Does the New Economy demand New Statistical Approaches?


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Discusses how indicators and statistical systems may need revision in light of socioeconomic macrochanges in advanced countries, proposes scenario workshop approach to progressing the issue.

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Does the New Economy demand New Statistical Approaches?

  1. 2. Does the New Economy demand New Statistical Approaches ? [email_address]
  2. 3. Outline <ul><li>Challenge of new economy - Knowledge-Based Society </li></ul><ul><li>An approach to determining new directions for activity - success scenario workshops </li></ul><ul><li>A “thought experiment” of how it might work for new economy statistics - statistical goals for the knowledge-based society </li></ul><ul><li>Some very provisional conclusions </li></ul>
  3. 4. “ Knowledge-Based Society ” <ul><li>Challenges to statistics associated with: </li></ul><ul><li>Information Society </li></ul><ul><li>Services Economy </li></ul><ul><li>Knowledge Production and Use </li></ul><ul><li>Innovation </li></ul><ul><li>Globalisation </li></ul>
  4. 5. Information Society “ Moore’s law” 1960 1970 1980 1990  Millions of Instructions per second (MIPS) 100 10 1.0 0.1 .01 Mainframe Minicomputer PC Embedded
  5. 6. Information Society <ul><li>Continuing dramatic performance trends (Moore’s Law, Gilder’s Law, Metcalf’s Law, etc.) </li></ul><ul><li>Rise (and rising relative cost) of software, services </li></ul><ul><li>Hedonics </li></ul><ul><li>Impact on economic performance (productivity paradox, US upturn) </li></ul><ul><li>Technology measurement </li></ul><ul><li>Digital divide </li></ul><ul><li>IS evolution - islands  archipelago  continent  ??ecosystem </li></ul><ul><li>etc… </li></ul><ul><li>MUCH measurement effort on some topics - esp ICT use, ecommerce - e.g. SIBIS </li></ul>Mainframe Minicomputer PC Embedded 1960 1970 1980 1990  Millions of Instructions per second (MIPS) 100 10 1.0 0.1 .01
  6. 7. Service Economy <ul><li>Services’ Employment Growth - trend only somewhat less marked in terms of output growth; very strong trends for business services </li></ul><ul><li>No longer “residual” </li></ul>
  7. 8. Service Economy <ul><li>Problems in measuring output, quality change, and also trade etc. </li></ul><ul><li>Distinctive features of services organisation (though convergence?) </li></ul><ul><li>“ Services” grow in all sectors, little track of associated service output </li></ul><ul><li>Business services and KIBS in particular contribute to performance of whole economy (e.g. Tomlinson); these are often very poorly tracked, and functions little understood </li></ul>
  8. 9. Knowledge Production and Use “ Intangible investment”: R&D, technology payment, software expenditures, public expenditure on education (proxy for training expenditures), and advertising expenditures. 1985 1989 1991 1992 source: European Commission 1998 Share of GDP: 12% 10% 8% 6% 4% 2% 0%
  9. 10. Knowledge Production and Use: eWORK Enterprises with 50+ employees, EU15 + 3 accession states, 2000 source: EMERGENCE eOutsourcing> in-firm eWork “ classic” telework < mobile telework
  10. 11. Knowledge Production and Use <ul><li>Knowledge activated in distributed systems, networks: new unit of analysis? </li></ul><ul><li>Much effort in firms in knowledge management, rise of intangible assets and of accounting for intangibles (and their performance) </li></ul><ul><li>Lifelong learning and other issues for human capital; skills shortages </li></ul>
  11. 12. Innovation Globalisation <ul><li>Services’ Innovation </li></ul><ul><li>R&D as only part of innovative effort </li></ul><ul><li>Patents capture only part of innovative output </li></ul><ul><li>Innovations are not all equal, and take many forms (not just technological) </li></ul><ul><li>New actors... </li></ul><ul><li>Expansion of global firms: where to attribute activity, how to deal with transfers </li></ul><ul><li>New forms of competition in network economy </li></ul><ul><li>... </li></ul>
  12. 13. Role of Statistics in “ Knowledge-Based Society ” <ul><li>Rapid change, complex relations - demand for more rapid intelligence </li></ul><ul><li>Using knowledge to inform decisions better - evidence-based policy etc. </li></ul><ul><li>But also changes in knowledge production - “mode 2”, “distributed systems”, etc. </li></ul><ul><li>And more uncertain, provisional, cross-disciplinary issues - need “trans-science”, expertise </li></ul><ul><li>Emergence of new approaches to mobilising knowledge - and expertise </li></ul>
  13. 14. One Approach: Success Scenario Workshops <ul><li>Essentially examine ~ What could be feasible, desirable success in the field? </li></ul><ul><li>Had a sponsor with demand for the process, decisions to make </li></ul><ul><li>Recognised need for drawing on widely-dispersed knowledge to develop viable vision and make useful plans </li></ul><ul><li>Use background research and analysis to inform dialogue; focus on applications and not just “disciplinary” problems </li></ul>
  14. 15. ICT, genomics and most recently nanotechnology as subject areas. 06/02 - “output” published - but action was already underway Royal Statistical Society Conference - Plymouth, September 2002 Nanotechnology CRIC
  15. 16. Workshop Preparation <ul><li>Define subfields - e.g. for nanotechnology, 6 application areas - drug delivery informatics, instrumentation,, new materials, sensors & actuators , tissue engineering. </li></ul><ul><li>Prepare background reports - benchmarking, SWOT analyses, Foresight reviews, data (even modelling), scenarios... </li></ul><ul><li>Select participants - researchers, policymakers, users and intermediaries (e.g. investors) </li></ul>
  16. 17. Workshop Structure <ul><li>Starting from the benchmarking studies and “snapshots” for the application areas, break-out groups and plenary sessions consider: </li></ul><ul><li>Where the UK stands </li></ul><ul><li>What are Drivers and Shapers of, and Barriers to - Change? </li></ul><ul><li>What would SUCCESS SCENARIOS look like? </li></ul><ul><li>How to get to Success? What actions are required (by whom)? </li></ul><ul><li>What are indicators of progress? </li></ul>
  17. 18. Hypothetical NESSS Workshop - New Economy Statistics Success Scenario <ul><li>Assume that focus will be on official and semi-official data sources and definitions - not so much on analyses, techniques (is this right?) </li></ul><ul><li>BACKGROUND MATERIAL </li></ul><ul><li>Some summary of major themes, issues, conclusions from IAOS Conference London Aug 2002 “Official Statistics and the New Economy” - - how strong is the case for rethink of statistics? </li></ul><ul><li>Argumentative analyses of nature of knowledge-based society trends, demands for statistics. Demystification of some myths (e.g. self-employment, innovative role of SMEs - Johnstone, Tether). </li></ul><ul><li>“ Benchmarking” - review of major initiatives and efforts elsewhere </li></ul><ul><li>Scenarios? Different prospects for role of official statistics in society? </li></ul>New Statistics
  18. 19. Hypothetical NESSS Workshop - New Economy Statistics Success Scenario <ul><li>What subfields to organise around? </li></ul><ul><li>Major areas of challenge? </li></ul><ul><li>Our analysis of KBS sees 3-5 major elements - Information Society, Services Economy, Organised Knowledge, Innovation, Globalisation </li></ul><ul><li>Or other approaches; OECD, DTI, or Australian Bureau of Statistics framework model’s 5 dimensions - Context, Innovation and entrepreneurship, Human capital, Information and communications technology, Outcomes (Sheridan Roberts IAOS paper 2002) </li></ul><ul><li>Major application areas? </li></ul><ul><li>E.g. use by policymakers - macroeconomic policy, public sectors (health, education, etc), policies for drivers of KBS (trade, competition, etc) and capabilities (R&D, human resources, innovation, etc. And use by economic actors - financial services, consultancies, industry associations, etc. </li></ul><ul><li>Other? </li></ul><ul><li>Major fields of statistics, or even methods of production? </li></ul>
  19. 20. Success Scenarios <ul><li>Credible, optimistic </li></ul><ul><li>Expert consensus if possible </li></ul><ul><li>Informed by benchmarking and other inputs </li></ul><ul><li>“ Stretch target” </li></ul><ul><li>Shared visions, improved understanding (break out of “boxes”) </li></ul><ul><li>Better indicators of progress (and projections) </li></ul><ul><li>Action points </li></ul>WHAT? WHY?
  20. 21. Drivers of Change <ul><ul><li>Nanotechnology application groups’ orientation: </li></ul></ul><ul><ul><li>Access to technology: </li></ul></ul><ul><ul><ul><li>New knowledge in the UK and internationally </li></ul></ul></ul><ul><ul><li>Local & global markets & competition: </li></ul></ul><ul><ul><ul><li>demand pull from users </li></ul></ul></ul><ul><ul><ul><li>appreciation of opportunities from knowledge </li></ul></ul></ul><ul><ul><li>Other issues </li></ul></ul><ul><ul><ul><li>Special features that distinguish your area ? </li></ul></ul></ul><ul><ul><ul><li>UK’s special advantages or problems compared to competitors? </li></ul></ul></ul>
  21. 22. Hypothetical NESSS Workshop Drivers of Change <ul><ul><li>Challenges associated with Knowledge BS </li></ul></ul><ul><ul><ul><li>Rate of Change </li></ul></ul></ul><ul><ul><ul><li>ICT and Information Society (productivity paradox, hedonic pricing...) </li></ul></ul></ul><ul><ul><ul><li>Services and Service Economy (service quality change, role of KIBS...) </li></ul></ul></ul><ul><ul><ul><li>Knowledge Production and Use (KM, intangible assets, network orgn...) </li></ul></ul></ul><ul><ul><ul><li>Innovation (innovative effort, collaboration...) </li></ul></ul></ul><ul><ul><ul><li>Globalisation (intrafirm/network trading, ecommerce...) </li></ul></ul></ul><ul><ul><ul><li>Others? </li></ul></ul></ul><ul><ul><li>New Demands: </li></ul></ul><ul><ul><ul><li>Changing roles of government; intersection of policy areas Legitimacy, public attitudes? </li></ul></ul></ul><ul><ul><ul><li>Business appreciation of opportunities from data analysis </li></ul></ul></ul><ul><ul><ul><li>Others? </li></ul></ul></ul><ul><ul><li>Other issues: </li></ul></ul><ul><ul><ul><li>Possible new data sources, methods - new modes of dissemination? </li></ul></ul></ul><ul><ul><ul><li>Scope for international collaboration? </li></ul></ul></ul>
  22. 23. Hypothetical NESSS Workshop Drivers of Change <ul><ul><li>Outcomes would be: </li></ul></ul><ul><ul><ul><li>Revised List of Drivers </li></ul></ul></ul><ul><ul><ul><li>Identification of Key Factors </li></ul></ul></ul><ul><ul><ul><li>Potentially, identification of degree of uncertainty, need for further research, other sources of knowledge (and participants) required) </li></ul></ul></ul><ul><ul><ul><li> Input to next steps in process. </li></ul></ul></ul>
  23. 24. What Indicators of ‘Success’? <ul><li>key products and applications </li></ul><ul><li>impact of products on end-user performance </li></ul><ul><li>local and global end-user markets - size and UK share </li></ul><ul><li>industry structure - large firms, SMEs, spin-outs </li></ul><ul><li>business model (e.g. high value added) </li></ul><ul><li>where are the UK companies in the supply chain? </li></ul><ul><li>effect on GDP/employment? And impact on inward investment? </li></ul><ul><li>our competitors, and how we compare </li></ul><ul><li>where is the leading-edge research? where UK stands? </li></ul><ul><li>other features </li></ul>How much change by 2006?
  24. 25. <ul><li>What key new statistics? </li></ul><ul><li>What in terms of timeliness, adaptability? </li></ul><ul><li>What level of user uptake and impact on end-user performance (different types of users and uses) </li></ul><ul><li>possible estimation of value for money of new developments? </li></ul><ul><li>where UK work compares with leading-edge research elsewhere </li></ul><ul><li>influence on EU, international practice </li></ul><ul><li>other features?? </li></ul>Hypothetical NESSS Workshop Indicators of ‘Success’ How much change by when? Quantifiable??
  25. 26. <ul><li>New statistics: </li></ul><ul><li>Output measures for 75% of public and private services widely accepted; services coverage improved (esp KIBS), data on IT vintages and utilisation; innovation statistics cover organisational and service change; data on business processes; skill gaps; better input-output... </li></ul><ul><li>Research explicates: </li></ul><ul><li>Valuation of intangibles; “impacts” of IT use; role of outsourcing and service use; innovation processes in networks </li></ul><ul><li>Roadmap for future statistics developments </li></ul><ul><li>timetable for continuing development, benchmarked </li></ul><ul><li>Influence on international processes </li></ul><ul><li>change-enabling role in Eurostat, OECD, UN… Use of ERA… quantify?? </li></ul><ul><li>Use of statistics in UK: </li></ul><ul><li>10% increase in citation of each of a set of data resources in academic journals; impact on ESRC programmes; 15% increase in business-initiated contacts with NSO... </li></ul>Hypothetical NESSS Workshop (Very) Speculative Indicators
  26. 27. What Enables Change <ul><ul><li>Quality of research </li></ul></ul><ul><ul><li>Ownership of research </li></ul></ul><ul><ul><li>Availability of skilled people </li></ul></ul><ul><ul><li>Sources of finance </li></ul></ul><ul><ul><li>Instrumentation, standards </li></ul></ul><ul><ul><li>Infrastructure and manufacturing capabilities (e.g. fab facilities) </li></ul></ul><ul><ul><li>Structure and organisation of industry and markets </li></ul></ul><ul><ul><li>Regulatory Environment </li></ul></ul><ul><ul><li>Policies for Health Services and other public sector markets </li></ul></ul><ul><ul><li>Intellectual Property Regimes </li></ul></ul><ul><ul><li>Other issues (please add your own) </li></ul></ul>
  27. 28. Hypothetical NESSS Workshop Enablers of Change <ul><ul><li>Quality and legitimacy of routine statistical apparatus, research efforts into improving data, scope for satellite accounting etc. </li></ul></ul><ul><ul><li>Links to user constituencies ( need more development ?) </li></ul></ul><ul><ul><li>Links to social science ( ESRC sees stats problems ) </li></ul></ul><ul><ul><li>Availability of skilled people ( shortages ? - interdisciplinarity ?) </li></ul></ul><ul><ul><li>Finance </li></ul></ul><ul><ul><li>Infrastructure and technology </li></ul></ul><ul><ul><li>Public sector and administrative by-product data </li></ul></ul><ul><ul><li>Good examples from elsewhere </li></ul></ul><ul><ul><li>Other issues ... </li></ul></ul>
  28. 29. Indicators of ‘competitiveness’ <ul><ul><li>Performance relative to other countries: </li></ul></ul><ul><ul><li>UK research recognised by global players as leading edge </li></ul></ul><ul><ul><li>UK firms assembling high value added patent portfolios </li></ul></ul><ul><ul><li>Venture capitalists and inward investors investing in UK start-ups (statistics-based KIBS??) </li></ul></ul><ul><ul><li>International collaborations </li></ul></ul><ul><ul><li>End users seeking/ recognising value of UK products (market share) (citation, use in social research, use overseas?) </li></ul></ul><ul><ul><li>Availability/size of facilities in the UK </li></ul></ul><ul><ul><li>Number of graduates and post-graduates in relevant disciplines </li></ul></ul><ul><ul><li>Other issues (please add your own) </li></ul></ul>
  29. 30. What do we do to make it happen? <ul><ul><li>S teps which need to be taken to maximise the likelihood of your success scenarios </li></ul></ul><ul><ul><ul><li>Research </li></ul></ul></ul><ul><ul><ul><li>People </li></ul></ul></ul><ul><ul><ul><li>Facilities </li></ul></ul></ul><ul><ul><ul><li>Finance and taxation </li></ul></ul></ul><ul><ul><ul><li>Access to technology [and international collaboration] </li></ul></ul></ul><ul><ul><ul><li>Regulatory issues </li></ul></ul></ul><ul><ul><ul><li>Other issues </li></ul></ul></ul>Moving from science to commercial/socially useful applications
  30. 31. Hypothetical NESSS Workshop <ul><ul><li>Key Actions: </li></ul></ul><ul><ul><ul><li>Research (where priorities - problems that could be effectively tackled) </li></ul></ul></ul><ul><ul><ul><li>People (what skills, organisation, management, linkages with HEI research) </li></ul></ul></ul><ul><ul><ul><li>Facilities (IT for production, processing, dissemination) </li></ul></ul></ul><ul><ul><ul><li>Finance </li></ul></ul></ul><ul><ul><ul><li>International collaboration (inc privacy, survey control) </li></ul></ul></ul><ul><ul><ul><li>Regulatory issues </li></ul></ul></ul><ul><ul><ul><li>Other issues - political support, autonomy/ professionalism, public attitudes </li></ul></ul></ul>
  31. 32. Provisional Conclusions <ul><li>Many pressures for change </li></ul><ul><li>Already much clamour about specific problems and new data requirements </li></ul><ul><li>Despite ‘new economy’ hype, substantial challenges are evolving </li></ul><ul><li>Time ripe for significant initiatives on several fronts, despite (a) inertia and (b) need for time-series </li></ul><ul><li>Worth exploring new processes. Heavy challenges - resource needs - need to develop case to justify effort. </li></ul>
  32. 33. Workshop Method <ul><li>Would it be worthwhile? New approach, new dialogue; new case to make to paymasters?…How to organise (e.g. real-time, IT use…) What alternatives? </li></ul><ul><li>Would need sponsor, champion, links to change agents </li></ul><ul><li>Could be transnational rather than UK </li></ul><ul><li>Need to link to ongoing efforts underway in UK (e.g. ecommerce), OECD and EU (e.g. SIBIS), “academic” research </li></ul><ul><li>Who to organise? </li></ul>
  33. 34. End of Presentation CRIC Success in Nanotechnologies