How do you track the overall development of a country and whether a country’s economy is on a long-term viable path? At INCAE’s Latin American Center for Competitiveness and Sustainable Development they have developed the Social Progress Index (SPI). The index is used to track a country’s overall well-being, factoring in areas such as environmental sustainability, security, education, healthcare, and water and sanitation development relative to the nation’s GDP.

Jaime García, researcher and methodology expert for SPI at the center, spoke with students about the long-term value of SPI and why it should matter not only to managers, but also to businesses. Students also participated in a game simulation where they used SPI indicators to develop a long-term plan for a fictitious country.

“The value of the Social Progress Index is that it helps leaders to make better decisions based on data in terms of sustainability and inclusivity,” said García. “Why does this matter to MBA and managers? Well, we are seeing that the global agenda is moving more towards looking at how we create a sustainable world.

“GDP doesn’t tell us the whole picture. It’s a measurement of goods and services, but what if you’re increasing GDP while destroying the environment? Is that sustainable? The idea of growth depends on how we make the decisions to boost the economy, and SPI is about the quality of the economic model behind the country, which helps us to decide whether we are on the right track.” 

This week, Matthew O’Rourke is reporting from Global Network Week 2017 in Costa Rica, where INCAE Business School is presenting its module, “Doing Business in Latin America: The Competitiveness and Sustainability Challenge.”