
00:23
still shapes the lives of
everyone on this planet.
00:28
That young man wasn't a politician,
00:34
he wasn't a businessman,
00:37
a civil rights activist
00:39
or a faith leader.
00:40
He was that most unlikely of heroes,
00:42
an economist.
00:45
His name was Simon Kuznets
00:49
and the report that
he delivered was called
00:51
"National Income, 1929-1932."
00:54
Now, you might think
00:59
this is a rather dry and dull report.
01:00
And you're absolutely right.
01:03
It's dry as a bone.
01:05
But this report is the foundation
01:08
of how, today, we judge the
success of countries:
01:10
what we know best as
Gross Domestic Product,
01:13
GDP.
01:17
GDP has defined and shaped our lives
01:19
for the last 80 years.
01:22
And today I want to talk about
01:24
a different way to measure
the success of countries,
01:26
a different way to define
and shape our lives
01:30
for the next 80 years.
01:33
But first, we have to understand
01:36
how GDP came to
dominate our lives.
01:38
Kuznets' report was delivered
01:42
at a moment of crisis.
01:44
The U.S. economy was plummeting
01:46
into the Great Depression
01:48
and policy makers were
struggling to respond.
01:50
Struggling because they didn't
know what was going on.
01:53
They didn't have data and statistics.
01:56
So what Kuznet's report gave them
01:59
was reliable data on what
the U.S. economy
02:02
was producing,
02:06
updated year by year.
02:07
And armed with this information,
02:10
policy makers were, eventually,
02:12
able to find a way out
of the slump.
02:14
And because Kuznets' invention
02:18
was found to be so useful,
02:19
it spread around the world.
02:21
And now today, every country
02:23
produces GDP statistics.
02:25
But, in that first report,
02:28
Kuznets himself delivered a warning.
02:31
It's in the introductory chapter.
02:35
On page seven he says,
02:37
"The welfare of a nation can, therefore,
02:39
scarcely be inferred
02:42
from a measurement of
national income
02:43
as defined above."
02:45
It's not the greatest sound
bite in the world,
02:47
and it's dressed up in the cautious
language of the economist.
02:50
But his message was clear:
02:54
GDP is a tool
02:56
to help us measure
economic performance.
02:58
It's not a measure
of our well-being.
03:01
And it shouldn't be a guide
to all decision making.
03:04
But we have ignored Kuznets' warning.
03:09
We live in a world where
03:12
GDP is the benchmark of success
03:13
in a global economy.
03:16
Our politicians boast when
GDP goes up.
03:19
Markets move
03:22
and trillions of dollars of capital
03:23
move around the world
03:25
based on which countries
are going up
03:26
and which countries
are going down,
03:28
all measured in GDP.
03:30
Our societies have become
03:33
engines to create more GDP.
03:34
But we know that GDP is flawed.
03:38
It ignores the environment.
03:42
It counts bombs and prisons as progress.
03:44
It can't count happiness or community.
03:48
And it has nothing to say
about fairness or justice.
03:51
Is it any surprise that our world,
03:56
marching to the drumbeat of GDP,
03:59
is teetering on the brink
of environmental disaster
04:02
and filled with anger and conflict?
04:05
We need a better way
to measure our societies,
04:08
a measure based on the real
things that matter to real people.
04:13
Do I have enough to eat?
04:18
Can I read and write?
04:20
Am I safe?
04:22
Do I have rights?
04:24
Do I live in a society where
I'm not discriminated against?
04:26
Is my future and the future of my children
prevented from environmental destruction?
04:29
These are questions that GDP
04:36
does not and cannot answer.
04:38
There have, of course,
04:43
been efforts in the past
04:44
to move beyond GDP.
04:45
But I believe that we're living
04:48
in a moment when we
04:49
are ready for a measurement revolution.
04:51
We're ready because we've seen,
04:54
in the financial crisis of 2008,
04:57
how our fetish for economic growth
04:59
led us so far astray.
05:02
We've seen, in the Arab Spring,
05:04
how countries like Tunisia
05:07
were supposedly economic superstars,
05:08
but they were societies
05:11
that were seething with discontentment.
05:13
We're ready, because today
we have the technology
05:16
to gather and analyze data
05:20
in ways that would have been
unimaginable to Kuznets.
05:22
Today, I'd like to introduce you
to the Social Progress Index.
05:26
It's a measure of the
well-being of society,
05:31
completely separate from GDP.
05:34
It's a whole new way
of looking at the world.
05:36
The Social Progress Index
05:40
begins by defining what it
05:42
means to be a good society
05:43
based around three dimensions.
05:45
The first is, does everyone have
the basic needs for survival:
05:48
food, water, shelter, safety?
05:53
Secondly, does everyone have
05:55
access to the building blocks
to improve their lives:
05:58
education, information, health
and sustainable environment?
06:01
And then third, does every
individual have access
06:05
to a chance to pursue their goals
06:09
and dreams and ambitions
06:12
free from obstacles?
06:14
Do they have rights,
06:15
freedom of choice,
06:16
freedom from discrimination
06:18
and access to the the world's
most advanced knowledge?
06:19
Together, these 12 components
06:23
form the Social Progress framework.
06:26
And for each of these 12 components,
06:30
we have indicators to measure
how countries are performing.
06:32
Not indicators of effort or intention,
06:35
but real achievement.
06:38
We don't measure how much
a country spends on healthcare,
06:40
we measure the length and
quality of people's lives.
06:44
We don't measure whether governments
pass laws against discrimination,
06:48
we measure whether people
experience discrimination.
06:53
But what you want to know
06:57
is who's top, don't you?
(Laughter)
06:58
I knew that, I knew that, I knew that.
07:01
Okay, I'm going to show you.
07:03
I'm going to show you on this chart.
07:05
So here we are,
07:07
what I've done here is put on the
vertical axis social progress.
07:08
Higher is better.
07:13
And then, just for comparison,
07:14
just for fun,
07:16
on the horizontal axis
is GDP per capita.
07:17
Further to the right is more.
07:21
So the country in the world
07:23
with the highest social progress,
07:26
the number one country on social progress
07:30
is New Zealand.
07:33
(Applause)
07:36
Well done! Never been; must go.
07:40
(Laughter)
07:43
The country with the least social progress,
07:45
I'm sorry to say, is Chad.
07:48
I've never been; maybe next year.
07:50
(Laughter)
07:53
Or maybe the year after.
07:55
Now, I know what you're thinking.
07:57
You're thinking, "Aha,
07:59
but New Zealand has a higher GDP
08:00
than Chad!"
08:02
It's a good point, well made.
08:04
But let me show you
08:07
two other countries.
08:08
Here's the United States —
08:10
considerably richer than New Zealand,
08:12
but with a lower level of social progress.
08:15
And then here's Senegal —
08:17
it's got a higher level of
social progress than Chad,
08:20
but the same level of GDP.
08:24
So what's going on? Well, look.
08:26
Let me bring in the rest of
the countries of the world,
08:28
the 132 we've been able to measure,
08:30
each one represented by a dot.
08:32
There we go. Lots of dots.
08:35
Now, obviously I can't do all of them,
08:36
so a few highlights for you:
08:38
The highest ranked G7 country is Canada.
08:40
My country, the United Kingdom,
08:44
is sort of middling, sort of dull,
08:46
but who cares —
08:49
at least we beat the French.
08:51
(Laughter)
08:53
And then looking at the
emerging economies,
09:00
top of the BRICS,
pleased to say, is Brazil.
09:03
(Applause)
09:06
Come on, cheer!
09:08
Go, Brazil!
09:09
Beating South Africa,
09:11
then Russia,
09:13
then China
09:14
and then India.
09:15
Tucked away on the right-hand side,
09:17
you will see a dot of a
country with a lot of GDP
09:19
but not a huge amount
of social progress —
09:23
that's Kuwait.
09:24
Just above Brazil
09:26
is a social progress superpower —
09:28
that's Costa Rica.
09:30
It's got a level of social progress the same
as some Western European countries,
09:32
with a much lower GDP.
09:36
Now, my slide is getting
a little cluttered
09:38
and I'd like to step back a bit.
09:40
So let me take away these countries,
09:42
and then pop in the regression line.
09:43
So this shows the average relationship
09:46
between GDP and social progress.
09:48
The first thing to notice,
09:50
is that there's lots of noise
09:53
around the trend line.
09:54
And what this shows,
09:56
what this empirically demonstrates,
09:58
is that GDP is not destiny.
10:01
At every level of GDP per capita,
10:04
there are opportunities
for more social progress,
10:07
risks of less.
10:10
The second thing to notice
10:12
is that for poor countries,
10:14
the curve is really steep.
10:16
So what this tells us is that
10:18
if poor countries can get
10:19
a little bit of extra GDP,
10:21
and if they reinvest that
10:22
in doctors, nurses, water supplies,
10:24
sanitation, etc.,
10:27
there's a lot of social progress bang
10:28
for your GDP buck.
10:30
And that's good news, and that's what
we've seen over the last 20, 30 years,
10:32
with a lot of people lifted out of poverty
10:35
by economic growth and good policies
10:37
in poorer countries.
10:40
But go on a bit further up the curve,
10:42
and then we see it flattening out.
10:44
Each extra dollar of GDP
10:46
is buying less and less social progress.
10:48
And with more and more
of the world's population
10:51
living on this part of the curve,
10:54
it means GDP is becoming
10:57
less and less useful
10:59
as a guide to our development.
11:01
I'll show you an example of Brazil.
11:03
Here's Brazil:
11:05
social progress of about 70 out of 100,
11:06
GDP per capita about
14,000 dollars a year.
11:09
And look, Brazil's above the line.
11:12
Brazil is doing a reasonably good job
11:15
of turning GDP into social progress.
11:17
But where does Brazil go next?
11:20
Let's say that Brazil
11:22
adopts a bold economic plan
11:23
to double GDP in the next decade.
11:25
But that is only half a plan.
11:28
It's less than half a plan,
11:31
because where does Brazil
want to go on social progress?
11:33
Brazil, it's possible
11:37
to increase your growth,
11:39
increase your GDP,
11:41
while stagnating or going backwards
11:42
on social progress.
11:44
We don't want Brazil
11:46
to become like Russia.
11:47
What you really want is for Brazil
11:48
to get ever more efficient at creating
social progress from its GDP,
11:51
so it becomes more like New Zealand.
11:56
And what that means is that
11:58
Brazil needs to prioritize social progress
12:00
in its development plan
12:02
and see that it's not just growth alone,
12:04
it's growth with social progress.
12:06
And that's what the Social
Progress Index does:
12:09
It reframes the debate about development,
12:12
not just about GDP alone,
12:14
but inclusive, sustainable growth
12:16
that brings real improvements
in people's lives.
12:19
And it's not just about countries.
12:23
Earlier this year,
12:26
with our friends from the Imazon
nonprofit here in Brazil,
12:29
we launched the first subnational
Social Progress Index.
12:33
We did it for the Amazon region.
12:38
It's an area the size of
Europe, 24 million people,
12:40
one of the most deprived
parts of the country.
12:44
And here are the results,
12:47
and this is broken down
12:48
into nearly 800 different municipalities.
12:50
And with this detailed information
12:54
about the real quality of life
12:55
in this part of the country,
12:58
Imazon and other partners
12:59
from government,
business and civil society
13:01
can work together to construct
13:04
a development plan
13:06
that will help really improve
people's lives,
13:07
while protecting that
precious global asset
13:10
that is the Amazon Rainforest.
13:13
And this is just the beginning,
13:16
You can create a Social Progress Index
13:18
for any state, region,
city or municipality.
13:20
We all know and love TEDx;
13:25
this is Social Pogress-x.
13:27
This is a tool for anyone to come and use.
13:29
Contrary to the way we
sometimes talk about it,
13:33
GDP was not handed down from
God on tablets of stone. (Laughter)
13:36
It's a measurement tool
invented in the 20th century
13:42
to address the challenges
of the 20th century.
13:46
In the 21st century,
13:51
we face new challenges:
13:53
aging, obesity, climate change, and so on.
13:55
To face those challenges,
13:58
we need new tools of measurement,
14:00
new ways of valuing progress.
14:02
Imagine if we could measure
14:05
what nonprofits, charities,
14:08
volunteers, civil society organizations
14:10
really contribute to our society.
14:12
Imagine if businesses competed
14:16
not just on the basis of
their economic contribution,
14:19
but on their contribution
to social progress.
14:23
Imagine if we could hold
politicians to account
14:27
for really improving people's lives.
14:30
Imagine if we could work together —
14:35
government, business,
civil society, me, you —
14:38
and make this century the
century of social progress.
14:43
Thank you.
14:48
(Applause)
14:49

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About the speaker:

Michael Green - Social progress expert
Michael Green is part of the team that has created the Social Progress Index, a standard to rank societies based on how they meet the needs of citizens.

Why you should listen

In his book Philanthrocapitalism (co-authored with Economist business editor Matthew Bishop), Michael Green defined a new model for social change built on partnerships between wealthy businesses, governments and community organizations. Shortly thereafter, Bishop floated the idea of a “Social Competiveness Index,” the idea that one day countries would compete with one another to be the most socially advanced, in the same way as they now compete to be economic top dog. Green loved it and decided to turn it into reality.

Teaming up with Avina's president Brizio Biondi-Morra, Sally Osberg of the Skoll Foundation and many other thought leaders from businesses and foundations, he began work on what would become the Social Progress Imperative, of which he's now CEO. Later they were joined by Harvard management guru Michael E. Porter, who became chairman of the SPI's advisory board. The first Social Progress Index was published in 2014.

More profile about the speaker
Michael Green | Speaker | TED.com