[Quartz] ReykjavikMichael Porter, a Harvard economist who made his name working on ideas around competition, has come to the capital of Iceland to talk about social process and how to measure it. Here at a conference on the topic, he reminds the audience that economic indicators—while we’re very used to measuring them—only tell part of the story.
From initial research, he says, there’s one key area where many societies (and not just poor ones) fall down: providing their citizens with enough opportunities to change and better their lives. This, he says, is a crucial but elusive ingredient to a smoothly functioning society—or what, at the individual level, one might call happiness.
He has come to Iceland, which—like many of its Scandinavian neighbors—consistently tops happiness charts, to launch his "Social Progress Index," a new scale for measuring how well societies are functioning.
The index is based on three key areas, broken into more granular layers. Basic human needs and "foundations of well-being" are the first two, and indeed, many societies have in recent decades improved access to the basic healthcare, food, and education that form that base layer, Porter said. But if people in a society—no matter how well it’s doing—don’t feel able to improve themselves or their lives, they won’t be happy. For that, they also need a society that fosters freedom, access to advanced education, tolerance, and personal rights, he argues.
We’ve been trying to work out how to live since forever. Where Porter’s index differs from predecessors is in stripping out all financial indicators. In the past, Porter said: "The idea has been that social progress happens if we can improve economic progress. If we increase GDP per capita... life gets better." That’s true, he said, but it’s not enough: