Inclusive Growth

Inclusive growth is economic growth that creates opportunity for all segments of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society.

In many countries, people have not seen their incomes rise for years. The gap between rich and poor has widened, with those at the top capturing the ‘lion’s share’ of growth. Rising inequality in earnings and in wealth is a major concern, but money is just one aspect of people’s well-being. In just about every area, whether it be education, life expectancy, or employment prospects, success is determined by socio-economic status, wealth and assets, sex, age or the places where people live.

The OECD approach to inclusive growth is multidimensional, going beyond income, and that the proceeds of economic growth must be shared.

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Inclusive Business

‌Businesses have a central role in promoting Inclusive Growth as job creators, providers of training and skills, investors in physical and knowledge-based capital and through diffusion of their products and services to previously marginalised groups. Firms are also increasingly recognising their role in reducing inequalities and are helping shape policy and regulatory environments.

This is a win –win scenario, as more equal societies benefit business too. Through higher financial returns, better governance and more engaged and productive employees as well as a larger middle class and a growing consumer purchasing power.

More informtation on the Inclusive Business agenda

Time to Act: Making Inclusive Growth Happen

The OECD has long highlighted the necessity of rethinking the traditional model of economic growth to put people’s well-being centre-stage, the release of the Update Report: 'Bridging the Gap' and the policy brief ‘Time to Act: Making Inclusive Growth Happen’ at the OECD Forum 2017, highlight the next steps for policy action on inclusive growth, building on the work of The Productivity-Inclusiveness Nexus that was released last year.

Our approach to inclusive growth

The OECD’s Inclusive Growth Framework includes a measure of “multidimensional living standards” designed to track societal welfare, and analyse the extent to which growth - in a given country and over a given period - translates into improvements across the range of outcomes that matter most for people’s lives.

It includes an income dimension, measured as average household real disposable income adjusted for inequality between the income of the average household and that of a household at a different decile (e.g. median or bottom 10%). It also includes the non-income dimensions of health and unemployment, chosen based on empirical work on the most significant determinants of subjective well-being.Recent data indicates that losses in living standards related to longevity and unemployment in the OECD equate to as much as 29% of household average income.

Methodological work is ongoing to refine the multidimensional livings standards measure, incorporating other non-income dimensions that matter for well-being, such as health inequality and education. Work is also underway to extend the analysis beyond the OECD to include emerging and middle-income countries, and to test the robustness of the Framework. The policy mapping work will pursue the analysis of the main drivers of the key dimensions – based on a production function approach – and the identification of robust empirical relationships.

Centre for Opportunity and Equality (COPE)

The OECD Centre for Opportunity and Equality is a platform for promoting and conducting policy-oriented research on the trends, causes and consequences of inequalities in society and the economy, and a forum to discuss how policies can best address such inequalities. COPE produces ground-breaking reports on inequalities, influences the international policy debate through high-impact events and promotes exchanges of information & expertise on inequality. With mounting evidence that inclusive growth policies are a must for shared prosperity, more governments and institutions are tackling the problem head on.  

Inclusive Growth and Public Governance

In many countries inequality is growing as the benefits of economic growth go to the richest members of society. Inclusive Growth is all about changing the rules so that more people can contribute to and benefit from economic growth. Governance - the way that governments do their jobs - can make the difference as to whether growth benefits everyone, or just a few. For more information, see our four steps of governance for inclusive growth or view the videos for a graphical presentation of each.

Group of Friends of Inclusive Growth

The Group of Friends of Inclusive Growth is an informal group involving OECD Delegations, Ambassadors from Key Partner countries and representatives from the OECD Secretariat who work on, or have a specific interest in, Inclusive Growth. Participation is voluntary and is open to all OECD members and Key Partner countries; staff of the Secretariat working on Inclusive Growth are also be part of the Group. Representation is at the Ambassador level; however, Delegations can also nominate a technical expert(s) to attend and contribute to meetings.