Research - 25.04.2023 - 10:00
The fourth annual Elite Quality Index 2023 (EQx) report with an expanded set of 134 indicators examines the roles of elites and whether they create or extract value from their nations. In a year characterized by an unprecedented rise in inflation, the implementation of massive COVID-19 fiscal support packages and war in Europe, EQx provides a revealing picture of the state of world affairs.
By and large, elites and their businesses are essential for value creation and economic growth. The flip side to value creation is value extraction, which is when elite business models extract value away from the general populations that they serve.
The research, led by University of St.Gallen (HSG) along with international academic partners and the St.Gallen-based Foundation for Value Creation, provides unique insight into value creation by categorizing nations by the quality of their elites. EQx2023 lead-authors and editors are Prof. Tomas Casas and Prof. Guido Cozzi. With the new global Elite Quality Country Comparison Tools you can compare national elite systems across the world based on their Sustainable Value Creation or check their Power and Value Creation relative to elites elsewhere. Based on the Panel EQx (PEQx) academic dataset, you can also look up the evolution of Elite Quality since 2005.
Switzerland beat out Singapore for the first time in the history of the index however the two nations continue to lead in elite quality as they have done for the past four years. Japan (rank # 4, up 14 places) and Germany (rank # 8, up 3 places) have made impressive advances. The same is true of India (rank # 59, up 38 places), Brazil (rank # 69, up 12 places) and South Africa (rank # 83, up 16 places). These achievements stand in stark contrast to fellow BRICS nation Russia (rank # 103, down 36 places).
The US (rank # 21, down 6 positions) and China (rank # 22, up 5 positions) are now running neck to neck. In times of the building geopolitical rivalry between the two powers, this becomes a matter of international interest as the sustainable value creation of elites is a foundation for future national strength and competitiveness.
It was not a good year for other Anglo-Saxon nations with the UK at rank # 9 dropping one place and Australia at rank # 7 down 4 places; the notable exception is New Zealand at # 3, up 11 places.
In a video contribution, Prof. Tomas Casas explains the background of the current development.
The NextGen Value Creation Barometer (NGVCB) is a collaboration with the St.Gallen Symposium and measures the Value Creation/Extraction relationship between present and future generations using 33 indicators. Nowhere is the future brighter for today’s youth than in Denmark (NGVCB rank # 1) or Israel (NGVCB rank # 2).
A critical view is that elite value extraction is on the rise around world. The current problems with the financial sector in Switzerland (rank # 1) or the increasing polarization now evident in Israel (rank # 5) point to problems in the elite systems of even the best performers. Given elite quality impact on economic and human development, a generalized decline ought to be a matter of global concern and a subject for analysis by multilateral organizations such as the World Bank and debated at global meetings such as those of the World Economic Forum.
With the release of EQx2023, the University of St.Gallen launches an interactive website of the EQx that is accessible to users everywhere at this link. Prof. Guido Cozzi remarks that “with this tool students, journalists and the general public across the world can better understand the role that elites play in our given societies, the origins of institutional quality and, more importantly, with the data at their fingertips, develop ideas and policies for inclusive growth.”
Image: Adobe Stock / fotochrist