Figure 1: Output per worker & output per hour 

Her conclusion – The traditional measures of output per worker and output per hour worked both remain very weak (around 0.1% year-on-year growth)

Figure 2: UK Labour Productivity vs. trend line

Like most others, her conclusions were:

• The upward trend witnessed in total UK productivity prior to the financial crisis had been pretty consistent since the data began in 1960
• Since then, however, this upward trend has clearly flattened
• Had the pre-crisis trend (between 1985 – 2007) continued, UK productivity would be approximately 17-18% higher than it currently is

 

Note that Stevenson, again like most others, takes the official statistics to be ‘gospel truth’, painting a true and fair picture of the overall health of the UK economy

But what if these statistics are fundamentally flawed – what if they don’t paint the correct picture – what if they even miss much of it?

For example, consider both the national outputs and inputs used which determine national productivity levels:

• Outputs – GDP is widely known to be seriously flawed – much national output is not counted – other outputs are miscounted – and the outputs of free public sector services are included by valuing them at cost, so the more profligate they are, the greater the assumed value of their outputs
• Inputs – Labour numbers or hours worked are easily countable and so measured – however, capital and material inputs are not – hence we are only offered national labour productivity statistics as if they were a proxy for national productivity levels – this may have been acceptable once, when labour dominated input costs but, as Paul Krugman might say,  it’s no longer ‘almost everything’

So the above graphs are very probably giving us the wrong impression of what’s been happening in the UK economy

In particular:

• As national outputs become cheaper and/ or better at supplying all our needs, wants and likes, so we demand less new stuff at less cost to replace old stuff – so GDP growth is bound to slow down, even fall, unless there’s additional, completely new stuff coming down the line, something which many experts think is no longer happening – hence, SoLs (Standards of Living) are said to have stalled also
• However, much of the new stuff on offer is free, albeit highly valued by all – this means it goes uncounted by GDP so SoLs appear significantly less than actual – efforts by some economists to put a value on such freebies and so increase GDP are, to date, limited to asking a sample of people what they would pay to avoid losing access to the likes of Facebook, Twitter or What’s app
• In many ways, SoL is an old-fashioned way of assessing the success of any economy – it’s largely determined by all the tangible stuff people could and can afford
• But QoL (Quality of Living) has been coming up fast on the rails in recent times with many considering QoL already to be of equal importance
• But there’s no generally accepted formula for quantifying QoL of any nation at any one time

So we’re all left with having to accept GDP per capita and GDP per labourforce-numbers as the main measures for national wealth and productivity

So the doom and gloom currently being peddled by just about every economic expert or commentator, not just Stevenson above, is plain wrong – misleading even

So national economic policies and investment plans, based on such ‘sand’, will be lucky to be effective

We’re currently measuring G7 economies using old-world error-prone measures – our leaders and their advisers thus have only a partial picture – one which will become more and more unrepresentative of the total picture

We need better stars for our wise men to follow

According to Valentina Romei, writing in the Financial Times, the last decade  saw living standards in the UK grow at their slowest rate since the second world war

She says: “The jobs bonanza, and the economy’s performance as a whole, was undermined by weak productivity, which grew at its slowest level in 60 years”

She supports this view about the last decade by making four points

1. Per capita output was less than half the postwar level 

• Growth in per capita output, the biggest driver of increased living standards, averaged less than half the rate of the postwar period
• Perhaps we’re not increasing the value added (and so prices paid) per worker or hour worked – due to most growth being in low value-adding sectors such as retail

2. Uninterrupted but sluggish expansion

• The UK enjoyed uninterrupted economic (GDP) growth
• However, it was slow, with an annual average of 1.8%
• This was far below the overall average of 2.4% in the 40 years to 1990

3. A decade of booming jobs

• The UK experienced a jobs boom in the 2010s, with employment growing at the fastest rate of any of the last six decades
• The number of hours worked also rose at the fastest rate over the same period
• But this employment boom hid poor quality jobs and is unlikely to be sustainable

4. Productivity growth slowed to a crawl

• The UK’s sluggish economic expansion in the 2010s was largely the result of more people being in work, rather than greater efficiency, resulting in the slowest productivity growth of any decade since the second world war
• According to the IMF, the output per person employed in the UK grew at an annual rate of 0.6% in the 2010s, compared with 1.1% in the previous decade and more than 2% in any other post world war decade
• Poor productivity growth undermines employers’ ability to pay their workers more, which would allow living standards to rise

Conclusion

Richard Davies, fellow at the London School of Economics, concludes: “The story will not change in 2020 – the most important economic puzzle of our time, the flat-lining of output per hour for over a decade, will remain the government’s key challenge”

The Times has announced a project to be run by the strangely named ‘Be the Business’, a government sponsored initiative aimed at solving the productivity crisis said to be afflicting the nation

100 big companies, including Amazon, Aviva, BAE systems, British Land, Cisco, Google and Rolls Royce, ‘will promise to boost UK productivity by encouraging greater adoption of tech skills among their suppliers and offering mentor programmes for managers’

The rationale for this venture seems to be as follows, with our first reactions attached:

• Current ONS statistics on GDP and national productivity are accurate and useful – they’re not – such stats prompt no action by individual businesses and are meaningless to individual citizens – and some say they’re ‘dangerously misleading’ for government ministers when policy-making
• ‘Economic growth across the country is stalling’ says Charlie Mayfield, also boss of the the retailer John Lewis, much in the news recently for underperforming – actually, current mis-measurement of GDP is such that the UK may even be performing well – nobody truly knows!
• ‘Productivity has barely improved over the last decade’ so the impact on the economy and our standard of living has been ‘severe’ –  whilst a social inequality gap still exists in the UK, the rich v poor ratio has continued to fall dramatically – most now have an acceptable standard of living and have moved on to seeking a better quality of life – national measures need to recognise this change
• Small firms and the self-employed form the UK’s ‘long-tail’ of poor performers – the implication is that all big firms in any sector are best performers employing best managers who use best methods – this was not my experience and is clearly not so
• If the ‘long tail’ acquire more tech skills and mentoring from the big boys (their customers) quantum leaps in productivity and revenue/ profits/ tax-take will result – many of the big boys fail to make big improvements when trying latest fads (aka tech skills?) such as Lean or Agile – they ignore the huge benefits on offer from truly putting their customers first, identifying and cutting causes of waste and making better use of existing resources –  and such actions don’t need any outside support (from consultants or the big boys’ surplus managers) or ‘best practice’ transfers, just internal enthusiasm and common-sense

All up, we hope we’re wrong about this latest venture – indeed, we hope it makes a big quantifiable difference for many people and businesses in the near future

At present, however, it seems to be yet another initiative that enjoys an initial fanfare of publicity and hope but lacks the beef to follow

Official measures of GDP are said to be ‘seriously flawed’

Now, a report by the OECD (Organisation for Economic Co-operation and Development) and the Centre for Cities think tank claims ‘millions more people are unemployed than official statistics suggest’

Worse still: “The joblessness rate could be three times higher than thought” because some three million people who are able and keen to work are being excluded from the register by being classified as economically inactive i.e. not in work, nor looking for work

The official unemployment rate     =      Total number of people out of work

Total economically active population

Given the current official UK unemployment total is at an apparent record low of 1.3 million (4.6%), then adding  another 3 miilion somewhat spoils this government claim, increasing the unemployment rate to 13.2%

The report thus calls on the government to increase investment in skills for people who have been out of the labour market for a long time – albeit without saying by how much and in what skills

In response, the ONS (Office for National Statistics) which produces the official unemployment statistics said:

• Its headline figures are based on internationally agreed definitions
• If they were widened, it would stop being a measure of spare employment capacity (i.e. precisely what the 3m are)

Conclusion:

• With the above huge discrepancy bewteen the official and actual unemployed figures, one can only wonder about the validity of the ONS’s official national (labour) input and so productivity statistics produced each quarter
• National GDP output measurement is already said to be ‘seriously flawed’
• Now, the same seems to apply to national labour inputs

Yian Mui reports on CNBC that the US Federal Reserve wants to know what the internet is worth to you.

He says the answer could help the central bank solve one of the most puzzling paradoxes of the modern economy: The current expansion is the longest in history, yet productivity gains are weak and GDP growth, while steady, is far from stellar.

In a speech this week, Fed Chairman Jerome Powell raised the possibility that the problem is with the data itself. GDP measures the value of products and services that are bought and sold. But many of the greatest technological innovations of the internet age are free. Search engines, e-mail, GPS, even Facebook — the official economic statistics are not designed to capture the benefits they generate for businesses and consumers.

“Good decisions require good data, but the data in hand are seldom as good as we would like,” Powell said.

Instead, Powell cited recent work by MIT economist Erik Brynjolfsson, one of the leading academics on the intersection of technology and the economy. In a paper with Avinash Collis of the National Bureau of Economic Research and Felix Eggers of the University of Groningen in the Netherlands, the authors conducted massive surveys to estimate the monetary value that users place on the tools of modern life.

The results?

• The median user would need about $48 to give up Facebook for one month
• The median price of giving up video streaming services like YouTube for a year is $1,173
• To stop using search engines, consumers would need a median $17,530, making it the most valuable digital service.

The authors also conducted more limited surveys with students in Europe on other popular platforms:

• One month of Snapchat was valued at about 2.17 euros
• LinkedIn was just 1.52 euros
• WhatsApp would require a whopping 536 euros
• Twitter, however, was valued at zero euros

“Over time, we’re spending more and more of our waking hours interacting with the internet or using those services on our mobile phones,” Brynjolfsson told CNBC – “A bigger share of our economy is being missed by GDP.”

Brynjolfsson is advocating an entirely new measure of economic health that calculates benefit rather than output. He calls it GDP-B and estimates that the welfare gains from Facebook alone would have added 0.05 to 0.11 percentage points to its annual growth.

“What we really care about if we want to know how well off people are is the consumer surplus — how much benefit you get — not how much you actually pay,” Brynjolfsson said.

Inside the Fed, a separate effort is underway to value the digital economy.

Powell also highlighted research by David Byrne and Carol Corrado that uses the volume of data transmitted through broadband, cable and WiFi to estimate the value of online products and services. Their analysis shows that GDP would have been half a percentage point higher over a decade if the full scope of the digital economy had been incorporated.

“The highly visible innovations in consumer content delivery raises the question of whether existing national accounts are missing consequential growth in output and income associated with content delivered to consumers via their use of digital platforms,” the authors say in their paper.

Powell delivered his speech at an annual convention of economists, where the theme was integrating old and new economies. At one point, Powell even waxed philosophical.

“How should we value the luxury of never needing to ask for directions?” he asked. “Or the peace and tranquility afforded by speedy resolution of those contentious arguments over the trivia of the moment?”

The answers to those questions may not be far off.

Conclusions:

• Given we’ve been banging on about this significant GDP gap for quite some time, how satisfying to find that the big boys not only have recognised it but also seem to be doing something about it
• Sadly, however, national economic policies will continue to be decided using the current dismal measures which only relate to the old materialist/ tangible world – so those policies may, or may not, be the right ones for the new material plus mental world we now live in

Tim Wallace in the Daily Telegraph reports Mark Carney, Governor of the BoE – Bank of England – saying: “Britain’s economy has a new, lower speed limit”

Growth can only get to even modest levels before inflation takes off whereupon ‘we must ease our foot off the accelerator’

Ben Broadbent, one of Carney’s deputies, claims: “Productivity growth has slowed in just about every advanced economy, but it has been more severe in this country than in others”

Apparently, poor investment and poor productivity growth is ‘ the biggest part of the story’ – oh, and Brexit has had an impact too

As we all know, the BoE has few clubs in its bag – bank rate manipulation is one used to drive the economy further and get it out of trouble

For the past decade, extremely low interest rates have been used to prop up demand – it keeps mortgage bills down, encourages savers to spend rather than earn measly returns – and, theoretically, businesses can fund investments more cheaply

But it has failed with business investment

Carney says we had much spare capacity in the past so lack of investment didn’t have much impact on the ‘speed limit’ of the economy

But now, labour supply and capacity is near its limit – production capacity also – so productive investment is certainly needed

One’s left hoping for the best and keeping one’s fingers crossed

After all, what are central bankers paid for?

Puzzle no more about dormant national productivity – the cavalry have arrived in the form of Andy Haldane, chief economist of the BoE (Bank of England) who is to chair the government’s new ISC – Industrial Strategy Council – it’s another quango of sorts for a select few of our great and good to deal with a nagging problem that nobody seems able to resolve

Despite most experts bemoaning the UK’s lack of significant productivity improvement over the last decade, Andy claims: “The UK’s macroeconomic performance has improved dramatically since 1992 when the UK was forced out of the EU’s ERM (Exchange Rate Mechanism)” – furthermore: “The UK is now, arguably, an established Premier League team”

Then another surprise

Apparently this is  all due to “inflation targeting” by his chums at the BoE rather than the government’s efforts which: “Frequently adopted and abandoned different industrial strategies as well as other schemes to raise Britain’s productivity”

Note the role of UK managers at the coal-face merit no mention yet it is they (in our view) who determine some 80% of national productivity levels achieved – Governments can only influence the other 20% by complementing the private sector via their taxation policies and investment in education, healthcare, low-income housing, R&D and infrastructure

Why such influence by organisation level managers?

Because workers in all sectors, public or private, soon settle down to a rate of work they’re comfortable with whatever the systems and processes they’re required to follow – and it’s those systems and processes that determine most of the productivity levels achieved, both at organisation and hence national level – indeed, the famous management guru Dr Edwards Deming went so far as to claim it was systems which determined as much as 94% of an organisation’s productivity level – and the people with the power over and sole responsibility for those systems and processes are organisation managers, not their employees

Undeterred,  Andy goes on to say the ISC will provide: “An independent body to evaluate progress and develop appropriate measures of success” which suggests he has doubts about the current official data available (we wish him well)

However, to kick off his ISC reign, Andy tells us he has identified three productivity gaps facing the UK – sadly,  they’re all based on the rich, albeit flawed, trove of national statistics available to him – viz:

• Inequality between the country’s highest and lowest performing areas/ regions
• Lower labour productivity than other large rich countries
• A slowdown in productivity growth since the 2008 financial crisis

Such claims may or may not be true to a greater or lesser extent – the data on which they’re based is so full of errors, forecasts and assumptions that we’re not talking here about 1% or even 5% error margins – our guestimate is it’s more likely to be in the 30% to 50% range

And if that were not bad enough, what would Andy and his new colleagues be prompted to recommend to whom on the basis of such claims – by the sound of it, he’d be focussing on possible changes to Government policies whilst continuing his successful BoE action, and thus restricting himself and his council to a mere 20% of the problem causes

One can only hope that the value of the ISC will itself be determined by some significant improvement in some acceptably accurate measures of national productivity – and disbanded if found to be yet another ‘kicking the can down the road’ initiative

Conclusion:

Beware all economist geeks bearing their advice and solutions

Currently, we are very cynical about Andy’s prospects with the ISC

“The new prime minister will have to rise to the skills and productivity challenge, and make sure that everyone, no matter where they come from, can get a chance to have a great job”, says Anne Milton, UK Minister for Skills and Apprenticeships

The following is an article she wrote in FEWeek

I want the next prime minister to make sure the work on technical and vocational education continues to be a priority and that we build on what we have already achieved.

Significant progress has been made on our technical education reforms: the first T-levels are on track to be rolled out in 2020; the first Institutes of Technology will launch later this year; and we continue to see more people starting on apprenticeships.

I want the progress we have made to be a step change in how FE (Further Education) is viewed in this country. People are finally waking up to the need for a rebalance between FE and HE. There is much more recognition of the huge impact our further education sector plays in supporting more people to gain the skills they need to get a good job, get on the path to great careers – and for the country, boosting productivity.

This week we published the findings from our review of level 4 and 5 qualifications – or Higher Technical Qualifications – and we launched new proposals to make sure more people and employers can take advantage of them in the future.

All the evidence from our review highlights that higher technical skills (the type that many level 4 or 5 qualifications can provide) are increasingly in demand from employers, but the uptake remains worryingly low. Only 1 in 10 adults in England have studied for a qualification at this level, despite the prospect of better wages and job prospects.

The skills our economy needs now and in the future are not always aligned with the qualifications on offer and we need to make sure that we change that. Young people need to be better informed when it comes to studying for jobs and careers in key sectors such as science, technology and engineering.

Some of this is about all of us continuing to bang the drum about the benefits of technical education. We need to dispel the intellectual snobbery that still exists which dissuades some students from choosing this route in favour of a traditional academic option.

There is no overnight fix for changing the way technical and vocational education is seen by the public, but we can make sure that the qualifications and options that are available are high-quality, are valued by students, parents and employers and ultimately get more people on a path to a good, well-paid job.

That is at the heart of everything we are doing – from the introduction of new T-levels, our reforms to apprenticeships, as well as consulting on changes to post-16 qualifications at level 3 and below, and our new level 4 and 5 proposal. It is all about providing a choice of high-quality options as well as logical, clear training routes that everyone can understand.

These are once-in-a-generation reforms and while I don’t imagine that we are going to get everything right at the first time of asking, if we want to make a success of them in the long term, we need a strong sustainable and coherent technical education system. This will help unlock untapped potential and boost our economy.

The new prime minister will have to rise to this challenge if we are to have the skills we need to increase productivity and make sure that everyone, no matter where they come from can get a chance to have a great job and fulfilling life. This will be critical to the future prosperity of individuals and the country as a whole.

Conclusion: “Well said, ma’am, as far as it goes

Adrian Blundell-Wignall, former director of the OECD and professor at Sydney University, says:

• “It’s not enough to tweak R&D incentives – we, Australia, need a detailed plan that will change the whole climate for smart investment and productivity growth
• During the (recent) election, the focus was on tax cuts and “having a go”
• The Treasurer has since talked about tax incentives for R&D
• But improving productivity growth will need a broader framework of reforms to avoid our cloudy future”

Past government plans have resulted in the shrinkage of manufacturing in high-labour-cost economies:

• In Australia, from around 16% of GDP in 1975 to 6% today
• In the USA, the decline was less – 16% down to 11% of GDP

Australia made up this gap via finance and mining – and we became ‘contented and complacent’

Since China joined the WTO at the end of 2001, the commodity super-cycle pushed up the terms of trade – the real purchasing power of the income generated by domestic production was boosted by 9% of GDP, the equivalent of three full years of economic growth – the resulting feel-good factor got credit booming and house prices rising – finance and insurance now make up over 9% of GDP versus only 7% in the USA

However, mining and finance now both face headwinds:

• In mining, China’s massive investment-focused strategy has resulted in diminishing returns – investments need to earn good returns if rising debt is to be paid for – China is on the classic path for financial crises – it suffered something of a recession in 2015, and more will follow – China is slowing structurally and diversifying its resource supply – both will hurt Australia
• In finance, house prices and debt levels are too high and must unwind in the years to come, not least because of low interest rates.

And, outside these two industries, Australia’s labour productivity growth looks terrible – so much so that there’s a good case for excluding them from the measure:

• Mining, because it’s so large and heavily capital intensive – relatively few people are employed there and the huge costs in equipment are someone else’s output
• Finance, because it’s imputed from interest rate spreads

Excluding them both reveals even lower productivity growth – a meagre 0.3% p.a. over the past six years – compare that with the UK, an economy without resources, which is doing much better

So Adrian says having a plan is essential – a plan which creates an environment for more diversified and higher value-added growth covering three broad groups of firms:

• Those with strong productivity growth accompanied by significant sales at home and in foreign markets
• Large incumbent companies in the domestic market with negative productivity growth and weak penetration of foreign markets
• A large number of medium-sized companies characterised by moderate growth and a domestic sales focus.

We know digitisation and technological innovations allow some firms to quickly saturate their domestic markets – however, only those that take advantage of economies of scale by expanding into foreign markets are able to remain in the strong productivity growth group

In addition:

• Fast growers are always those firms with the highest levels of R&D expenditure
• Mergers and acquisitions (M&A) activity are a recurrent theme in their business models

R&D innovations that drive productivity do not (outside Silicon Valley) come from small start-up companies “having a go” – R&D is a huge cost activity – in the main, it comes from larger companies with barriers to the appropriation of their IP by others, and which have access to external finance, particularly equity finance, essential for risk-taking and for entering foreign markets – their ability to restructure quickly, opening and shutting down plants via M&A, is critical – small firms lack capital and resources to carry out meaningful R&D and to launch products based on it

Overall, the “plan” should be to develop a research-and-innovation culture and policy certainty – one which recognises that better education output is central to future productivity growth – one which supports an equity culture for risk taking – so it must remove barriers to domestic and cross-border M&A

The plan must also resolve the problem that while economies of scale depend on foreign sales, tax avoidance by firms also relies on cross-border activity – IP, trademark and other earning rights should not be owned by foreign subsidiaries in tax havens

Adrian thus concludes that Australian productivity requires many hard reforms rather than just tinkering with R&D tax incentives.

Adrian Blundell-Wignall is also author of ‘Globalisation and Finance at the Crossroads’

Consumer surplus is defined as the difference between the highest price a consumer would have been willing to pay and the price actually paid

It’s the unquantified value customers obtain from tangible stuff they buy – such benefits include taking less time or effort to do things, obtaining more fun and pleasure from life, having more social contacts with friends and family – all things people want, all demand growth areas, but all difficult if not impossible to measure

Nowadays, statistics on tangible outputs, GDP and national productivity levels seem to be flat-lining as we simply replace stuff, once worn out or used up, rather than add to it as in the past as more of our needs were met – and much of it, thanks to productivity improvement, would be available at lower unit prices (thus lowering GDP) if it did not incorporate significant quality and design improvements

For example:

• In 1985, about 100,000 wealthy families were willing to pay over $1,000 for a set of the Encyclopedia Britannica – some would have paid more if they had to – others would have bought if the price had been a lot less
• To calculate GDP, government statisticians looked at the market value of actual sales and multiplied the average price by the number of units sold – $100m say
• Nowadays, Britannica sells about 50,000 online subscriptions at $75 each – a total of less than $4m
• So the contribution to GDP from Britannica has dropped by 97%
• But we are better off, not worse off
• Thanks to the internet, Wikipedia and many other sources of specialised knowledge, the cost of such information consumption has fallen to near zero
• We’re getting a lot more and paying a lot less

A similar story can be told for many other modern goods and services e.g. phones, GPS, voice recorders, digital watches, portable music players, video cameras

But economists and national statisticians can’t cope with this consumer surplus – they use measures better suited to the 20th century tangible world, not the new 21st century intangible world

As Matt Hancock, ex Bank of England economist and now UK Health Secretary, suggests, the growth of free apps is benefiting consumers but potentially dampening economic figures: “I don’t think economics has caught up with the impact of zero marginal cost production (digital copies) or products that are free”

Indeed, we believe consumer surpli may well represent a vast black hole in the GDP universe and may well explain much if not all of the so-called ‘productivity puzzle’ currently afflicting most developed nations

As Milton Friedman once famously claimed: “There is no such thing as a free lunch” – consumers always pay, somehow – they have to offer something of value in return for any freebie they get – and freebie services have proliferated over the last decade

Freebie services are used to trap people into revealing private data about themselves and their buying interests, preferences and search criteria – data which is then sold on to a wide variety of suppliers enabling them to focus their marketing and selling efforts on people most likely to buy from them, thus maximising their ‘hit rates’ – so the more attractive a freebie service can be, the more people will sign on to it and divulge their data, making the service even more valuable

Freebie services are thus carrots, modern ‘hidden persuaders’, clever marketing ploys predominantly peddled by IT entrepreneurs – during the past decade alone we’ve enjoyed an increasing variety of them via the iPhone, Uber,  Airbnb and Amazon plus Google, Facebook, Twitter and WhatsApp – and the value of those services to their customers, if counted somehow, would surely have increased national GDP and so productivity levels well beyond those officially announced – perhaps even making up the claimed big differences (18% in the UK) between actual current GDP levels and trend levels

No wonder Professor Hal Varian, chief economist at Google says: “GDP has a very hard time with free”

And Professor Erik Brynjolfsson agrees: “They (freebies) add a lot of consumer welfare but do not show up in GDP”

To underline his view, Erik determined the value offered by many digital services which go unrecorded by GDP:

• He paid people to stop using freebie services and worked out a ‘reservation price’ for each one – an estimate of hidden GDP
• He found the average user:
  • Would drop Twitter for nothing
  • Valued Facebook at £85 a month
  • Wanted £470 per month to give up WhatsApp, commenting “I run my life around it – I wouldn’t be able to go to any parties on Saturdays – I wouldn’t be able to contact my babysitter”
• He concluded that: “Some of these services have become almost indispensable”

Clearly, the actual value of this consumer surplus varies per person as each of us usually has a different maximum we will pay for anything – hence it is nigh impossible to measure it for any nation as a whole

That said, some expert has already claimed that Whatsapp alone would add 3.74% to the Dutch GDP if 10 million of the country’s 17 million people used it (n.b. another statistic that gains credibility because nobody can disprove it)

Conclusions::

• GDP only records transactions at market prices – it’s completely silent on what we might be getting free
• Volume of sales may have peaked but value of benefits is forever rising
• G7 economies are currently undergoing radical changes through digitisation but economists and their performance measures are not keeping pace – they focus on tangibles that dominated growth over the last century but this new century is increasingly concerned with intangibles
• Some new measures are needed for national productivity, prosperity and well-being