By Daniel Hunter
Overall prosperity is on the rise in the UK, according to the latest findings from the Legatum Institute’s Prosperity Index.
Britain climbed one place in the worldwide prosperity rankings in 2012 (to place 13th) — as well as scaling the Governance, and Safety & Security sub-categories (seventh and 20th respectively) — and ranks amongst the world’s 30 ‘Top Performers’ for overall prosperity.
The Legatum Prosperity Index is a unique and robust assessment of global wealth and wellbeing, which benchmarks 142 countries around the world in eight distinct categories: Economy; Education; Entrepreneurship & Opportunity; Governance; Health; Personal Freedom; Safety & Security; and Social Capital.
According to the Index, the UK outperforms America in the Entrepreneurship & Opportunity sub-index (placing sixth and 12th respectively) and Governance (seventh and tenth respectively) and, with the US dropping to 12th position in the overall rankings, the UK is expected to overtake its ally by 2014.
Economy - the thorn in Britain’s side
However, poor economic performance and low confidence in the health of the UK economy could hold back Britain’s prosperity. The UK fell four places in the Economy sub-index since last year, now ranking in 26th position.
According to the Index, job satisfaction is particularly low in Britain. Just 12.3% of citizens agree that it is a good time to find a job, compared to the US (26% agree) and the BRICs (59%, 27%, 41% and 37% respectively).
In addition, the proportion of ICT exports also dropped to 1.9% of total exports from 2.2%.
By contrast, Germany has scaled the Economy rankings — rising from eighth to sixth place — reporting higher levels of confidence in their financial institutions (47% compared to the UK at 39%) and high levels of satisfaction with their living standards (89% report being satisfied). UK citizens’ satisfaction with living standards is down on last year, dropping to 84.5%.
Jeffrey Gedmin, President and CEO of the Legatum Institute, said: “The Legatum Prosperity Index allows us to paint a comprehensive picture of what makes a country truly successful, encompassing traditional measures of material wealth, as well as capturing citizens’ sense of wellbeing — from how safe they feel, to their perceived personal freedom.
“GDP alone can never offer a complete view of prosperity, which goes some way to explaining why the UK has climbed the global rankings despite slow economic growth. In order to ensure it remains competitive, keeping in step with its European neighbours, Britain must focus on growth without losing out in other areas such as Governance.”
But good news for entrepreneurial Britain
According to the Index, low start-up costs for new businesses are a key factor in the UK’s strong Entrepreneurship & Opportunity score. Start-up costs in the UK are low at 0.7% of Gross National Income, compared to the global average of 20%.
Britain ranks in sixth position in the Entrepreneurship and Opportunity sub-index, behind Scandinavian nations Denmark, Sweden and Finland (first, second and third respectively) but well ahead of traditionally strong export economies, including Hong Kong, Japan and Taiwan (15th, 23rd and 24th respectively).
In addition, British citizens have increasingly equal access to opportunities (measured on a scale of 1-10, with one being equal and 10 being unequal), falling from 4.7 to 4.2 over the last three years.
Mr Gedmin comments: “Entrepreneurship, opportunity and good governance are time and again proven as significant drivers of prosperity. And, at a time of stagnant growth, entrepreneurship will be a key catalyst of recovery. In order to take advantage of the opportunities on offer, UK citizens must be empowered with belief, drive and inspiration, and be given access to the ingredients needed to succeed — such as favourable business conditions, and access to capital.”
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