November 2017: The Global Sustainable Competitiveness Index (GSCI) has ranked the five Scandinavian countries the highest on social, environmental and economic development, with Eastern European nations, the Baltic states, New Zealand, South Korea and Japan also placing in the top 20 countries. The GCSI measures countries’ current and future capabilities to generate and sustain financial and non-financial income and wealth for their populations.
The GSCI considers fundamental causes of economic development and success, based on 111 quantitative performance indicators from the World Bank, the International Monetary Fund (IMF) and various UN agencies. The indicators address: natural capital (resource availability and depletion); social capital (health, security, freedom, equality and life satisfaction); resource management (resource efficiency and intensity); intellectual capital (education, innovation and value-adding industry); and governance efficiency (infrastructure, market and employment structure, and financial industry).
Per the index’s sixth edition, the top 20 spots are dominated by the Northern European countries, Eastern European countries, New Zealand, South Korea and Japan. In general, Eastern European countries have higher scores than Southern Europe. For Brazil, the Russian Federation, India and China (BRICS), China is ranked 32, Brazil is 42, the Russian Federation is 45 and India is 121. The Index finds that China is among the leading nations on intellectual capital and investments, but the country’s limited natural resources, arid areas and low resource efficiency threaten its overall sustainability. All African regions are ranked in the bottom half of the Index.
According to the GSCI rankings, the world’s largest economies present a mixed picture: Germany is ranked 13, Japan is 20, the UK is 22 and the US is 29. In addition, some of the world’s richest countries score significantly lower on the Index than their gross domestic product (GDP) would indicate, such as the oil-rich countries in the Middle East like Saudi Arabia and Kuwait. Conversely, some countries, such as Bhutan, Bolivia and Lao People’s Democratic Republic (Lao PDR), rank higher than their current GDP would predict, suggesting that there is not a direct correlation between GDP and GSCI scores.
The accompanying report provides an analysis of countries across the five categories. Among the findings, it notes that countries with a high abundance of water have the highest levels of natural capital, regardless of their geographic location, and less developed countries have higher resource-intensity rankings. On intellectual capital, South Korea, Japan, Singapore, China and Scandinavia lead the intellectual capital ranking.
China’s industrial development has significantly damaged its environment and resources, but is expected to reverse this downward trend by 2024.
The report features a section on sustainable competitiveness in China and the US. The report predicts that the US will “fall substantially behind China” in the GSCI, particularly on innovation, social and governance areas. On natural capital, the report reflects that the US has rich biodiversity and availability of natural resources but is expected to experience decreases in its natural capital, based on anticipated national policies. China’s industrial development has significantly damaged its environment and resources, but the country is expected to reverse this downward trend by 2024 as a result of its investments in restoration and a green economy. On resource efficiency, neither the US nor China are leading nations, the report notes, while on intellectual capital, it highlights “dismal” student performance in the US, with implementation of national policies predicted to drop the US intellectual capital score further, while China is anticipated to improve its score. On governance efficiency, the report predicts the US will fall beyond the global average after 2025, and China will decrease slightly after the mid-2020s.
SolAbility, an independent sustainability think tank, has published the report annually since 2012. In addition to the World Bank and IMF data, the Index uses datasets from the UN Development Programme (UNDP), UN Environment (UNEP), the UN Children’s Fund (UNICEF), the Food and Agriculture Organization of the UN (FAO), the World Health Organization (WHO), the World Meteorological Organization (WMO), and NGOs. [GSCI Webpage]