Definition: Socio-economics is the study of the relationship between economic activity and social life. In many cases, however, socio-economists focus on the social impact of a specific kind of economic change. Such changes might include displacement of people due to a closing factory, village-to-city migration, market manipulation and even the signing of trade treaties, etc.
Value: The goal of a socio-economic study is generally to undertake an impact assessment and bring about socio-economic development, usually in terms of improvements in metrics such as GDP, life expectancy, literacy and/or levels of employment.
Next Generation Consultants has conducted numerous socio-economic studies for clients across industry sectors, but specifically the mining sector. The value of these studies is that they provide a context of the environment in which mines operate, but also serve as a baseline to measure any socio-economic spend and the impact thereof on the community.
Over the past 15 years, we have discovered almost 75 benchmarks that speak to aspects that need to be considered when conducting these studies. These indicators are directly linked to the investment portfolios of our clients, namely education, health, community and social development, and in the case of mines their contribution to local economic development, housing and infrastructure provision.
For our clients, socio-economic research is becoming increasingly important as a way to contextualise investment and development priorities, but also to provide input into social reports (i.e. social value and impact reports, as well as sustainability and integrated reports). But most importantly, it provides a voice to indigenous communities, fenceline communities and laboursending communities, and it positions them as active participants and stakeholders in social development.
It is not, however, currently treated as having the same weight as other areas of research – particularly outside academia – to the detriment of producing holistic, nuanced accounts of existing operations or forging new, strategic pathways to engagement and development.
Metrics metrics metrics
In Next Generation’s latest CSI Trends, Forecasts and Impacts Research Report, three of the key 2017 trends identified are: Popularisation of a return-on-investment approach to development, an increasing focus on measurement (monitoring, evaluation and impact assessment) and the emergence of for-profit development. Because all these trends imply more of a business strategy towards development, it’s incumbent on actors in the development space to familiarise themselves with results-driven measurement methodologies if they are to remain relevant. These methodologies can only be constructed on the basis of socio-economic baseline data.
For-profit organisations have used measurement tools such as KPIs (key performance indicators), ROI (return on investment) and other, quantifiable business metrics to assess performance for a long time. It’s only fairly recently that the same standards have started being applied to the development and public sectors. In a world with finite resources and seemingly infinite and growing issues, resource allocation processes are more critical than ever.
Why socio-economic data is critical to understand
In tech speak, UX (user experience) has emerged as an essential area of consideration: the e-commerce giant Shopify, for example, has publicised its unwavering support for contextualisation in research. Dylan Blanchard, UX researcher at Shopify, says: “As researchers, we can fall into the trap of making misguided recommendations by not understanding the larger context around our observations, or by not understanding the wider business objectives.” Although this is a purely business example, one can extrapolate the learnings to the development sector (including CSI).
Understanding community dynamics, issues and resource gaps is the way to begin a new development policy or social investment strategy. An oft-touted example in the development sector of how not to go about a project is PlayPump: the story goes that well-intentioned development practitioners conceptualised a merry-go-round which also functioned as a community water pump. There was little to no community engagement before the project kicked off and, many Bush Foundation dollars later, it was found that it neither met community needs nor did it fit in with community lifestyles. Engaging with socio-economic data would have shaped the project entirely differently and maximised its chances of success.
Where is Africa’s quality socio-economic data?
Many, if not all, of Next Generation’s projects depend on socio-economic research. In fact, the area is greatly underestimated and in need of advocacy.
A discourse of Africa not having the means to provide quality, standardised socio-economic data has pervaded for decades. Starting in 2002 and somewhat as a response to this, there has been a movement dedicated to standardising data across the continent. This culminated in the Africa Data Consensus in 2015 and has gained international recognition through the UN-led Independent Expert Advisory Group on Data Revolution for Sustainable Development.
Despite the increased publicity on the value of data in a development context, there continues to be a dearth of relevant, quality data on African countries. TRALAC (Trade Law Centre) asserts that the main reasons for this data not existing or existing in very small quantities are:
- Inadequate funding and limited autonomy of national statistics offices
- Data unavailability due to low human capital
- Differing methodologies, concepts, definitions, coordination and available technology leading to poor data quality
- Data inaccessibility (perhaps due to infrastructural constraints)
- Underuse of geospatial data
Data from public bodies such as Statistics South Africa is not without merit, however, large-scale data collection exercises such as censuses only take place every ten years (moved from every five years due to lack of capacity). There are attempts to fill some gaps in-between through general household and community surveys, but they are not as comprehensive.
To compensate for the lack of socio-economic data, a number of organisations have moved towards monetising access to data. Some of the more well-known examples in South Africa are the Institute of Race Relations, Quantec and HIS. While this data provides relief for those with the means to pay for it (often upwards of R60 000 per year for access), entry-level researchers and government departments with limited budgets cannot afford it. The net result is the anti-democratisation of data.
African countries need strengthened national statistics bodies
With the development landscape adapting to be more like the business one and the advent of the Sustainable Development Goals, the increase in data reliance is in line with globalisation and the information age. There is plenty of room for private companies investing in collecting more nuanced data points for profit purposes but, at the very least, recent and accurate data indicating quality of life (at national, provincial, district and municipal levels) should be readily available for all.
Government policies and strategies should be underpinned by quality data, otherwise decisions made on behalf of residents could be irrelevant and a waste of precious resources. By the same logic, development initiatives need to operate on similar terms in order to mitigate programme risk and to safeguard beneficiaries against interventions that may do more harm than good, or that are otherwise superfluous.
Author Reana Rossouw is one of Africa’s leading experts on social innovation, sustainable development, shared value and inclusive business strategies. As director of Next Generation Consultants, a specialised management consultancy, she believes strongly in contributing to the development and capacity-building of the sector. She presents practical, useful, interactive master classes on (1) Stakeholder engagement and management, (2) Human rights management, (3) Strategic social investment and (4) Monitoring, evaluation, impact and return on investment assessment. See the full brochure (including dates and booking details).
Next Generation also specialises in socio economic research and has conducted numerous social research studies for clients to be used as a) baselines for social investment and development, b) measure progress and impact against as part of determining the impact of social investments, c) to inform social investment and development strategies for funders and grantmaking institutions and d) develop flagship and signature programmes that directly speak to community needs and development priorities.