Page 273 - Special Topic Session (STS) - Volume 4

STS587 Hui W. et al.
introduction of new goods and services. This has been making responses by
international statistics community, for example, OECD-IMF collaboration has
made efforts to address immediate concerns about the potential scale of GDP
mismeasurement in key areas where mismeasurement is often suspected.
Another bunch of studies of digital economy is focuses on challenges to
mismeasurement for the productivity slowdown. The productivity slowdown
has occurred in dozens of countries, and a number of commentators and
researchers have suggested that this slowdown is at least in part illusory,
because real output data have failed to capture the new and better products
of the past decade.

New ‘Solow Paradox’ and GDP mismeasurement interpretation
(1) Three forces shaping the digital era (Brynjolfsson & McAfee 2014)
Sustained exponential improvement in computing; Extraordinarily large
amounts of digitalized information; Recombinant innovation. These three
forces enhance mental power are yielding breakthroughs that convert science
fiction into everyday reality.
(2) Digital technologies transform economy (Varian 2016)
Data collection and analysis; Personalization and customization;
Experimentation and continuous development; Innovations in contracting;
Coordination and communication
(3) Examples of digital technologies
A small group of small drones can build a rope bridge without human
control; Robots can climb ladders and walk over uneven terrain; Artificial
intelligence is transforming and improving many services such as health care,
education and financial services; Machine language translation.
(4) Benefits brought about by digital technologies
Digital technologies have been transforming the ways we produce,
consume and distribute goods and services. More efficient and new
production methods, new markets and new business models proliferate.
Consumers are able to consume greater volume, variety and quality of goods
and services. Consumers can enjoy more choices and leisure time
(5) GDP statistics tell different story
Real GDP growth rates have been slow across OECD countries; Real wage
rates have been growing very slowly or decline. For example, U.S. labour
productivity (output per worker) growth rates: 2.73% in 1947-1973; 1.54% in
1974-1994; 2.85% in 1995-2004; 1.27% in 2005-2015.
(6) Major explanations on offer
GDP is underestimated due to measurement challenges; Low investment
both in physical and human capital; Wide disparities in productivity between
leaders and laggards; Digital technologies are not so powerful as previous
technological advances.

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