Future of Growth Index

The Future of Growth Report 2024 introduces a multidimensional framework to assess the quality of economic growth across 107 countries globally. It characterizes nations’ economic growth across four pillars: Innovativeness; Inclusiveness; Sustainability; and Resilience.
The Future of Growth Report stresses on looking beyond quantity in assessing economic growth rather also assessing the underlying nature and quality of growth in which it is achieved that ultimately matters most for positive economic, societal and environmental outcomes.

The starting point for the framework is an overview of a country’s recent economic growth performance, measured by three core indicators: GDP per capita, GDP growth, and GDP per capita growth over the past five years.
For each of the four pillars it gives a score of 0-100 for all the indicators under these pillars. Then averaging them to get a fina score for each pillar.

The Future of Growth Report 2024 offers a detailed examination of Bahrain’s economic development status through four pillars: Innovativeness, Inclusiveness, Sustainability, and resilience.

Innovativeness

Bahrain achieved a score of 53.4 in the Innovativeness pillar, which is above the global average of 45.2 but below the high-income group average of 59.4.

Among GCC countries, Bahrain is ranked fourth.

Strengths:

• The availability of digital and technology talent is a significant asset, driven by effective educational initiatives and training programs.
• Comprehensive mobile network coverage facilitates connectivity and supports innovation.
• Bahrain’s robust framework for long-term, venture, and SME finance availability encourages entrepreneurial activities and innovation.
• A strong digital payments infrastructure and high exports of advanced services reflect an advanced and innovative financial sector.
• High scores in policy vision and stability, along with regulatory quality, create a conducive environment for innovation and business development.

Areas for Improvement:

• Bahrain’s education attainment levels need enhancement to support broader innovation.
• Low R&D expenditure and lower outputs in patent applications, scientific publications, and trademark applications highlight the need for increased focus and investment in research activities

Inclusiveness

Bahrain scored 55.7 in the Inclusiveness pillar, slightly below the global average of 55.9.

Among GCC countries, Bahrain is ranked fifth.

Strengths:

• High levels of individual internet usage indicate robust digital inclusion.
• Significant progress in social mobility, access to safe drinking water, and financial services.
• Affordable ICT costs facilitate greater access to technology and services for a broader population.

Areas for Improvement:

• Addressing wealth inequality and improving income distribution are critical challenges.
• Enhancing gender parity in the labor force remains an important area for progress.

Sustainability

Bahrain’s score in the Sustainability pillar is 30.8, which is significantly below the global average of 46.8.

Among GCC countries, Bahrain is ranked fifth.

Strengths:

• Bahrain performs well in maintaining biodiversity, indicating some strengths in environmental conservation.

Areas for Improvement:

• High greenhouse gas emissions, low renewable energy consumption, and agricultural environmental damage are critical concerns.
• Addressing total waste generation and improving waste management practices are necessary.
• Increased investment in renewable energy and stronger regulatory frameworks are required to improve sustainability.

Resilience

This pillar evaluates a country’s ability to withstand and recover from economic, social, and environmental shocks. Bahrain scored 47.9 in the Resilience pillar, below the global average of 52.7. Among GCC countries, Bahrain is ranked sixth.

Strengths:

• High scores in old-age dependency, foreign labor hiring, and investment in reskilling indicate strong human capital management.
• Robust infrastructure and resilient financial systems support economic stability.

Areas for Improvement:

• Low numbers of health workers, hospital beds and insufficient diversification in energy sources and water resources.
• Vulnerabilities in food and commodity supply concentration need addressing.
• Challenges in bank system default risk and bank concentration.
• Limited participation in environmental treaties suggests a need for greater international cooperation on sustainability issues.

Conclusion

Bahrain’s performance in the Future of Growth Report 2024underscores its strengths in innovation and inclusiveness but highlights significant challenges in sustainability and resilience:

1. Innovativeness: Bahrain is above the global average but needs to bolster R&D and education attainment to reach high-income country standards.
2. Inclusiveness: Close to the global average, with strong digital inclusion, but wealth inequality and gender parity need improvement.
3. Sustainability: Significantly below the global average, necessitating urgent environmental reforms and investment in renewable energy.
4. Resilience: Below the global average, with strengths in human capital and financial systems, but healthcare and resource management need enhancement.