SEDA a new 'Well-Being' measure.

Leaders around the world increasingly recognize that GDP alone cannot give a full picture of a country’s performance. The well-being of citizens is an even more important measure. The Boston Consulting Group’s Sustainable Economic Development Assessment (SEDA) is a powerful diagnostic designed to provide leaders with a perspective on how effectively countries convert wealth, as measured by income levels, into well-being. SEDA also helps identify specific areas where a country is lagging behind others, even after taking into account its income level and growth rate.

SEDA defines well-being through three fundamental elements that comprise ten dimensions.

  1. Economics – Income, Economic Stability and Employment
  2. Investments – Health, Education and Infrastructure
  3. Sustainability – Income equality, Civil Society, Governance and Environment

SEDA

The wealth-to-well-being coefficient compares a country’s current-level SEDA score with the score that would be expected given the country’s GDP per capita. The expected cur- rent-level score is based on the relationship between GDP per capita and current-level well-being scores among all countries in our analysis. (See Exhibit 2.) The coefficient thus provides a relative indicator of how well a country has converted its wealth into the well-being of its population. Countries that sit above the solid line in Exhibit 2 —meaning that they have a coefficient greater than 1.0—deliver higher levels of well-being than would be expected given their GDP levels, while those below the line deliver lower levels than expected. New Zealand sits above Japan in the Exhibit 2.

GDP v SEDA

To understand how countries stack up in terms of well-being, and to see whether they are gaining ground or falling behind, it is helpful to examine both current-level and recent-progress SEDA scores. Countries in the upper-left quadrant of Exhibit 5 below have high current-level scores for well-being, but their recent-progress scores are below the median—meaning that they are in good shape but have been losing ground relative to the rest of the world. Those in the upper-right quadrant have scores that are above the median for both current level and recent progress— their well-being levels are relatively high and have been improving. Those in the lower-right quadrant have relatively low current-level scores but recent-progress scores that are above the median—what we describe as weak but improving. Those in the lower left are the most challenged: they have poor current-level and recent-progress scores, meaning that they have relatively low well-being already and have been losing more ground.

SEDA - improving etc

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SEDA

 

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