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How to Measure a New Economy | DAVOS 2020

Heizo Takenaka
Professor Emeritus at Keio University
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World Economic Forum 2020
January 23, 2020, Davos, Switzerland
World Economic Forum 2020
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How to Measure a New Economy | DAVOS 2020
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About speakers

Heizo Takenaka
Professor Emeritus at Keio University
Gillian Tett
US Managing Editor at Financial Times
Douglas L. Peterson
President and Chief Executive Officer at S&P Global
Mariana Mazzucato
Professor of Economics of Innovation and Public Value at University College London (UCL)
Saadia Zahidi
Managing Director at World Economic Forum

BA in Economics, Hitotsubashi University; PhD in Economics, Osaka University. 1973, with Japan Development Bank; 1981, Visiting Scholar, Harvard and University of Pennsylvania; 1990, Associate Professor and 1996, Professor, Policy Management, Keio University; 1998, Member, Economic Strategy Council; 2000, Member, IT Strategy Council; 2001, Minister of State for Economic and Fiscal Policy and for IT Policy; 2002, Minister of State for Financial Services and for Economic and Fiscal Policy; 2004, elected to House of Councillors; Minister of State for Economic and Fiscal Policy; 2005, Minister for Internal Affairs and Communications and Privatization of Postal Services. Currently, Professor Emeritus, Keio University, Professor, Toyo University. Member of the Board of Trustees, World Economic Forum.

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Undergraduate degree in Mathematics and History, Claremont McKenna College; MBA, Wharton School, University of Pennsylvania. Formerly, with Citigroup for 26 years, transforming businesses and driving performance in investment and corporate banking, brokerage, asset management, private equity, and retail banking; Chief Executive Officer, Citigroup Japan; Country Manager, Costa Rica and Uruguay; Chief Auditor, Citigroup; Chief Operating Officer, Citibank, Citigroup's principal banking entity that operates in more than 100 countries. September 2011, joined S&P Global as President, Standard & Poor’s Ratings Services; since November 2013, President and Chief Executive Officer. World Economic Forum: Steward, Shaping the Future of Long-Term Investing, Infrastructure and Development System; Co-Chair, Financial Services Governors Community. Co-Chair, Bipartisan Policy Center's Executive Council on Infrastructure. Serves on the Boards of Directors of S&P Global, the Federal Deposit Insurance Corporation’s Systemic Resolution Advisory Committee, the US-China Business Council, the Partnership for New York City and the Kravis Leadership Institute, and the Boards of Trustees of Claremont McKenna College and the Paul Taylor Dance Company.

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PhD. Professor in the Economics of Innovation and Public Value at University College London (UCL) and Founding Director of the UCL Institute for Innovation & Public Purpose (IIPP). Recipient: 2018 Leontief Prize for Advancing the Frontiers of Economic Thought; 2019 All European Academies Madame de Staël Prize for Cultural Values. Named one of the “3 most important thinkers about innovation”, New Republic; one of 25 leaders shaping the future of technology, Wired. Author of “The Entrepreneurial State: debunking public vs. private sector myths” (2013); “The Value of Everything: making and taking in the global economy” (2018). Advises policy-makers around the world on innovation-led inclusive and sustainable growth. Current roles include: Member of the Scottish Government’s Council of Economic Advisors; the South African President’s Economic Advisory Council; the OECD Secretary-General’s Advisory Group on a New Growth Narrative; the United Nations Committee for Development Policy (CDP); SITRA’s Advisory Panel in Finland; and Norway’s Research Council. Through role as Special Adviser to the European Commissioner for Research, Science and Innovation, authored the high-impact report on “Mission-Oriented Research & Innovation in the European Union”, turning “missions” into a crucial new instrument in the European Commission’s Horizon innovation programme.

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BA in Economics, Smith College; MPhil in International Economics, Graduate Institute Geneva; MPA, Harvard University. With the World Economic Forum: Economist (2003-2005); Head of Gender Parity Programme (2005-2011); Head of Civil Society (2008-2011); Head of Employment and Gender Initiatives (2013-2016); Head of Education, Gender and Work (2016-2018); currently Head of Centre for the New Economy and Society and Member of the Managing Board. Co-Author of Forum reports on Human Capital, Gender Gaps and Future of Jobs. Author, Fifty Million Rising (2018). Recipient of honours and awards, including: BBC 100 Women (2013 and 2014); Financial Times/McKinsey inaugural Bracken Bower Prize (2014); longlisted for FT/Mckinsey Business Book of the Year (2018). Interests: future of work, impact of technology on employment, education and skills, income inequality and using big data for public good.

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About the talk

Gross domestic product, the dominant metric of economic progress over the last century, is facing growing criticism for neglecting the intangible factors of societal progress. What alternatives hold the greatest promise?

On the Forum Agenda:

- Measuring well-being, happiness and ease of living

- Redesigning statistics and policy frameworks

- Scaling up for wider adoption

Speakers: Heizo Takenaka, Gillian R. Tett, Douglas L. Peterson, Mariana Mazzucato, Saadia Zahidi

The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. We believe that progress happens by bringing together people from all walks of life who have the drive and the influence to make positive change.

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As Mike Bloomberg. Incest if you can't measure something you can't manage it and that applies to companies and it flies it countries. And right now the question of how and managing the global economy is critically important it something we write about a lot of the financial times Without Partners an AK and it's something which is becoming very very important for policymakers. So we have a fantastic group of people talk about it and All My Hope Is that me is Doug Peterson who is president and chief executive officer of S&P Global next to him

is Mariana mazzucato who is Professor of economics and also the author of a book the value of everything which is exactly about this question of what's wrong with GDP and oh my midget last day of your right is Heather talking with former Finance Miss economics minister in Japan and is now professor at University. The issue of how we look at GDP is the ticket irrelevant because this was basically a twentieth-century construct. It was created to measure manufacturing industrial processes that dominated the world in the 20th

century. But we've moved on we have digital world. We have you know, the environmental issues things that really starting to impinge. When you look at it this shoe at someone who's not an economist not as far as you make her butt in the date of business and S&P. What do you think about how we using GDP today? Well, first of all GDP is so critical for us as a CEO in is exactly because we use it to make decisions about where we going to the Baton. So when we're looking around the world where you want where we want them fast forward going to put our our new operations. We look to see where is

there growth? So it is it has consequence for people like me to look at what we're going to be investing when we talked earlier about the new economy in the old economy the old a GDP Just described Not only was it built around a manufacturing economy a farm based economy. The way that information is gathered is still Antiquated you can you imagine how much information there is it Amazon and MasterCard in new ways to gather information. We can talk more about that and then another part that still Antiquated. Is there as many activities that aren't picked up you don't pick up informal

activity. So you don't pick up cash-based activity which in many economies is large different not the black market and then you've got another markets homework people that work at home and then eat then you have the illegal market. So there's parts of it and some economies that's up to 35% of GDP the dismissed the grey market in the info in a closed environment to but You wrote Anna Todd book about what's wrong with this give us a pricey. So will the book wasn't on GDP was actually on value. And of course what underlies CDT is what we value. So if we're not

valuing care and Care is often done for free in the home, then you know, it doesn't get measured and that's a huge problem is like if you marry your babysitter GDP goes down, so don't do it service that was being paid for around Carroll the sudden maybe still being done since he not being paid for and where there's lots of weird things like that in GDP interesting as we could actually squeeze so much more out of GDP, even as it currently exists so much, you know, interesting things are being said around the world about what to add to it in terms of well-being and happiness. But even with his

current state you could never break down GDP in two different ways either by income or on by product and if you look at you no income so prophets wages rent do we really understand the difference between processed and rent today, you know rents used to be called unearned income to the point that most Financial sector up until 1970 wasn't even included in GDP because it was basically saying that the transfer just like Social Security payments when they did include at 5 to pick up the rest and and a

commercial banks financial intermediation. What kind of breaking down what actually ended up happening with Finance Finance largely at ended up financing itself to which we could also you know start breaking down. Is it really creating value? Is it extracting value which bits or really creating value and differentiating on butt? You know even just the other way to look at it would be in terms of demand consumption investment government spending and net exports a country. Like the UK is currently mainly growing through consumption not investment that consumption is being

driven by private jet for the ratio of private debt to disposable income is back at record levels that you can see what's just GDP as it stands without any happiness, but no one's talking about that front pages of the financial times, but the idea that you know, once upon a time will Street wasn't even measured in GDP might be taken is quite insulting for a lot of the fake Financial Tyson for those pictures. You see type of problems are raw and how to listen to keep up with changes in the economy button and say I'd like to ask you if you were in charge

of the Japanese economy. I'm trying to set policy using the statistics that you had available. How good were they did you trust them when I was in the cabinet as a Minister Farrakhan to pick up or is he well, I was asked to write the GDP of us to buy many people to write Judy. So we have no problems other people. However, it is very important to history in 1929. We had the Great Depression many people understand the importance of the we need some major to grasp the situation of

the country cooperate. I created this is tomorrow national account and a FaceTime history. Just like the human being good life span. Shut up. You know I'm going to need a lot. Do we need at this moment in the new economy l p a t what is a new economy a economy? You are smart technology in the industrial revolution. So in this regard Thunder sustainability and they grow seedless Ice Age is concerned end up way up a calculation for GDP for years ago and the time be increased by 3.5%.

Also added to GDP at the intermediate expense if you say in Spanish, Investment it's a very important investment to create desktop. So intangible asset is a very easy to understand I said we have salt but anyway, anyway, so change of the calculation of GDP blood cell taken by Korea Iran and Diesel country. So did he play with in Crystal River Road of intangible asset? That is very interesting because not only do you have all the say an aging shrinking population and people often say all the Japanese economy is in the

doldrums because TDP is not been impressive, but the fact you've brought in the investment into the equation is striking a Nintendo. Call issue striking to I mean, how do you think it's cuz it's a decision should be at she tried to capture the intangible adamant. Absolutely and when we think about some of the aspects of GDP, the measurements one is the intangible what's in in some ways. It's mostly about utility as opposed to a cash flow or what was measured that has a monetary value another aspect as you're not measuring depletion either. So it's because GDP is a is a flow and not

a stock. You could be creating a very strong GDP, but depleting your assets depleting you you was some of the things we talked about ESG factors where you're depleting the environment and you're not picking that up but on the intangible, let me give you an example of of what we have today. If you think about went when I was growing up I had to go to the Encyclopedia Britannica to get information out. I have this little computer my pocket and I can get I get information on my fingertip and I don't that's not measured at all in in a GED. The information the substitution of how I get that value

and I don't I'm not an expert in this but I'm always asking the question. How do you measure utility and value created as opposed to something? That is a cash flow or something is measured in a in a delivery of cash want one quick example, if I were using a travel agent to purchase a ticket, but now there's a new way. I do it by by using a website that work didn't go away of booking a ticket. It's no longer being paid for at a travel agent. So GDP might have gone down but the but the work created the value created is still there. So I know this is something I'm trying to figure out. How do

you how do you capture value created in utility engine trying to capture some of the intangibles but Are any countries doing this right meme Ariana you've been looking at these were all the all the countries that are run by women correlation. I mean, but what you're talkin about our drivers of long-term GDP growth that already becomes another variable or we just talked about a little flipping GDP or long-term driver and you mentioned Christmas cuz it was so clear. He's like,

oh by the way, don't use this to me or talk about 1.7 1.78 1.8% I saw your steering a car exactly where to go and I think you know, what's so interesting in Europe. For example, we look so much at the deficit with a debt and as soon as you divide, All right, if he comes were no refined and so Italy for example that was accused of spending too much but it hasn't does new its deficit has been out of two to 3% off and lower than Germany's but debt-to-gdp very high. Why does the long run drivers of GDP thinks

like productivity have not grown from was 20 years in Italy. And so, you know again we could actually with existing measure say a lot but we don't talk about this in Europe. We just told Portugal Italy Greece and Spain cut cut cut your spending too much and the other thing about R&D, you know that as well. We don't really have an understanding of how to make sure that what we're spending on attention of the public budgets are in fact, the more steer towards these long-range driver. So our India still in many countries Justin has a cost as opposed to Eno capital expenditure a long-run

growth and especially in software software is definitely book to the cost. But I think of software is it is almost like a capital investment but doesn't get treated like that. On this is leading fantasy to pick policy mistakes. I've been curious because there was so much discussion about the lost a case of stagnant growth. Do you think people need to rethink that impression of the Japanese economy? If they have a different vision of the Japanese sadistics on Japan, but you know, you all the cars

they make it on the paddle and a lot of interest in this. Wow, it's a bit difficult issue because how many people recognizing put on Stevie B Because because I mentioned it it showed a very comprehensive economic activity. However at the same time as well example, so we have been discussing this symbol of it. That's your fault for a long time in 1970,, See all day. I going to find agency of Japanese government. It is the new but I'm interested. So conceited into DDP how to

bake a cake all day imputed. The cost of environment should be subtracted from GDP. Japan GDP by 2% but still should not depend too much on single indicator indicator by weight height and the body Improvement on TV static statistics needed indicators important and interesting point about the media. Is it obviously the financial press on the markets tend to hang on these dates releases. What you think people should be talking about in the daily basis? I mean, what

should we do with people to go on the front page of the financial times? Will the Nikkei of the Nikkei Asian review or book? Well, I mean again if we come back to what we know Drive GDP growth, for example, we know that certain types of Institutions are fundamentally important and even just within Europe we have very different types of Institutions, for example that link or don't link Science and Industry, you know, the kind of fraunhofer Institute, for example in Germany, they don't necessarily exist. In other parts of Europe think that they're important for having that kind of

productivity a growth or vocational training education or indeed kind of spending than we would be looking on her dashboard on terms of the health of the country those kind of indicators as well. As of course, the more refined analysis recently run well-being of the nation and different types of indicators, but then you could argue that the in Europe for example when it's getting out bail out. They're having problems instead of having these conditions that are also just not one number you saying that you have to do X Y Zed based on debt to GDP.

If they want that country to become more competitive. They could actually also be giving more refined advice not just reducer deficit. But hey, you really need to start building these institutions which we know through evidence-based are quite important. But again, that's more of a dashboard understanding of competitiveness and health of an economy write a really profound policy issues, but she were grappling with when you were in office that can I text another question which is Is there any way to change how we collect data because I thought it just astonishing that we have

these Tech Giants who have the tools to know what we had for lunch before we eat it. You can track everything. We do all the time and a setting the data to each other and what they told a to brokerage industry and yet we have to wait for the entire month or sometimes a lot longer to get GDP statistics is art by the way. She thought actually collecting data about economy. Did you ever try and ask asking if you'll tech companies to help you and the Medics and speech. The data free flow witchcraft? Well, this is a very important topic being discussed

in this still. For example, where a big daughter got it important that same time. Wow in order to calculate GDP. So are you mentioned about what we do is we what what what kind of is that? This could we watch it? If it's very important date EP appears only every quarter on a recorder a 3-month 1 2 3 month so say it's very limited. So well, this is very important that the same time we need much more freaking statistics Day date. Discussing I dunno open statistics open quotation track that for this is too. Well, very frequent. GDP fluctuation

should be reflected in the rate of unemployment, etc. Etc makers for sale in Decatur. What type of indicator is needed? For example of issued a competitive eating Decatur saw the combination combining these statistics very important for the Viewpoint of policymakers Jordan reactivity in the trade area we have now that we've got access to almost every port and airport in the world for and we extract that dated daily, unless they're that Porter airport doesn't have it. Can we put it into a database and we can see we will know sometimes that Apple has changed the battery. They're using their

Lindsay is using before the markets do because we can see the shipments that are going around the world so might my answer the questions. Absolutely you could be using new data techniques machine learning alternative ways to gather data an example that's happening right now. Every 10 years United States does a census in this year the sentence is going to go out and they're going to do it in a way that electronic and you could do it on your computer using the internet. You can use it on your phone. You can do it in paper and they only expect about 65% of people are going to do one of

those three, which means they're still going to 35% of people that they're gonna have to go higher 302 600,000 people as part-time workers to go finish. The census Department of Commerce newest is attempting this new approach using the phone and the internet and I do think that it's a good step that they're trying something new about Gathering fun. Shuffle data, but there's so many more ways you could do it but the key word is fundamental data and that's different from the speed figures every kind of 5 Seconds. And in fact,

you know getting more refined analysis precise around the digital economy. There's this great book out called surveillance capitalism of the behavioral surpluses look like shoshana zuboff. She says that the reason of people think they're searching Google for free, but actually Google is searching you and so this whole again difference between occupation value extraction. Can we actually start using different types of measures that really tell us the way that were using the power of the algorithms and new technologies in ways that really contribute to a healthier more productive

capacity in our economy versus Amore extracted one. GDP ratio of this is very important is also very important to get a quick information about from the day from the data at the same time by analyzing these indicators. We can understand very clearly the strengths and the weakness of this company for the economy. For example, in the case of the United Kingdom food sample investment is high or low consumption. Hello and so long. So in this regard, for example, I have to go back to the intangible investment intangible asset in the case of Japan in

tangible Investments GDP ratio at about 9% 9% in the United States 15% or so, maybe what the contents of the intangible investment is more important issue for Japan, for example I've been investing. These are indeed a high GDP ratio in Japan is not especially human resource investment and the expenditures on this is very weak in Japan. So by analyzing this intangible asset investment. Well, we can understand a weakness in the swing some pecan tree company. This kind of function is very important to make yourself this time with the tistics Dishonored.

I'm aware that there are a lot of people in the room who are experts in the field of a larger size than just a moment. But before I do I do stop preparing a question before I do Mariana. Can you give us go back to some of the examples you see which actually encouraging among the countries in dealing with this issue? Because you know all this a lot of the economic report in the world tend to be dominated by Europe that your Zone America Japan Big Country studies of countries, which have been created and that she doing the kind of things are talking about. I

think what's interesting is the conversations changing from just the measures to will what are we even trying to do? So if we have the sustainable development goals, which were signed up to buy the country is what is that then mean for the value of the kind of economy that were trying to create and what's interesting is that at the microphone on this level that conversation is really having an impact on the metrics, right? You know whether the SG. Better isometrics within company is and whether they're really reaching these targets around environment or different types of social factors.

And I think what's interesting is can we then link that conversation which is about governance of organization in business another two given that then we do aggregate up statistics about companies also to get parts of the stickers for GDP. What is that? Then look like at the macroeconomic level and and yet the conversations about the environment for example in GDP is not linked up to that governess of the microeconomics unit and currently do you think so that there is a bit of a washing you talking a lot about the environment and then if you look again at the figures, I was actually

happening as fine, as you know, the top three asset management companies BlackRock Vanguard, and another one that can actually increase their spending on fossil fuel-based companies by 35% since Paris on since cops in 2015, so You know the talk turning it into a walk will be much easier when these metrics First wall or mandatory. But also when the kind of my friend of microvilli are more line that says in Jakarta writings on you and you're trying really for the first time to systematically look at in these am non-traditional at my metrics when you

look at companies cannot be extended countries as well. I think so they think but be to your point starting at the at the micro-level soda called the corporate level is going to be important cuz that will drive Behavior if we start measuring companies, we have more standardized approach to measuring ESG factors right now. The S is hard to get there's not a lot out there the social factors. It's not really very well to find that the government has been around a long time. And on the on the environmental factors is not consistent. It's hard to get the information at the casino at the corporate

level right now. If we want to get the data and we're we're actually Gathering ourselves. It's it's self-reported. It's not audited. It's not consist of people don't measure the same way. And in fact, one of the really valuable discussions that we've been having this week in Davos is exactly run in question. I'm in the International Business Council of with the last few days of Brian Moynihan, let us a group of people that came up with a draft of a some pilot questions and pilot statistics that we would have divorced it. All corporations would start putting together. So I think that we can

start driving it at corporate level of micro level and have the same dialogue as well at the national level indicating where the well is going so well chosen I know juicy areas where Japan could try and do more to measure the impact on the environment of the other way around Sanibel and inclusive Society in this is now have been discussed. And we now have some additional what the income gap income income equality. This also should be considered and the same time nowadays in Japan most attention-grabbing discussion people that house

has 1 billion people in the world. Ministry of economy trade industry amending some excellent companies for Health Management, etc. Etc. So this should be too. Very seriously. We are moving toward the Aging Society cost, etc. Etc. So why are you my best friend and and environment? Can I make a comment about this? Japan is actually an example of a developed country in this team of environmental impact. It's actually much more positive than the others that energy usage of a of a for GDP or per capita in Japan is about 60%

of the US. It's at about 80% of Europe and it's partially because of City design Urban Design its mass use of Meth. Picture of a mess Transit it's it's the it's the subway systems. It's the train people live in smaller homes. And so there's a whole footprint environmental footprint that as we start thinking about other solutions to Smart cities in an environmentally friendly cities some places. We can look too already or we can see practiced in Japan International earnings from each other, but on that

note, let's have some comments from the audience. I know the number of you who would like to speak. Let me put you say I already thought with you it would be cut if not compelled speech identify yourself. And since we have a number of has already, please keep any comments or questions by child from London and ulcer the CEO of NRG stage tech company. Thank you very much for the title of my question is mainly for Mariano, but please feel free to input. There is a very dominant narrative in Silicon Valley. Public sector is mainly a hindrance which of course is not true. It would be great. If

you could maybe share some of your research and findings on how public spending government spending has in fact been critical to commercializing many of the technologies that we use today. Thank you very much. So how does sadistic show that government is good. So the phone that your friend there has Isabel call about Apple everything that makes your smartphone and invested by public institutions write the internet Siri touchscreen display GPS. Now what's interesting though is that again? When these are publicly financed institutions? We also don't

really have a narrative to talk about this. So any can Onix is not just the value debate. That is so interesting. But the way we think of policies just correcting something so we talked about it this correcting a market failure, but actually what public institutions didn't Silicon Valley was really cool create an app that market and I think this really comes back to this issue of narrative Amici DPS in just a number there's narratives around it both in terms of how we talked about in the media. But where we think wealth creation comes from how it can be that think it was a timer

since the head of a Goldman Sachs that a 2009 Goldman Sachs workers are the most productive in the world and then they were bailed out by what over ten billion you didn't hear. The most productive in the world, right and a school teacher doesn't say where the most productive in the world because in fact with public education when it's free, we only know how to measure the cost of the salary's not the output. We're still not even measuring something as obvious as the value that publicly education that public education system provides. So we literally can't even account for the

productivity because we don't have a price for the outside but the big thing about the public sector is that of course we need it but it's not just about kind of wartime Cold War kinds of technological spending coming back to the sdgs this notion that we really should have Mission oriented kind of spending with real kind of public-sector guidance of big directional pushes and then crowding and bottom-up experimentation also by the business Community or mainly just saw these big public gold that's a very different way to structure public-private partnership and I would argue that what we

need and wealth is to really off have metric of how to define an interesting Dynamic symbiotic public-private-partnership going for a goal versus the kind of parasitic predator. Pray kind of public-private Partnerships. We have freezing up on the health sector. Wow. Johnson High School from Imperial College in popularity by defending you don't need to apologize to be an economist. I think you were in the majority in the room. Add the steel and the cause

which is a software in attempting to capitalize intangibles fix the company account account. all your fault. Does a Great Plains and the food we have a response question as well? Because there's already a very good point and then I got off. To defend corporate accountants America y'all from a professor at MIT and I very much want to build on it on Jonathan, He's much too much information as we have less and less information about where real value comes from and that's not necessarily fish GDP

accounting numbers of cars produced or bushels of wheat, its design for a digital age. Show me the things we get on our smartphone is the maths or the music or the Wikipedia of 0 weight of an interesting point. One of them was that do not use GDP as a welfare measure of well-being measure, but with the exception of the people here, that's what a lot of Journalism production. We need a measure of well-being. We have a new measure called ddpp the V4 benefit to be parallel to GDP the captures those benefits and it uses some of the power of the

digital age because we have to do online Choice experiments to assess how much people need to be paid to give up different different goods. And ultimately we will by the time next year have a parallel set of numbers of GDP big focus on the benefits to go along with the production cost GDP and I think Dan will have a piece of the dashboard of the two great controlling Traditions is to discussion. I think one of the subjects says do you want to understand this

read Mariana's book and click on today? We haven't got much time left so I can be short one question was precisely is it in already that we need more access to data to find true measurement in the discussion information because we are facing and kind of privatization question. Is it snow in between perhaps legitimate businessman potentiality and accessories? Turn off question. I'm going to let you eat respond. I do want to be fair to the room. Make sure that both right and left. I like I'm doing a disservice to

your neck muscles instruments thing about measures of carriers and narrative and in particular GDP that we all know. Just consumers Eminem or actually that the identity of a consumer has there's a fairly good-sized but instead it's restrictive and maybe prioritizes consumption as a strategy for governments for those people about the environment in one another. How to deal with a massive for hypothetical questions and private data GDP is still critical. We have a Time series. It's been around a long time and it is the foundation of so

many decisions and it's also used by political world the financial world. And the question we had here today is how a kid, how can we make it better? And I think we've heard that the second point I want to make is that there is a massive amount of data available to make it better or to find new measurements. Whether it's how we think about well-being how we think about the education system how I think about the healthcare system and I will tell you in our own case both in the ratings business are index business to tell her we incorporate that kind of information into choosing and making

a decision about rating or choosing acid. Switch be included in index. It's not just a simple GDP metric. And then finally, we're in a world where data is now massive. It's everywhere and every single organization is either struggling with or embracing a data strategy and I think is part of our discussion here. Everybody has to have a data strategy and how they're going to use new machine learning new approaches to Mint managing large large volume of data, and we need to incorporate that back into how we think about GDP

the ownership in the governance of the data and who it benefits and your personalized medicine has created all sorts of a day. Where is benefiting from Big Data in ways that for example, the welfare state hasn't yet? And that's one of the biggest questions. How can we actually reinvent the welfare state instead of decimating it as has been happening in many countries and really allow it for example what they're doing about Going to every time you click on citymapper, you're generating data right date

isn't static is being generated. Now the people on their phones and they've been thinking about the new kinds of Institutions actually need for simple a public repository of the date. I wish you knew that would come from citizens engaging with arms across the city which one would benefit immediately public transport transport infrastructure and ideas about Mobility, but really kind of benefiting citizens the Baptist requires a whole other conversation, which is about democracy and again the comments and data comments and it is just that we shouldn't assume that because there's so much

data out there and we just need to get access to it. It's going to be good right questions about her seven. Answer key just in case it wasn't clear. It's not a good thing when you're growing just like buying things especially way just haven't been paid and you can see this in the GDP deflator. That's why I would defend GDP on so many levels were just not using it for that way. You can see in the UK is that private debt to disposable income is back at record levels? What caused the crisis staff but no other papers talking about it and you actually can see that with the GDP data

consumption LED growth private by private debt, and that's what causes bubbles. Okay, I'll let me focus on a fun point dashboard or UDP. Why does a very challenging question but the moderate amendment of GDP is needed considering the importance of the intangible asset but sometimes but I I do not recommend radical amendment of GDP this time. Dubrow set example example of how can get the environmental issue and also we should consider intangible asset but something moderate, id'd the same time. Well that's bored or type of indicator.

Has more GDP amendment of GDP is an idiot and the Discount Tobacco have been accumulated by many Congress are also find out what type of indicator we should focus more from here on will thank you, but I must say I find it's a fascinating discussion. Thank you to all three of you and also the Odeon and I take away to the three main points. No one is that clearly? They're all big challenges right now about how we look at the world around us and metric measurements. And this

has ticket policy implications. What is encouraging is that there is no debate in recognition. What the hell is even more encouraging is its groups like The World economic Forum all trying to bring people together to talk about this, but it's not going to be easy to text and it is coming to any kind of new car lot of work to be done. That will not note. I'd like to finish by asking Saadia zahidi who's the manager for the weather like for him to talk about what you're doing on this front and bring this discussion fascinating fascinating central place.

We have for its you know, you know, you're at the 50th Anniversary, but 40 years ago. We are bound her started the little competitive kitchen porch, which was a novel idea that let's take a look at the factors that feed into medium-to-long-term productivity and looked at human capital looks at this institution to settle along the way. We've added things like our Global Gender Gap Index. We batted just earlier this week or social Mobility index looking at human capital in the future of jobs, and the idea now is inspired by the work. We've been able to do in the last six months with our

International Business Council on having some convergence around GSG metrics. Could we try to help create that dashboard around you two piece of today's conversation has been fascinating for anybody who would like to be involved in that effort over this coming year. Please do talk to me or my team that is here. Thank you so much that what's his face? Thank you.

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