Coinciding with the ongoing Davos 2024, the World Economic Forum (WEF) has released its The Future of Growth Report 2024, advocating a modern way to assess economic growth. The new framework goes beyond looking at the traditional gross domestic product (GDP) metric. It incorporates other factors to evaluate the quality of growth in 107 economies.
According to WEF Managing Director Saadia Zahidi, “Reigniting global growth will be essential to addressing key challenges, yet growth alone is not enough.”
“The report proposes a new way for assessing economic growth that balances efficiency with long-term sustainability, resilience and equity, as well as innovation for the future, aligning with both global and national priorities,” she added.
Broader perspective
In its “Future of Growth” report, the WEF also underscored that the majority of the countries surveyed are growing in ways that could be more sustainable and inclusive. It highlights these nations’ limited capacity to adapt to or drive innovation, reducing their contributions to and resilience against global disturbances.
WEF evaluated 107 economics based on four pillars. “Inclusiveness” assesses how well an economy’s growth benefits and includes all participants. “Resilience” gauges a country’s ability to endure and recover from disruptions. The “sustainability” measure evaluates how well an economy’s growth stays within environmental limits. Lastly, the “innovativeness” metric determines how a nation adapts and progresses in response to new technological and societal changes for long-term growth quality.
Globally, the averages of these four metrics are 55.9, 52.8, 46.8 and 45.2, respectively. These figures show that “the world economy is just halfway toward innovative, inclusive, sustainable and resilient growth.”
The report showed that none of the nations scored above 80 at the country level in any of the four key areas assessed.
Specifically, high-income economies generally score well in inclusiveness, innovativeness and resilience but lag in sustainability. In contrast, upper-middle-income and lower-middle-income economies face challenges in innovativeness and sustainability. Low-income economies, while showing better sustainability performance, need to improve in terms of resilience, inclusiveness and innovativeness.
Read: Davos 2024: Mixed growth outlook for global economy amid challenges
Future of Growth initiative
Accompanying the report is the WEF’s two-year “Future of Growth” initiative. It is designed to help policy-makers, economists and experts find balanced pathways for growth, innovation, inclusion, sustainability and resilience.
This new initiative marks a pivotal change in measuring and achieving economic growth, calling for a more comprehensive strategy.
In light of this shift, the report warned of an impending global economic slowdown. It predicts that by 2030, growth rates could fall to their lowest in 30 years. This anticipated downturn is occurring alongside other critical challenges. These include the climate crisis, weakening social contracts and escalating geopolitical conflicts.
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