This article is the first in a series providing insight on why government leaders need to look beyond economic development and prioritize the overall well-being of citizens. The second article will explore how leaders can approach and tackle inequality, and the third will cover direct actions governments must take for the short- and long-term development of countries and their citizens.
One of the biggest lessons COVID-19 taught governments is that societal well-being makes countries more resilient. Nations that invest across a range of development dimensions—such as education, health, infrastructure, and governance—have been better able to cushion the socioeconomic fallout from the pandemic. Our analysis shows that countries with improved abilities to convert wealth into well-being as well as those with high overall well-being tended to mitigate drops in economic performance and limit the growth of unemployment rates during the first year of the pandemic. In contrast, countries with lower levels have fallen further behind, particularly in GDP growth and employment. This aligns with our previous research that shows countries better at converting wealth into well-being were able to recover more quickly from the 2008–2009 financial crisis.
Since 2012, BCG has ranked countries according to a proprietary economic development tool called the Sustainable Economic Development Assessment, or SEDA. (See “A Comprehensive Measure of Well-Being.”) A consistent finding from our research is that the more traditional metrics of economic development, which focus on GDP and other macroeconomic indicators, are not sufficient to gauge the true state of development in any society. Rather, countries need to take a more comprehensive and sustainable approach that incorporates and optimizes societal well-being. Viewed through this lens, SEDA analyses have shown that some lower-income countries are actually better off than high-income countries because they look beyond economic metrics and invest in well-being more broadly. COVID-19 brought in a new dimension—an opportunity to observe how such efforts make countries more resilient in a crisis.
A Comprehensive Measurement of Well-Being
Explore BCG’s rankings of national well-being
