Professor Michael E Porter at #WhatWorks2016

1. Social Progress Imperative #socialprogress1 SOCIAL PROGRESS – WHAT WORKS? Professor Michael E. Porter HARPA CONFERENCE CENTER – REYKJAVÍK, ICELAND APRIL 28, 2016

2. Social Progress Imperative #socialprogress WHAT IS THE RELATIONSHIP BETWEEN ECONOMIC DEVELOPMENT AND SOCIAL PROGRESS? Economic Development GDP per capita 2 HOW DO WE MEASURE DEVELOPMENT? Social Progress

3. Social Progress Imperative #socialprogress Economic Development GDP per capita 3 THE PARADIGM HAS BEEN THAT ECONOMIC DEVELOPMENT MEASURED BY GDP WILL LEAD TO SOCIAL PROGRESS. HOW DO WE MEASURE DEVELOPMENT? Social Progress

4. Social Progress Imperative #socialprogress BUT SOMETIMES THE LINK BETWEEN ECONOMIC DEVELOPMENT AND SOCIAL PROGRESS IS MISSING. ECONOMIC DEVELOPMENT DOES NOT ALWAYS LEAD TO SOCIAL PROGRESS… Economic Development GDP per capita 4 HOW DO WE MEASURE DEVELOPMENT? Social Progress

5. Social Progress Imperative #socialprogress …AND IT IS CLEAR THAT SOMETIMES SOCIAL PROGRESS INFLUENCES ECONOMIC DEVELOPMENT. 5 Economic Development GDP per capita HOW DO WE MEASURE DEVELOPMENT? Social Progress

6. Social Progress Imperative #socialprogress TO UNDERSTAND INCLUSIVE GROWTH WE NEED TO MEASURE SOCIAL PROGRESS DIRECTLY Social Progress ? 6 HOW DO WE MEASURE DEVELOPMENT?

7. Social Progress Imperative #socialprogress SOCIAL PROGRESS INDEX: DESIGN PRINCIPLES 7 Outcomes – not inputs Actionability Relevant to all countries Exclusively social and environmental indicators

8. Social Progress Imperative #socialprogress DEFINITION OF SOCIAL PROGRESS Social progress is the capacity of a society to meet the basic human needs of its citizens, establish the building blocks that allow citizens and communities to enhance and sustain the quality of their lives, and create the conditions for all individuals to reach their full potential. 8

9. Social Progress Imperative #socialprogress THE SOCIAL PROGRESS FRAMEWORK 9

10. Social Progress Imperative #socialprogress10 SOCIAL PROGRESS INDEX FRAMEWORK INDICATORS 2015 10 Basic Human Needs Opportunity Nutrition and Basic Medical Care  Undernourishment  Depth of food deficit  Maternal mortality rate  Child mortality rate  Deaths from infectious diseases Water and Sanitation  Access to piped water  Rural access to improved water source  Access to improved sanitation facilities Shelter  Availability of affordable housing  Access to electricity  Quality of electricity supply  Indoor air pollution attributable deaths Personal Safety  Homicide rate  Level of violent crime  Perceived criminality  Political terror  Traffic deaths Access to Basic Knowledge  Adult literacy rate  Primary school enrollment  Lower secondary school enrollment  Upper secondary school enrollment  Gender parity in secondary enrollment Access to Information and Communications  Mobile telephone subscriptions  Internet users  Press Freedom Index Health and Wellness  Life expectancy  Premature deaths from non- communicable diseases  Obesity rate  Outdoor air pollution attributable deaths  Suicide rate Ecosystem Sustainability  Greenhouse gas emissions  Water withdrawals as a percent of resources  Biodiversity and habitat Personal Rights  Political rights  Freedom of speech  Freedom of assembly/association  Freedom of movement  Private property rights Personal Freedom and Choice  Freedom over life choices  Freedom of religion  Early marriage  Satisfied demand for contraception  Corruption Tolerance and Inclusion  Tolerance for immigrants  Tolerance for homosexuals  Discrimination and violence against minorities  Religious tolerance  Community safety net Access to Advanced Education  Years of tertiary schooling  Women’s average years in school  Inequality in the attainment of education  Globally ranked universities Social Progress Index Foundations of Wellbeing

11. Social Progress Imperative #socialprogress 2015 SOCIAL PROGRESS INDEX: WORLD PERFORMANCE 11

12. Social Progress Imperative #socialprogress12 SPI rank SPI score Country SPI rank SPI score Country SPI rank SPI score Country SPI rank SPI score Country 1 88.36 Norway 18 81.91 Portugal 35 74 Lithuania 52 68.19 Albania 2 88.06 Sweden 19 81.62 Slovenia 36 73.66 Mauritius 53 67.79 Macedonia 3 87.97 Switzerland 20 81.17 Spain 37 73.3 Croatia 54 67.5 Mexico 4 87.62 Iceland 21 80.82 France 38 73.08 Argentina 55 67.23 Peru 5 87.08 New Zealand 22 80.59 Czech Republic 39 72.79 United Arab Emirates 56 67.1 Paraguay 6 86.89 Canada 23 80.49 Estonia 40 72.6 Israel 57 66.34 Thailand 7 86.75 Finland 24 79.21 Uruguay 41 71.79 Panama 58 66.24 Turkey 8 86.63 Denmark 25 78.45 Slovakia 42 70.89 Brazil 59 66.15 Bosnia and Herzegovina 9 86.5 Netherlands 26 78.29 Chile 43 70.19 Bulgaria 60 65.89 Georgia 10 86.42 Australia 27 77.98 Poland 44 69.83 Jamaica 61 65.7 Armenia 11 84.68 United Kingdom 28 77.88 Costa Rica 45 69.79 Serbia 62 65.69 Ukraine 12 84.66 Ireland 29 77.7 Korea, Republic of 46 69.55 Malaysia 63 65.64 South Africa 13 84.45 Austria 30 77.45 Cyprus 47 69.19 Kuwait 64 65.46 Philippines 14 84.04 Germany 31 77.38 Italy 48 69.01 Montenegro 65 65.22 Botswana 15 83.15 Japan 32 74.8 Hungary 49 68.85 Colombia 66 64.98 Belarus 16 82.85 United States 33 74.12 Latvia 50 68.37 Romania 67 64.92 Tunisia 17 82.83 Belgium 34 74.03 Greece 51 68.25 Ecuador 68 64.31 El Salvador Social Progress categorization: • SPI rank 01 – 10: very high • SPI rank 11 – 31: high • SPI rank 32 – 56: upper middle • SPI rank 57 –98: lower middle • SPI rank 99 – 125: low • SPI rank 126 – 133: very low 2015 SOCIAL PROGRESS INDEX RESULTS

13. Social Progress Imperative #socialprogress SOCIAL PROGRESS DOES INCREASE WITH GDP PER CAPITA BUT GDP IS FAR FROM THE WHOLE STORY 13

14. Social Progress Imperative #socialprogress SOCIAL PROGRESS AND ECONOMIC DEVELOPMENT Economic development alone is not sufficient to explain social progress outcomes • There is a non-linear relationship between Social Progress Index scores and GDP per capita • Social Progress Index scores display significant deviation from the GDP per capita regression line • GDP per capita is an incomplete measure of a country's overall performance 14

15. Social Progress Imperative #socialprogress DIMENSIONS OF SOCIAL PROGRESS INDEX VS. GDP PER CAPITA 15

16. Social Progress Imperative #socialprogress WHAT WORKS? UNDERSTANDING COUNTRY PERFORMANCE

17. Social Progress Imperative #socialprogress BENCHMARKING DRIVES IMPROVEMENT • Social Progress Index allows us to see how a country is performing in absolute terms and relative to its economic peers. Every country has areas for improvement. • Social Progress Index allows us to look at a country’s performance holistically, looking at how performance varies across different aspects of social progress. It breaks down the silos between social issues and helps prioritization. • Benchmarking allows countries to identify areas of relative weakness to help set strategic priorities for improvement. 17

18. Social Progress Imperative #socialprogress DEFINING PEER COUNTRIES • We define a country’s economic peers as the 15 countries closest in GDP PPP per capita. • Once the peer group is defined, a country’s performance is compared to the median performance of countries within the peer cohort. • If a country’s indicator score is greater than (or less than) the average absolute deviation from the median of the comparator group, it is considered a strength (or weakness). Scores within one average absolute deviation are considered neither strengths nor weaknesses (neutral) within the cohort. 18

19. www.socialprogressimperative.org Strengths and weaknesses are relative to 15 countries of similar GDP: Relative Strength n/a – no data available Neutral Relative Weakness Score Rank Score Rank Score Rank BASIC HUMAN NEEDS 91.23 21 W FOUNDATIONS OF WELLBEING 75.15 35 W OPPORTUNITY 82.18 8 N Nutrition and Basic Medical Care 98.52 39 N Access to Basic Knowledge 95.33 45 W Personal Rights 82.16 24 W Undernourishment (% of pop.) 5.0 1 N Adult literacy rate (% of pop. aged 15+) 99.0 1 N Political rights (1=full rights; 7=no rights) 1 1 N Depth of food deficit (cal./undernourished person) 8 1 N Primary school enrollment (% of children) 91.8 73 W Freedom of speech (0=low; 2=high) 2 1 S Maternal mortality rate (deaths/100,000 live births) 28 55 W Lower secondary school enrollment (% of children) 98.0 57 W Freedom of assembly/association (0=low; 2=high) 1 48 W Child mortality rate (deaths/1,000 live births) 6.9 38 W Upper secondary school enrollment (% of children) 89.5 49 W Freedom of movement (0=low; 4=high) 3 67 W Deaths from infectious diseases (deaths/100,000) 31.3 37 N Gender parity in secondary enrollment (girls/boys) 1.0 1 N Private property rights (0=none; 100=full) 80 17 W Water and Sanitation 98.68 28 W Access to Information and Communications 85.00 23 W Personal Freedom and Choice 82.64 15 N Access to piped water (% of pop.) 98.6 25 W Mobile telephone subscriptions (subscriptions/100 people) 95.5 87 W Freedom over life choices (% satisfied) 86.6 27 W Rural access to improved water source (% of pop.) 98.0 41 W Internet users (% of pop.) 84.2 13 N Freedom of religion (1=low; 4=high) 3 55 W Access to improved sanitation facilities (% of pop.) 100.0 27 N Press Freedom Index (0=most free; 100=least free) 23.5 36 W Early marriage (% of women aged 15-19) 0.03 32 W Satisfied demand for contraception (% of women) 84.7 14 N Corruption (0=high; 100=low) 74 15 N Shelter 90.05 6 N Health and Wellness 68.66 68 W Tolerance and Inclusion 74.46 15 N Availability of affordable housing (% satisfied) 69.0 7 S Life expectancy (years) 78.7 30 W Tolerance for immigrants (0=low; 100=high) 81.5 11 N Access to electricity (% of pop.) 100.0 1 N Premature deaths from non-comm. diseases (prob. of dying) 14.3 35 W Tolerance for homosexuals (0=low; 100=high) 71.3 15 N Quality of electricity supply (1=low; 7=high) 6.3 19 W Obesity rate (% of pop.) 31.8 126 W Discrim. and viol. against minorities (0=low; 10=high) 4.5 31 N Household air pollution attr. deaths (deaths/100,000) 0 1 N Outdoor air pollution attributable deaths (deaths/100,000) 33.6 78 W Religious tolerance (1=low; 4=high) 3 36 N Suicide rate (deaths/100,000) 10.7 81 W Community safety net (0=low; 100=high) 90.1 27 W Personal Safety 77.66 30 W Ecosystem Sustainability 51.63 74 W Access to Advanced Education 89.47 1 S Homicide rate (1= <2/100,000; 5= >20/100,000) 2 41 W Greenhouse gas emissions (CO2 equivalents per GDP) 421.7 4 N Years of tertiary schooling 1.8 1 S Level of violent crime (1=low; 5=high) 1 1 N Water withdrawals as a percentage of resources 2.9 85 W Women's average years in school 13.9 4 N Perceived criminality (1=low; 5=high) 2 2 N Biodiv. and habitat (0=no protection; 100=high protection) 63.4 68 W Inequality in the attainment of edu. (0=low; 1=high) 0.07 38 W Political terror (1=low; 5=high) 3 80 W Number of globally ranked universities 181 1 S Traffic deaths (deaths/100,000) 11.4 38 W UNITED STATES Saudi Arabia, Switzerland, Netherlands, Ireland, Austria, United Arab Emirates, Sweden, Germany, Denmark, Australia, Canada, Belgium, Iceland, Finland, and Norway GDP per capita rank: 6 Social Progress Index rank: 16/133 Social Progress Index score: 82.85

20. Social Progress Imperative #socialprogress Basic Human Needs Foundations of Wellbeing Opportunity Nutrition and Basic Medical Care Water and Sanitation Shelter Personal Safety Access to Basic Knowledge Access to Info and Communic ations Health and Wellness Ecosystem Sustainability Personal Rights Personal Freedom and Choice Tolerance and Inclusion Access to Advanced Education SOCIAL PROGRESS INDEX 2015: UNITED STATES VS. PEER COUNTRIES Social Progress Index Rank: 16 GDP per Capita Rank: 6 Weakness Strength Expected Range United States Other Cohort Countries Cohort Countries: Saudi Arabia, Switzerland, Netherlands, Ireland, Austria, United Arab Emirates, Sweden, Germany, Denmark, Australia, Canada, Belgium, Iceland, Finland, and Norway 20

21. Social Progress Imperative #socialprogress SOCIAL PROGRESS INDEX 2015: UNITED STATES INDICATOR STRENGTHS Cohort Countries: Saudi Arabia, Switzerland, Netherlands, Ireland, Austria, United Arab Emirates, Sweden, Germany, Denmark, Australia, Canada, Belgium, Iceland, Finland, and Norway Availability of affordable housing Years of tertiary schooling Number of globally ranked universities Basic Human Needs Opportunity Shelter Access to Advanced EducationPersonal Rights Freedom of speech Weakness Strength Expected Range United States Other Cohort Countries 21

22. Social Progress Imperative #socialprogress SOCIAL PROGRESS INDEX 2015: GREATEST UNITED STATES WEAKNESSES 22 Cohort Countries: Saudi Arabia, Switzerland, Netherlands, Ireland, Austria, United Arab Emirates, Sweden, Germany, Denmark, Australia, Canada, Belgium, Iceland, Finland, and Norway Basic Human Needs OpportunityFoundations of Wellbeing Tolerance and Inclusion Personal Freedom and Choice Personal Rights Personal Safety Health and Wellness Ecosystem SustainabilityAccess to Basic Knowledge Access to Advanced Education Weakness Strength Expected Range United States Other Cohort Countries

23. Social Progress Imperative #socialprogress WHAT WORKS: BENCHMARKING TO GUIDE IMPROVEMENT • Social Progress Index identifies countries that are doing well on particular aspects of social progress. This allows identifying best practices and potential solutions. • The SPI reveals economic peers that have demonstrated excellence in each area. Learning from frontier social progress performers, adapted for local context, informs strategies for improvement. 23

24. Social Progress Imperative #socialprogress STRENGTH IN BASIC HUMAN NEEDS 24 Basic Human Needs Nutrition and Basic Medical Care Water and Sanitation Shelter Personal Safety Low Income Nepal The Gambia Rwanda The Gambia Nepal Benin Comoros The Gambia Rwanda Burundi Nepal Rwanda Comoros Nepal Lower Middle Income Moldova Kyrgyzstan Uzbekistan Tajikistan Senegal Armenia Djibouti Kyrgyzstan Moldova Uzbekistan Kyrgyzstan Tajikistan Djibouti Moldova Armenia Honduras Egypt Senegal Uzbekistan Moldova Morocco Vietnam Senegal Tajikistan Bhutan Djibouti Vietnam Georgia Morocco Laos Moldova Uzbekistan Upper Middle Income Bosnia and Herzegovina Mauritius Turkmenistan Thailand Mauritius Costa Rica Malaysia Bosnia and Herzegovina Mongolia High Income Japan Czech Republic

25. Social Progress Imperative #socialprogress STRENGTH IN FOUNDATIONS OF WELLBEING 25 Foundations of Wellbeing Access to Basic Knowledge Access to Information and Communications Health and Wellness Ecosystem Sustainability Low Income Uganda Rwanda Kenya Comoros Rwanda Nepal Malawi Madagascar Zimbabwe Mali Benin The Gambia Ethiopia Uganda Burkina Faso Cambodia Rwanda Lower Middle Income Honduras Nicaragua Senegal Tajikistan Kyrgyzstan Moldova Uzbekistan Cape Verde Moldova Ghana Vietnam Senegal Laos Bhutan Upper Middle Income Ecuador Costa Rica Colombia Costa Rica Peru Colombia Ecuador Costa Rica Serbia High Income Sweden Iceland Norway Latvia Uruguay Estonia New Zealand Switzerland Norway Slovenia Latvia

26. Social Progress Imperative #socialprogress STRENGTH IN OPPORTUNITY 26 Opportunity Personal Rights Personal Freedom and Choice Tolerance and Inclusion Access to Advanced Education Low Income Comoros Malawi Liberia Mali Guinea-Bissau Burkina Faso Rwanda Cambodia Kenya Mozambique Sierra Leone Burkina Faso Zimbabwe Uganda Madagascar Tanzania Dem. Rep. of the Congo Mozambique Kenya Rwanda Malawi Lower Middle Income Lesotho Philippines Ghana Cape Verde Ghana Timor-Leste Papua New Guinea Lesotho Lesotho Philippines Bhutan Uzbekistan Nicaragua Lesotho Ukraine Kyrgyzstan Tajikistan Uzbekistan Moldova Philippines Georgia Lesotho Papua New Guinea Armenia Upper Middle Income Costa Rica Jamaica Mongolia Belize Costa Rica Jamaica Costa Rica Botswana Jamaica Costa Rica Brazil Paraguay Bulgaria High Income Uruguay New Zealand Chile Portugal Uruguay Estonia New Zealand Chile Uruguay Chile New Zealand Poland Uruguay Portugal New Zealand Chile Malta Iceland Spain Russia United States Canada Israel United Kingdom Australia

27. Social Progress Imperative #socialprogress COMPARING MUNICIPALITIES: ORIXIMINÁ, AMAZON REGION, BRAZIL 27

28. Social Progress Imperative #socialprogress COMPARING REGIONS: BASQUE REGION, SPAIN 28

29. Social Progress Imperative #socialprogress COMPARING CITIES: MEDELLIN, COLOMBIA 29 SocialProgressIndex

30. Social Progress Imperative #socialprogress SOCIAL PROGRESS – WHAT WORKS? • The goal of this conference is to begin the process of moving from measurement to action to impact. • SPI highlights peers that offer models, and lessons, for improvement that can help others. • The 8 case studies on what works, presented today by local experts, will be documented and shared internationally. • This meeting is just a beginning. We are building a global community of experts to share knowledge on advancing social progress. • Join us! 30

Professor Michael E Porter at #WhatWorks2016

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