leads the world for the fifth year in a row as the Legatum Institute launches its 2013 Legatum Prosperity Index™, a unique and robust annual assessment of global wealth and wellbeing, which benchmarks 142 countries around the world in eight distinct categories.
The Legatum Institute’s 2013 Legatum Prosperity Index™ was launched at the Institute’s Mayfair offices with a series of presentations and panel discussions.
Key findings from the 2013 Index include:
- Norway tops the Index for the fifth consecutive year;
- The US drops out of top 20 in the Economy sub-index;
- Latin America and the Caribbean rise above the world average in the Economy sub-index for the first time;
- Bangladesh overtakes India in overall prosperity.
In addition, the 2013 Index highlights twenty countries that are predicted to move up the rankings by 2020 if they continue on their current path. This ’20:20 Vision’ is made up of nations that are regional or sub-index leaders, including Slovakia, Mongolia and Uruguay.
Following a presentation of key findings by Nathan Gamester (Senior Programme Director to the Legatum Prosperity Index™), Nathan and Jeffrey Gedmin (President and CEO of the Legatum Institute) moderated three interactive, livestreamed panel discussions:
Panel 1 - Does Economic Growth Improve People's Wellbeing?
- Brendan Burchell, Head of Sociology, University of Cambridge
- Jules Evans, Policy Director for the Centre for the History of the Emotions, Queen Mary, University of London
- Len Shackleton, Professor of Economics, University of Buckingham / previously Dean, Westminster Business School
The first panel of the day discussed the relationship of economic growth to people’s wellbeing and asked broadly if policies that promote growth align with policies that promote wellbeing. In considering the topic the conversation centred on the role of the state, firstly in measuring and understanding wellbeing, and secondly on the ability of the state to ensure wellbeing and a good quality of life.
Although economic growth often doesn’t directly correlate with wellbeing it was agreed that both wealth and wellbeing are mutually reinforcing, creating a virtuous circle that lifts the whole of society. On this theme Brendan Burchell stated that employment opportunities and a positive environment for entrepreneurship are key for wellbeing and national prosperity, while Jules Evans highlighted the role of civic institutions and community in giving life purpose and meaning.
Related to this was the question of to what extent can the state measure conditions of wellbeing and then champion individual policies that can lead directly to improved wellbeing indicators. The panellists agreed that often individual happiness is largely affected by factors that government can’t directly influence, in contrast with local and community groups who can impact wellbeing on an individual and micro level. On this point Len Shackleton stated that “whether governments are part of a solution or a problem remains open”. Jules Evans concluded by emphasising that participation in society and communities can play a huge role in belonging and self-fulfilment.
Panel 2 - Does Technology Stimulate Entrepreneurship and Prosperity?
- Erkko Autio, Chair in Technology Venturing and Entrepreneurship and Director of the Doctoral Programme, Imperial College London
- Christian Busch, Co-Founder, Sandbox / Associate Director, LSE's Innovation and Co-Creation Lab (ICCL)
- Luke Johnson, Chairman, Risk Capital Partners / Chairman, Centre for Entrepreneurs
- Iqbal Quadir, Founder, Grameenphone / Founder and Director, Legatum Center at MIT
The second panel addressed the role of technology in stimulating entrepreneurship and increasing opportunity. The panellists shared a positive view that technology was the great leveller across continents and between peoples, creating environments in which opportunity can flourish more quickly than ever before. Technology such as the mobile phone, for example, has decentralised and dispersed power, allowing for better governance and easier innovation. Christian Busch highlighted Kenya as an example where a great deal of business innovation was taking place with only very limited capital or resources.
Rapid technological advancement has accelerated the pace of change, with many new and disruptive technologies creating scalable opportunities. Iqbal Quadir described technologies as “game changers”, and that it is “entrepreneurs who are those trying to make a living changing the game”. Luke Johnson suggested that we are still in the ‘foot-hills’ when considering the internet’s true entrepreneurial potential. The panel agreed that the pace and disruptive capacity of technological change experienced today has created fertile ground for innovative business opportunities.
Other themes touched upon included a growing social dynamic to entrepreneurship; many new companies have both a desire to and do social good as well as create wealth. The level and role of government support in fostering innovation was also discussed. Erkko Autio noted that Nokia was created during a deep recession and only prospered because the Finnish government sustained R&D funding during this period. A final theme considered was in what environment innovation is easiest, with panellists contending that innovative approaches are more likely in newer and smaller companies, as the risk of failure outweighs new opportunity in large, established organisations.
Panel 3 - Youth Bulge in Africa: Threat or Opportunity?
- James Schneider, Editor-in-Chief, Think Africa Press
- Deborah Sporton, Senior Lecturer in Human Geography, University of Sheffield
- Elliott Green, Lecturer in Development Studies, London School of Economics
- Anke Hoeffler, Research Officer at the Centre for the Study of African Economies, University of Oxford
The final panel of the day resulted in a lively discussion and Q&A session. Deborah Sporton framed the debate by drawing everyone’s attention to the fact that in Africa the average fertility rate is 4.8 children per women, and in Niger this figure is 7.8. In addition to this 70% of people live on less than $2 a day. The challenge, as James Schneider went on the elaborate, is to ensure that jobs are created for the young people of the continent. However, this could prove difficult as manufacturing as a proportion of economic activity on the continent is only 5%, a level it has remained at since 1995. Without the mass of jobs that manufacturing brings, Schneider was worried about Africa’s employment prospects.
Anke Hoeffler drew attention to the further threat of intra-state violence. This remains a problem on the continent, and one that could be exacerbated by a swell of young people, especially those not engaged in employment. Turning to solutions, Elliot Green highlighted the importance of representative institutions and effective governance. He pointed to Ghana as a country with institutions that had encouraged economic growth and development; one of the few African countries to do so without significant natural resources.
Questions from the floor included: whether or not an African country may soon experience the unrest we’ve recently seen in the Middle East? To which Deborah Sporton pointed to recent unrest in Uganda. Another asked whether Rwanda’s current success would continue? To which there was the feeling across the panel, that while the country’s economic success has been impressive, it was difficult to predict how the country will fare once Paul Kagame’s term as President ends.
The 2013 Index, including further key findings, the list of full rankings, analysis pieces and interactive tools to explore the data, is available at www.prosperity.com.
Video - The Path to Prosperity (2013 Legatum Prosperity Index)
2013 Legatum Prosperity Index - Full Report [Download PDF]
2013 Legatum Prosperity Index - Rankings
2013 Legatum Prosperity Index - Key Findings
2013 Legatum Prosperity Index - Methodology
2013 Legatum Prosperity Index - Infographic