The party leader Alasdair McDonnell said it was astonishing that just 37% of what Northern Ireland produced came out of the private sector.
The SDLP said it wants this policy to be taken as seriously as the peace process.
Mr McDonnell added that Northern Ireland was not economically viable.
Speaking at the launch, he said the party wants to agree up-front investment in roads, schools, universities and hospitals as part of a plan to wean society off subsidies.
He said: "The SDLP is offering a simple choice - prosperity not austerity.
"We have a choice. We can choose further austerity or choose a prosperity process."
Main pledges
Policy guide: Where the parties stand
The smaller of the two nationalist parties standing in Northern Ireland, the SDLP said it will argue for greater economic powers, including the ability to issue bonds to support infrastructure projects.
It wants the minimum wage to be set by the Stormont executive, and to have control over energy and natural resources.
It reaffirmed its commitment to a united Ireland, but says that in any new arrangement the Stormont assembly should remain, as should health and education provision for the most vulnerable.
The party also pledged to set up a Scottish-style commission on devolving fiscal powers to Northern Ireland during the next parliament.
Mr McDonnell said: "Through this mechanism, Scotland has succeeded in winning the argument to allow them to borrow money and issue their own bonds.
"The same powers should be extended to Northern Ireland to enable us to stimulate our private sector through infrastructure projects."
The SDLP envisages a united Ireland as a merger between two equal partners.
The manifesto does not outline what the cost of the prosperity process might be, but it is understood that it would require more money from the treasury to pay for what is an ambitious spending plan.
The party also ruled out supporting the Conservative Party in the event of a hung parliament in May's General Election.
The SDLP's other policies include:
The SDLP has launched its manifesto, in which it calls for a prosperity process for Northern Ireland to expand its private sector.