Smart economics means investing in people, making economic, digital and energy transformations work for all

15 October 2026 – Economic, digital and energy transformations are reshaping the world at extraordinary speed. Yet, billions of people remain excluded from the jobs, skills, services, infrastructure and protections they need to benefit from this change, according to The World Social Report 2026: The New Economics of Social Inclusion: Making Transformations Work for All, launched today by the United Nations Department of Economic and Social Affairs (UN DESA).

The report warns that the cost of leaving people behind is rising. It argues that social inclusion is a productive investment for resilient, sustained and broadly shared transformation.
 

Numbers reveal a world divided

Despite advances in income, education, health and access to services, major gaps remain. In 2025:

• 58 per cent of workers worldwide were informally employed
• 27 per cent of young women aged 15 to 24 were not employed, or in education or training
• 26 per cent of the world’s population still did not have internet access
• More than 50 countries experienced rising income inequality between 2000 and 2024, including 23 high-income countries

These gaps limit productivity, weaken resilience and leave societies less able to adapt to technological disruption, climate pressures and geopolitical fragmentation.
 

Digital advances and climate pressures are leaving people behind

An estimated 2.2 billion people did not have access to internet connectivity in 2025. Even among people who are connected, affordability, service quality and limited digital skills continue to restrict meaningful participation.

Without deliberate action, unequal access to connectivity, devices, data and AI skills could turn today’s digital divide into deeper and more persistent gaps in learning, income and economic opportunity.

The report also documents the growing human and economic consequences of climate change. Of the 1.1 billion people living in multidimensional poverty, 887 million are exposed to at least one major climate hazard.

These impacts fall most heavily on people and countries with the fewest resources to adapt—threatening livelihoods, essential services and long-term economic resilience.
 

Invest in people now, or lose gains

One of the report’s findings is that delaying inclusion carries a measurable economic cost.

Simulations across a set of countries indicate the costs of delaying inclusion. The report shows that if countries delay investments in social protection by ten years, they face a potential loss of 12 percent of economic output compared to countries that invested early.

The message is clear: Investing in inclusion early is not only fairer, it makes economic sense.
 

Transformations do not guarantee inclusion

Drawing on evidence from 168 countries over the last 25 years, the report introduces a new dashboard on Socially Inclusive Transformation (SIT) for assessing whether a country’s economic, digital and energy transformation is accompanied by economic and social inclusion.

Malta, Ireland and Denmark record the highest SIT scores, respectively, while most African countries are disproportionately concentrated at lower levels. Within Asia, country performance is more widely dispersed. Latin American countries generally have strong performance in SIT scores but are more widely dispersed than European countries.

The results reveal a persistent “conversion gap” between transformation and inclusion.

Countries with similar income or transformation levels frequently achieve very different inclusion outcomes. None of the five highest-scoring countries under the transformation pillar (Malta, Ireland, USA, Singapore and China) appears among the five highest-scoring countries under the inclusiveness pillar (Belgium, Finland, Iceland, Netherlands and Sweden).

Different countries lead across each of the sub-pillars. Fully balanced performance across sub-pillars is rare. For example, digital leaders like the USA, Singapore and the Republic of Korea do not appear in the top five under the inclusiveness pillar.

The finding demonstrates that economic, digital and energy transformations do not automatically translate into wider economic and social inclusion, and shared prosperity.

National policies, institutions and governance choices play a decisive role in determining who contributes to transformation and who benefits from it.
 

Social inclusion promotes successful economic transformation

The report advances a New Economics of Social Inclusion, built on a simple proposition: Societies cannot transform successfully when large parts of their populations lack access to quality learning, healthcare, connectivity, finance, social protection and productive employment.

Broad participation expands the available workforce, strengthens human capital, encourages innovation and entrepreneurship, improves the allocation of labour and allows productivity gains to spread more widely.
 

Four priorities for making transformation work for all

The report calls for four connected priorities:

• Build the capabilities to adapt - Governments should expand access to quality education, lifelong learning, digital and AI skills, resilient health systems and universal social protection.
• Connect everyone to the new economy - Affordable digital connectivity and reliable, sustainable energy must become universally accessible, including through decentralized and off-grid solutions for underserved communities.
• Make labour markets work for people - Policies should support decent work, workers’ voices, equal pay, portable benefits, targeted training and active labour-market programmes that help people move into new opportunities.
• Ensure that prosperity is widely shared - Stronger wage-setting institutions, collective bargaining, profit-sharing and progressive fiscal systems are needed to distribute the gains from transformation more fairly.
   

National action needs global backing

Many developing countries face severe fiscal, technological and institutional constraints that limit their ability to invest in inclusive transformation. Rising debt burdens, declining development cooperation and geopolitical fragmentation are compounding these challenges.

The report calls for renewed international cooperation to expand fiscal space, improve access to affordable long-term development finance, reduce debt-service burdens and promote broader access to technology, innovation and digital infrastructure. It also calls for more representative, inclusive and responsive global governance arrangements.
 

Transformations are inevitable. Exclusion is not.

By placing people at the centre of transformation, countries can build economies that are more productive, societies that are more resilient and institutions that command greater trust.

The World Social Report 2026: The New Economics of Social Inclusion: Making Transformations Work for All is available at https://desapublications.un.org/.