A community based health evaluation is a systematic analyze community health needs/status. The process provides a way for community to prioritize health needs and to plan and act upon unmet community health needs.
Socio-Economic Factors Determines Community Based Health Status
Summary.
We frequently find ourselves managing in situations where the company or unit strategy is unclear, in flux, or constantly changing. The best managers find ways to provide steady, realistic direction and to lead with excellence, even when the strategy isn’t clear. There are three things you can do today that will put you in a better position to manage strategic ambiguity:
Cultivate emotional steadiness by being learning more about the situation, acknowledging and navigating your emotions, and keeping team communication open. Tap into others’ expertise by imagining what the leader you respect the most would do, engaging other managers, and embracing the wisdom of thought leaders. Following these three approaches, you can keep lack of clarity at your company from cast a shadow over your confidence or performance.It’s one of the few facts in business everyone agrees on:Without a clear and compelling strategy, your business will fail. From MBA programs, to business book jackets, to the last keynote you attended, you’ve heard it repeated again and again.
Despite this, we frequently find ourselves managing in situations of strategic ambiguity when it isn’t clear where you’re going or how you’ll get there. Why does this happen? Market conditions shift rapidly. Customers have more choices than ever. Resources are constrained. Executives leave, interims are appointed, and searches drag on. The list continues, and even if your company is nimble enough to set strategy effectively at the top, keeping the entire organization strategically aligned is an entirely different challenge.
Your company might have a clear strategic imperative, but your unit or team might not.In my consulting practice, I work with leaders all over the world on strategy and execution, and they shift uncomfortably in their chairs every time I broach this topic. Strategic uncertainty can feel like slogging through mud. Leaders avoid investments. Decisions are deferred. Resources are frozen. Fear, uncertainty, and doubt drive bad behavior and personal agendas. Even so, companies often succeed or fail based on their managers’ ability to move the organization forward precisely at times when the path ahead is hazy.
The best managers find ways to provide steady, realistic direction and to lead with excellence, even when the strategy isn’t clear. Push your leaders for clarity, yes. In the meantime, be productive. There are three things you can do today that will put you in a better position to manage strategic ambiguity:
Take Pragmatic Action
I’m a proponent of practical approaches to dealing with uncertainty. Doing something, anything, in support of your company’s success makes you and your team feel better than doing nothing.
Deliver value. First, focus on what you can control. You owe it to the organization and to your team to deliver value every day. What clientele does your team serve today and what do they expect or need from you? How can you perform better, faster, or smarter to deliver on the promise of excellent service? What matters to the organization’s mission or vision? How can your team contribute to that? When uncertainty comes, first and foremost do good work. You’ll put the company in the best possible position to navigate new strategic choices.
What’s likely? When the strategy is uncertain, the best managers acknowledge what’s unknown, but also look ahead to what is known and what is likely to happen. What do you know about the dynamics impacting your company? What options are being discussed? What does your boss think will happen? What can you do today to prepare yourself, your team, and potentially your clients for change? In almost every case, managers can place intelligent bets and start to work toward a future state even when the complete landscape remains out of focus.
Embrace short-term strategies. Once you’ve focused your team on delivering value and started to explore what’s possible, you’re prepared to move forward with a discrete set of priorities. Take a note from organizations that use agile methods and create your own strategic sprint. What can you do personally to contribute to strategic clarity for your part of the business? What projects can your team execute in 30, 60, or 90 days that will benefit the organization regardless of which direction the strategy takes? Strategy isn’t only the work of senior executives—any work you do to further the company’s capabilities and position your team for the future is a great investment. Don’t stand still, awaiting the “final” answer on strategy. Move your team and the company forward.
Cultivate Emotional Steadiness.
Strategic ambiguity pushes you out of your comfort zone. When there’s clear, unwavering direction, you can focus on defined targets and deliver results. When strategies shift, or are hinting toward a shift, it’s normal to feel unsettled, and you’ll see this in your team too. Here are three steps you can take to help yourself and your team navigate the emotions of strategic ambiguity.
Learn more. One of the reasons I suggest pragmatic action is because doing something concrete helps you move beyond your raw emotions. But there’s more to emotional steadiness. Questions arise naturally: How will this impact my group? What if everything we’re doing today alters? What if this involves job changes, layoffs, or lost resources? Learn as much as you can so you’re informed, not just reacting to rumor and innuendo. Use your internal network and ask others in the organization for insight, context, and clarity. When you’ve done the hard work of sense-making, you’ll be able to anticipate the questions your team will ask and prepare the most effective answers you can.
Emotional steadiness requires that you be intentional about the way you show up in the workplace. Your role is to be calm, transparent, and steady, all while painting a vision for the future. Acknowledge your emotions and talk to a peer or your boss if you need to work through them. Play out the worst-case scenario in your mind and then move on to the more likely outcome. Chances are the reality isn’t as bad as what you might conjure up when your emotions are heightened. Commit to avoiding stress responses, frustration, rumors, or other nonproductive behavior. Your team members are watching and taking their cues from you.
Strategic uncertainty can cause managers to communicate with team members less frequently and less openly. “If I don’t have clarity to provide, why not wait?” the thinking goes. But in truth, ambiguous situations require you to communicate even more than normal. To demonstrate emotional steadiness, share your own emotions and acknowledge those of your team in productive ways. Let team members know that what they feel is okay. But talk with them about your commitment to being emotionally steady even during times of uncertainty. Ask them to do the same and come to you if they are frustrated or concerned. Maintaining open dialogue will keep your team engaged and aligned until a clear direction emerges.
Tap into Others’ Expertise.
Leading through periods of uncertainty and change can be isolating for managers. Remind yourself that you are not alone. You have a network of people who have likely faced similar challenges and you can tap into their experiences. Here are three ways you can tap into the expertise of others for support.
What would they do in your situation? How would they handle the ambiguity or state of flux? How would they view the way you’re handling yourself? This exercise can be incredibly powerful in helping you stay calm and emotionally steady, exercise your critical thinking, and take pragmatic action even in the most uncertain circumstances. Those we most respect have demonstrated traits we admire. Tap into their strengths to inform your own.
Managers often believe they need to “be strong” and go it alone to demonstrate managerial confidence and competency. That’s not true. My executive clients reach out to peers and former colleagues regularly for advice, counsel, and emotional support. If someone you know reached out to you to ask for your advice, you’d happily provide support and feel valued as a peer. Your network will feel the same. Start the conversation with “I could really use another point of view” and you’ll be surprised how quickly others engage.
Your network becomes global when you expand beyond those you know personally to those you can access in today’s digital environment. The greater your understanding of how others think about strategic agility and change leadership, the better you’ll be able to navigate ambiguity in your company. The brightest and most inspiring minds are at your fingertips—read books and articles, listen to podcasts and interviews, and watch instructive videos, webinars, and more to expand your thinking and learn new approaches relevant to your specific situation.
The ability to thrive during periods of strategic uncertainty separates the great managers who go on to become exceptional leaders from the rest. Don’t allow a lack of clarity at your company to cast a shadow over your confidence or performance. Even in the most challenging and ambiguous of situations, you put yourself in a position to succeed when you commit to taking pragmatic action while demonstrating emotional steadiness and drawing on the expertise of others.
Public investment projects shapes choices about where people live and work, influences the nature and location of private investment, and affects quality of life. When done right, public investment can be a powerful tool to boost growth and provide right infrastructure to leverage private investment. In contrast, poor investment choices or badly managed investment waste resources, erode public trust and may hamper growth opportunities.
Public Investment Management Project System and Economic Growth Perspective in Tanzania
Tanzanian youths being the majority in the country’s labor force, they are still challenged in issues around pursuing their destiny through decent economic activities & employment, access to quality education and their participation in decision making processes.
In pursuing your dream, you will be the biggest factor in your own success – your ability to identify an opportunity, execute an idea or deliver a service. In this section we will consider the all-important question: What are the qualities and personality traits that come together to make the successful entrepreneur?
Many studies have been conducted that delve into the personality of entrepreneurs. The results of these studies can help us begin to build the profile of the successful entrepreneur. For example: they were most likely the first born in their family; they held their first job before they were fifteen; and while they are college graduates, they were average students.
These kinds of studies of the entrepreneurial psyche may be interesting, but as you evaluate your entrepreneurial potential, you need to know more. After all, being the second born in your family, or being at the top of your class, does not preclude entrepreneurial success.
While many of the key characteristics and attitudes that make up the entrepreneurial "right stuff" can be acquired or learned, the importance of innate attributes such as physical health, energy and emotional stability cannot be overlooked. The life of the entrepreneur is a demanding one and there is little distinction between professional and personal life. That they are comfortable in this all-consuming role is critical to the success of the business and the satisfaction of the individual.
In this chapter we will look at what have been described as the key elements of the entrepreneurial "right stuff" the characteristics that are essential to the successful entrepreneur. It is important that you evaluate yourself as objectively as possible. There is no right or wrong answers and an honest evaluation will help you map your characteristics against those that define the successful entrepreneur.
Is It You? Ask yourself if you agree with the statements listed in the "Is It You?" section following each characteristic description. The more strongly you agree with the statements, the more closely your characteristics match those of the successful entrepreneur.
Determination, dedication, perseverance, commitment– many consider these to be the most important of all the characteristics of the entrepreneur. In fact, strength in these areas can make up for many other areas of "weakness".
Starting a new business is never easy and these characteristics are necessary tools for those who persevere through the difficulties of start-up – the practical implications of which can put anyone’s dedication and determination to the test.
Is It You?
"An entrepreneur must be prepared to spend long hours and be the last in line to collect dollars from a venture." Michael Mulhall
"There are lots of smart people in business, but the ones who succeed never give up. In business, perseverance is the key to success."Ron Connelly
Successful entrepreneurs combine natural optimism with a healthy dose of realism. They are very self aware and possess a keen sense of their own strengths and weaknesses. They are objective and can examine themselves and their ideas impartially. They know when they are beyond their capabilities and have no problem seeking help from experts. In pursuing opportunities, the entrepreneur is not fool- hardy or stubborn.
In fact, despite their dedication and determination, they will give up the pursuit of an opportunity more quickly than most if they perceive it will not deliver the promised benefits. This – combined with the fact that the entrepreneur possesses a keen understanding of their competitive environment and an intimate knowledge of their customers – means that entrepreneurs do not waste their efforts.
Is It You?
Studies have shown that many successful entrepreneurs have had businesses that have failed in the past. This statistic speaks to one of the key defining characteristics of a successful entrepreneur: the ability to bounce back and respond positively to challenges.
Entrepreneurs do not take failure personally. In fact, for them there is no such thing as an unmitigated failure– every experience is a lesson and every challenge an opportunity. They quickly come to terms with a defeat and learn from their mistakes in order to ensure that the same problems do not reoccur. They have the ability to pick themselves up, dust themselves off, and begin again – armed with new information that makes them stronger and better at what they do.
Entrepreneurs meet change head-on. When they meet with failure, they are able to objectively analyze the situation and identify what should have been done differently. In evaluating how things should be done differently, they are creative thinkers: unconcerned with rules, hierarchy or how things have been done in the past.
Entrepreneurs have an insatiable desire to know how they are performing. Quantitative evaluation is more important to them than qualitative; they want to see sales figures and profit margins. They seek out constructive criticism from those they respect. They are good listeners and quick learners.
Is It You?
"Trial and error are the ways of progress. A capacity to enjoy the trial and error adventure is a common characteristic of successful entrepreneurs."Grant Hooker
Entrepreneurship has no built-in status and no guaranteed perks or income level. Entrepreneurs therefore are not motivated by status or money, but instead they have a high need for achievement.
Their greatest satisfaction is derived from the excitement and challenge of creating and building a business. For this reason, they are never content with the status quo and are not comfortable resting on their laurels. They always feel that things could be done better, more efficiently, more effectively — and they are constantly solving problems and improving their practices.
Entrepreneurs have a strong success orientation but it is their own definition of success that is important and that definition is a constantly moving target. They are not content with just being better than others; they want to be better than their own best results. They are action-oriented and want to begin achieving results immediately.
Successful entrepreneurs need not only be self-motivated, but must also be able to motivate others. They are visionaries with a clear idea of what they want to achieve. Because, as we have seen, they have little time for hierarchy, entrepreneurs can exert influence without a formal structure. They are able to inspire people to work towards a solution; they are skilled in conflict resolution.
They understand that a substantial business cannot be achieved by one person. Because they have a strong understanding of their own strengths and weaknesses, entrepreneurs seek out those that complement their skills — and inspire those people to become part of the team. They are hero builders: happy to reward members of their team by sharing credit for success and giving them more responsibility. After all, it is not status that motivates the entrepreneur.
Is It You?
Entrepreneurs have tremendous confidence in their own abilities. They are optimistic and believe they can achieve anything. In fact, they believe that the impossible just takes a little longer to accomplish. They believe that they have been the most important factor in their own success and feel that luck (although welcome) has not been a major contributing factor.
During the course of their lives, entrepreneurs have not been heavily involved in team or group activities. They do not have a great need for affiliation. They can get along with many different personalities but do not need to have a lot of friends. Their belief in their own abilities means that they do not need to seek approval in making decisions and they are comfortable with the fact that it is “lonely at the top”.
Is It You?
As we know, there are no guarantees of success for entrepreneurs starting out.
In the same way that status and perks are not of great importance to them, they are not overly concerned with job security and retirement. They are tolerant of uncertainty and ambiguity.
There is a commonly held misconception that entrepreneurs are risk-seekers but this is not the case. Entrepreneurs are comfortable accepting moderate and calculated risk — and they deal with stress effectively. They are able to make decisions quickly under pressure but they exhibit the patience and exert the self-control necessary to maintain their vision.
Is It You?
"Entrepreneurship is responsible risk-taking... the leadership of responsible risk-taking." John Kelly
Integrity and reliability are the characteristics that are rated most highly among entrepreneurs as the quality that they most respect.
Trust is the single most important ingredient in building the strong business relationships that are key to success. Successful entrepreneurs are honest and forthright. They expect and reward the same from those they work with, both customer and suppliers.
Is It You?
While this section outlines what are commonly held as the key characteristics of a successful entrepreneur, weakness in some areas does not forestall success. As we outlined at the beginning of this section, many of the characteristics of the successful entrepreneur can be learned or acquired– and knowledge and understanding of your areas of weakness can help you improve.
"In business if you don’t dream of doing more, you’ll just end up doing more of the same." Jim Cummings
The tax structure is one importance aspects of the multifaceted concept of the quality of taxation. It deals with the design of tax policy to achieve desired policy objectives, while at the same time promoting economic growth, minimizing distortions and reducing the cost of tax collection. This insight focuses on he effects of taxation on Economic Growth.
The COVID-19 crisis has impacted the MSME sector with several challenges. Here are a set of ideas for MSMEs that can help accelerate the development of a robust sector that will boost economic development.
The success of the MSME sector is critical to achieving goal of emerging as an economic superpower. The sector is credited with large-scale employment generation and nurturing entrepreneurial spirit, helping it become an economically self-reliant nation. It continues to hold a lot of promise despite a challenging business environment.
The COVID-19 crisis has impacted the MSME sector with challenges such as stress on cash flow, new safety norms, and government regulations, increase in online business models coupled with an increase in cyber threat, restriction on travel and movement, and a slowdown in the local and the global economy, etc.
The following are a set of ideas for MSMEs that can help accelerate the development of a robust sector that will boost economic development.
Power of collective focus
As most MSMEs are small and fragmented, they do not enjoy the benefits that scale offers in areas such as marketing, sales operations, and new product development. A collective or a combined approach in these areas can be harnessed in many innovative ways, for example, by helping a town or village focus all its resources on manufacturing one particular product or type of product. This strategy helps leverage the collective might of these MSMEs.
As part of a cluster, MSMEs can benefit from economies of scale and enjoy easier access to capital from traditional lending channels. Most importantly, in a cluster, MSMEs mostly face the same/similar business challenges and can collectively devise a solution strategy that benefits all in the cluster. Clusters can spur healthy competition among businesses.
While MSMEs as a whole are highly varied in the type of products produced or nature of service rendered, at certain geographical locations, there are concentrations of common skill sets or types of industries. These can be clubbed into clusters with common characters.
Internet as equaliser
The rising internet penetration has tremendously contributed to the rapid growth of MSMEs, especially during the COVID-19 pandemic. By shifting their businesses online and adopting digital payment facilities, MSMEs were able to maximise customer convenience and create value for them.
An online presence also helps increase the discoverability of a small business by potential customers.
Online marketplaces and B2C platforms have enabled MSMEs to further expand to new markets and serve new customers by putting them at par with products offered by large multinational companies.
MSMEs can use digital marketing techniques like media promotions, social media marketing, content marketing, online client testimonials etc., which is a significant advancement to word-of-mouth marketing in the digital marketing era.
Building on niche
Building a niche is at the core of every successful business enterprise and MSMEs are no exception to this rule. A successful business enterprise has to first identify its niche either in terms of its product or service. A niche market involves serving a specific target audience to satisfy a specialised need.
Concentrating on niche market segments also helps MSMEs optimise their limited resources and focus on the limited management bandwidth available on the chosen market or niche product/service to help achieve better business results through specialisation.
By nature, MSMEs are well-equipped to service a niche set of customers as they are close to their customers and always have an ear to the ground. It would be great for MSMEs to think beyond the boardroom dilemma of ‘thinking big’ and having to satisfy a big mainstream audience's needs and choose to focus on building a niche instead.
Instead of competing with large companies, MSMEs can stand out by focusing on untapped opportunities rather than the mainstream areas of the market. That way, despite the stiff competition from other players, all of whom want the same piece of the pie, MSMEs can succeed with product/service differentiation.
Small can be powerful
While MSMEs may miss out on economies of scale, they can still use their size to their advantage. Successful MSMEs know that their size gives them the advantage of being nimble, agile, and increases their ability to adapt to changing landscape and respond faster to evolving customer needs.
Owing to their small size MSMEs have the biggest advantage of having the business owner being present at the core of the operations. Customers can interact directly with SME owners instead of intermediaries and share their feedback and complaints, which helps owners do a quick course correction and adapt policies as needed, more quickly.
As a result, the key stakeholders are more likely to trust the brand. In the absence of stringent procedures and policies, MSMEs are more flexible in their operations and aided by their agility and nimbleness; they can demonstrate innovativeness admirably.
Collaboration is key to growth
Encouraging the sharing of information, ideas, and research among MSMEs would go a long way in making them more dynamic and helping themselves integrate into global value chains. Collaboration among MSMEs is a real win-win for all parties involved as they can benefit from each other’s strengths and can identify and address their genuine on-ground problems and find innovative ways to grow together, a feat that might be difficult, if not impossible, when operating alone.
MSMEs should also be open to establishing strategic alliances with foreign players as well. Joint Ventures with foreign firms are a good way for MSMEs to expand their presence in the current era of rapid globalisation. Joint Venture with foreign players also helps MSMEs adopt new technologies and at the same time, take advantage of skilled workforce.
Successful collaboration helps companies complement each other’s strengths and tap into markets and opportunities beyond their reach when working individually. It can also create an ecosystem of healthy competition.
Strong DNA of innovation
One of the paths to success for a business, regardless of its size, is constant innovation. Developing new ideas is essential for any company to stay relevant, enhance its efficiency and processes, improve infrastructure, introduce new, improved, and more cost-effective products and services into the market, and increase profitability and establish a strong brand identity.
MSMEs may be small in size compared to MNCs, but they have a huge potential to introduce innovative, out-of-the-box ideas, successfully market them and scale up quickly.
Innovation plays a very critical role in making MSMEs more sustainable and prosperous. By adopting an innovation strategy, MSMEs can produce world-class products and services at lower costs and be more viable. The connection between innovation and demand is fundamental.
While all the innovations in the business world are directed towards fulfilling a certain need, small businesses have often come up with game-changing ideas that can transform the outlook of an entire industry besides fulfilling certain compelling needs.
MSMEs, especially micro businesses, can consult TICGL regularly for their professional advice and technical expertise in a multitude of core areas, making their ‘adviser, confidant, analyst, facilitator and educator to their clients’ A successful collaboration between MSME and Consultant-TICGLis the need of the hour to deliver value constantly for all stakeholders in the long run.
Tanzania has emerged as one of the fastest-growing economies in Africa in the early twenty-first century. Despite this rapid growth, however, structural transformation of the economy remains the country’s central challenge.
Doing business report aim is to help entrepreneur to have knowledge of and comply with applicable regulation.
Entrepreneurs may not be aware on what to be done or how to comply with regulation and may lose considerable time trying to find out.
Doing a Business
The results show that average of 167 of the respondents which equal to 49.5% respond that starting a business in Tanzania regarding it’s procedures, time,cost and paid in minimum capital to start as a limited liability company are FAIR, and average of 110 respondents which equal to 32.6% respond hat the environment are GOOD. This implies that regardless of having other setbacks but their is a chance of at least starting Doing a Business.
Dealing with Construction permitting
The results show that average of 190 of the respondents equal to 55% said procedures, time and cost to complete all formalization to build a warehouse and the quality control and safety mechanism in the construction permitting system is GOOD, while average of 80 of the respondents which gives 23.18% respond to FAIR, This implies that the environment of getting approved construction permit are good and provided fair.
Getting social services
The results show that average of 150 of the respondents which is equal to 43.98% respond that the easy getting social services eg. Electricity, water etc. to business is GOOD this including procedures, time and cost to get connected to the electricity but also the reliability of the electricity supply and the transparency of tariff , while average of 110 of the respondents which equal to 32.2% of the respondent says it is GOOD procedures.
Employing workers
The results show that the average of 180 of the respondents equal to 52.94% respond to EXCELLENT on flexibility in employment regulation and employ workers, while the average of 120 of the respondents equal to 35.29% respond that the situation of employing workers are GOOD.
Getting credit
The results show that average of 137 of the total respondents which is equal to 39.25% respond that getting credit (access to finance) both with movable collateral laws and credit information system are GOOD, While average of 90 respondents gives 25.7% respond to FAIR and average of 72 of the respondents for about 20.63% respond to BAD, this implies that despite that the general results show and respond to good but their is setbacks for a business to access credit from financial institution and this could be the way they demand to due to collateral issues and interest rates.
Protecting minority investors
The results show that average of 151 of the respondents which gives 44.25% respond minority shareholders right related to transaction and in corporate governance are FAIR while average of 90 of the respondents which equal to 26.52% respond GOOD and average of 70 responds gives 20.52% respond to BAD,this implies that despite of having fair respondents but also the results shows that there is a setbacks on protecting minority investors situation in Tanzania.
Paying taxes
The results show that the average of 179 of the respondents in 51.73% respond that payment, time and total tax and contribution rate for a firm to comply with all tax regulation as well as post filling procedures are BAD, this implies that Doing business in Tanzania one of the setbacks are paying taxes, while 120 of the respondents gives 34.6% respond to paying tax system is FAIR.
Trading across borders
The results show that average of 180 of the respondent which gives 52.17% responds to that time and cos to export the products of the comparative advantage and to import is FAIR while average of 90 of the respondent equal to 26.08% respondent that the situation of trade across borders are BAD, this implies that their is setbacks on Doing business in Tanzania across borders and need to be addressed.
Registering property
The results show that average of 170 of the respondents which gives a 48.9% respond that registering property such as procedure, time and cost of registering property business are GOOD, but this also including cost of transfer property and the quality of the land administration system while average of 120 of the respondents which equal to 34.58% respond to procedure , cost and time is FAIR.
Enforcing contracts
The results show that the average of 150 respondents which gives 54.7% responds to measure time and cost for resolving commercial dispute through a local first instance court and the quality of judicial processes respond to FAIR, while average of 120 respondents gives to 43.79% respond to GOOD on time and cost to resolve a commercial and the quality of judicial processes.
Resolving insolvency
The results show that average of 150 of the respondents equal to 63.8% respond to FAIR on time, cost, outcome and recovery rate for a commercial insolvency , while the strength of the legal framework for insolvency, while average of 65 of the respondents equal to 27.6% respond to GOOD on insolvency financial distress in which business is unable to pay the bills.
Understanding economic growth, And why is it so important?
This article presents the data and research to make progress against the world’s largest problems.
This post draws on data and research discussed in our entries on Income Inequality, Global Extreme Poverty and Economic Growth.
Good health, a place to live, access to education, nutrition, social connections, respect, peace, human rights, a healthy environment, happiness. These are just some of the many aspects we care about in our lives.
At the heart of many of these aspects that we care about are needs for which we require particular goods and services: think of those that are needed for the goals on that list above – the health services from nurses and doctors, the home you live in, or the teachers that provide education.
Poverty, prosperity, and growth are often measured in monetary terms, most commonly as people’s income. But while monetary measures have some important advantages, they have the big disadvantage that they are abstract. In the worst case monetary measures – like GDP per capita – are so abstract that we forget what they are actually about: people’s access to goods and services.
The point of this text is to show why economic growth is important and how the abstract monetary measures tell us about the reality of people’s material living conditions around the world and throughout history:
• In the first part I want to explain what economic growth is and why it is so difficult to measure.
• In the second part I will discuss the advantages and disadvantages of several measures of growth and you will find the latest data on several of these measures so that we can see what they tell us about how people’s material living conditions have changed.
What are these goods and services that I’m talking about?
Have a look around yourself right now. Many of the things you see are products that were produced by someone so that you can use them: the trousers you are wearing, the device you are reading this on, the electricity that powers it, the furniture around you, the toilet that is nearby, the sewage system it is connected to, the bus or car or bicycle you took to get where you are, the food you had this morning, the medications you will receive when you get sick, every window in your home, every shirt in your wardrobe, and every book on your shelf.
At some point in the past many of these products were not available. The majority did not have access to the most basic goods and services they needed. A recent study on the history of global poverty estimates that just two centuries ago roughly three-quarters of the world “could not afford a tiny space to live, food that would not induce malnutrition, and some minimum heating capacity.”
A few centuries ago the only way to produce a book was for a scribe to copy it word-for-word, by hand. Book production was a slow process; it took a scribe about eight months of daily work to produce a single copy of the Bible.It was so laborious that only very few books were produced. The chart shows the estimates of historians.
But then in the 15th century the goldsmith Johannes Gutenberg combined the idea of movable letters with the mechanism that he knew from the wine presses in his hometown. He developed the printing press. Gutenberg developed a new production technology and it changed things dramatically. Instead of spending months to produce one book, a worker was now able to produce several books a day.
As the printing press spread across Europe, book production soared. Books, which were previously only available to a tiny elite, became available to more and more people.
This is one example of how growth is possible and what economic growth is: an increase in the production of goods and services that people produce for each other.
Before we get to a more detailed definition of economic growth, it’s helpful to remind ourselves of the astonishingly wide range of goods and services that people produce. I think this is helpful because measures of economic output can easily become abstract. This abstraction means we easily lose the mental connection to the goods and services such measures actually talk about.
This list of goods and services isn’t meant as a definitive list, but it helped me to think about the relevance of poverty and growth:
At home: Light in your home at night; the sewage system; a shower; vacuum cleaner; fridge; heating; air conditioning; electricity; windows; a toilet – even a flush toilet; soap; a balcony or a garden; running water; warm water; cutlery and dishes; a hut – or even a warm apartment or house; an oven; sewing machine; a stove (that doesn’t poison you); carpet; toilet paper; trash bags; music recordings or even online streaming of the world’s music and film; garbage collection; radio; television; a washing machine; furniture; telephone; a comfortable bed and a room for one’s own.
Food: The most fundamental need is to have enough food. For much of human history a large share of people suffered from hunger and millions still do.
But we also need to have a richer and varied diet to get all of the nutrients we need, unfortunately billions still suffer from micronutrient deficiency.
Also, think of clean drinking water; reliable markets and stores with a wide range of available goods; food that rarely poisons you (pasteurized milk, for example); spices; tea and coffee; kitchen utensils and practical ingredients (from a bag of flour to canned soups or a yogurt); chocolate and sweets; fresh fruit and vegetables; bread; take-away food or the possibility to go to a restaurant; ways to protect your food from spoiling (from the cold chain that delivers the goods to the cellophane to wrap it with); wine or beer; fertilizer (very important); and tractors to work the fields.
Knowledge: Education from primary up to university level; books; data that allows us to understand the world around us; newspapers; vocational training; kindergartens; and scientific knowledge to understand ourselves and the world around us.
Infrastructure: Public transportation with buses, subways, and trains; roads; paved roads; airplanes; bridges; financial services (including bank accounts, ATMs, and credit cards); cities; a network of competent workers that can help you to fix problems; postal services (that delivers fast); national parks; street cleaning; public swimming pools (even private pools); firefighters; parks; online shopping; weather forecasts; and a waste management system.
Tools and technologies: Pencils, ballpoint pens, and paper; lawnmowers; cars; car mechanics; bicycles; power tools like drills (even battery-powered ones); a watch; computers and laptops; smartphones (with GPS and a good camera); being able to stay in touch with distant friends or family members (or even visiting them); GPS; batteries; telephones and mobiles; video calls; WiFi; and the internet right here.
Social services: Caretakers for those who are disabled, sick, or elderly; protection from crime; non-profit organizations financed by the public, by donations or by philanthropies; insurances (against many different risks); and a legal system with judges and lawyers that implement the rule of law.
There are also a wide range of transfer payments, which in themselves are not services (they are transfers), but which become more affordable as a society becomes more prosperous: sick leave and disability benefits; unemployment benefits; and being able to help others with a regular donation of some of your income to an effective charity.
Life and free time: tents; travel and holidays; surfboards; skis; board games; hotels; playgrounds; children’s toys; courses to learn hobbies (from painting to musical instruments or courses on the environment around us); a football; pets; the cinema, theater or a music concert; clothes (even comfortable and good-looking ones that keep you warm and protect you from the rain); shoes (even shoes for different purposes); shoe repair; the contraceptive pill and the ability to choose if and when to have children; sports classes from rock climbing to pilates and yoga; cigarettes (not all goods that people produce for each other are good for them); a musical instrument; a camera; and parties to celebrate life.
Health and staying well: Dentists; antibiotics; surgeries; anesthesia; mental health care from psychologists and psychiatrists; vaccines; public sewage; a haircut; a massage; midwives; ambulances; modern medicine; band-aids; pharmaceutical drugs; sanitary pads; toothbrushes; dental floss (some do floss); disinfectants; glasses; sunglasses; contact lenses; hearing aids; and hospitals – including very well-equipped, modern hospitals that offer
CT scans, which include intensive care units and allow heart or brain surgery or organ transplants.
Specific needs and wishes: Most of the products listed above are generally helpful to people. But often the goods and services that are most important to one individual are very specific.
As I’m writing this I have a big cast on my left leg after I broke it. These days I depend on products that I had no use for just three weeks ago. To move around I need two long crutches and to prevent thrombosis I need to inject a blood thinner every day. After I broke my leg I needed the service of nurses and doctors. They had to rely on a range of medical equipment such as X-ray machines. To get back on my feet I might need the service of physiotherapists.
We all have very specific needs or wishes for particular goods and services. Some needs arise from bad luck, like an injury. Others are due to a new phase in life – think of the specific goods and services you need when you have a baby or when you take care of an elderly person. And yet others are due to specific interests – think of the needs of a fisherman, or a pianist, or a painter.
All of these goods and services do not just magically appear. They need to be produced. At some point in the past, the production of most of them was zero, and even the most essential ones were extremely scarce. So if you want to know economic growth means for your life look at that list above.
What is economic growth?
So, how can we define what economic growth is?
A definition that can be found in so many publications that I don’t know which one to quote is that economic growth is “an increase in the amount of goods and services produced per head of the population over a period of time.”
The definition in the Oxford Dictionary is almost identical: “Economic growth is the increase in the production of goods and services per head of population over a stated period of time”. And the definition in the Cambridge Dictionary is similar. It defines growth as “an increase in the economy of a country or an area, especially of the value of goods and services the country or area produces.”
In the following footnote you find more definitions. Bringing these definitions together, and taking into account the economic literature more broadly, I suggest the following definition:
Economic growth describes an increase in the quantity and quality of the economic goods and services that a society produces.
I prefer a definition that is slightly longer than most others. If you want a shorter definition you can speak of ‘products’ rather than ‘goods and services’ and you can speak of ‘value’ rather than mentioning both the quantity and quality aspects separately.
What are economic goods and services?
Many definitions of economic growth simply speak of the production of ‘goods and services’ collectively. This bypasses a key difficulty in its definition and measurement. Economic growth is not concerned with all goods and services, but with a subset of them: economic goods and services.
In everything we do – even in our most mundane activities – we continuously ‘produce’ goods and services in some form. Early in the morning, once we’ve brushed our teeth and made ourselves toast, we have already produced one service and one good. Should we count the tooth-brushing and the toast-making towards the economic production of the country we live in? The question of where to draw the line isn’t easy to answer. But we have to draw the line somewhere. If we don’t, we end up with a concept of production that is so broad that it becomes meaningless; we’d produce a service with every breath we take and every time we scratch our nose.
The line that we have to draw to define the economic goods and services is called the ‘production boundary’. The sketch illustrates the idea. The production boundary defines those goods and services that we consider when we speak about economic growth.
For a huge number of goods or services there is no question that they are of the ‘economic’ type. But for some of them it can be complicated to decide on which side of the production boundary they fall. One example is the question of whether the production of illegal goods should be included. Another is whether production within a household should be included – should we consider it as economic production if we grow tomatoes in our backyard and make soup from them? Different authors and different measurement frameworks have given different answers to these questions.
There are some characteristics that are helpful in deciding on which side of the boundary a particular product falls. Economic goods and services are those that can be produced and that are scarce in relation to the demand for them. They stand in contrast to free goods, like sunlight, which are abundant, or those many important aspects in our lives that cannot be produced, like friendships. Our everyday language has this right: we don’t refer to the sun or our friendships as a good or service that we ‘produce’.
An economic good or service is provided by people to each other as a solution to a problem they are faced with and this means that they are considered useful by the person who demands it.
And a last characteristic that is helpful in deciding whether you are looking at an economic product is ‘delegability’. An activity is considered to be production in an economic sense if it can be delegated to someone else. This would include many of the goods and services on that long list we considered earlier, but would exclude your breathing, for example.
Because economic goods are scarce in relation to the demand for them, human effort is required to produce them. A shorter way of defining growth is therefore to say that it is an increase in the production of those products that people produce for each other.
The majority of goods and services on that long list above are uncontroversially of the economic type – everything from the light bulbs and furniture in your home to the roads and bridges that connect it with the rest of the world. They are scarce in relation to the demand for them and have to be produced by someone, their production is delegable, and they are considered useful by those who want them.
It’s worth recognizing that many of the difficulties in defining the production boundary arise from the effort to make measures of economic production as comparable as possible.
To give just one concrete example of the type of considerations that make the discussion about specific definitions so difficult, let’s look at how the production boundary is drawn in the housing sector.
Imagine two countries that are identical except for one aspect, home ownership. In Country A everyone rents their homes and the total sum of annual rents amounts to Tsh 2 billion per year. In Country B everyone owns their own home and no one pays rent. To provide housing is certainly an economic service, but if we only counted monetary transactions then we would get the false impression that the value of goods and services in Country A is Tsh 2 billion higher than in Country B. To avoid such misjudgment, the production boundary includes the housing services that are provided without any monetary transactions. In National Accounts, statisticians take into account the “imputed rental value of owner-occupied housing” – those households who own their home get assigned an imputed rental value. In the imagined scenario, these imputed rents would amount to Tsh 2 billion in Country B so that the prosperity of people in these two countries would be judged to be identical.
It is the case more broadly that National Account figures (like GDP) do include important non-market goods and services that are not included in household survey measures of people’s income. GDP does not only include the housing services by owner-occupied housing, but also the provision of most goods and services that are provided by the government or nonprofit institutions.
How can we measure economic growth?
Many discussions about economic growth are extraordinarily confused. People often talk past one another. I believe the reason for this is that the discussion of what economic growth is, gets muddled up with how it is measured.
While it is straightforward enough to define what growth is, measuring growth is very, very difficult.
In the worst cases measures of growth are mixed up with a definition of growth. Growth is often measured as an increase in income or inflation-adjusted GDP per capita. But these measures are not the definition of it – just like life expectancy is a measure of population health, but is certainly not the definition of population health.
To see how difficult it is to measure growth, take a moment to think about how you would measure it. How would you determine whether the quantity and quality of all economic goods and services produced by a society increased or decreased over time?
Finding a measure means that you have to find a way to express a huge amount of relevant information in a single metric. As the sketch shows, you have to first measure the quantity and quality of all the many, many goods and services that get produced and then find a way to aggregate all of these measurements into one summarizing metric. No matter what measure you propose for such a difficult task, there will always be problems and shortcomings of any proposal you might make.
In the following section I will show four possible ways of measuring growth and present some data for each of them to see how they can inform us about the history of material living conditions.
Measuring economic growth by tracking access to particular goods and services
One possible way to measure growth is to make a list of some specific products that people want and to see what share of the population has access to them.
We do this very often at Our World in Data. All of these statistics measure some particular aspect of economic growth.
The advantage of measuring growth in this way is that it is concrete. It makes clear what exactly is growing, and it’s clear which particular goods and services people gain access to.
The downside is that it only captures a small part of economic growth. There are many other goods and services that people want in addition to water, electricity, sanitation and cooking technology.
You could of course expand this approach of measuring growth to many more goods and services, but this is usually not done for both practical and ethical considerations.
One practical reason is that a list of all the products that people value would be extremely long. Keeping lists that track people’s access to all products would be a daunting task: hundreds of different toothbrushes, thousands of different dentists, hundreds of thousands of different dishes in different restaurants, and many millions of different books. If you wanted to measure growth across all goods and services in this way you’d soon employ half the country in the statistical office.
In practice any attempt to measure growth as access to particular products therefore means that you look only at a relatively small number of very particular goods and services that statisticians or economists are interested in. This is problematic for ethical reasons. It should not be up to the statisticians or economists to determine which few products should be considered valuable.
You might have realized this problem already when you read my list at the beginning of this text. You might have disagreed with the things that I put on that list and thought that some other goods and services are missing. This is why it is important to track incomes and not just the access to particular goods: measuring people’s income is a way of measuring the options that they have, rather than the choices that they make. It respects people’s judgment to decide for themselves what they find most important for their lives.
Measuring economic growth by tracking the ratio between people’s income and the prices of particular goods and services
To measure the options that a person’s income represents we have to compare their income with the prices of the goods and services that they want. We have to look at the ratio between income and prices.
Before the invention of the printing press in the 15th century the price was often as high as several months of work. The fact that books were unaffordable for almost everyone should not be surprising. It corresponds to what we’ve seen earlier, that it took a scribe several months to produce a single book.
This shows us how an innovation in technology raises productivity and how an increase in production makes it more affordable. How it increases the options that people have.
Global inequality: How do incomes compare in countries around the world?
In the previous section we measured growth as the ratio between income and the price for one particular good. But of course we could do the same for all the many goods and services that people want. This ratio – the ratio between the nominal income that people receive and the prices that people have to pay for the goods and services – is called ‘real income’.
Real income = Nominal income / price of goods and services
Real income grows when people’s nominal income increases or when the prices of goods and services decrease.
In contrast to many of the other metrics on Our World in Data, a person’s real income does not matter for its own sake, but because it is a means to an end. A means to many ends in fact.
Economic growth – measured as an increase of people’s real income – means that the ratio between people’s income and the prices of what they can buy is increasing: goods and services become more affordable, people become less poor. It is because a person has more choices as their income grows that economists care so much about these monetary measures of prosperity.
The two most prominent measures of real income are GDP per capita and people’s incomes as determined through household surveys.
Before we get back to the question of economic growth, let’s see what these measures of real income tell us about the economic inequality in the world today.
Both measures show that global inequality is very large. In a rich country like Denmark an average person can purchase goods and services for $47.80 in a day, while the average Ethiopian can only afford goods and services that cost $2.80 per day.
Both measures of real incomes in this chart are measured in ‘international-dollars’, which means that they take into account the level of prices in each country (using purchasing power parity conversion factors). This price adjustment is done in such a way that one international-$ is equivalent to the purchasing power of one US-$ in the US. An income of int.-$2.80 in Ethiopia, for example, means that it allows you to purchase goods and services in Ethiopia that would cost US-$2.80 in the US. All dollar values in this text are given in international dollars, even though I often shorten it to just the $-sign.
If you are living in a rich country and you want to have a sense for what it means to live in a poor country – where incomes are 20-times lower – you can imagine that the prices for everything around you suddenly increase 20-fold. If all the things you buy suddenly get 20-times more expensive your real income is 20-times lower. A loaf of bread doesn’t cost $2 but $40, a pair of jeans costs $400, and an old car costs $40,000. If you ask yourself how these price increases would change your daily consumption and your day-to-day life, you can get a sense for what it means to live in a poor country.
The two shown measures of real income differ:
Income as a measure of economic prosperity is much more abstract than the metrics we looked at previously. The comparison of incomes of people around the world in this scatterplot measures options not choices. It shows us that the economic options for billions of people are very low. The majority of the world lives on very low incomes of less than $20, $10, or even $5 per day. In the next section we’ll see how poverty has changed over time.
How does the income of the poorest compare with GDP per capita?
GDP per capita vs Daily income of the poorest 10%
GDP per capita vs Daily average income
Global poverty and growth: How have incomes changed around the world?
Economic growth, as we said before, describes an increase in the production of the quantity and quality of the economic goods and services that a society produces. The total income in a society corresponds to the total sum of goods and services the society produces – everyone’s spending is someone else’s income. This means that the average income corresponds to the level of average production so that the average income in a society increases when the production of goods and services increases.
Average production = average income
In this final section let’s see how incomes have changed over time, first as documented in survey incomes and then via GDP per capita.
Measuring economic growth by tracking incomes as reported in household surveys
The data shows that global poverty has declined, no matter what poverty line you choose. It also shows that the majority of the world still lives on very low incomes. As we’ve seen we can describe the same reality from the production side: the global production of the goods and services that people want has increased, but there is still not enough production of even very basic products. Most people in the world do not have access to them.
GDP per capita is a broader measure of real income and in contrast to survey income, it also takes government expenditures into account. A lot of thinking has gone into the construction of this very prominent metric so that it is comparable not only over time, but also across countries. This makes it especially useful as a measure to understand the economic inequality in the world as we’ve seen above.
Another advantage of this measure is that historians have reconstructed estimates of GDP per capita that go back many centuries. This historical research is an extremely laborious task and researchers have dedicated many years of work to these reconstructions. The ‘Maddison Project’ brings together these long-run reconstructions from various researchers and thanks to these efforts we have a good understanding of how incomes have changed over time.
It is no accident that the shape of this chart is very similar to the chart on book production at the beginning of this text – very low and almost flat for many generations and then quickly rising. Both of these developments are driven by changes in production.
Average income corresponds to average production and societies around the world were able to produce very few goods and services in the past. There were no major exceptions to this reality. As we see in this chart, global inequality was much lower than today: the majority of people around the world were very poor.
To get a sense for what this means you can again take the approach we’ve used to understand the inequality in the world today. When incomes in today’s rich countries were 20-times lower it was as if all the prices around you today would suddenly increase 20-fold. But in addition to this you have to consider that all the goods and services that were developed since then disappear – no bicycle, no internet, no antibiotics. All that’s left for you are the goods and services of the 17th century, but all of them are 20-times more expensive than today. The majority of people around the world, including in today’s richest countries, lived in deep poverty.
Just as we’ve seen in the history of book production this changed once new production technologies were introduced. The printing press was an exceptionally early innovation in production technology; most innovations happened in the last 250 years. The starting point of this rise out of poverty is called the Industrial Revolution.
The printing press made it possible to produce more books. The many innovations that make up the Industrial Revolution made it possible to increase the production of many goods and services. Compare the effort that it takes for a farmer to reap corn with a scythe to the possibilities of a farmer with a tractor or a combined harvester; or think of the technologies that made overland travel faster – from walking on foot to traveling in a horse buggy to taking the train or car; or think of the effort it took to build those roads that the buggies once traveled on with the modern machinery that allows us to produce the corresponding public infrastructure today.
The production of a myriad of different goods and services followed trajectories very similar to the production of books – flat and low in the past and then steeply increasing. The rise of average income that we see in this chart is the result of the aggregation of all these many production increases.
In the past, before societies achieved economic growth, the only way for anyone to become richer was for someone else to become poorer; the economy was a zero-sum game. In a society that achieves economic growth this is no longer the case. When average incomes increase it becomes possible that people become richer without someone else becoming poorer.
This transition from a zero-sum to a positive-sum economy is the most important change in economic history (I wrote about it here), and made it possible for entire societies to leave the extreme poverty of the past behind.
In the top left panel you can see how global poverty has declined as incomes increased; in the other eight panels you see the same all world regions separately. The starting point of each trajectory shows the data for 1820 and tells us that two centuries ago the majority of people lived in extreme poverty, no matter where in the world they were at home.
Back then it was widely believed that widespread poverty was inevitable. But this turned out to be wrong. The trajectories show how incomes and poverty have changed in each world region. All regions achieved growth – the production and quality of goods and services that people need increased – and the share living in extreme poverty declined.
This historical research was done by Michail Moatsos and is based on the ‘cost of basic needs’-approach as suggested by Robert Allen (2017) and recommended by the late Tony Atkinson.21 The name ‘extreme poverty’ is appropriate as this measure is based on an extremely low poverty threshold. It takes us back to what I mentioned at the very beginning; this historical research tells us – as the author puts it – that three-quarters of the world “could not afford a tiny space to live, food that would not induce malnutrition, and some minimum heating capacity.”
Since then all world regions have made progress against extreme poverty – some much earlier than others –, but in particular in Sub-Saharan Africa the share living in deep poverty is still very high.
The last two centuries were the first time in human history that societies have achieved sustained economic growth and the decline of global poverty is one of the most important achievements in history. But it is still a very long way to go.
That the world has made substantial progress but nevertheless still has a long way to go is the case for many of the world’s very large problems. I’ve written before that all three statements are true at the same time: The world is much better, the world is awful, and the world can be much better. This is very much the case for global poverty. The world is much less poor than in the past, but it is still very poor and it remains one of the largest problems we face.
Some writers suggest we can end poverty by simply reducing global inequality. This is not the case. I’m very much in favour of reducing global inequality and I hope I do what I can to contribute to this. But it is important to be clear that a reduction of inequality alone would still mean that billions around the world would live in very poor material conditions. Those who don’t see the importance of growth are not aware of the extent of global poverty. The production of many crucial goods and services has to increase if we want to end it. How much economic growth is needed to achieve this? This is the question I answered in this recent text.
To solve the problems we face, it is not enough to increase overall production. We also need to make good decisions about which goods and services we want to produce more of and which ones we want less of. Growth doesn’t just have a rate, it also has a direction and the direction we choose matters – for our own happiness and for achieving a sustainable future.
I hope this text was helpful in making clear what economic growth is. That it is necessary to remind ourselves of that is a consequence of the fact that we mostly talk about poverty and growth in monetary terms. The monetary measures have the disadvantage that they are abstract, perhaps so abstract that we even forget what growth is actually about and why it is so important. The goods and services that we all need are not just there – they need to be produced – and economic growth means that the quality and quantity of these goods and services increases, from the food that we eat to the public infrastructure we rely on.
The history of economic growth is the history of how societies leave widespread poverty behind by finding ways to produce more of the goods and services that people need – all the very many goods and services that people produce for each other: look around you right now.