Anthony Gooch, Director of the OECD Forum and the Public Affairs & Communications Directorate of OECD
To make a good dish you need more than one ingredient, and this is the same when looking at the quality of people’s lives. It has become clear since the crisis that the sole ingredient of gross domestic product (GDP) as a measure of societal progress is not enough. Governments have to take into account the wide range of factors affecting people’s lives and try to find solutions that spread across many areas of policy. This year’s OECD Forum Investing in the Future People, Planet and Prosperity focusses on essential themes that need to be addressed to create better lives.
The OECD Better Life Index captures elements of these themes and more by measuring 11 key aspects of life. Instead of just looking at the usual economic factors such as income, jobs and housing, the Better Life Index also includes environment, community, work-life balance, personal security, education, health, civic engagement and the level of satisfaction with life. So how do countries perform in these three themes?
“People” can be measured by many different factors. For example, Iceland ranks at the top in employment, with the highest rate of 82% of people with a paid job. The Czech Republic does the best in educational attainment, with 92% of adults having completed upper secondary education. Australia, has the highest civic engagement with a voter turnout of 93%.
When it comes to the “Planet”, the Nordic countries, New Zealand and Germany perform best, with low levels of air pollution and good water quality. Sweden does better overall with the cleanest air, and over 95% of Swedes say they are satisfied with the water quality.
In terms of income, an admittedly limited indicator of “Prosperity”, the United States comes out top with the highest household disposable income and financial wealth, although this is not distributed equally among the population.
But what good are these numbers if they do not coincide the aspirations of the people that live in these countries? Apart from simply measuring a wide range of well-being indicators, we need to engage with citizens to find out what they think is really important in life. The Better Life Index does this by inviting people to rate the 11 dimensions of well-being according to the importance they give them in life. For example, if you think the environment is more important than income you can give it a higher rating and see how the countries rank depending on their performances in these two dimensions. When you create and share your own Better Life Index, you also provide valuable information on what individual people think is most important for well-being around the world. So far, more than 90,000 people have shared their view on what makes for a better life since the Index was launched in 2011.
What are they telling us so far? Overall people want to be “healthy, happy and wise”, ranking health as the top priority for a better life, with life satisfaction and education coming in close behind. They give low importance to civic engagement. This may refelect the fact that the crisis, and the high unemployment that has come with it, has undermined the confidence and trust of citizens in everything from governments to markets, businesses and institutions at large, with users from almost every country ranking civic engagement as the lowest priority.
However a closer look at the Responses map of users’ choices reveals that there are many differences depending on where you come from, how old you are, and sometimes whether you are a man or a woman. For example, in Europe, although people rank life satisfaction as top, Italians give a greater importance to the environment and civic engagement, whereas the Irish attach more importance to having a good balance between work and personal life. Outside Europe, greater importance is given to safety in countries like Japan and Korea, and to education in Chile and Mexico. These results often mirror the performance of the country in the various dimensions. In Italy the greater importance they give to civic engagement is translated into the fact that a large share of its population votes in national elections: 75% participated in the most recent parliamentary elections, well above the 68% average in the OECD. Although Japan has one of the lowest homicide rates in the OECD, people put safety as the top priority in a country that was the tragic victim of a tsunami so recently.
Apart from providing fascinating insights, the Better Life Index is a way for policy-makers and policy-shapers to see what citizens want and expect, and where policies to improve people’s lives should be focused. Many countries have now started their own well-being initiatives, and are starting to evaluate and implement policies through a well-being lens. These initiatives will be crucial for citizens to regain trust in their governments and institutions. This is also why the OECD is committed to expanding its work on well-being with many other studies such as How’s Life in Your Region? Measuring Regional and Local Well-being for Policy Making and How Was Life? Global Trends in Well-being since 1820. With the addition of an Italian version launched in April in conjunction with Expo Milan 2015 as well as a complementary website highlighting well-being in various countries through food, the Better Life Index is now availablein seven languages
But we still need your help. The more indexes we get the more we can get a sense of what people need to improve their lives. So if you think you know what the recipe is for La Dolce Vita tell us by creating and sharing your own Better Life Index and adding your voice to others all around the world.
Anthony Gooch, Director of the OECD Forum and the Public Affairs & Communications Directorate of OECD
The 2015 OECD Forum comes at key moment in what is proving to be a watershed year. It will be followed by the G7 Summit on 7-8 June, focussing on responsible business conduct and environmental and social conditions along global supply chains. In July, Addis Ababa will play host the third International Conference on Financing for Development which will prepare the ground for the UN Summit in September, where the adoption of the post-2015 development agenda will define a set of Sustainable Development Goals (SDGs). If this were not enough, the G20 Summit in Turkey is set to endorse the biggest overhaul in international tax rules in a century led by OECD. The G20 will build on its commitment to close the gender gap in labour market participation by 25% by 2025 which could bring an extra 100 million women into labour markets. And the year ends with the COP 21 Climate Change Summit, here in Paris in December.
It is in this context that we identified the 2015 OECD Forum theme: Investing in the Future: People, Planet, Prosperity. We need investment that fosters green growth, supports innovation and entrepreneurship, and contributes to closing the inequality gaps that this crisis has widened. But investment has decreased by as much as 25% relative to pre-crisis forecasts in many countries, and moving to a longer-term investment environment requires a transformational change in both government and investor behaviours.
The OECD’s recently released In It Together report shows that the gap between rich and poor is at its highest level in 30 years, with the richest 10% of the population now earning almost 10 times what the poorest 10% earns. That is up from 7 times from the 1980s. Globally, over 200 million people are unemployed, over 42 million in the OECD alone, 9 million more than just before the crisis. More than 35 million young people, aged 16-29, across OECD countries are neither employed nor in education or training.
When people do get jobs, the chances are high that they are on short-term contracts, and lack long-term career prospects or training and development opportunities. The Forum will discuss how to close income and wealth gaps, and how to promote access to more and better quality jobs. It will also examine how governments, the education system, business and civil society can address growing inequality by expanding access to learning and health. We know how important this is thanks to the 6 million people around the world who have tried our Better Life Index. They rank health, life satisfaction and education as their top 3 priorities, whereas income is consistently ranked only 9th out of the 11 indicators covered.
We’ll also look at which skills give people more control of their futures. Predictions suggest that average working lives will evolve to include around 20 different jobs or projects, instead of the seven or eight career changes common at the moment. The entrepreneurial sector provides opportunities for job-seekers of all ages. The Forum features a number of founders of sharing economy initiatives that allow people to share large and small possessions, from apartments to tools, and even skills. These initiatives can strengthen social cohesion within communities and also help us to use resources more rationally and contribute to our environmental objectives. There are also growing opportunities in the area of social enterprise, combining profit with social goals.
Innovation offers promising solutions in areas such as health, ageing, climate change, food security, and will be a significant source of future growth. But we also have to address the concern that only the highly skilled will have access to rewarding professional careers in the future, further increasing inequality. If we are to harness the benefits of technology without excessive costs to certain workers, we need to act imaginatively.
In his contribution to our OECD Yearbook released in advance of the Forum, HRH the Prince of Wales calls for a “Magna Carta for the Earth”, a global contract for the planet and humanity’s relationship to it. The conventional wisdom has shifted significantly to the point that it is now generally accepted that we are not moving quickly enough to avert disastrous and irreversible climate change. Two-thirds of all the greenhouse gas that the planet can take if we want a planet that can sustain human life, have already been emitted. Fiddling at the margins is no longer enough. Global emissions must have peaked by 2030. If international climate goals are to be met, 90% of power plant investments must be in low-carbon technologies by then. The way to make that happen is to put a high price on carbon.
Effective climate action requires coherent policies across our economies, and today this is far from being the case. The OECD and its sister organisations the International Energy Agency, Nuclear Energy Agency and International Transport Forum have analysed the extent to which policies ranging from land use to trade and investment are hampering efforts to fight climate change. The report Aligning Policies for the Transition to a Low Carbon Economy will be unveiled here tomorrow. Fixing policy misalignments could make our low-carbon ambitions much more achievable if acted upon in the run-up to and following COP21.
Cities that already generate 80% of global economic output, and use 70% of global energy, lie at the heart of finding long term solutions. Over half of the world’s population lives in cities today, and this figure is expected to increase to 70% by 2050. We will feature their voice in the Forum by welcoming representatives of major global cities such Amsterdam, Paris, Prague, Seoul and Rotterdam in the shape of Mayor Ahmed Aboutaleb.
2015 was the deadline set to meet the Millennium Development Goals. We succeeded in halving the proportion of people living in extreme poverty five years ahead of schedule. More people are better educated and live longer and healthier lives than ever before. But we need to finish the work and shift towards a more sustainable future. The post-2015 SDGs offer opportunities for ending poverty, protecting our environment, achieving gender equality and realising sustainable development for all. The goals will apply to all countries, signalling a transition away from the North-South dynamic that has defined development policy for decades. In focussing on financing and implementing the Sustainable Development Goals the Forum reflects the major significance for the OECD, its membership, current and future and partners around the world.
Meeting the financing needs to achieve the SDGs will require public, private, international and domestic investment. There is high expectation with regard to the contribution of the private sector through foreign direct investment, as well as from new public-private partnerships. The OECD Policy Framework for Investment helps countries develop the investment policies needed to achieve these aims. The Forum session on Tax – The Price We Pay will bring into sharp focus our work on Base Erosion and Profit Shifting (BEPS) and tax transparency to provide a fairer tax system, ensuring that countries can invest tax revenues in key areas such as health, education and infrastructure. The G20 Summit in Antalya will see the culmination of three years of work on making the international tax system fairer and fit for the 21st century economy. This can result in a qualitative leap forward in countries’ ability to mobilise domestic resources and close inequality gaps.
During OECD Week 2015 we bring together all the actors and factors that help make and shape policies to invest in a future that is more prosperous in the broad sense of the word, for people and the planet we share. To borrow from one of them, Jeffrey Sachs, “Let the future say of our generation that we sent forth mighty currents of hope and that we worked together to heal the world”.