In this article, we’ll take a look at the 20 Most Socially Advanced Countries in the World, with a detailed analysis of the connection between social advancement and economic prosperity. You can skip and read the 5 Most Socially Advanced Countries in the World.
In today's interconnected world, the success and attractiveness of a nation to global businesses isn't just a reflection of its GDP or the size of its stock market. Social advancement plays a crucial role in shaping a nation's appeal to both foreign investors and multinational corporations. This is especially significant when businesses consider long-term investment or setting up base in a new country.
Take, for instance, the tech titan Apple Inc (NASDAQ:AAPL). When deciding on locations for its new campuses and stores, Apple Inc (NASDAQ:AAPL) doesn't merely evaluate the economic robustness of a region. The company's Environmental Progress Report shows its keen interest in regions that prioritize sustainable initiatives and education. Apple Inc (NASDAQ:AAPL)’s extensive educational programs and partnerships, such as its collaboration with educational institutions in countries with a strong focus on STEM (Science, Technology, Engineering, Math), further solidify this stance.
Social advancements such as poverty reduction, gender quality, and sustainability have been linked with improved economic growth as well.
For instance, gender quality is a significant factor in social advancement, which could have a positive or negative impact on economic growth. According to the World Bank, around 2.4 billion women don’t have equal income opportunities and only 12 countries worldwide provide 100% equal legal standing to women across different measures, such as entrepreneurship, workplace, mobility, pension, marriage, and more.
However, the European Institute of Gender Equality (EIGE) believes that promoting gender equality can significantly boost GDP per capita, thus leading to improved economic development. It believes that initiatives in gender equality could produce up to 10.5 million additional jobs by 2050.
When we talk about social advancement in the global economic scenario, it’s clear that businesses taking responsibility for their environmental and social impacts are likely to perform better. A 2020 report confirms this, revealing that companies with high ESG scores were more likely to outperform their counterparts in the stock market.
Another meta-analysis of over 1,000 studies on ESG by the Stern School of Business found a positive correlation between ESG and the company’s financial performance for 58% of the analyzed studies. According to another global survey, more than $30 trillion is now invested in assets that have some ESG criteria, a significant rise from a decade ago.
With these facts, companies are now focusing on complying with ESG standards to attract more investors. One such example is Gap Inc (NYSE:GPS). The company introduced the P.A.C.E program to empower women in the global garment industry. Over 1.3 million women across 19 countries participated in this program, yielding high returns for female garment workers, their families, and the companies they work for. Moreover, Gap Inc (NYSE:GPS)’s 75% of employees are women, which shows its commitment to closing the gender gap. This dedication to social responsibility, among other factors, positions Gap Inc. (NYSE:GPS) as a dominant global retailer, with outlets in more than 40 countries.
Microsoft Corp (NASDAQ:MSF) is another example of a dedication to ESG principles. With a goal to be carbon-negative by 2030, Microsoft Corp (NASDAQ:MSF) contracted the removal of 1.44 million metric tons of carbon in FY 2022 alone. By the same year's end, the company provided nearly a million people with clean water and sanitation solutions. Additionally, since its founding, Microsoft Corp (NASDAQ:MSF) has earmarked over $600 million from its Climate Innovation Fund for impactful investments. This holistic ESG strategy has likely played a part in its robust financial performance and appeal to investors. Microsoft Corp (NASDAQ:MSF)’s current market cap stands at around $2.74 trillion, making it one of the most valuable companies globally.
This shift is a reflection of a global community that's becoming increasingly conscious of its impact and responsibilities. Whether it's nations optimizing their socio-economic standards or businesses rethinking their strategies, the path forward is clear: economic prosperity and social responsibility must go hand in hand.
Below is our list of the 20 most socially advanced countries in the world.
20 Most Socially Advanced Countries in the World
20. Spain
Spain is known for its progress in education, healthcare, and gender equality. The country’s GDP stood at around $1.4 trillion in 2022, making it one of the largest eurozone economies. It has a 99% literacy rate. Spain also ranked 21st in the 2022 World Index of Healthcare Innovation.
19. South Korea
South Korea has a lively civil society and a strong GDP. Its citizens have easy access to quality higher education and healthcare. However, the country is currently fighting with the challenges of the aging population and low birth rate.
18. Lithuania
This high-income country is a member of the European Union and the Council of Europe. According to the Global Gender Gap Report 2023, Lithuania ranked 9th for gender equality worldwide. However, the country struggles with the challenges of income inequality, which has been one of the largest in the EU and is still on the rise. In 2018, its Gini coefficient of equalized disposable income stood at 36.9%.
17. Japan
One of the wealthiest nations in the world with a GDP of $4.23 trillion as of 2021, Japan excels in technology, entrepreneurship, and quality of life. However, Japan grapples with gender disparity, standing at 125 among 146 countries in the Global Gender Gap Report 2023.
16. New Zealand
The Social Progress Index (SPI) of 2022 ranked New Zealand as the 15th most socially advanced country. It ranked 7th among 139 countries on the WJP Rule of Law Index of 2021. The country also ranks well in healthcare, education, and overall well-being of citizens.
15. United Kingdom
The United Kingdom has a strong scientific, economic, and political influence, making it a highly developed country in the world. A report by the US News ranked it 4th out of 88 for entrepreneurship and 5th for power. It also ranked 12th for social purpose, based on various metrics such as religious freedom, care about human and animal rights, social justice, and more.
14. Germany
Various social insurance programs, including sickness insurance, universal healthcare, accident insurance, and a retirement pension, were introduced by Germany. The country has a rich legacy in the fields of science and technology, boasting renowned researchers such as Albert Einstein, Karl Benz, and Max Born. German people are generally sensible and are known to respect each other’s privacy.
13. Estonia
The e-Estonia movement in the 1990s turned Estonia into a digital society, making it one of the most technologically advanced countries in the world. Its economy is also known as one of the most liberal economies in Europe, mainly attributed to Estonia’s few custom tariffs and flat-rate income tax. The Estonian legal Framework emphasizes gender equality.
12. Switzerland
The Social Progress Index of 2022 ranked Switzerland 4th among 188 countries, making it one of the most socially advanced countries in the world. It’s also a leader in the pharmaceutical industry — Roche and Novartis AG (NYSE:NVS) stand among the best pharmaceutical companies in the world.
11. Uruguay
Uruguay is best known for its social security system, advanced education, and liberal social laws. According to the World Bank, the country has low levels of income equality and poverty. Notably, extreme poverty is virtually nonexistent in Uruguay.
10. Australia
Australia is known for its high quality of life, advanced education and healthcare, political rights, and economic freedom. The country also promotes gender equality, making it one of the most gender-equal countries in the world. However, the country grapples with income inequality; the bottom 90% of the Australian population has seen only 7% economic growth per person since 2009 compared to 93% growth among the top 10% population.
9. Luxembourg
Luxembourg tops the list of countries with the highest GDP per Capita in 2023, with the GDP per capita standing at around $128,820 in 2023. Its citizens enjoy a high quality of life, a friendly ecosystem, and a favorable tax environment, making it one of the most progressive countries in 2023. The country also ranks higher for safety, gender equality, religious freedom, and human rights.
8. Denmark
With 90.54 points, Denmark ranks 2nd on the 2022 Social Progress Index. Its citizens enjoy a high standard of living and well-developed social services, including gender equality, income equality, and social security.
7. Finland
With gender equality, high per capita income, and honesty in personal relationships, Finland makes it to the list of the 10 most socially advanced countries in the world. It’s also one of the happiest countries in the world, mainly attributed to its extensive welfare benefits, progressive wealth distribution, and income equality.
6. Iceland
Iceland ensures economic freedom, a high quality of life, and protection of civil liberties for its citizens, making it one of the most progressive countries in the world. It upholds a robust Nordic social welfare system to provide its citizens with universal healthcare and tertiary education access. Income equality in Iceland is lowest among OECD countries.