GDP as metric is not sufficient. How to value the digital economy?


It is one the most commonly used measures of economic activity: gross domestic product (GDP), defined as the total market value of all final goods and services produced within a country in a given period.

But GDP misses out on huge chunks of value in the digital economy. When digital goods, whether Google Maps or Wikipedia, are available free of charge, they make no impact on GDP despite the value to their users.

This has major consequences. Without a valid tool to measure the value of the digital economy, policymakers are left scratching their heads over how to manage it. That led a group of economists at MIT to develop a new tool to measure the benefits of the digital economy.

During the WE Forum’s annual meeting in Davos this year (Jan 2019) MIT’s Eric Brynjolfsson gave an important interview, where we exposed new insight about the benefits economy and how to measure, called the GDP-B. To read the transcript of the interview please follow this link.

You also can watch a panel discussion where Eric Brynjolfsson attended and explained his views on the digital economy.

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