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A Social Competitiveness Index?

Imagine if countries competed with each other to create the best environment in which social innovation can happen…

That’s the idea behind a new project we are working on, with Jed Emerson of Blended Value fame: the “Social Competitiveness Index”. The concept has been developed under the auspices of the World Economic Forum’s Global Redesign Initiative, by the Global Agenda Council on Philanthropy and Social Investment, and is now being advanced with support from the Avina Foundation together with a crack team of volunteer researchers from Deutsche Bank. We we would like your help to think it through.

Three decades ago, the WEF produced its first Global Competitiveness Report (GCR), the most authoritative comparative assessment of countries’ capacity to generate economic value. Unlike traditional measures of economic development that look at levels of national income, the GCR asked about the future potential for economic growth. In doing so, it has helped policy-makers to map out and drive change to make their economies stronger and more productive.

Yet the GCR only captures the economic capacity of countries, not their ability to create social value. Other indices, such as the UN’s Human Development Report, provide comparative information on different aspects of human wellbeing – but these largely reflect countries’ accumulated social value rather than countries’ capacities to respond to new challenges on a prospective, forward looking basis.

The Social Competitiveness Index (SCI) would rank countries according to the effectiveness of their legal, fiscal, governance and cultural environment with regard to social innovation. It would drive the creation of a systematic body of knowledge about the current structure of legal, tax and other policies toward social innovation, and about what works best. In doing so, it would provide a meaningful tool for decision-makers in all sectors to benchmark a country’s ability to tackle social and environmental problems and, through case studies, identify concrete steps on how to enhance this capacity. 

So what makes a country socially competitive? Our working hypothesis (which you can read about in more detail on pages 103-108 of this report) is that it’s about the capacities of government, the private sector and the non-governmental sector to do three things:

First, to innovate and create new models or technologies. This means having a strong civic sector that is able to come up with new ideas, a legal framework that allows these ideas these to be shared (freedom of expression, etc) and funding to get these ideas tested.

Second, a capacity to test these ideas and figure out what actually works. The quality of charities’ and social enterprises’ own reporting, as well as the quality of academic and media debate about the social sector is clearly important here. Yet so, too, is the openness of government, which is a crucial source of data on the nature of the social and environmental problems that needs to be tackled, as well as the effectiveness of a government’s own programmes.

Third, funding to get the ideas that work to scale. If social innovations are to reach meaningful scale they need to tap into sources of funding beyond the always limited pool of philanthropic grant capital. Governments must be ready to work in partnership with the social sector, to take new ideas and scale them up. Corporations must be willing to take new ideas of social and environmental responsibility and make them part of their mainstream business models. New legal structures for social investment will also be crucial to take ideas to scale.

We understand that creating the SCI is a huge a challenge, particularly if we are to make comparisons across countries with very different levels of development, different economic models, different social and cultural models. Over the next few weeks, we are looking forward to discussions with a number of others currently exploring this concept (or something similar). We also want  your input. Have we nailed the essence of social competitiveness or are we way off the mark? Comment on this blog post. Join the discussion on our Facebook group. Join the debate on twitter with the #socindex hashtag. E-mail us at philanthrocapitalism@yahoo.com. Write a response on your own blog, or maybe be a guest on the Philanthrocapitalism blog.

What we want most of all is the debate. Even our critics share the view that something is changing in the way that the world tackles social problems, in this era of social entrepreneurship and multi-stakeholder initiatives. We all have an interest in figuring out how to turn this social innovation movement into real change in the world.

The WEF’s Global Competitiveness Report has proven itself to be a powerful tool in enhancing the performance of the world economy. As globalization moves ahead and creates new challenges, the Social Competitiveness Index has the potential to drive social innovation higher up the political agenda and make the world a better place to do good.

Over to you!

0 replies on “A Social Competitiveness Index?”

I’m curious as to the data on which you base the assumption that the government, rather than private enterprise or donors, are best placed to fund social innovations (be it in the testing or scaling up phase). Can you share?

A great concept. Agree with the comment about perhaps including private enterprise and donors. The Access to Medicine Index, edition II released yesterday, may be of interest: atmindex.org. It has measured some aspects of access that are pretty challenging to quantify and certainly seems be driving access higher on big pharma’s agenda.

Matthew, you and Jed are always shaking things up! Your SCI idea will create important new conversations. I agree about factoring private enterprise and donors into the equation. They, too,can stimulate or stifle social innovation. Think of the Tatas and Khemka’s in India, for instance. This index should get everyone’s attention, since they all (government, industry, donors, NGOs, etc.) have a stake in it and can all work to improve it. Hope it is structured so that those operating in countries on the low end can see how to improve.

[…] Matthew Bishop suggests we find out, so policymakers can legislate the best possible environment for social innovation. Enter the SCI, a ranked list of countries in order of the social innovation-friendliness of their legal, fiscal, governance and cultural framework. It was conceived by the Global Agenda Council on Philanthropy & Social Investing, as a part of the World Economic Forum’s Global Redesign Initiative. (The Council, chaired by Bishop, includes several Big Names in Philanthropy, e.g., Jed Emerson, Martin Fisher, Jacqueline Novogratz and Sean Stannard-Stockton.) […]

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