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Sustainable Economic Development Assessment

BCG’s Sustainable Economic Development Assessment (SEDA) is a proprietary diagnostic tool that gives countries insight into their overall social and economic conditions.

Without a doubt, there is a connection between a country’s wealth and economic growth and improvements to its overall well-being. So rather than focusing solely on GDP per capita—the most frequently used indicator of a country’s general welfare—SEDA offers an objective measure of the relative standards of well-being experienced by people in developed and developing nations around the globe.

For each country, we look at not only the current level of well-being but also its recent progress. We also compare each country with the other 148 countries in our data set. SEDA’s analysis can then be used to better inform and shape national and local strategies and priorities.

SEDA defines overall well-being by examining three fundamental elements that are made up of ten dimensions. 


This element gauges how a country is performing in terms of generating balanced growth. This provides a basis for the country to invest in the other two elements. Economics are measured according to:

  • Income. Wealth or GDP per capita
  • Economic Stability. Inflation and the volatility of GDP growth
  • Employment. Employment and unemployment levels


The following areas—major items in any government budget—encompass short- and long-term investments that help drive improvements in both economic growth and well-being over time.

  • Health. Access to health care, and mortality and morbidity rates
  • Education. Educational quality and access
  • Infrastructure. Water, transportation, sanitation, and communications


Sustainability is defined broadly to encompass social inclusion and the environment. It studies:

  • Income Equality. Income disparities across the population
  • Governance. The effectiveness and quality of government institutions, along with accountability, stability, and civic freedoms
  • Environment. The quality of the environment and polices aimed at improvement and preservation
  • Civil Society. The strength of the bonds among individuals, including the degree of intergroup cohesion, civic activism, and gender equality

The Element of Time

When formulating economic development strategy, it is not enough to produce a snapshot type of analysis, even when it can be updated regularly. Instead, development must be measured across three time sequences: recent progress, current level, and long-term sustainability.

  • The current level of socioeconomic development is a static measure of well-being that shows how well a country is performing across ten dimensions of development, based on the most recent available data.
  • A country’s recent progress is a measure of what it has achieved over the most recent five-year period across SEDA’s ten dimensions, both individually and in aggregate.
  • The long-term sustainability score is a measure that relies on ten sustainability factors (chosen based on extensive research in the development field and BCG’s experience with governments worldwide). This measure indicates a country’s ability either to begin improvements or to sustain them through the next generation.

Together, these time horizons provide complementary perspectives that are more valuable than any measure taken in isolation. For example, by taking into account the current level of development and recent progress, we can analyze a country’s relative and overall performance or the potential for improvement compared with other nations.

Douglas Beal

An Alternative to GDP That Encompasses Our Well-Being

Most economists agree that GDP, the most widely used measure of a country’s success and growth, is a poor indicator of the overall well-being of a nation. Douglas Beal created an alternative index that measures well-being in addition to wealth. The new gauge takes into account such factors as income equality, sustainability, and education. Douglas shares insights on the development of the index and reveals how it offers a new perspective on which countries are the real winners and losers in the global economy.

Public Sector
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