In this episode of ‘Dialogues’, Sean Scull from SKEMA Publika is joined by:
Amaury Goguel has been Director of the MSc in Financial Markets and Investment at SKEMA for around ten years; he holds a PhD in economics and is an associate professor at SKEMA Business School. He is co-author of the report “Measuring Economic Development in the 21st Century”.
Thomas Deconstanza is a graduate of SKEMA Business School and holds a PhD in Slavic languages and literature from the University of Lille; he is currently Country Manager. He is a co-author of the report “Measuring Economic Development in the 21st Century”.
A need to rethink the concept of development in the 21st century
Recent geopolitical, economic and even military changes highlight how the indicators traditionally used are now incomplete, or even obsolete. The categories inherited from the post-Second World War era – ‘developed countries’ versus ‘developing countries’ – were constructed within a specific context, structured in particular around the Bretton Woods institutions. However, the last fifty years have been marked both by the rise of international organisations such as the UN, the World Bank and the WTO, tasked with assessing development, and by an intensification of interdependencies between states, rendering these frameworks increasingly inadequate.
It is with this in mind that we, at SKEMA Publika, have sought to propose a renewed and complementary approach. One of the contributions of our work is to construct a new development scale based on the aggregation of several indicators, in order to better reflect contemporary dynamics, analysing in particular China, France and the United States. This framework rests on three pillars: an economic dimension encompassing commercial resilience; a societal dimension incorporating human development and governance; and, finally, a strategic dimension covering technology, digital sovereignty, strategic autonomy and the environment.
Our aim is twofold: to move beyond an overly static view of development and to propose an analytical tool capable of shedding light on the realignments within the multipolar world. This work is intended to serve as a useful basis for guiding public policy recommendations tailored to the realities of the 21st century.
The limitations of GDP
GDP suffers from three major blind spots that distort our understanding of global balances:
1. GDP aggregates production flows (added to stocks from previous years) in a purely arithmetic manner, without prioritising their real value. Growth artificially inflated by debt, a speculative property bubble or unsustainable public spending increases GDP, but in reality undermines a nation’s structural soundness.
2. Furthermore, GDP perpetuates the illusion of the average. GDP per capita is a statistical average. As such, it creates an illusion of homogeneity and stability.
3. Finally, GDP is blind to the externalities of production and to a nation’s resilience to shocks. Yet we live in an era of converging tensions and overlapping shocks.
The advantages of the multidimensional indicator
The traditional approach to development relies predominantly on aggregate indicators, in particular GDP per capita, sometimes supplemented by indices such as the HDI. These tools have been useful, but they now have significant limitations: they remain partial and insufficiently adapted to the world’s transformations.
Our indicator specifically seeks to overcome these limitations. It is based on a multidimensional aggregation approach, incorporating not only economic variables but also dimensions relating to resilience, governance, technological sovereignty and the adaptability of states. It thus provides a better understanding of contemporary dynamics. A country may have a high level of wealth whilst being vulnerable in terms of energy or technology, whilst other economies may stand out for their capacity for innovation or their strategic positioning.
We therefore aim for a more nuanced and strategic understanding of development. It is no longer simply a matter of measuring a level, but of assessing a trajectory and the capacity to evolve within an increasingly unstable international environment. In this sense, our approach enables us to better grasp the reality of development in the 21st century and to provide a more relevant analytical tool to inform public decision-making.
Three key takeaways
1. The concept of development is not merely descriptive; it has increasingly become instrumental.
2. The debate should no longer be ‘which country is developed?’, but rather: how does each country produce, finance, stabilise and increase complexity, and at what cost in terms of internal trade-offs?
3. Development must be viewed as a trajectory subject to constraints. The strength of one pillar does not exempt a country from vulnerabilities in others; quite the contrary. We therefore call for a shift in the debate: from the status of development to its architecture, and from architecture to resilience. The report provides an illustration of this – almost a method – and in any case, elements that we hope will serve as a source of inspiration
