TWN Info Service on UN Sustainable Development (Oct26/06)
19 October 2026
Third World Network

UN: Social inclusion essential in rapidly transforming world, says report
Published in SUNS #10536 dated 19 October 2026

Penang, 16 Oct (Kanaga Raja) — While simultaneous economic, digital and energy transformations can offer major opportunities to raise productivity, expand access to services and accelerate sustainable development, they can also deepen existing inequalities when people lack the capabilities, opportunities, infrastructure, protection or voice needed to adapt, making the cost of exclusion increasingly high.

This is one of main conclusions highlighted by the World Social Report 2026, released by the United Nations Department of Economic and Social Affairs (UN DESA) in New York on 15 October.

The report, titled “The New Economics of Social Inclusion: Making Transformations Work for All”, argues that social inclusion is an investment and a prerequisite for successful economic, digital and green transformation.

The report found that despite advances in income, education, health and access to services, major gaps remain.

For instance, 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; and more than 50 countries experienced rising income inequality between 2000 and 2024, including 23 high-income countries.

UN DESA said that these gaps limit productivity, weaken resilience and leave societies less able to adapt to technological disruption, climate pressures and geopolitical fragmentation.

In a video message on the launch of the report, UN Secretary-General Antonio Guterres said that the World Social Report 2026 highlights a profound global imbalance.

He said on the one hand, rapid transformations – digital technologies, artificial intelligence, renewable energy and demographic and economic transitions – are reshaping our world.

On the other hand, these transformations are not working for all, Mr Guterres said, noting that poverty and deprivation are widespread.

“Billions are locked out of opportunities because of income, gender, age, disability, ethnicity, or the many other fault-lines that undermine equality. Cascading global shocks – including the Middle East crisis – are making matters worse.”

Food, fuel and fertilizer prices are surging, he said, pointing out that more than 100 countries have had to lower their growth forecasts this year alone.

The UN chief said that the report advances a “New Economics of Social Inclusion”, reminding the world that social inclusion is not only a moral or ethical imperative, it is also an economic necessity, adding that inclusive societies are more productive, resilient, and prosperous.

He also said the report urges investments in education, job creation, and skills training so all people can benefit from technological advancements and the growth of new industries.

The report calls for inclusive institutions and policymaking to ensure all voices are represented, and advocates equity-focused approaches to labour markets and taxation, to open opportunities for all people – no matter who they are or where they live.

However, the UN chief underscored that investments require resources and many developing countries are getting squeezed.

“Nearly half of the world’s poorest countries are either in or at high risk of debt distress – with interest payments relative to revenue at their highest levels in a generation.”

In this regard, Mr Guterres said that leaders must live up to the commitments made in last year’s Doha Political Declaration on Social Development and the Sevilla Commitment on financing for development.

He also called for reform of international financial institutions to better represent and serve developing countries.

“Transformations are inevitable. Inequality and exclusion are not. Let’s work together to ensure that the profound transformations reshaping our world help build societies rooted in justice, dignity and opportunity for all,” the Secretary-General concluded.

Launching the report at a press conference in New York on 15 October, Bjorg Sandkjaer, Assistant Secretary- General for Policy Coordination at UN DESA, said that “we do live in a world of extraordinary innovation, of amazing technologies and wealth.”

“Yet millions of people remain excluded from decent work, from quality education, from health care, from digital connectivity and from meaningful participation in society.”

Recalling the Sustainable Development Goals Report 2026 released by UN DESA in July, she said that report showed, among other things, that more than 2 billion people still remain without internet access and 730 million people lack access to electricity.

She said that women are even further behind, and that at the same time, technological advancement is racing ahead and economies are prospering while inequalities widen.

Ms Sandkjaer said the central message of the World Social Report 2026 is that social inclusion or “leaving no one behind” is not only the right thing to do, it’s the smart thing to do.

“The success of the transformations that are reshaping our world will depend on whether everyone has the opportunities, the capabilities, and the means to participate and to benefit from them.”

She said the evidence that is presented in the report shows that progress towards economic, digital and energy transformations does not automatically translate into greater inclusion.

However, Ms Sandkjaer said that what the report brings to the table is evidence to support the proposed guiding principles to make social transformations socially inclusive.

The first is to build people’s adaptive capacity so that they can cope with change – lifelong learning, and other ways to support adaptation, while the second is to strengthen inclusive institutions so that opportunities are open to everyone.

She said the report documents how a small investment in inclusion now translates into greater benefits further down the line.

Inclusion is not a cost or a byproduct of growth. It is and needs to be an investment that strengthens productivity, resilience and long-term prosperity, Ms Sandkjaer emphasized.

Highlighting the main findings of the report at the press conference, Rashmi Banga, Chief of the Development Research Branch, Economic Analysis and Policy Division, at UN DESA, said that firstly, the report provides empirical evidence that transformations do not automatically translate into inclusion.

She said the report measures 25 years of progress on economic, digital, and energy transformations alongside social and economic equity across 168 countries and finds that countries with similar income and transformation levels often achieve very different inclusion outcomes.

For example, Ms Banga said none of the five top performing countries in transformation, namely Malta, Ireland, the United States, Singapore and China rank among the top five in inclusiveness, which are mainly the European countries.

Many African countries lag behind, especially in digital transformation and energy transition, which is a shift to cleaner energy, she said, stressing that social equity and energy transition show some of the greatest disparities across countries.

Secondly, the report advocates that social inclusion is not a cost, but an investment. Simulations indicate that if countries delay investments in social protection, for example, for ten years, they face a potential loss of 12% of economic output compared to countries that invest early, she pointed out.

It is found that inclusion of the unemployed youth in employment for one country, for example, could raise its GDP by 9.6% in ten years.

Thirdly, she said, the report proposes a “New Economics of Social Inclusion”, which places social inclusion at the center of transformations.

It recommends two guiding principles for policymakers – first, strengthen the adaptive capacity of people, i.e. the ability of all people and communities, especially disadvantaged groups, to adapt to change.

Second, she said, is to build inclusive institutions that ensure a fairer distribution of opportunities.

According to Ms Banga, the report also sets out four priority policy areas for policymakers, namely expand people’s capabilities, ensure universal access to digital and energy infrastructure, promote inclusive labour markets and ensure shared prosperity.

In conclusion, she said that the report calls for a paradigm shift in development planning, from structural transformation to socially inclusive transformation.

She said that this would require a change in development thinking from one degree for life to lifelong learning, for example, from wage-only employment to diversified livelihoods, from extractive to regenerative digital systems, from concentrated ownership to distributed participation, and from reactive governance to anticipatory governance.

However, Ms Banga said the report also recognises that national efforts alone cannot achieve socially inclusive transformation.

“International cooperation is essential to expand fiscal space, provide affordable long-term development finance, ease debt burdens and widen access to technology, innovation and digital infrastructure,” she concluded.

Advancing social inclusion

According to the report, technological advances, accelerating climate change and geopolitical fragmentation are reshaping opportunities and risks, and without inclusive policies, these changes can widen divides and create new barriers to participation.

Exclusion weakens growth potential, resilience and adaptability. Delayed action also allows barriers to become entrenched, making future inclusion more difficult and costly, it said.

The report said adaptive capacity and inclusive institutions are central to making transformations work for all.

The New Economics of Social Inclusion (NESI) advances a paradigm shift in how transformation is planned and governed, calling for strengthening people’s ability to adapt while ensuring that institutions keep opportunities open and gains broadly shared, it said.

“The world today exists within a complex web of transformations that are straining societies and testing the resilience of economies, institutions and individuals.”

The report said geopolitical tensions, accelerating climate change, rapid technological advancements – including artificial intelligence (AI) and shifts in global production and trade – are reshaping patterns of production and consumption, thus disrupting livelihoods and supply chains while also creating new opportunities and changing the conditions for economic and social inclusion.

It said that the challenges raised by these transformations are not transitory. However, as nations divert their resources towards immediate crisis management, longer-term development priorities such as addressing poverty, inequalities, exclusions, unemployment, illiteracy, poor health, and building sustainable infrastructure are being neglected.

At the same time, the report said that investments in such priorities are more urgent than ever to ensure that the ongoing transformations lead to more productive, resilient and broadly shared outcomes.

These growing and overlapping transformations are reshaping the conditions for social inclusion, which refers to the process of ensuring that all individuals and groups – regardless of their background, identity or circumstances – have equal opportunities, access to resources, and the ability to participate fully in economic, social, cultural and political life.

Economic, digital and energy transformations can widen opportunities when they expand access to jobs, basic services, infrastructure and markets; for example, off-grid solar has brought electricity to hundreds of millions of people in previously under-served areas, and mobile-money platforms have expanded financial inclusion in regions with limited formal banking, said the report.

But these transformations can also deepen exclusion when the benefits accrue mainly to people, firms and places that already have the necessary resources, skills and institutional access that allow them to benefit from them, it added.

Social inclusion is a core tenet of development because it determines whether people can participate in economic life, build capabilities, and influence the decisions that shape their futures, it pointed out.

“Over recent decades, many countries have reduced poverty and expanded access to essential services. Yet progress has remained uneven.”

In many contexts, growth has not generated enough decent jobs, learning gaps have persisted despite expanded school enrolment, and households’ economic security remains fragile. These are not just social failures; they are also economic constraints that weaken productivity, resilience and the durability of growth, it said.

Many countries have made important gains in income growth, poverty reduction and access to basic services. Yet progress on social inclusion remains uneven and incomplete.

The central problem is not only that some outcomes remain unequal, but that growth and transformation have not consistently widened people’s ability to participate in economic life, build capabilities, access essential services and exercise voice in the decisions that affect them, the report underlined.

Countries at similar income levels often display very different levels of inclusion, with cross-country evidence showing that higher income and economic transformation do not automatically produce inclusive outcomes, it said.

According to the report, this points to a persistent “conversion gap”: the gains from transformation are not reliably converted into broader participation, access and security.

The same pattern is visible across all measures of inclusion for different social groups. For instance, women’s labour force participation remains substantially below men’s.

“The share of youth not in employment, education or training remains high in many countries, with persistent gender gaps; persons with disabilities continue to face major barriers to economic participation; and informal employment remains widespread.”

Gaps also persist in access to healthcare, education, digital infrastructure and channels of political participation.

These disadvantages interact over the life course, limiting social mobility, weakening resilience and making it harder for people and communities to benefit from ongoing transformations, the report emphasized.

“These patterns show why progress on inclusion cannot be inferred from growth, transformation or aggregate poverty reduction alone. Inclusion depends on whether economic opportunities, services and participation in decision-making processes are accessible to all.”

Where these systems remain unequal, transformation can raise aggregate output while leaving many people with limited security, weak bargaining power and few practical routes into new opportunities, it added.

Furthermore, these persistent gaps in social inclusion have been accompanied by rising income inequalities, both within country and between countries. Within-country income inequalities have increased across a wide range of countries, the report noted.

Over the past 25 years (2000-2024), more than 50 countries – spanning all income groups – have seen a rise in internal income disparities, including 23 high-income countries, it said.

The report said that these have been marked by the rising fortune of billionaires in the past five years, with the number of billionaires surpassing 3,000 for the first time in 2025, with their collective wealth growing by 81% since 2020, reaching $18.3 trillion in 2025.

Highlighting the challenges to social inclusion, the report said persistent exclusions are being reshaped by rapid technological change, climate pressures and responses, and shifts in geopolitics.

It said while these forces can widen opportunities when they expand access to clean energy, digital services, new markets, and more productive activities, they can also deepen exclusion when people, firms, and places lack the infrastructure, capabilities, finance and institutional voice needed to benefit from them.

The question is therefore not only how to overcome current exclusions, but how to govern these transformations so that more people can remain active, secure and effective participants as economies change, it added.

Against this backdrop, the report highlighted the risk of widening inequalities and exclusions from digital and AI divides; the potential for climate change to weaken livelihoods, services and adaptive capacity; the capacity of energy transitions to expand resilience, while distributional risks remain; the continuing effect of geopolitical pressures on challenges to social inclusion, including rising conflicts and more fragmented trading relationships.

Cost of social exclusion

At present, change is happening faster, gains are concentrating more quickly, and disruptions are propagating more easily across borders and sectors. Under these conditions, existing gaps in skills, access to finance, social protection and representation carry heavier consequences, amplifying the costs of exclusion, said the report.

Exclusion is not only a social shortfall. It also carries economic costs as it keeps households, workers and firms from accessing the systems that support continuity, adjustment, and productive risk-taking, it added.

It said that when access to social protection, skills, finance and basic security is limited, shocks are more likely to interrupt learning, weaken labour force attachment, force distress sales of assets, and push people and firms away from pathways of upgrading.

Delayed investment in social inclusion therefore does more than postpone social progress. It can make adaptation more difficult, reduce resilience, and weaken the conditions for sustained productivity growth, it pointed out.

These costs arise across different dimensions of social inclusion, including labour market participation, finance, health, social protection, and education and skills.

Social protection provides one measurable example: as it helps people manage shocks, remain connected to work and invest in re-skilling, it can reduce the risk that temporary disruptions become lasting exclusions.

The report said despite recent expansion, 47.6% of the global population – about 3.8 billion people – remained without any social protection benefit in 2023.

At the pace of progress observed since 2015, universal coverage by at least one benefit would not be reached until 2073, it cautioned.

Building social protection systems requires substantial resources. ILO estimates indicate that universal social protection floors would require additional spending equivalent to about 3.3% of GDP, or roughly $1.4 trillion annually, across low- and middle-income countries.

For low-income countries, the financing gap is estimated at 52.3% of GDP, while for low- and middle-income countries as a group, it is equivalent to 10.6% of current government expenditure.

Evidence from sub-Saharan Africa suggests that cash transfers can have effects beyond the households that receive them, UN DESA said.

As recipients spend the money on food, services and other basic needs, part of the benefit circulates through local economies, with estimated gains ranging from 1.3 to 2.5 times the original transfer, said the report.

In Brazil, each additional unit of social protection spending was estimated to raise household consumption by 2.3 units after two years, while in Lebanon, each additional dollar of cash assistance generated about $2.13 in GDP.

The report said review evidence also finds village-level income multipliers of 2.5 to 2.8, alongside persistent gains in consumption, food security, and assets after programmes ended.

An eight-country modelling study estimates that a 1% of GDP increase in social protection investment raises absolute GDP by 1.1% on average, with effects varying by country structure and model assumptions.

The simulation results show that investment in 2025, with effects phased in over five years, yields cumulative discounted GDP gains equivalent to about 22.2% of 2025 GDP by 2045, while delaying the start by ten years yields gains of about 10.3%. The implied loss from waiting is therefore about 12% of 2025 GDP.

Put simply, the report said delaying investment means giving up gains that would otherwise accumulate year after year, pointing out that a ten-year delay reduces cumulative discounted gains by about 12% of 2025 GDP over two decades.