Screen Shot 2012-10-30 at 06.57.52David Cameron recently
talked about being in a “global race”. Today’s Prosperity
Index, newly published by the Legatum Institute, suggests that the UK is performing better than some may have suspected
. Nathan Gamester is the Programme Director for the Prosperity Index
at the Legatum Institute. The Prosperity Index can be found at Follow Nathan on Twitter.

During his
conference speech
earlier this month David Cameron focused his remarks
around the idea that we are now in a global race. This, the Prime Minister said,
means we face “an hour of reckoning” where our choices are to “sink or swim. Do
or decline.”

The global race is very much on and, what’s more, the number
of competitors is increasing. Advances in mobile technology across sub-Saharan
Africa and other developing countries mean that doing business around the world
has never been easier.

If we really are in a global race, how are we doing? Are we
falling behind our fellow competitors or surging ahead? Last week’s GDP growth figures may
not have proven that we are up to full speed but they do suggest that something
is working.

Screen Shot 2012-10-30 at 06.52.14

Click on the table to enlarge.

The growth figures are positive, but they don’t tell the whole
story. The Legatum Prosperity Index™ is an assessment of
what makes a country truly successful, encompassing traditional measures of
material wealth as well as capturing citizens’ sense of wellbeing. Covering 96%
of the world’s population and 99% of global GDP, the Index provides a more
complete picture of global prosperity than any other tool of its kind.

The 2012 Index – released today – reveals that prosperity is
on the rise in the UK. Overall, the UK has climbed one place in the rankings since last year
and places 13th in 2012.[1]
The UK also performs well in the Governance and Safety & Security
sub-categories (ranking seventh and 20th, respectively).

So how does the UK stack up against the rest of the world? The
UK outperforms America in a number of key areas including Entrepreneurship
& Opportunity where the UK places sixth (compared to 12th for
the US) and Governance where the UK ranks seventh (compared to 10th
for the US). What’s more, with the US dropping to 12th position in
the overall rankings, the UK is only one place behind and could even overtake the
US by 2014 if current trends continue.

Within Europe, the UK is ahead of both Germany and France in
overall levels of prosperity. However, Germany outperforms the UK on the
Economy sub-category (6th compared to 26th, globally).
Perhaps unsurprisingly, Scandinavian countries perform very well in the Index
with Norway, Denmark, and Sweden ranking first, second, and third,

Although the UK performs well on measures of governance (7th
globally), there has been a decline in levels of government approval over the
last year.  This has fallen to 50%
(from 57% in 2011). However, this is still not as low as it was in 2009 when
government approval stood at less than 40%.

China ranks 55th overall, due in part to poor
scores in the Personal Freedom and Safety & Security sub-categories. China
does, however, outperform the UK in the Economy sub-index, ranking 11th
overall compared to the UK’s 26th.

Many countries in the Index rank similarly on GDP levels,
but other factors such as Education, Health and Personal Freedom can highlight
significant variation, demonstrating that national success is based on much
more than material wealth.

The idea that GDP is an incomplete measure of national success has been
argued by political leaders as different as Nicolas Sarkozy, Robert F Kennedy, the King of Bhutan and, of course, David Cameron

David Cameron is right to say we are in a global race. We
are at a time of flux, with many of the world’s nations in transition and
looking for new ways to address social, political and economic issues. Today’s
findings from the 2012 Prosperity Index combined with the recent GDP growth
figures suggest that the UK is starting to pick up speed.

[1] Due to new
countries being added to the Index, it may appear that the UK has not improved
its ranking since last year (also 13th). However, if we consider only
the 110 countries from last year’s Index, the UK would rank 12th this
year – an improvement of one place.