All progress is local

SYDNEY: Until the COVID-19 pandemic, humanity was making great strides in extending lives and increasing economic prosperity. It is critical that we return to that trajectory as the global economy recovers. New research, which examines progress at a granular level, can help us get there.

Typically, human progress is assessed at a country level. On average, the 178 countries where data are readily available have an area of 700,000 square kilometres (about 270,000 square miles), populations of some 40 million people, and produce around $700 billion in GDP. But there obviously are vast differences across and within countries, and the effectiveness of efforts to enhance economic prosperity and human well-being depends on understanding these differences.

That is why our new report, Pixels of Progress: A Granular Look at Human Development Around the World, paints a picture that is 230 times more detailed than a country-level perspective. Using night-time luminosity and other cutting-edge techniques to gather and analyse data, we examine population patterns, economic performance, and changes in life expectancy from 2000 to 2019 across more than 40,000 microregions, each averaging 3,000 square kilometres in area, 180,000 people, and $3 billion in GDP.

This approach revealed, for example, that in 2019, almost half of the world’s population enjoyed living standards that, just 20 years earlier, had been attained by only 21 per cent of humanity (largely in OECD countries). In 2000, 12 microregions along China’s coast – with populations of 71 million – boasted life expectancies of more than 72.5 years and GDP exceeding $8,300 per capita, putting them in the top 30 per cent globally for both of these metrics. By 2019, 86 per cent of China’s population – 1.2 billion people – lived in a microregion with living standards exceeding those thresholds. Beyond China, microregions containing 920 million people spread across 75 countries crossed the same threshold.

Similar gains were made at the other end of the spectrum. In 2000, more than one billion people resided in microregions with the lowest standards of living. By 2019, the figure had dropped to just over 400 million people, despite population growth. India in 2000 accounted for 43 per cent of microregions where longevity was less than 65.6 years and income was lower than $2,400 (the bottom 30 per cent globally); in 2019, it no longer had a single microregion in that category.

Overall, our granular approach shows that living standards declined only rarely, and in places often identifiable only through a microregional lens. Country averages obscure differences in microregional realities: using regression analysis, we found that a country’s growth rate of GDP per capita explains only about 20 per cent of the variation in growth rates in its microregions. In other words, economic progress is primarily explained locally.

For example, in places where a country-level view showed falling GDP per capita, our analysis tells a more nuanced story. A country-level analysis shows that 191 million people living in 20 countries experienced negative income growth from 2000 to 2019. But as we zoom in, we can see exactly where GDP per capita fell: in 6,300 microregions that are home to three times as many people – 574 million – in 100 countries. For 80 per cent of these people, income losses can be explained not by overall economic decline, but rather by rapid population growth.

Then there are the microregions that have made particularly rapid progress. Consider Dibër, a microregion tucked away in the Albanian Alps. Dibër’s economy remains highly agrarian, but, since Albania joined NATO in 2009, the local authorities have been working to revive its once-thriving tourism sector – catering to affluent European travellers visiting the Peshkopi thermal baths – with the help of international agencies.

During the period we studied, the number of health tourists rose steadily as accommodations increased, while glacial lakes and old-growth forests attracted hikers and trekkers. Such developments may have helped to boost health and incomes in Dibër, where GDP per capita more than tripled – from $3,300 to $10,200 – between 2000 and 2019, and average life expectancy rose from 74.1 to 78.3 years.

Dibër’s experience is representative of a broader trend: income and longevity have grown faster in microregions that started out further behind, narrowing global gaps in health and prosperity. In 2000, the bottom 5 per cent of the world’s population lived in microregions where life expectancy was less than 49.7 years, and the top 5 per cent could expect to live over 30 years longer (more than 79.5 years). By 2019, that gap had narrowed to 23 years.

The pandemic interrupted – and even reversed – the progress we examined, but it did not extinguish the potential for further gains. With a more granular understanding of how past progress unfolded – one that informs, for example, how we deploy resources – we can put ourselves on a path towards fulfilling that potential. We may even be able to chart a faster, clearer, and more efficient course.

Chris Bradley is a director of the McKinsey Global Institute and a McKinsey & Company senior partner in Sydney. Marc Canal Noguer is a fellow at the McKinsey Global Institute in Barcelona.

Copyright: Project Syndicate, 2022.

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