Professor Michael E. Porter unveiled the Social Progress Index in Sao Paulo, Brazil on September 4, 2013, discussing how to measure national development and the challenges Brazil's social progress faces.

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Professor Michael E. Porter
Sao Paulo, Brazil
September 4, 2013
THE SOCIAL PROGRESS
INDEX AND THE
CHALLENGE TO BRAZIL

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HOW DO WE
MEASURE A
NATION’S
DEVELOPMENT?
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• In both economic and business development our understanding of success has been incomplete
• There is a powerful connection between economic and social development, both positive and negative
• Separating business and competitiveness from social progress and societal issues is a serious mistake
THE DUAL CHALLENGES OF DEVELOPMENT
Economic
Development
Social
Development
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MEASURING NATIONAL DEVELOPMENT
• There has been a growing recognition of the need to go
beyond GDP in measuring a nation’s performance
• A series of indexes have been introduced to do so:
- Human Development Index
- Millennium Development Indicators
- Happy Planet Index
- OECD Better Life Indicators
- Legatum Prosperity Index
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SOCIAL PROGRESS INDEX: DESIGN PRINCIPLES
• Separate from economic indicators
• Holistic framework
• Outcomes rather than inputs
• Relevant to all countries
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WHAT IS SOCIAL PROGRESS?
Social progress is the capacity of a society to
meet the basic human needs of its
citizens, establish the building blocks that allow
citizens and communities to enhance and sustain
the quality of their lives, and create the
conditions for all individuals to reach their full
potential.
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SOCIAL PROGRESS INDEX MODEL
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Social Progress Index
Nutrition and Basic Medical Care
Air, Water, and Sanitation
Shelter
Personal Safety
Access to Basic Knowledge
Access to Information and
Communications
Health and Wellness
Ecosystem Sustainability
Personal Rights
Access to Higher Education
Personal Freedom and Choice
Inclusion and Equity of Opportunity
Does a country provide
for its people’s most
essential needs?
Are the building blocks in
place for individuals and
communities to enhance
and sustain wellbeing?
Is there opportunity for
all individuals to reach
their full potential?
OpportunityFoundations of WellbeingBasic Human Needs

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SPI RANKINGS: 2013
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1. Sweden
2. United Kingdom
3. Switzerland
4. Canada
5. Germany
6. United States
7. Australia
8. Japan
9. France
10. Spain
11. Korea, Rep.
12. Costa Rica
13. Poland
14. Chile
15. Argentina
16. Israel
17. Bulgaria
18. Brazil
19. United Arab Emirates
20. Turkey
21. Dominican Republic
22. Colombia
23. Thailand
24. Peru
25. Mexico
26. Philippines
27. Paraguay
28. Tunisia
29. Georgia
30. Viet Nam
31. Jordan
32. China
33. Russian Federation
34. Kazakhstan
35. Botswana
36. Sri Lanka
37. Morocco
38. Indonesia
39. South Africa
40. Egypt, Arab Rep.
41. Ghana
42. Bangladesh
43. India
44. Senegal
45. Kenya
46. Rwanda
47. Mozambique
48. Uganda
49. Nigeria
50. Ethiopia

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SPI RANKINGS: 2013
1. Sweden
2. United Kingdom
3. Switzerland
4. Canada
5. Germany
6. United States
7. Australia
8. Japan
9. France
10. Spain
11. Korea, Rep.
12. Costa Rica
13. Poland
14. Chile
15. Argentina
16. Israel
17. Bulgaria
18. Brazil
19. United Arab Emirates
20. Turkey
21. Dominican Republic
22. Colombia
23. Thailand
24. Peru
25. Mexico
26. Philippines
27. Paraguay
28. Tunisia
29. Georgia
30. Viet Nam
31. Jordan
32. China
33. Russian Federation
34. Kazakhstan
35. Botswana
36. Sri Lanka
37. Morocco
38. Indonesia
39. South Africa
40. Egypt, Arab Rep.
41. Ghana
42. Bangladesh
43. India
44. Senegal
45. Kenya
46. Rwanda
47. Mozambique
48. Uganda
49. Nigeria
50. Ethiopia

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SOCIAL PROGRESS INDEX VS. GDP PER CAPITA
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SOCIAL PROGRESS INDEX VS. GDP PER CAPITA
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SOCIAL PROGRESS INDEX VS. GDP PER CAPITA

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SOCIAL PROGRESS INDEX VS. GDP PER CAPITA
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THE SOCIAL PROGRESS INDEX: KEY FINDINGS
• Economic development is necessary but not sufficient as a
measure of national performance
• Some approaches to economic development are less effective
than others in advancing social progress, and even
counterproductive
• Just as economic development helps social progress, social
progress can enable sustainable economic development
• The amount of government spending (as a percent GDP) is an
incomplete explanation for social progress performance
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OVERALL SPI VS. GOVERNMENT EXPENDITURE (% OF GDP)
Government expenditure source: 2013 Index of Economic Freedom

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Brazil
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Brazil
BRAZIL’S SPI PERFORMANCE AGAINST BRICS

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RECENT SOCIAL PROGRESS TRENDS IN BRAZIL
• Faster prosperity growth in the recent decade
• Shift to democracy increased the focus on social inclusion
and achieving better opportunities for the poor and
disadvantaged citizens
• Targeted support programs for the very poor (Bolsa
Escola/Bolsa Familia)
• Improved access to basic medical services (Health care
reform/Sistema Único de Saude)
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SOCIAL PROGRESS BRAZIL SCORECARD
OVERALL RANK 18
Brazil GDP per capita rank is 24th among
sample of 50 countries
Basic Human Needs 30 Foundations of Wellbeing 20 Opportunity 16
Nutrition and Basic Medical Care 27 Access to Basic Knowledge 26 Personal Rights 15
Undernourishment 29 Adult literacy rate 32 Political rights 17
Depth of food deficit 31 Primary school enrollment 25 Freedom of speech 12
Maternal mortality rate 25 Secondary school enrollment 19 Freedom of assembly/association 1
Stillbirth rate 23 Women's mean years in school 30 Private property rights 18
Child mortality rate 24 Women's property rights 1
Prevalence of tuberculosis 24
Air, Water and Sanitation 28 Access to Information and Communications 20 Personal Freedom and Choice 16
Indoor air pollution attributable deaths 31 Mobile telephone subscriptions 14 Basic religious freedoms 26
Outdoor air pollution attributable deaths 18 Internet users 20 Contraceptive prevalence rate 3
Access to piped water 16 Fixed broadband subscriptions 22 Access to childcare 17
Rural/urban access to improved water source 34 Press Freedom Index 17 Freedom over life choices 13
Access to improved sanitation facilities 29
Access to wastewater treatment 24
Shelter 23 Health and Wellness 31 Inclusion and Equity of Opportunity 2
Availability of affordable housing 28 Life Expectancy 27 Equity of opportunity for ethnic minorities 1
Access to electricity 22 Obesity 27 Women treated with respect 43
Cancer death rate 27 Community safety net 9
Deaths from cardiovascular disease & diabetes 22 Tolerance of immigrants 13
Deaths from HIV - Tolerance for homosexuals 6
Availability of quality healthcare 45
Ecosystem Sustainability 21 Access to Higher Education 33
Ecological footprint of consumption 29 Tertiary school enrollment 33
CO2 emissions per capita 20 Female tertiary enrollment 31
Energy efficiency (use per $1,000 GDP) 29
Water withdrawals per capita 20
*
*Safety net, tolerance and respect for minorities, women, and disadvantaged
Personal Safety 46
Homicide rate 47
Level of violent crime 39
Perceived criminality 36
Political terror 38

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OVERALL SPI VS. GOVERNMENT EXPENDITURE (% OF GDP)
Government expenditure source: 2013 Index of Economic Freedom

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THE SOCIAL PROGRESS IMPERATIVE: DRIVING TO ACTION
The Social Progress Imperative is not just an Index, but a
global effort designed to catalyze action at the country
level. It aims to form and support National Committees of
leaders and stakeholders in each country, and work jointly
with them to mobilize policy changes and private sector
initiatives.
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THE ROLE OF THE NATIONAL COMMITTEE
• Interpret and disseminate country level priorities for social
progress improvement
• Pursue policy changes in priority areas for social progress,
through cross-sector collaboration
• Foster improvements in local data collection and relevant
research
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THE ROLE OF BUSINESS IN SOCIETY
• Only business can create wealth and prosperity
• Business is facing growing scrutiny as the cause or a
contributor to many of today’s societal challenges
• Corporate social responsibility efforts are greater than ever,
but the legitimacy of business has fallen
• Government and NGO’s alone lack sufficient resources
and capabilities to fully meet social challenges
We need a new approach
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• Compliance with
community standards
• Good corporate
citizenship
• “Sustainability”
• Mitigate risk and
harm
Corporate Social
Responsibility
(CSR)
Creating Shared
Value
(CSV)
Philanthropy
THE ROLE OF BUSINESS IN SOCIAL AND ECONOMIC PROGRESS
• Donations to worthy
social causes
• Volunteering
• Address societal
needs and challenges
with a business
model
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SOCIAL NEEDS AND ECONOMIC VALUE CREATION
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• Social deficits create economic costs for companies
• Social needs represent the largest market opportunities
Company
Productivity
Skills
Worker Safety
Environmental
Improvement
Education
Water Use
Energy Use
Health
Affordable
Housing
Community
Economic
Development

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CREATING SHARED VALUE IN PRODUCTS AND MARKETS
JAIN IRRIGATION SYSTEMS
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• Drip irrigation equipment for small farmers in Africa and India
• Serves more than 4 million farmers worldwide as of 2012
• Reduces water use by over 40%
• Enables higher crop yields that improve food security while
raising farmers’ income
• Jain is now a $820 million company that is rapidly growing

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SHARED VALUE IN THE VALUE CHAIN
FIBRIA, BRAZIL
• Fibria, a large manufacturer of pulp for paper, utilizes planted eucalyptus
trees rather than native and old growth forests
• The company supports and encourages small-scale producers near its mills
to plant eucalyptus in conjunction with other crops, assisting them with
technical training and inputs
• Fibria achieves far greater resource efficiency versus old growth forest
production, with eucalyptus yielding 30 times higher yield per acre of wood
pulp
• Small scale producers contribute 27% of the raw material volume utilized in
Fibria mills, improving efficiency
• 4000 households have significantly increased their income

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THE PURPOSE OF BUSINESS
• Our purpose in business is to create shared value for society, not economic
value for its own sake
• Businesses acting as businesses, not as charitable givers, are arguably the
most powerful force for addressing many of the pressing issues facing our
society
• Shared value will give rise to far broader opportunities for economic value
creation
• Shared value thinking will drive the next wave of innovation, productivity,
and economic growth
• A transformation of business practice around shared value will give purpose
to the corporation and represents our best chance to legitimize business
again
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THE SOCIAL PROGRESS COMMITTEE IN BRAZIL
• A network in Brazil is forming under the leadership of:
- Fundación AVINA
- Instituto Arapyaú
- Instituto Ethos
- Deloitte
- Coca Cola
• Other potential partners include:
- Vale, SA
- Local chapter of WBCSD
- CEAL
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THE CHALLENGE TO BRAZIL
• Is Brazil, as a leading emerging economy and steward of vital
natural resources, willing to become a leader in advancing social
progress and a role model for the emerging world?
• Is the business community in Brazil willing to embrace shared
value as a way to engage directly in Brazil’s social challenges?
• Is government ready to move from solely government solutions to
collaborating with the private sector to drive social progress
through shared value solutions?
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www.socialprogressimperative.org
Twitter: @socprogress
#socialprogress