A Paradigm Shift in Measuring Economic Growth: Insights from the World Economic Forum’s Latest Report

Davos-Klosters, Switzerland, 17 January 2024: In an era marked by rapid economic transformations and escalating environmental concerns, the World Economic Forum’s latest report presents a groundbreaking perspective on measuring economic growth. Released today, the “Future of Growth Report 2024” shifts the focus from traditional metrics to a more holistic framework, intertwining efficiency with long-term sustainability, resilience, and equity.

Reassessing Global Economic Trends The report unveils a sobering picture of the global economy, forecasting a dramatic slowdown to the lowest growth rate in three decades by 2030. This downturn, fueled by persistent economic and geopolitical upheavals, aggravates multiple global challenges, including the escalating climate crisis and a fraying social contract. These factors collectively threaten the trajectory of global development.

Saadia Zahidi, Managing Director at the World Economic Forum, emphasizes the urgency and complexity of the situation. “While reigniting global growth is crucial,” Zahidi explains, “focusing solely on growth metrics is insufficient. Our report introduces a novel approach to evaluate economic growth, one that balances efficiency with sustainability, resilience, equity, and future-focused innovation, aligning with both global and national priorities.”

Introducing the Future of Growth Initiative Accompanying the report is the Forum’s “Future of Growth” initiative. This two-year campaign aims to redefine the narrative around economic growth. It brings together policy-makers, economists, and experts worldwide to identify the most effective strategies for balancing growth with innovation, inclusiveness, sustainability, and resilience.

A Deeper Dive into the Global Analysis The report reveals a concerning trend: most countries are growing in ways that are neither sustainable nor inclusive. They struggle to foster innovation or mitigate their impact on global crises. The inclusiveness and resilience dimensions score relatively high globally, but sustainability and innovativeness lag behind, indicating significant room for improvement.

Country-Level Insights The report provides a comprehensive analysis of 107 economies, revealing that none have scored above 80 in the framework’s four dimensions. It highlights disparities among different income groups:

• High-income economies exhibit strength in innovation and inclusion but need to enhance sustainability.
• Upper-middle-income economies show promise in inclusiveness and resilience but fall short in sustainability and innovation.
• Lower-middle-income economies score better in sustainability but need to focus more on inclusiveness and innovation.
• Low-income economies, while having a lighter environmental footprint, must improve in resilience, inclusiveness, and innovation.

Challenges and Opportunities Common challenges across these groups range from talent availability, green technology adoption, and income inequality to environmental regulation and technology absorption. Each group faces unique hurdles, underscoring the need for tailored strategies to achieve balanced growth.

The Road Ahead The “Future of Growth” initiative and the Annual Meeting 2024, themed “Rebuilding Trust,” are poised to play pivotal roles in reshaping global economic strategies. As the world navigates through these challenging times, the insights from the World Economic Forum’s report and initiatives offer a beacon of hope and a roadmap for a more inclusive, sustainable, and resilient economic future.