It’s Time to Modernize Measures of Growth
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- Authors: REBECCA RILEY
- Published: November 17, 2025
Summary
- Assessments of the world’s economies may be off by trillions of dollars because existing metrics for GDP, consumer prices, productivity, and related statistics are not keeping pace with technological change and new business models.
- Continued innovation in measurement systems and tapping new data sources are necessary to avoid a growing gap between what is measured and the evolving data-driven economy.
- Significant hurdles exist to harnessing new data and developing trustworthy statistics, but advances already achieved show real benefits for economic policymaking.
The rewired economy
- The global benchmark for national accounts is the United Nations System of National Accounts (SNA); inflation measurement is guided by the IMF’s consumer price manual.
- The data-driven digital economy relies heavily on intangibles such as software, marketing databases, and “organization capital” (the structure, processes, and culture that allow firms to operate efficiently).
- In many advanced economies, businesses invest at least as much in intangibles as in buildings and factories, implying investments “in the hundreds of billions of dollars and more likely trillions.”
- Conference Board research (Carol Corrado and colleagues) estimates that “fully half of intangible investments in advanced economies are essentially data investments” that economic accounts are only starting to include as part of an update to the SNA this year.
- Globalization and the use of intangibles by multinational enterprises create measurement issues such as profit shifting and the separation of production inputs and associated revenues across countries.
Macroeconomic aggregates and measurement challenges
- Real GDP and real household consumption aim to capture gains in the quantity and quality of goods and services, but measuring product quality is elusive amid rapid innovation.
- Measured productivity in information and communications services stagnated substantially in several advanced economies during the decade after the 2008 financial crisis, contributing to a slowdown in global growth.
- Research by Richard Heys and collaborators (2021) developed a new approach suggesting that actual growth in the telecommunications industry was stronger because of a sharp fall in quality-adjusted prices; implementing this and other methodological advances “shaved a quarter of a percentage point off the estimated slowdown in UK productivity growth” during that decade.
- Approaches to adjusting for quality gains in digital products have affected measured inflation and growth within countries and the comparability of statistics across countries.
- Many digital services consumed at zero monetary cost (search engines, social media, open-source software) are not counted in household consumption, despite experiments showing they have nonzero value.
- Paul Schreyer’s conceptualization includes use of social media as an input for digitally enabled leisure services and incorporates that value into an extended measure of economic activity; preliminary UK research put the nominal value of digital leisure services produced by households at 8 percent of nominal GDP.
- Free digital services can substitute for market activities (for example, making travel arrangements) and voluntary household production (software, advice material), requiring time-use information for accurate assessment.
Harnessing new data
- The 2025 revision to the SNA is the first update since 2008 and seeks to better capture digitalization, globalization, environmental sustainability, and well-being.
- New data from digital interactions offer opportunities for timelier, more accurate, and more granular economic statistics but require expanded capabilities and potentially heavy up-front costs.
- Directing private-sector data toward the public good may require data-sharing agreements, legislative changes, investment in data-processing technologies, and trusted institutions.
- Statistical agencies have begun incorporating private-sector data into consumer price indices: The Netherlands, Australia, and Canada have gradually used point-of-sale data over the past decade; the UK statistical agency is also making progress.
- Benefits of private-sector data include improved timeliness and granularity (evident during the pandemic) but are partially offset by statistical noise, potential double counting, and inadequate samples.
- Researchers have benchmarked private-sector data against representative national statistics, highlighting necessary adjustments and the value of blended approaches that combine private-sector data, administrative data, and surveys, possibly using AI-assisted surveys.
- Technical advances in handling large-scale messy data are illustrated by work from Kevin Fox and colleagues.
The way forward — policy recommendations and institutional actions
- Strengthen investment in economic statistics infrastructure to avoid losing the ability to monitor the economy and make informed decisions.
- Implement the 2025 SNA revision and updates to the IMF’s balance of payments manual widely across statistical agencies.
- Foster collaboration:
- Between public and private sector data owners.
- Across government agencies, supported by legal and technical frameworks.
- Among statistical agencies internationally and with university academics.
- Address obstacles including bureaucratic inertia, funding for overhauling accounting systems, and the need for coordinated action.
- Ensure trusted statistics are produced by national agencies with statistical rigor, accountability, transparency, impartiality, and equal access to avoid noise filling measurement gaps.
Examples of emerging collaborative initiatives
- Economic Statistics Centre of Excellence at King’s College London (established by the UK Office for National Statistics).
- Economic Measurement Research Institute at the National Bureau of Economic Research in the US.
- Centre for Applied Economic Research at the University of New South Wales in Australia.
- Measurement in Economics Chair at the Paris School of Economics, supported by the national statistics agency in France.
Key statistics and exact figures cited
- “fully half of intangible investments in advanced economies are essentially data investments”
- Revision timing: “first since 2008” and “an update to the SNA this year” (2025 revision).
- Research milestone year: 2021 (Richard Heys and collaborators).
- Productivity adjustment impact: “shaved a quarter of a percentage point off the estimated slowdown in UK productivity growth” for the decade after 2008.
- Preliminary UK estimate: digital leisure services at “8 percent of nominal GDP.”
- Reference publication years and items cited in text: 2020, 2021, 2022, 2025.
- DOI cited: 10.1080/07350015.2025.2537392
Source: It’s Time to Modernize Measures of Growth, Rebecca Riley, F&D Magazine, December 2025.
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