What GDP doesn’t tell you about citizens’ wellbeing

Global index rating suggests State is good place to live in terms of basic human needs, wellbeing and opportunity

‘Over half of those emigrating last year over the age of 15 had a third-level degree.’ Photograph: Getty Images

‘Over half of those emigrating last year over the age of 15 had a third-level degree.’ Photograph: Getty Images

 

Our citizens don’t measure their wellbeing by consulting figures for national GDP growth or corporate quarterly results. These measures are a very incomplete way of measuring the wellbeing of a society and its people.

The 2016 Social Progress Index, an international framework that measures human and societal development in 133 countries including Ireland, has just been published. Developed by the Social Progress Imperative, it omits economic indicators and assesses what matters most to people, regardless of personal or national wealth. The index measures performance on basic human needs (such as water and shelter), foundation of wellbeing (including health and education) and opportunity (the ability people have to improve their lives, such as through equality and personal rights).

In 2016, Ireland ranks 12th of 133 countries measured. This is in line with last year’s ranking and so shows Ireland is maintaining its position. Within the EU, Ireland is actually in the “very high” tier, grouped with the Scandinavian countries, the Netherlands and the UK. Relative to the OECD countries Ireland is a mid-table performer, ranking 12th out of the 33 ranked OECD countries.

A healthy ranking for social progress makes a country an attractive place to live. This is not only good for current citizens, but it also improves our ability to attract talent and investment. Research by Deloitte has shown that where a country performs well on the index, it tends also to perform well on attracting foreign direct investment. This link holds especially true for societies that perform well within the opportunity dimension of the index.

Such societies differentiate themselves by protecting personal rights, fostering high levels of tolerance and inclusion, and providing access to advanced education. This attracts workers from abroad, and in a world where the availability of talent increasingly spells success or failure for business, investment follows talent. With changes to investment patterns expected in a post-Brexit world, this becomes an even more important consideration.

Tolerance and inclusion

While Ireland has an overall ranking of 12th internationally, we perform particularly well on opportunity-related indicators. Our ranking of fifth globally on opportunity is driven by strong performance in the areas of tolerance and inclusion and access to advanced education.

On indicators related to basic human needs and the foundations of wellbeing, Ireland ranks 17th. This lag is driven by shortfalls in infrastructure (29th on affordable housing, 41st on water and sanitation, 23rd on internet access), health and wellness (Ireland ranks 108th for obesity and 69th for suicide rates), and environment (Ireland ranks 41st globally on biodiversity).

Although Ireland ranks well on opportunity, the index does point to important challenges. There is notable inequality of access to advanced education – Ireland ranks 29th here. An upcoming EU regional social progress index produced by the EU Commission, which applies the social progress framework, shows that in the Border-Midland-West region 35 per cent of those between 25 and 64 possess a third-level qualification, while the figure in the Southeast is 42 per cent. Broadband penetration levels are 70 per cent in the Southeast and 59 per cent in the Border-Midland-West region, according to the EU index. While the rising tide of Ireland’s economic recovery has brought welcome employment opportunities, it is clear that it has not lifted all boats.

Net migration by Irish citizens continued into 2015, reaching 23,200. Over half of those emigrating last year over the age of 15 had a third-level degree. As we look to entice those who left in recent years back to our shores, it’s interesting to note that among Ireland’s net migration destinations, the UK, Canada and Australia all rank higher than Ireland on social progress. For emigrants who have established lives and, in many cases, families abroad, these societies may offer a quality of life that tips the balance towards staying away.

Regional divergences on social progress should be looked at in much the same way as international divergences. If the Government is to realise its plan of creating 135,000 jobs outside Dublin by 2020, we need to deliver on social progress outside the capital, providing an attractive environment for local and international talent.

Many of the challenges highlighted by the social progress index were issues during the recent election and are priorities for our current Government. The current programme for a partnership government refers to the action plan on housing, an updated national broadband strategy, continued investment in water infrastructure, strategies on obesity and suicide prevention, and an action plan for educational inclusion.

Critical role

Clearly businesses have a critical role to play. Not only do they provide products and services to drive social and economic development, but it is in their interest that this development takes place.

Not-for-profits also play an important role, but it is collaboration that will drive real change. That is why Deloitte collaborates with organisations such as Ashoka, which promotes social innovation, and business in the community. In my role as chairman of the Corporate Social Responsibility (CSR) stakeholder forum, I have observed first-hand what can be achieved through this collaboration, but also what still needs and can be done.

Finally, as an open economy that plays on a global stage, Ireland is set to undergo demographic shifts as it internationalises. Inclusiveness and tolerance will play an increasingly important role here. Tools such as the social progress index will allow for government, business and societal players to monitor our progress and, most importantly, to act together.

Brendan Jennings is managing partner of Deloitte, which collaborates with the Social Progress Imperative, producers of the social progress index. The report for 2016 has just been published at: http://iti.ms/2bhWFdz

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