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Achieving Sustainable Economic Development

Sustainable economic development—economic progress that improves quality of life while preserving resources for the future—is a matter of importance and urgency for everyone.

In support of economic growth, governments and companies alike need a sustainable, comprehensive approach to economic development—one that helps them navigate economic challenges such as global crises and conflicts, natural disasters, inequality, and policy changes.

Below, we focus on three main approaches to support sustainable economic development: BCG's Sustainable Economic Development Assessment (SEDA), job creation and employment, and financial inclusion.

1. SUSTAINABLE ECONOMIC DEVELOPMENT ASSESSMENT (SEDA)

BCG’s Sustainable Economic Development Assessment (SEDA) reveals that countries can, in fact, do both. The tool provides insight into the relative well-being of a country’s citizens and how effectively that country converts wealth—based on three fundamental elements to measure income levels—into well-being.

The first element is economics, which includes income, economic stability, and employment dimensions. The second element, investments, encompasses education, health, and infrastructure, which account for much of government budgets. The third element covers two aspects of sustainability: social inclusion—including income equality, civil society, and governance—and environment.

2. JOB CREATION AND EMPLOYMENT

Labor, employment, and social services can have one of the largest direct impacts on sustainable economic development and well-being. Government has an important role to play in matching people's skills and experience to the jobs of today and tomorrow, and ensuring that no talent is wasted and no job is left unfilled.

Another lever for improving job creation and GDP growth is foreign direct investment (FDI), which contributes to a virtuous circle toward improving a nation’s competitiveness. A nation’s ability to attract, maintain, and accelerate FDI can have a profound impact on many aspects of the local economy, including:

•  A boost in productive capital resulting in higher output and more jobs
•  Improved access to previously unavailable export markets
•  New technologies and management skills


3. FINANCIAL INSTITUTIONS

Financial inclusion—the adoption, usage, and sustainability of financial services—has a proven positive correlation to economic development. By allowing people to transact more efficiently, save, invest, and be insured, their standard of living and well-being improves; family prosperity and GDP growth increases; and poverty decreases.

Building financial inclusion is a multiyear journey. To succeed, we recommend the following four steps:

  1. Understand the current state of affairs, identify root causes, and begin to build support.
  2. Develop a vision for the future that addresses root causes and has broad support among all relevant parties.
  3. Develop a tangible, realistic plan that allocates responsibility and authority for individual initiatives.
  4. Establish an implementation, monitoring, and feedback system that relies on both a centralized program management office and fast feedback that facilitates course correction.

Learn More About Sustainable Economic Development

Why Citizens' Well-Being Matters More Than GDP

Why Citizens' Well-Being Matters More Than GDP

Digging in on Social Impact in Africa

Shalini Unnikrishnan on the Ground in Rwanda

The Tipping Points for Economic Growth in Vietnam

Diversifying for Quality Growth in Oil-Rich Countries

Achieving Sustainable Economic Development in Nigeria

Economic Development in Southeast Asia

Read More About Our Impact in Sustainable Economic Development

Meet BCG’s Experts in Sustainable Economic Development

BCG's consultants and industry experts focusing on economic development continue to partner with leading social organizations, governments, corporations, and nonprofits to support economic growth, job creation, financial inclusion, and well-being. These are some of our experts on this topic.

  • Leads BCG in Ho Chi Minh City
  • Tourism and promotion
  • Institutional strategy
  • Industrial development
  • International strategy, business development, distribution, global development
  • Africa insight and build
  • Infrastructure
  • Sustainability
  • Behavioral economics
  • Social impact
  • Digital transformation
  • Impact investment
  • Africa insight
  • Economic development and competitiveness
  • Energy in sub-Saharan Africa
  • Transformation and implementation
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