In an interaction with Amit Kapoor, Scott Stern talks about Social Progress and Economic Prosperity.
Why do we need to measure social progress?
Scott Stern: For the countries, regions and cities to understand the wellbeing of their citizens, to understand their strengths and weaknesses, we need to move beyond traditional metrics of economic performance. There is no doubt that traditional economic metrics are extraordinarily useful for capturing the goods and services sold into society, but GDP was never meant to be a measure of wellbeing or a measure of social progress. The social progress imperative is about trying to bring the systematic measurement of social progress at the country level, region level, city level to be coequal with GDP as a metric for charting our progress. Charting social progress in a systematic way allows places, governments, citizens and stakeholders to come together to first understand the relationship between their economic prosperity and their social progress as well as to identify specific strengths and weaknesses, so that they can marshal resources, change policy, change behaviors, in order to create better wellbeing for their services.
Without social progress foundations, it is unlikely that economic prosperity will be sustainable, and conversely, economic prosperity and economic competitiveness provides the resources and the dynamism that allows us to prioritize investment and change in areas where we need to redress our social progress weaknesses.
Do you think there is some danger in terms of how it could also lead to social progress becoming a political tool or have other such negative outcomes?
Scott Stern: There is a long journey before we have full and complete portrait for social progress. The first issue is that we can’t start to even discuss social progress if we don’t know and can’t measure it in the first place. We need to therefore start bringing this together with systematic data. The efforts to bring the social progress index around the world and to India is an effort to really begin a conversation to begin understanding what systematic measurement tells us. That sparks a conversation about whether or not there are aspects of our social wellbeing that are poorly measured. We can then start to measure those things, and start to identify things that perhaps are known to some communities but have eluded the scrutiny of policymakers or the broader citizenry, because they’ve been somewhat invisible relative to the dominance of more traditional economic statistics. They can show the areas where economic progress has masked social progress or the lack thereof and show areas where a country or a region has been able to advance in social progress despite some economic challenges. It’s that ability to start having a conversation that is at the heart of why we use measurement to generate shared understanding.
Economic prosperity is important and so is social progress, so how do you think governments should start making decisions in terms of what needs to be done?
Scott Stern: An integrated strategy for economic competitiveness and social progress go hand in hand. Without social progress foundations, it is unlikely that economic prosperity will be sustainable, and conversely, economic prosperity and economic competitiveness provides the resources and the dynamism that allows us to prioritize investment and change in areas where we need to redress our social progress weaknesses. So, there is a two-way relationship between the two. The key is for governments to at least recognize the relationship between different factors, identify the things they can change through either policy or changes of individual programs where they are already expending resources, or identify areas where economic progress, economic competitiveness can be used as a tool to provide resources to advance social progress within a country.
How do you think the use of social progress as a tool will move in various parts of the world?
Social progress is a tool that will be applied differently in different countries and contacts around the world. In very advanced economies that nonetheless have tremendous economic sluggishness and real political discord, their social progress is a tool that is starting to illuminate some almost forgotten strengths but also its almost root-cause weaknesses that are threatening those political systems. In economies like Europe, social progress turns into a tool to show that it’s not simply a lack of economic dynamism in Europe but also the real social progress challenges that are at the heart of some of the challenges we see there.
In more economically dynamic areas of the world, social progress is putting new things on the agenda. There has been an effort to focus on economy for a long time, and now as prosperity arrives, people can look towards how to invest, prioritize and make strategic investment in social progress agenda.
In some of the poorest countries in the world, the absolute low levels of social progress besides other issues reinforce the challenges that some of those societies face, and opens up conversation about the role that stakeholders around the world can play in helping to advance the development agenda for those countries.
The social progress index tells that one of the biggest problems the world sees today is extremism, and it is probably a battle of the haves and the have-nots rather than being a religious battle. This discord is linked to economic development and social progress, so how do you think it can be solved?
Scott Stern: We face a choice. We can proactively understand our strengths and weaknesses and social progress, gain stakeholder engagement from government to citizen, to institutions, to NGOs, and have honest conversations about how to make people’s lives better, or we can only focus on zero-sum activities, or even an economic agenda that leaves behind too many people. In the latter case, we are likely to end up with a reliance on extremism, on a push towards polarization -political, religious, ethnic- and have much more of a brittle society where small number of things can really lead to large changes in the lives of large numbers of people, whether it is political violence, geographic dislocation, or partisanship in advanced democracies.
The world has likely not had great advancement in the political process for the last few years despite broad advances in social progress, and in some sense, what we’re doing is overreacting to some of the challenges we used to face. It’s very likely that we’re going to have to address the consequences of changing political systems throughout the world.
Without a discussion grounded in shared understanding, i.e., the measurement of how societies are doing, it is extremely difficult to figure out how to move past the noise of political debate and lack of accountability.
There has been a political battle of the coalition of restoration versus the coalition of transformation, and you make a point that the dominance of the narrative of restoration is where the problem probably arises. How will people understand that we need to move towards transformation?
Across all political systems, individuals have to somehow believe that the system is itself legitimate and that leadership and stakeholders are working to advance broad interests. Progress index is a tool that allows us to have a conversation, but also to hold accountable the government, institutions and ourselves on how we are creating the foundations for wellbeing and the tools that we need to advance our lives and to give opportunity.
Without a discussion grounded in shared understanding, i.e., the measurement of how societies are doing, it is extremely difficult to figure out how to move past the noise of political debate and lack of accountability. Shared measurement that then generates prioritization and a meaningful discussion of alternatives is a way of setting up the foundations for that transformative strategy. But that is not the only thing that has to change. There are issues of economy, national security and broader geopolitical issues.
Nevertheless, an important fraction of reshaping the global conversation towards the narrative of transformation involves meaningfully engaging societies in a conversation about the broadest measures of wellbeing that we can develop. This involves moving beyond the simple economic and accounting for social progress too.
How do you think corporates should define the strategy for the future
The corporate leaders are starting to, and in many cases, are actually leading the social progress agenda. They know that something needs to change. They know that the sustainability of the economics of their business depend on being able to sell goods and services, on innovating in markets and in countries that have strong social progress foundations.
Leading players are charting a path towards saying that one of the main things they can get behind is to invest in their own businesses in ways that also advance the real creation of better lives for the people in the territories and the markets in which they operate. Very often, we have an unhelpful debate that corporate social responsibility is completely separated from the issue of competitive advantage. In fact, the best competitive advantage is to be the kind of company that creates tremendous value for the people you work with. It creates loyalty and real value, and that real value is reflected in the enhanced social progress of the markets in which you work.
Would you then say that the next realm of competitive advantage is going to be driven through understanding societal needs?
Yes. At MIT, we are fortunate to have lots of innovators and entrepreneurs working in different ways. Almost every great entrepreneur is driven by a purpose. They’re trying to solve a problem and interestingly, they are aware that that solving their problem will require a for-profit enterprise that will address the problem in a meaningful way.
However, the issue often is addressing a social progress challenge that could be housing, health, personal safety, enablement of a broader democratic society, or access to information. The private sector has played a large role in addressing these problems. For example, Google has probably enabled more social progress than any government initiative. Wikipedia, a nonprofit but nonetheless, a private sector organization has made the world’s knowledge available to every human being with access to internet. That is a transformation in people’s lives. The economic impact of those companies is small relative to their social impact.
Do you think educational institutions will change and reorient themselves to create better conditions for social progress?
They won’t have to, but they should reorient themselves. One of the things we’ve learned about social progress is that very often big parts of what we call education are not giving people the skills and tools they need to necessarily advance their economic interest. Reconciling parts of education, both from the K through 12 education to higher education is about investing in the ability of people to make choices for themselves- broad choices about their political expression, about their ability to learn knowledge and about their ability to reach it.
With that said, the university sector in particular plays a unique role in promoting and being at the forefront of the social progress movement. It is a combination of a group of people who have an appreciation for the role of measurement and the role of societal wellbeing with the passion of students and others on campuses who are trying to make a change. People used to come to school for a particular career, at least in the United States, but one of the big changes we see now is that students come to school with the aim to solve a particular problem. If we give them the tools to make those changes and measure it, be accountable, it can be transformative on both the ability to deliver on social progress agenda as well as to do that in a way that reinforces rather than becomes a substitute for economic dynamism.
In fact, the best competitive advantage is to be the kind of company that creates tremendous value for the people you work with.
There must be some accusations on you of being too idealistic. Would you accept that label?
Scott Stern: No. I don’t accept that. Measurement is focusing people on what we know and gaining shared understanding. It is one of the few ways we have as societies to create a new conversation that should have been taking place earlier. Not all countries, political leaders, corporations and universities will respond to that challenge, but if you can get that tip of the sphere, you can demonstrate the impact of convening that measurement approach, that conversation and that change, and you’re able to provide an exemplar that then people can take their measurement.
It is not idealistic. It is an endeavour to say that there is a big domain here, a big opportunity for societies to enhance the scope of what we prioritize of the domains of activity that we effectively see as part of the integrated whole. That itself will allow us to move away from the balkanization of many of the individual topics under the domains of social progress.
How would you think the world would be impacted by the social progress index?
Scott Stern: There is a lot that can be done within the social progress movement. The first is that if we are able to move the conversation away from a dominant narrative of economic concerns and a balkanized discussion around all the social issues to having an integrated discussion of the economic dynamism and the social progress of individual countries and having an integrated strategy, it would be a big shift. That is a shift that many political leaders, many companies, many academic leaders, and more generally, the broader society is ready for. People know that it is the next agenda.
The second part is that we have to get better at measuring social progress as well as economic metrics. The very act of showing what is available from the data often points us to where we need to be creating new measurement. Hence, it will bring great insight over the next several years as people begin react to the social progress index, both national level indices as well as the global index and saying that we need to start measuring different things. We need to start capturing these elements in a more nuanced way, so that it is context specific and comparable over time.
The third part is that having that conversation upfront hopefully can allow debates about how countries should be prioritizing as they chart their broader strategy to not use economic prosperity as a mask for the inability to address broader social progress issues, and secondly, it will become a world in which we will be less susceptible to the confused debates that we currently have right now about the performance of political leaders, business community, and more broadly societal metrics.
One last message that you will want to send out to the world?
Scott Stern: The work of the institute to develop the social progress index for India is inspirational. We are going to gain enormous insight by undertaking a systematic and rigorous effort that allows for measuring how all places are different from each other in terms of their strengths and weaknesses, and allows individual regional leaders and different parts of civil society to react in different ways to chart a new agenda. This part is going to be extremely important going forward.