Contrary to popular belief, countries don’t need to choose between fostering economic growth and improving the lives of their citizens. They can, in fact, do both.
Time is up for the traditional approach to economic development. While boosting GDP is important, policymakers no longer have the luxury of waiting for gains to translate—hopefully—to improvements in citizens’ lives. Instead, they need to deliver growth and well-being simultaneously. By creating jobs, nurturing skills, and improving access—for all—to services and opportunities, governments create a foundation for faster, more sustainable economic development. This requires pulling a variety of levers in a carefully orchestrated way.
The most crucial levers for economic development can also be the most challenging to apply. BCG helps policymakers tackle the imperatives and impediments alike.
Nations that innovate excel at job creation, entrepreneurship, talent, and ecosystems. But unleashing innovation requires significant investment and streamlined bureaucracy. We work with governments to develop comprehensive, long-term strategies. Case in point: helping Vietnam create its National Innovation Center, a hub for advances—and opportunities—in Industry 4.0 technologies.
When financial services are readily accessible, whole populations can improve their lives and open new doors. Yet 1.7 billion adults are still unbanked. We use new lenses—such as behavioral economics and geospatial mapping—to understand why people don’t, or can’t, use certain products, and to figure out how to build better solutions.
How can government and the private sector work together to drive better outcomes? We look at the factors that make—or hinder—successful partnerships, such as regulatory systems, institutional support, and the climate for foreign direct investment. Then we design solutions—such as Rwanda’s Investment Accelerator—to spark interest from private companies and spur collaboration.
Countries that convert wealth into well-being for citizens—through means such as effective education, reliable infrastructure, and sound governance—grow faster and recover more quickly from economic crises.
The dynamics around economic development are rapidly evolving. New technologies and business models are shifting economic growth to new sectors. Rising levels of inequality and increasing competition for foreign investment are adding complexity—and urgency—to achieving sustainable economic growth and well-being. To help governments reach their goals, BCG taps a unique combination of people, partnerships, and tools.
The people comprise a global network of BCG experts in economic development consulting. They include thought leaders in agricultural and financial technologies, digital, and agile ways of working.
The partnerships are with some of the world’s most influential global economic development organizations, collaborating to gain insights on how new—and often disruptive—ideas, technologies, and business models can further sustainable economic growth and well-being. For example, we’ve worked with the Bill & Melinda Gates Foundation to examine how cash-in/cash out systems—and mobile money agent networks in particular—can foster financial inclusion.
The tools we use in economic development consulting consist of cutting-edge resources and programs that help us quickly develop the optimal strategy for a particular region. Our most important tools include:
Given that GDP is a limited metric for assessing economic development, SEDA takes a holistic approach, looking at an array of dimensions—including health, education, infrastructure, income, investment, and stability. Covering 143 countries, the SEDA database lets us zero in on focus areas for a specific country while revealing best practices from outperformers. Using SEDA, we can gauge a country’s true performance—and determine how it can do better.
Explore more about the makeup and value of BCG’s SEDA toolAs inflows tighten, attracting FDI is more challenging than ever. BCG employs an end-to-end methodology, helping countries look beyond one-off deals and develop the unique value propositions, resources, and ecosystems that catch investors’ eyes—en masse and fast.
Learn more about BCG’s role in foreign direct investmentTo provide a nuanced picture of how attractive a country is to business and investment, BCG worked with the Russian Agency for Strategic Initiatives to create RICI. This index measures investment climates across different regions within a nation, looking at 44 local factors—including regulatory environment, infrastructure, resources, supportive institutions, and the strength of small and midsize businesses.
Read how RICI helps spur regional growthTrue economic development means laying a foundation for sustainable economic growth—for both a country and its citizens. The following client-impact stories highlight BCG's approach to making that happen.
To gain a deeper understanding of the regional investment landscape and to better monitor and improve it, the Russian Agency for Strategic Initiatives (ASI) and Boston Consulting Group began developing a national set of metrics to assess how attractive individual regions were to business investors.
It was an all-too-common problem: seemingly accessible financial products launch, but too few people use them. BCG worked with Morocco to understand the factors behind low penetration rates, particularly among women, and to zero in on strategic levers and enablers, such as mobile payments and microfinance. We identified 150 key actions and designed a roadmap for financial inclusion that is truly inclusive.
BCG developed the country’s emerging-tech Centre of Excellence (CoE) to drive innovation and talent growth at a national level. The CoE has enabled Bangladesh to position itself as a hub for emerging technology and get the country—and local companies—on the radar of global IT and business-process-outsourcing (BPO) firms. Within two years, the initiative created more than 1,500 jobs and more than $50 million in export revenues.
Our economic development consultants have vast experience helping to advance sustainable economic growth and well-being. Meet some of our experts on the topic.
The digital revolution presents huge opportunities for developing nations that have the right strategies and can mobilize their entrepreneurs and pools of hidden innovators.
Governments need a dashboard—one that tracks not just economic growth but also citizens’ well-being and happiness levels—in order to understand how their performance stacks up.
Entrepreneurs who offer banking via mobile devices could finally put financial services within reach for 1.7 billion adults around the globe.
