Data collected over the last decade highlights a clear increase in global well-being post the financial crash, particularly in Africa, where many countries showed strong improvements in infrastructure and economic stability.
Since 2012 The Boston Consulting Group (BCG) has used the proprietary diagnostic tool Sustainable Economic Development Assessment (SEDA) to produce a score that measures the relative well-being of countries and also relative scores for 10 dimensions. The 2018 report, Striking a Balance Between Well-Being and Growth: The 2018 Sustainable Economic Development Assessment, reveals that countries which lead in generating well-being for their citizens tended to post faster economic growth over the past decade.
While African countries on the whole have maintained their overall wellbeing rankings, many have made positive strides towards improvement. Twenty-six out of 40 countries (65%) have enhanced their ability to transform wealth into wellbeing and nearly a quarter (nine of 40) are now above the world average ability to do so.
However, despite the encouraging rise, African countries still have much room for improvement as they display lower than average well-being levels, in particular in sub-Saharan nations.
This is in large part to much lower than average income levels and so comes as no surprise. However, there are several factors which should be focused on to help improve wealth to well-being conversion for citizens.
The research identified that countries which saw the most progress over this period were particularly successful in improving education, infrastructure and overall governance.
“In Africa, as well as globally, we see that the same three dimensions pop up as differentiators for countries that have made the most progress,” says Joao Hrotko, a BCG partner and report coauthor. “It is also interesting to note that despite infrastructure having improved in most countries in Africa, the dimension still stood out as a differentiator between most improved and least improved African nations.”
The research found that digital technology has a positive and significant association with a country’s ability to convert wealth into well-being at low and middle usage levels.
Robust digital infrastructure supports employment by allowing faster matches in the job market, improves education by expanding the access of students to new material or instruction and strengthens governance by involving citizens more directly in decision making and reducing the inequality in access to information.
“The positive relation between technology readiness and well-being underlines the importance for developing countries to put the widespread adoption of digital technology among the items at the top of policy agenda, either through investing in digital infrastructure and promoting technology usage, or by creating the conditions for the private sector to invest,” adds Hrotko.
The last decade has shown that governments who stick to strategies and policies focused on well-being can deliver material impact to the population. African nations that have done so include Morocco, which has improved five places, Ethiopia (eight places), Rwanda (seven places), and the Republic of Congo (six places), which have all improved more than five places, and Kenya, which improved four places.
“BCG has been a strong advocate of the need for countries to focus policies and development strategies on improving well-being, however there remains a belief that policies aimed at improving well-being may lead to weaker GDP growth,” says Enrique Rueda-Sabater, a senior advisor at BCG.
“Our analysis finds this tradeoff can be avoided and, in fact, an approach that balances both well-being and growth is advisable under normal circumstances as well as during times of crisis. In such periods, countries must resist the temptation to pursue policies that come at the expense of well-being.”