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How does big data affect GDP? Theory and evidence for the UK

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Title: How does big data affect GDP? Theory and evidence for the UK
Authors: Goodridge, PR
Haskel, J
Item Type: Working Paper
Abstract: We present an economic approach to measuring the impact of Big Data on GDP and GDP growth. We define data, information, ideas and knowledge. We present a conceptual framework to understand and measure the production of “Big Data”, which we classify as transformed data and data-based knowledge. We use this framework to understand how current official datasets and concepts used by Statistics Offices might already measure Big Data in GDP, or might miss it. We also set out how unofficial data sources might be used to measure the contribution of data to GDP and present estimates on its contributions to growth. Using new estimates of employment and investment in Big Data as set out in Chebli, Goodridge et al. (2015) and Goodridge and Haskel (2015a) and treating transformed data and data-based knowledge as capital assets, we estimate that for the UK: (a) in 2012, “Big Data” assets add £1.6bn to market sector GVA; (b) in 2005-2012, account for 0.02% of growth in market sector value-added; (c) much Big Data activity is already captured in the official data on software – 76% of investment in Big Data is already included in official software investment, and 76% of the contribution of Big Data to GDP growth is also already in the software contribution; and (d) in the coming decade, data-based assets may contribute around 0.07% to 0.23% pa of annual growth on average.
Issue Date: 1-Jul-2015
URI: http://hdl.handle.net/10044/1/25156
DOI: 10.25561/25156
ISSN: 1744-6783
Publisher: Imperial College Business School
Copyright Statement: © The authors 2015. This work is licensed under a Creative Commons Attribution 4.0 International License.
Notes: Discussion Paper 2015/06
Publication Status: Published online
Appears in Collections:Imperial College Business School



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