We can no longer predict the future economic performance of countries just by forecasting GDP, since it is a measure of the combined activity of millions of people, influenced by many changing socio-economic factors. Our global economy is changing rapidly and the future does not look like the past.
In this new economic era, the main source of a nation’s wealth is not the resource rent but the social infrastructure that allows every person to realise his or her intellectual and creative potential.
In order to gauge a country’s ability to compete and grow in this new economic era, it is vital to look at a range of broader socio–economic infrastructure such as; the levels of education, the ‘cloud’ or infrastructure for doing business, its legal system, physical and intellectual property rights, competitive environment, political stability, digital infrastructure, and the ecosystem of thousands of suppliers that can provide high-quality services ranging from venture financing to marketing and web design.
To assess a country’s future potential we have developed – The Indigo Score – which provides some insight into the current state of a country’s socio-economic infrastructure that will shape, and influence, its economic performance in the new Indigo Era.
The score is based on five measures:
Stability & Legal Framework – including Political Stability Index, control of corruption, government effectiveness, regulation quality and Fragile States Index
Creativity & Innovation – including measures of expenditure on education, adult literacy rates, tertiary education, Global Creativity Index and investment in R&D
Economic Diversity – including natural resources rent, patent applications, intellectual property rights, trademark applications and Economic Diversity Index
Digital Economy – including ICT exports, mobile subscriptions, internet users and global connectivity
Freedom – including measures of press freedom, democracy ranking and Democracy Index
THE SCORE METHODOLOGY
The score uses over 30 measures from a wide range of published data sources, including the World Bank, UNESCO, CIRI Human Rights Data Project, Center for International Development at Harvard University and the Global Education Monitoring Report. Each of these measures was used to determine the score for one of five factors, detailed above. Once these five scores were determined for each country, they were amalgamated to form an overall Indigo score.
The score represents an average figure for each of these five key measures. An overall score of 100 is equal to the global average. A very high score is around 170, while a very low score is around 40. The final index includes the 152 countries for which sufficient data could be gathered for analysis.
Creativity & Innovation is king
The Indigo Score shows that the most creative and innovative economies have the highest scores and hence greatest chance of prosperity. Creativity & Innovation is a key driver of the overall score, with the top five countries scoring exceptionally highly in this area. Countries that foster entrepreneurialism and lifelong learning, and invest heavily in people, are those that we expect to thrive the most.
The Nordic region’s future is bright
The Nordic countries are particularly well-prepared for the future global economy, with three Nordic countries (Sweden, Finland and Denmark) scoring in the top five. This is attributed to their very high scores for Creativity & Innovation as well as Freedom, which are strong drivers of the overall score.
Low scorers are burdened with social and political problems
The countries with the lowest chance of prosperity in the coming era are affected by significant issues such as war, political turmoil and corruption. These issues are so serious that these countries may be unable to fully develop their economies and establish the institutions necessary to underpin their growth. For example, Syria is third from bottom with a score of 19.2 (average global score = 100), while Iraq is in second last place with a score of 19.0.