Ranked: The Social Mobility of 82 Countries

It’s an unfortunate truth that a person’s opportunities can be partially tethered to their socioeconomic status at birth.

Although winning or losing the “birth lottery” will continue to shape the lives of generations to come, climbing the socioeconomic ladder is possible. However, it boils down to what opportunities people are afforded in the country they live in.

Today’s chart pulls data from the inaugural Global Social Mobility report produced by the World Economic Forum. The report ranks 82 countries according to their performance across five key pillars: healthcare, education, technology access, working conditions, and social protection.

While most countries aim to create a level playing field, which places best live up to this lofty and challenging mission?

The Spectrum of Social Mobility

Social mobility refers to the movement of individuals either up or down the socioeconomic ladder relative to their current standing, such as a low-income family moving up to become a part of the middle class.

Countries with high levels of social mobility exhibit lower levels of income inequality and provide more equally shared opportunities for its citizens across each of the five pillars.

Here is how all 82 countries rank, according to the report:

There are a number of countries that set an example for social mobility that others can follow.

The Mobility Medal Winners

All of the countries in the top 10 are European, but it is the Nordic countries that sit comfortably at the top of the ranks.

Denmark holds the title for the most socially mobile country in the world, boasting an index score of 85.2. If a person is born into a low-income family in Denmark, the WEF estimates it would take two generations to reach a median income. In contrast, someone in Brazil or South Africa would take nine generations at the current pace of growth.

As one of the few non-European countries in the top 20, Canada also performs well across the majority of pillars, but similarly to Denmark, it could improve in the area of lifelong learning which includes providing support for the unemployed and teaching digital skills.

The Least Socially Mobile Countries

Developing country Côte d’Ivoire sits at the bottom of the ranks, with an index score of just 34.5. As a nation once ravaged by internal conflict and turbulent economic shifts, the resulting poverty rate remains high at 46.3%.

While the government has made improvements to its basic social services, the country falls behind on categories like access to education and fair wages, and retains the highest gender inequality rate in the world.

Despite a significant decrease in the percentage of people living in absolute poverty, India ranks low on the index in 76th place. Structural reform is required across all pillars if India is to increase its score, especially in relation to fair wages and education.

Why Invest in Social Mobility?

According to the report, most economies are far from providing fair conditions for their citizens to thrive, with the greatest challenges ranging from lack of social protection and low wages to poor lifelong learning systems.

Countries that fail to invest in the key pillars of social mobility could experience damaging consequences for governments and citizens alike:

• Precarity (the unpredictability of living without secure and well-paid employment)
• Perceived loss of identity and dignity
• Weakening social fabric
• Eroding trust in institutions
• Disenchantment with political processes

Aside from the social returns, the economic impact of investing in the right blend of social mobility pillars could be substantial.

Calculating the True Cost

The report dives into the opportunity cost of low social mobility and finds that if each country increased its score by just 10 index points, it could result in an extra 4.41% of cumulative GDP growth for the global economy by 2030—equal to $5.1 trillion.

China alone could add $1 trillion of GDP growth by 2030 if a 10 point increase is achieved:

Although social mobility can act as an economic lever, many countries are struggling to provide the optimal conditions for their citizens to thrive. For those countries, globalization and technology may continue to exacerbate income inequality.

If countries are unable to create new social mobility pathways towards more inclusive economies, they risk being stuck in a cycle where inequality remains entrenched—and history continues to repeats itself.

Shifting Perspectives: The World’s Top Financial Centers

Financial centers are catalysts for global growth, with tremendous economic influence.

Historically, the rise of nations has coincided with the emergence of robust financial hubs. From London towering in the 19th century, to New York City gaining dominance in the 20th century, broader economic shifts are at play.

Today’s chart uses data from the Duff & Phelps Global Regulatory Outlook 2020, and it highlights changing perceptions on the world’s financial centers.

In total, 240 senior financial executives were surveyed—we take a look at their responses, as well as key factors that could impact perspectives across the wider financial landscape.

Financial Hubs Today

In the below graphic, you can see the percentage of respondents that voted for each city as the world’s preeminent financial center:

The Status Quo

New York and London are perceived to be at the helm of the financial world today.

New York City is home to the two largest stock exchanges in the world—and altogether, U.S. stock markets account for an impressive 43% of global equities, valued at over $34 trillion. Of course, New York is also home to many of the world’s investment banks, hedge funds, private equity firms, and global credit rating agencies.

Across the pond, the London Stock Exchange has surpassed $5 trillion in market capitalization, and the city has been a global financial hub since the LSE was founded more than 200 years ago.

Together, the United States and the United Kingdom account for 40% of the world’s financial exports. But while New York City and London have a foothold on international finance, other key financial centers have also established themselves.

Rising in the East

Singapore, accounting for 2.1% of the respondents’ vote, is considered the best place to conduct business in the world.

Meanwhile, seventh-ranked Hong Kong is regarded highly for its separation of executive, judiciary, and legislative powers.

Despite ongoing protests—which have resulted in an estimated $4 billion outflow of funds to Singapore—it maintains its status as a vital financial hub globally.

Where are Financial Centers Heading?

A number of core financial hubs are anticipated to underpin the future of finance.

Although New York maintains the top spot, some executives surveyed believe that the top financial center could shift to Shanghai, Singapore, or Hong Kong.

Growth in Asian Hubs

According to survey results, 8.7% of respondents said Shanghai is predicted to be the next global financial hub by 2025. Shanghai houses the largest stock exchange in China, the Shanghai Stock Exchange (SSE), and the SSE Composite tracks the performance of over 1,600 listings with $4.9 trillion in combined market capitalization.

Meanwhile, Singapore accounted for 5.4% of the respondents’ vote. Exporting $27.2 billion in financial services annually, Singapore’s economy has grown at an average clip of 7.7.% per year since the country’s independence, one of the highest growth rates in the world.

The Impending Impact of Brexit

After four tumultuous years, Britain’s departure from Europe took place on January 31, 2020.

Despite a long-awaited victory for the Conservative government, many experts are saying that economic prospects for the region look dim.

We now know that the economy will be between 2—6% smaller in 10 years than it would otherwise have been.

– Ray Burrell, Professor at Brunel University

The UK financial sector could lose over $15 billion (£12B) due to Brexit, and falling investment in the private sector may lead to wage pressure and layoffs.

On the flip side, 51% of UK businesses said that Brexit will be beneficial to business conditions.

A New Paradigm

Although the global financial sector is primarily influenced today by New York City and London, it seems that perceptions are shifting.

While both of these cities will maintain their reputations as massive financial capitals going forward, it’s also clear that hubs such as Singapore, Hong Kong, and Shanghai will be providing some stiff competition for capital.