Strategy. Innovation. Brand.

Gross National Happiness

Happiness, Brand, and Innovation

World leaders.

World leaders.

Are Finland, Sweden, and Switzerland the three best countries in the world? You might think so based on the latest rounds of research.

In the past, I’ve reported on the World Happiness Report (WHR) and the Global Innovation Index (GII). Both studies are produced regularly and measure a country’s ability to promote specific outcomes. The WHR measures how happy a country’s citizens are and why. The GII measures how effectively a country promotes and protects innovation, especially in regards to scientific and technical innovation.

In a previous article, I compared happiness and innovation. There seems to be a connection, though it’s difficult to say whether happiness promotes innovation or vice versa. Or perhaps some hidden, third variable promotes both. (By the way, I’ve also written about how happiness is measured).

This year, in addition to the updated versions of WHR and GII, I’ve added another — FutureBrand’s Country Brand Index (CBI) —  that measures the strength of a country’s brand. Now in its eighth edition, CBI asks citizens of many countries to judge the most attractive countries to produce “future-positive predictions”. WHR and GII aim to measure the actual phenomenon — either happiness or innovation. CBI measures perceptions; how is a country perceived by citizens of other countries.

Putting together the three studies reveals a great deal of overlap. In the table below, I’ve listed the top ten countries in each report. Countries that make the top ten in all three studies are in red. Countries that reach the top ten in two studies are in blue. Countries that make the list in one study are in purple.

Switzerland is ranked number one in the CBI and GII studies and number three in the WHR study.  It’s happy and innovative and has a positive reputation.

All of the Nordic countries — Denmark, Finland, Iceland, Norway, and Sweden — make at least one of the top ten lists. Sweden and Finland make all three. Denmark and Norway make two. Tiny Iceland makes one.

The USA makes the top ten in brand and innovation but ranks only 17th in happiness.

The lists are dominated by European Protestant countries or their offspring. Asia is represented by only three countries — Hong Kong, Japan, and Singapore. African and Latin American countries  don’t make any of the top ten lists. The degree of overlap makes me wonder exactly what we’re measuring in these studies. It could be that happiness, innovation, and brand power are intimately related and that these studies measure the strength of the relationship. On the other hand, this could be an example of cultural bias. Or it could be a halo effect. Countries that are successful in one area may be viewed as successful in other areas as well. Of course, the reverse may also be true.

I plan to delve into each of these studies more closely in the future. In the meantime, please review the table below and help me sort out the relationship between the variables and the countries. What causes what?

WHR 2013 CBI 2013 GII 2013
1 Denmark Switzerland Switzerland  
2 Norway Canada Sweden  
3 Switzerland Japan UK  
4 Netherlands Sweden Netherlands  
5 Sweden New Zealand USA  
6 Canada Australia Finland  
7 Finland Germany Hong Kong  
8 Austria USA Singapore  
9 Iceland Finland Denmark  
10 Australia Norway Ireland

Why Your Dog Is Happier Than You Are

The door's opening!

The door’s opening!

Story 1: When I come home, I open the front door and our dachshund, Bella, comes racing through the house, throws herself at my feet, rolls over for a belly rub, and wags her tail vigorously. It doesn’t matter if I’ve been outside for a few minutes or away on a business trip for a few days. Bella’s reaction is always the same – she’s thrilled to see me.

Story 2: Suellen and I enjoy art and we’re friends with several artists, so we have a lot of artsy things – photographs, etchings, a few paintings, and sculptures. Some of it is pretty good stuff. Even the not-so-good stuff has lots of sentimental value. I notice, however, that I don’t notice the art so much. I can walk through the house without registering that it’s filled with art. It’s almost like wallpaper.

Why is it that Bella gets excited just by hearing the door creak open while I can blithely ignore some very stimulating art? I think it’s because of hedonic adaptation. I have it. Bella doesn’t.

When we acquire a new piece of art, I pay a lot of attention to it. I may study it, talk about it, maybe even brag about it. It’s new and different and it stimulates me. After a few months, however, it’s just part of the new normal. I still like the piece but it doesn’t stimulate me. I’ve adapted to its presence. That’s hedonic adaptation (or the hedonic treadmill as it’s sometime called).

Bella, on the other hand, doesn’t seem to grow accustomed to the same old thing. Everything seems new to her all the time. The door creaks and off she goes to a new adventure. At the very least, she’ll get a belly rub. She might even get a treat. Oh, it’s so exciting!

There’s a subtler difference as well. Art is a thing, something to be owned. An opening door is an experience: who knows what will happen? There’s a bundle of evidence that experiences generate more happiness than things. If you want to improve your general level of happiness (and perhaps get off the hedonic treadmill for a while), invest in doing things rather than buying things.

I’ve written about happiness before (click here and here and here). There’s a rising tide of research on Gross National Happiness and a suggestion that we over-emphasize Gross National Product in public policy. For instance, American wealth has tripled in the past half century but we haven’t gotten any happier. Relative wealth seems more important than absolute wealth.

What about at the personal level? The best advice seems to be to invest in small experiences. Why small rather than big? Because you can do them more often. Frequency seems to be more important than size. There’s a novelty factor that seems to intrigue and stimulate us. Bottom line: do more things, buy fewer things. Oh, and get a dog.

Does Happiness Cause Innovation? Or Vice-Versa?

I'm happy being innovative.

I’m happy being innovative.

Does happiness cause innovation? Or is it the other way round: does innovation cause happiness? Or is there a third variable that causes both happiness and innovation to vary together?

In the past, I’ve written about measures of national happiness (here and here) and measures of innovation (here, here, and here). I’ve been wondering: are happiness and innovation correlated? It seems like a reasonable thought but I haven’t had any evidence to make an inference. Until now.

I’ve just been reviewing the Global Innovation Index of 2012 (the GII) as published by INSEAD (the business school) in conjunction with the World Intellectual Property Organization (part of the UN). One of the goals of the GII is to develop effective measures of innovation that can be applied at the national level. INSEAD has published the report annually since 2007. Each year, it evolves and adds new variables. In theory, each year it becomes a better reflection of the true state of innovation around the world. In the 2012 edition, the report incorporates about 80 different variables.

What struck me immediately was the relationship between the GII and the World Happiness Report that I’ve written about before. While researching this article, I also stumbled across the Legatum Institute‘s ranking of national happiness. Though Legatum uses a different method, the results closely match the World Happiness Report. Indeed, the top ten countries in each report are the same — though in different order.

So, how does happiness relate to innovation? Look at the table below, which compares the top ten countries in the World Happiness Report (WHR), Legatum, and the Global Innovation Index (GII). Half of the top ten most innovative countries (with *) are also among the world’s happiest countries. The correlation seems to grow stronger if you look past the top ten. For instance, the USA is 11th on the WHR and ninth on the GII. Similarly, Canada, New Zealand, and Norway are 11th, 12th, and 13th on the GII and all three are in the top ten of both WHR and Legatum.

Why should happiness be related to innovation? I’m not at all sure. Part of the reason I’m publishing this is to ask my readers: what do you think? Let’s gather the best ideas and see if we can test them logically. Over to you.

WHR Legatum GII
1 Denmark Norway Switzerland *
2 Finland Denmark Sweden *
3 Norway Sweden Singapore
4 Netherlands Australia UK
5 Canada New Zealand Netherlands *
6 Switzerland Canada Denmark *
7 Sweden Finland Hong Kong
8 New Zealand Netherlands Ireland *
9 Australia Switzerland USA
10 Ireland Ireland Luxembourg

What Makes You Happy?

Are you happy? Would that be “affective happiness” or “evaluative happiness”?

Affective happiness has to do with day-to-day life and emotions. It can go up or down quickly depending on how your day is going. Evaluative happiness is your overall evaluation of your life. How happy are you with your place in society? Think of it as overall life satisfaction.

So what makes people happy? I’m glad you asked since I’ve been reading the World Happiness Report. (For my earlier article on Gross National Happiness, click here. For the full Report, click here.) The Report summarizes surveys and statistics from around the world and develops some surprising conclusions about what contributes to evaluative happiness. Here’s a look at a few of the variables.

Income — you might think that richer people are happier. To a degree, you’re right — but income works in strange ways. First, richer people are generally happier than poorer people but the quest for higher income can reduce happiness. Second, as countries grow richer, they don’t necessarily grow happier. GNP per capita has risen threefold in the U.S since 1960, yet we’re not happier. That’s partially because happiness is tied more to relative income rather than absolute income. If we all get richer at more or less the same rate, then our relative positions don’t change — nor does our happiness. Third, there seems to be an income limit. Up to a certain level, income seems to increase happiness. Beyond that level, more income does not yield more happiness. Ultimately, differences in income explain about 1% of the variance in evaluative happiness.

Marriage – “Marriage is one of the unambiguous, universally positive and statistically significant correlates of life satisfaction.” But what’s the cause and what’s the effect? Does marriage make people happy or do happy people get married? It seems to be a bit of both. People who are happier when they’re young are more likely to get married. But marriage then gives a happiness boost — over and above the “normal” rate of happiness.

Age — as you get older, your body starts to break down physically and mentally. So you should be less happy, right? Not quite. There’s a big U-turn when you relate age to happiness. Other things being equal, we’re happier when we’re young and then happiness declines until we reach our 40s. Then things brighten up again and our life satisfaction rises. Could it be the wisdom of maturity? Maybe. Or maybe we can just afford better wine.

Gender — “In most advanced countries women report higher satisfaction and happiness than men.” This is less true in poorer countries but seems to be universally true in richer, more advanced countries.

Education — the evidence is mixed. More education doesn’t correlate directly with greater happiness. But it does contribute indirectly in that more education generally results in higher income which can create greater happiness.

Children — “Surprisingly, the presence of children in the household appears not to be associated with higher life satisfaction.”

Television — “Many studies have shown that watching TV is associated with lower happiness, other things equal. An early study exploited the fact that one Canadian town gained access to TV some years later than other towns. The result was a relative fall in social life and increased aggression.” Additionally, TV watchers see many rich people on the tube and tend to underestimate their own relative income. As we saw earlier, your perception of your income relative to others is what counts in happiness.

There’s much more to it — including mental health, freedom, corruption, equality, and community — but I think I’ll stop here for the moment. Does that make you happy?

Gross National Happiness

We’re happy in Denmark.

What’s with these Danes? On virtually every survey that purports to measure national happiness — or Gross National Happiness — Denmark scores number one. In fact, the Nordic countries — Denmark, Finland, Iceland, Norway and Sweden — typically occupy half of the top ten “happy slots”. I’ve visited all the Nordic countries. They’re really nice but are they the happiest places in the world? Wasn’t Hamlet Danish? He didn’t seem so happy.

As you may have guessed, I’ve been reading the World Happiness Report published through The Earth Institute at Columbia University. (Click here). It’s about 170 pages long and makes for very interesting reading — enough so that I’m going to write about various facets of it from time to time. Here are some of the key questions:

  • Is happiness a topic that we can take seriously? According to the study’s authors, there is enough empirical research coming from many different cultures that we can start to make useful comparisons and judgments. I’ll admit that I’m very curious about how to measure national happiness, so I’ll write about the method as well as the results.
  • What makes people happy? Money helps but not as much as other factors like social cohesion, strong family ties, absence of corruption, and degree of personal freedom. Interestingly, giving money away seems to make people happier than receiving money.
  • As countries get richer, do they get happier? Some do and some don’t. Apparently, the USA is one of those countries that hasn’t gotten happier as we’ve gotten richer. I’d like to dig into that.
  • Is the world getting happier? Apparently we are, especially in areas where extreme poverty is being eliminated.

I’ll write occasionally on happiness studies and delve into what makes people happy and what doesn’t — and how all this affects the way we live. Feel free to send me any of your questions about happiness studies and I’ll try to get them answered.

In the meantime here are two questions for you:

  • Taking all things together, how happy would you say you are? (0 = extremely unhappy; 10 = extremely happy)
  • All things considered, how satisfied are you with your life nowadays? (0 = extremely dissatisfied; 10 = extremely satisfied).

In the Nordic countries, the average life satisfaction score is 7.6. If yours is lower than that, maybe it’s time to head to Denmark.


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