“Forewarned, forearmed: to be prepared is half the victory”Miguel de Cervantes, 1547-1616
Which countries are in the best shape to deal with the big forces we all know will pummel us over the next decades, and what should other countries do to emulate them? Those are the questions that the Wake Up 2050 Index seeks to answer, or at least to help us all try to answer.
This is not just a matter of wealth, military power or recent economic growth. The 2008 financial calamity taught us – or should have – that short-term thinking and short-term indicators are dangerous guides. It is not surprising: we are all, as individuals, companies and governments alike, prone to complacency and even to willful blindness, in pursuit of an easier life. But giving in to such thinking is a big, costly mistake. So the Wake Up 2050 Index is designed to reward and encourage a longer term perspective.
To understand the index better, start by asking yourself whether you are surprised that Switzerland comes top this year. The Swiss have always been rich and comfortable up there in the Alps, you might say, deliberately closed off from the stormy world around them. But then think of the long-term forces at play in the world: high Swiss wages are vulnerable to global competition; smart automation threatens the jobs of Swiss craftsmen, bankers and lawyers; ageing societies are imposing greater burdens on all developed countries; trends in geopolitics may make membership of international networks more valuable, and Switzerland has stayed out of most.
Switzerland’s top spot comes because the country has, over the past 20 years, tried to anticipate these pressures and prepare for them. It has become very open to both immigration (24% of the population is foreign-born) and trade (except for farming); it has invested heavily in innovation and education; its population is healthy, relative to other ageing societies, and scores well on measures of equality; its institutions, including its democracy and its regulatory system for financial services, show strong resilience.
This indicates the questions that the Wake Up 2050 Index seeks to answer for the affluent, industrialised democracies that we call the West, defined as the 35 members of the Organisation for Economic Co-Operation and Development. It does so by assembling internationally comparable data on 25 different measures, grouped under the themes of demography, knowledge, innovation, globalization and resilience (institutions). We used those measures to derive both an overall ranking for each country, as well as rankings on each theme.
This index focuses on preparedness for the future, and yet all data-sets are, by definition, measures of the present and the past. This index is not, and cannot be, a set of forecasts, though we hope it will be useful in guiding your own forecasts. Our statistical measures are chosen so as to indicate the sorts of weaknesses and strengths that might show up in future. So, for example, a high level of obesity is a warning sign of future health-care costs, while spending a high proportion of GDP on public pensions is a warning that a welfare state promises to become unaffordable as the share of the population that is over-65 climbs beyond a quarter in most OECD countries and approaches even one-third.
This is a launch version of the Wake Up 2050 Index. We are sure it can be improved, so we invite suggestions from experts and lay-people alike on what measures should be introduced in order better to portray and encourage long-term thinking, and what should be dropped.