New research reveals true extent of stunting to private sector in emerging economies
London, 7 June 2022 — New research from The Power of Nutrition and Modern Scientist Global reveals businesses in low and middle-income countries lose more than a quarter of a trillion dollars (up to $264.6 billion) in revenue every year, due to their employees experiencing chronic undernutrition in childhood. The novel study – The Economic Cost of Stunting to Businesses in Low- and Middle-Income Countries – is the first to quantify the cost of childhood stunting to the private sector in emerging economies.
Affecting more than one in five children globally, stunting (defined as low-height for age) is caused by prolonged undernutrition in a child’s early years. As well as restricted physical development, it impacts educational performance and causes lost productivity for wider society.
The new research, led by global public health research consulting firm Modern Scientist Global in collaboration with The Power of Nutrition is published in the Lancet EClinicalMedicine journal. It models for the first time the potential impacts of health and education outcomes caused by childhood stunting on businesses’ revenue, workers’ income, and countries’ Gross Domestic Product (GDP). Key findings include:
The new data confirms malnutrition hampers the development of an entire society. Private sector workers who were stunted as children earn less as adults, are less productive, and have limited purchasing power to sustain themselves and their households. In Ethiopia, the data shows that garment factory workers lose up to 18% of their already low average $50 monthly salary due to stunting. Reduced disposable income increases the chances of malnutrition and poverty repeating in further generations, as well as leading to reduced business returns and stagnant economic growth.
The research also demonstrates that investment in stunting reduction efforts today yields some of the highest returns in development, with $1 invested annually potentially yielding up to $81 for national economies (an 8,000% return on investment).
Describing the significance of this new study, Meera Shekar, Global Nutrition Lead, World Bank said: “This new evidence is a ground-breaking piece of research that shows how integral good nutrition is to greater human capital and economic prosperity. It is a call for private-public action to tackle malnutrition and avoid huge losses of potential.”
The novel findings come at a time when global malnutrition rates are on the rise, driven by the impact of Covid-19, prolonged conflict and the effects of climate change. More recently, global food security and access to nutrition is threatened by the overwhelming soar in food prices caused by the conflict in Ukraine. In parallel, global overseas aid for nutrition is in decline and, despite the Tokyo 2021 Nutrition for Growth Summit mobilising $27 billion in investments for nutrition, an annual $10.8 billion funding gap for nutrition remains.
Simon Bishop, CEO, The Power of Nutrition said: “The research should be a wake-up call for businesses in low- and middle-income countries – and beyond. We already know stunting is a life-sentence for impacted individuals. This new data shows it is also a huge cost to business and economies due to lost productivity and consumer spending power. Tackling stunting should be a leading priority for business, to transform lives as well as profits.”
The research was led by Modern Scientist Global, which analysed data using epidemiological and economic methods and machine learning technology. The project was supported by in-kind expertise from a network of businesses including Royal DSM, Kellogg’s, Olam International, Otsuka, and PVH Corp, development networks including the SUN Movement and multilateral organisations including the World Bank, and with funding from the Patrick J. McGovern Foundation.
Nadia Akseer, CEO, Modern Scientist Global said: “This study uses big data and cutting-edge AI methodologies to fill an important knowledge gap. By evidencing the true cost of stunting to business, this new data will be crucial in catalysing investment in nutrition and bringing more stakeholders to the table.”
Claudia Juech, Vice President of Data and Society at the Patrick J. McGovern Foundation, added: “It has been our privilege to work with our Accelerator partner The Power of Nutrition to deploy the advanced analytics approaches and cloud computing technology that ultimately unlocked these critical insights on the economic impact of stunting”.
Working with its partners, The Power of Nutrition has developed recommendations for businesses to address undernutrition. Aiming to encourage businesses to engage with the entire nutrition ecosystem, the set of broad recommendations aims to tackle undernutrition sustainably with a multisectoral approach.
For more information and supporting resources for this research, access the full communications toolkit here.
About The Power of Nutrition
The Power of Nutrition is a charitable foundation that raises money and creates partnerships to advance the fight against malnutrition in Africa and Asia. Our vision is a world where every child has the right nutrition to achieve their full potential.
Our innovative finance and partnership model multiplies nutrition investments to make resources go further than any organisation could achieve alone. We currently have 19 programmes in countries with high rates of malnutrition in Sub-Saharan Africa and Asia, reaching over 92 million women, children and adolescents. Each is aligned behind national government plans, carefully designed to deliver impact at scale, and is based around a core set of evidence-based, high-impact interventions known to improve child, adolescent, and maternal nutrition.
Visit https://www.powerofnutrition.org for more information on our work and how to partner with us.
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