SOURCE: Boston Consulting Group

Boston Consulting Group

February 10, 2017 10:00 ET

Illinois Lags in Resident Well-Being, Nationwide Study Finds

Illinois Ranks 34th Overall and 11th Among the 15 Most Populous States, But Its Strengths Offer Reasons for Optimism, Says The Boston Consulting Group in a New Report

CHICAGO, IL--(Marketwired - Feb 10, 2017) - Illinois' performance in translating wealth into well-being for its residents has been underwhelming, according to a nationwide study by The Boston Consulting Group (BCG), one of the world's leading management consultancies. The detailed findings of the research appear in a new report, The Path Forward for Illinois: Prioritizing Well-Being in the Prairie State, released today.

The report provides a quantitative evaluation of Illinois' performance in four areas -- economics, investments, sustainability, and equality -- and compares the results with those of the other 49 states, focusing particularly on the 15 most populous states. The report illuminates Illinois' key strengths and challenges, identifies opportunities for improvement, and highlights the strategic choices that business, civic, and political leaders must make for the future.

"We've developed a scorecard that objectively measures a state's ability to provide well-being for its residents," said Marin Gjaja, a Chicago-based BCG senior partner and coauthor of the report. "GDP doesn't tell the whole story."

Of the four areas, investments is a bright spot for Illinois. The study found that the state's accomplishments in funding early and higher education and in providing health insurance contribute substantially to its ranking of 17th in this element. However, Illinois' overall performance is weighed down by its ranking of 44 in economics, 38 in sustainability (a measure of civic engagement as well as governance and environmental factors), and 39 in equality (a measure of income, health, and education inequality).

These rankings are based on BCG's Sustainable Economic Development Assessment (SEDA), a diagnostic tool that benchmarks social and economic conditions as a measure of a government's success in providing for the well-being of its people. Since 2012, BCG has been using the tool to conduct worldwide comparative analyses of country-level well-being. The framework was adapted for the US by adding equality as a fourth element and choosing dimensions appropriate for state-level analysis.

Drilling Down to the Real Issues

"The headlines tend to cite Illinois' administrative gridlock and dysfunctional political culture," said Justin Manly, a Chicago-based BCG partner and coauthor of the report. "It's easy, however, to lose sight of the state's notable strengths."

Although Illinois ranks a disappointing 34th nationwide, the state has a strong foundation on which to build: a world-class city, a large and still-vibrant economy, an educated workforce, and a young demographic profile. Illinois also has a history of investing in its people. As an example, its education system in some parts of the state matches the best in the country.

Still, investments don't always translate into results. Despite a strong record of providing health insurance and health care access, Illinois is only middling in health outcomes. In education, impressive preschool enrollment numbers and a high level of college attainment are offset by disappointing scores on national elementary education tests. "Our analysis zeroes in on specific areas that can have significant impact in improving well-being," Manly noted.

Key Takeaways from the National Findings

Two clear trends emerged from the national analysis of state-level results.

First, strong performance in economics often comes at the expense of success in sustainability. Three of the top five performers in economics (Texas at number two, Delaware at number three, and Wyoming at number five) rank in the bottom third in the area of sustainability.

Second, highly populated states tend to struggle on equality, as measured by racial, gender, and socioeconomic gaps in income, health, and education outcomes. Of the 15 most populous states, 7 rank very low in equality; Illinois is 39th. But having a large population does not necessarily handicap well-being. Massachusetts and Washington, each with populations of about 7 million, finished first and eighth, respectively.

Strategic Choices of the Best in Class

The report examines the results of the top performing, most populous states on the basis of the priorities and choices of those states. 

  • Massachusetts, the number one state overall, is 1st in investments, 11th in economics, and 19th in sustainability. Its emphasis on investments has yielded positive outcomes in health and education. But Massachusetts struggles with equality. And despite its solid performance in economics, its cost of living and net migration rate are among the highest in the nation.
  • Washington, second among the most populous states (and eighth overall), has achieved an enviable balance. It is first in equality and sustainability among the most populous states. Among the 50 states, it is ninth in economic performance. Yet Washington's physical infrastructure hasn't kept up with the state's growth.
  • Texas is second overall in economics, a reflection that growth has been a priority. But in sustainability, it is dead last. It is 38th in investments and has poor outcomes in health and education.

The Path Forward for Illinois

Almost every large state faces similar challenges: deindustrialization, legacy economic burdens (including high pension obligations), and complex demographics. The difference between Illinois and its high-ranking peers is that Illinois lacks a clear, coherent strategy for the future.

"Successful states have a vision, a strategy, and the will -- political, economic, and social -- to work through the tradeoffs, make well-considered choices, and lay the groundwork for long-term success," said Gjaja, who leads BCG's six offices in the Great Lakes region and Canada and directly manages the Chicago office. "Illinois' leaders need to come together to focus on our strengths and on the possibilities for shaping a better future."

The publication of The Path Forward for Illinois: Prioritizing Well-Being in the Prairie State coincides with the launch of BCG's Center for Illinois' Future. Located in the firm's Chicago office at 300 N. LaSalle, the center was established to consolidate BCG's social impact (or corporate social responsibility) work in Illinois and maximize the benefit of that work for all those with a stake in Illinois' future -- residents, leaders, advocates, and institutions. For more information on the center, please visit centerforillinoisfuture.bcg.com.

To arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or corriveau.alexandra@bcg.com.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com.

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