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Economic Growth Alone Won’t Be Enough To Solve Our Global Challenges

Growing GDP is nice, but won’t get us nearly close to make the leaps in social progress that we need.

Economic Growth Alone Won’t Be Enough To Solve Our Global Challenges
[Illustrations: Markovka via Shutterstock]

Economic growth is the most important driver of human progress we know. But it’s not a guarantee for everyone. There are lots of countries that have gotten richer overall but haven’t improved happiness and human rights at the same time.

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For that to change, says a new report, we need to focus less on GDP in the future and more on a wider frame of objectives. We need a “‘productivity revolution’ in creating social value” if we’re meet the challenge of the new Global Goals for Sustainable Development, say the authors.

The report, developed by consultants Deloitte, is based on data from the Social Progress Imperative, which rates countries on everything from water and sanitation to access to knowledge and levels of tolerance. The groups track the relationship between social progress and GDP and argue that, while economic growth does improve lives, it’s won’t be sufficient going forward.

“If the same relationship between GDP per capita and social progress … continue[s] to hold in the future as countries’ incomes grow, the forecast income increases are unlikely to be associated with notable social progress improvements by 2030,” the report says.

The groups forecast average global annual incomes to rise from $14,000 to $23,000 by 2030, but for average index scores to improve only from 61 to 62.4 out of 100 at the same time. That’s the equivalent position of Ecuador and Mexico today. To meet the Global Goals requires reaching SPI scores of at least 75, the report says. (Countries like Norway or New Zealand have scores of at least 85, as we said here).

“The limits of relying on economic growth to attain development in the different facets of social progress makes the case for governments, business and international institutions to collaborate and recognize that economic development alone may not be sufficient to generate inclusive growth,” the report argues.

Read more here.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.

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