The OECD Statistics Newsletter, Issue 69, December 2018

The Statistics Newsletter For the ex tended OECD s tatis tic al net work

FEATURING ++If we measure the wrong thing, we will do the wrong thing ++International productivity gaps: Are labour input measures comparable? ++Developing digital economy satellite accounts for macro-economic statistics

THE LATEST THE FUTURE OF WELL-BEING

www.oecd.org/sdd/statisticsnewsletter Issue No. 69, December 2018

THE IEAFOREU4ENERGY EXPERIENCE

Contents 3

If we measure the wrong thing, we will do the wrong thing

Martine Durand, Chief Statistician and Director of Statistics and Data Directorate, OECD

6

International productivity gaps: Are labour input measures comparable?

Nadim Ahmad (nadim.ahmad@oecd.org), Ashley Ward (ashley.ward@oecd.org) and Belen Zinni (belen.zinni@oecd.org), Statistics and Data Directorate, OECD

9

Developing digital economy satellite accounts for macro-economic statistics

Nadim Ahmad (nadim.ahmad@oecd.org) and Peter van de Ven (peter.vandeven@oecd.org), Statistics and Data Directorate, OECD

14

Recent publications

15

Forthcoming meetings

The Statistics Newsletter is published by the OECD Statistics Directorate.

This issue and previous issues can be downloaded from http://oe.cd/statisticsnewsletter To receive the OECD Statistics Newsletter by email, you can subscribe to OECDdirect e-mails: www.oecd.org/about/publishing/oecddirect.htm Follow us on

@OECD_STAT

Editor-in-Chief: Martine Durand Editors: Nadim Ahmad and Peter van de Ven Editorial and technical support: Robert Akam and Sonia Primot Contact us at sdd.statnews@oecd.org

2 The OECD Statistics Newsletter - Issue No. 69, December 2018

If we measure the wrong thing, we will do the wrong thing Martine Durand, Chief Statistician and Director of Statistics and Data Directorate, OECD

N

obel laureate Joseph E. Stiglitz, leading economist Jean-Paul Fitoussi and the OECD’s Chief Statistician Martine Durand launched the reports of the “High Level Expert Group on the Measurement of Economic Performance and Social Progress” (HLEG) on 27 November 2018 in Incheon, Korea, at the 6th OECD World Forum on Statistics, Knowledge and Policy (www.oecd-6wf.go.kr/eng/main.do). The HLEG is the independent body created in 2013 to follow-up on the “Commission on the Measurement of Economic Performance and Social Progress” (also known as Stiglitz-Sen-Fitoussi - or SSF - Commission), established

by French President Nicolas Sarkozy in 2007. That Commission report has been highly influential within the statistics and policy community, leading to a range of national and international initiatives to implement its recommendations.

(Martine Durand, Yann Algan, Nora Lustig, Jacob Hacker, Ravi Kanbur, Jil Matheson, Thomas Piketty, Walter Radermacher, Chiara Saraceno, Arthur Stone and Yang Yao). The HLEG’s output includes two reports.

First, is a collection of chapters authored by some of the Group’s members (For Good Measure); these chapters deal with topics that either already figured in the SSF report -- but which are now revisited in greater depth in the light of developments since 2009 (e.g. economic inequalities, subjective well-being, sustainability) -- or new topics where key metrics should be developed by the statistical community (e.g. trust, economic security, equality of opportunity, horizontal and intra-household inequalities). Second, is an overview by the HLEG chairs providing a broad perspective on these topics and other issues that fall under the “Beyond GDP” agenda, as well as 12 recommendations to move the measurement agenda forward.

The OECD, which contributed to the work of the SSF Commission, hosted the independent HLEG from 2013 to 2018. The HLEG included many of the members of the SSF Commission (Joseph Stiglitz, Jean-Paul Fitoussi, Angus Deaton, François Bourguignon, Enrico Giovannini, Jeffrey Heal, Alan Krueger) alongside new members

The HLEG Chairs’ report takes “measurement” as its point of departure, stressing that the SSF report has helped to found a “global movement”, giving expression to latent concerns in society and providing a vocabulary through which various people could approach this agenda. As noted by Stiglitz, Fitoussi and Durand, the “central message is that what we measure affects

Martine Durand, OECD; Joseph E. Stiglitz, Columbia University and Jean-Paul Fitoussi, Sciences-Po and Luiss University

Issue No. 69, December 2018 - The OECD Statistics Newsletter 3

what we do. If we measure the wrong thing, we will do the wrong thing. If we don’t measure something, it becomes neglected, as if the problem didn’t exist”. But they also stress that measurement issues are not only technical, and go to the root of how our democratic system functions: “the gap between the ‘experts’ and the citizens they are supposed to be serving has played an important role in the bitter divisions within society that have been so vividly demonstrated in a number of recent elections”.

This is not to dismiss the importance of GDP, which remains a critical measure for assessing economic conditions at large and the effects of a range of policies. But GDP also continues to be used for purposes that it was not designed to meet, i.e. as the single yardstick to gauge the overall “success” of a country and the well-being of its people. What is needed is a broader range of established, well-being statistics, including more granular and timely data that better capture the state of the economy, the diverse situations of different population groups, and the threats to the long-term sustainability of our development model.

The 2008 financial crisis and its aftermath illustrate well why such a change of perspective is needed. The GDP loss that followed the crisis was not the temporary, one-off event predicted by conventional macro-economic models. The crisis caused the permanent loss of significant amounts of capital; both physical capital, such as machines and building structures, but also “hidden capital”, in the form of lower skills associated with long-term unemployment, lower on-the-job training, permanent scars on young people entering the labour market, and lower trust in a political system perceived as “rigged” to benefit just a few. The crisis also reinforced pre-existing inequalities, such as in income and wealth, and focused attention on new ones, e.g. in skills, longevity, social mobility and subjective well-being. Had all these consequences, and the lived experience of ordinary citizens, been better captured by our statistics and models, we may have avoided the populist voting, fake news and the backlash against globalisation that are dominating the public debate today.

So what needs to be done for improving the measurement of social progress? First, the HLEG reports emphasise the importance of not only better measuring people’s material conditions but also the quality of their lives, focusing not just on average outcomes but on inequalities

4 The OECD Statistics Newsletter - Issue No. 69, December 2018

across a wide range of outcomes, on the resources needed to ensure sustainability in the future and the extent to which we are approaching (if not trespassing) critical “tipping points” and planetary boundaries. Simon Kuznets, one of the fathers of the system of economic accounts, stressed the importance 50 years ago of ‘qualitative’ features that are both important for the functioning of our economy and central to people’s concerns.

As highlighted by the OECD Secretary-General, Angel Gurria, in his opening speech at the OECD word forum in Incheon, measures for some of these "qualitative" aspects have started to find their way into policy. For example, at the OECD, the new Jobs Strategy, launched in early December, emphasises not only the number of jobs created but also their quality (www. oecd.org/employment/jobs-strategy/), while the Going Digital Project looks at the positive and negative impacts on well-being of the digital transformation (www.oecd.org/going-digital/).

While better measures of “social progress” are needed, they are surely not enough. Having the right diagnosis is just the beginning. What also matters is to anchor these measures in the policy process, in ways that survive the vagaries of electoral cycles.

Beyond GDP also takes stock of country-experiences in using well-being indicators in the different phases of the policy-making process, from identifying priorities for action, to assessing the advantages and disadvantages of different strategies to achieve a given goal, to help allocate the resources needed to implement the selected strategy, to monitor interventions in real time, and to audit the results achieved.

While recent, these experiences hold the promise of delivering policies that, by going beyond traditional silos, are more effective in achieving their goals and in improving people’s well-being, overcoming those barriers between elites and ordinary people that are at the root of today’s political crisis.

Read the two books: Stiglitz, J., J. Fitoussi and M. Durand (eds.) (2018), For Good Measure: Advancing Research on Wellbeing Metrics Beyond GDP, OECD Publishing, Paris, https://doi.org/10.1787/9789264307278-en.

Stiglitz, J., J. Fitoussi and M. Durand (2018), Beyond GDP: Measuring What Counts for Economic and Social Performance, OECD Publishing, Paris, https://doi.org/10.1787/9789264307292-en.

The Future of Well-being “We can create the future we want. One that is anchored in well-being and sustainability for all people and our planet.”

Ban Ki-Moon closed the 6th OECD World Forum on Statistics, Knowledge and Policy with this empowering statement on how we can shape the future of well-being. The former UN Secretary-General explained that even though people cannot be reduced to mere numbers, statistics are vital to recording progress and are at the heart of delivering the Sustainable Development Goals.

The OECD World Forum brought together over 3,000 global figures, statisticians, business representatives, futurists, and many others in Incheon, Korea, from 27-29 November to discuss and push forward well-being measurement and policy. The Forum was organised by the OECD in collaboration with Statistics Korea and the City of Incheon. In addition to looking toward the future of well-being, participants explored changing governance, digitalisation, and the role of the private sector through a number of key note speeches, plenary and parallel sessions, and seminars.

What you measure matters was a common thread through the three days of discussions. At the launch of the reports of the High Level Expert Group (HLEG), co-chair and Nobel Prize-winning economist Joseph E. Stiglitz said: “If we do not look at the things that matter in life – whether that is inequalities, how people feel they are doing, their health and capabilities, or environmental sustainability – we cannot make the right choices for people, societies and the planet.” See the accompanying article “If we measure the wrong thing, we will do the wrong thing” for more information on these reports.

HRH Princess Laurentien of the Netherlands, in the Forum’s opening keynote address, shared with people in the room and those watching online that if we are not delving into the human feelings behind our statistics, we might be measuring the wrong thing, and therefore making the wrong interventions.

The OECD’s Secretary-General Angel Gurrìa emphasised the international dimension: “We have to stand strong, including at the multilateral level, to keep pushing our measures and indicators that inform on real people’s conditions on GDP and beyond.”

Beyond this common argument in favour of improving measurement, discussions included how to place the well-being of all citizens at the heart of government and how governments and businesses could work together to alleviate threats coming from new technologies to workers’ well-being. Among many other topics, speakers also discussed how companies with higher environmental, social and governance ratings actually also perform better as businesses, with increased innovation and productivity.

Looking to the future, the OECD’s Chief Statistician Martine Durand closed the Forum by noting that “better measures are already used by the people taking the decisions that impact on our lives. The debate has only just started on the future of well-being.”

Videos of the keynote speeches and plenary sessions can be found on the website (www.oecd-6wf.go.kr), together with the programme, speaker presentations, and all other information about the event.

Issue No. 69, December 2018 - The OECD Statistics Newsletter 5

International productivity gaps: Are labour input measures comparable?

Nadim Ahmad (nadim.ahmad@oecd.org), Ashley Ward (ashley.ward@oecd.org) and Belen Zinni (belen.zinni@oecd. org), Statistics and Data Directorate, OECD

D

ifferences in the measurement of labour In practice there are two main approaches adopted by input, in particular, hours worked, contribute countries to estimate hours actually worked: to the observed gaps in levels of productivity across countries. To better understand the 1. A direct method, which directly extracts and annualises potential scale of differences in sources and average actual weekly hours worked derived from methods, in February 2018, the OECD and Eurostat continuous surveys. This method often relies on launched a survey to collect metadata a single source, generally the LFS, ...results point to a on national accounts labour input and assumes that full and part-week reduction in relative absences and extra hours worked in the measures. Based on the results of the survey, and in close collaboration productivity gaps of main and/or additional job/s are wellwith the UK Office for National around 10 percentage captured in self-reported estimates of Statistics (ONS), the OECD carried weekly actual hours worked averaged points on average out an assessment of the approaches over the year. followed by countries to estimate compared with current official estimates... labour input measures – in particular, 2.

The component method, which hours worked – and their impact on the starts from estimates of contractual, international comparability of labour productivity levels paid or usual hours per week from establishment (Ward, Zinni and Marianna, 2018). surveys, administrative sources or, indeed, the LFS, with explicit adjustments for absences (holidays, The results of the 2018 OECD/Eurostat survey sickness, maternity leave, etc.) and (paid and/or on the measurement of labour input unpaid) overtime.

Overall, 45 countries participated in the survey.

Responses revealed that, in most countries, labour force The direct method has the practical advantage in surveys (LFS) form a primary source of information for that it typically uses a single data source and simple labour input statistics in national accounts, including calculations. However, estimates of actual working hours worked. Because the coverage of LFS does time directly collected, for example, from LFS, are not fully align with the coverage of activities used to sensitive to both over-reporting, in particular for those estimate value added (GDP), adjustments relying on working long hours, like managers and professionals, complementary sources, such as administrative sources and to underestimation of absences from work due to (e.g. tax records, social security registers) or business public holidays and annual and sickness leave. Similar statistics (e.g. establishment surveys), are often applied difficulties can arise if business surveys are used as to bridge conceptual differences. However, the range of the single source, as these rarely account for unpaid adjustments made by countries is not always exhaustive, overtime or for potential under-reporting of hours worked. with some applying no or negligible adjustments, which The accuracy of these direct approach estimates can be affects international comparabilit. significantly improved if the working time components are confronted across different data sources. For example, Measuring hours worked social security registers or health surveys can provide more accurate estimates of hours lost due to sickness.

In productivity analysis, labour input is most appropriately The potential impact on international measured as the total number of hours actually worked productivity gaps by all persons engaged in production, i.e. employees and self-employed. These include all hours effectively used To illustrate the importance of adopting a full range of in production, whether paid or not, and, in turn, exclude adjustments and to give some sense of the potential hours not used in production (e.g. annual and sickness impact that these different approaches may have on the leave), even if some compensation is received for them. international comparability of hours worked, the OECD

6  The OECD Statistics Newsletter - Issue No. 69, December 2018

Figure 1. Average annual hours worked per person, selected OECD countries, 2016 Average annual actual hours worked per person

Official estimates

OECD revised estimates

2100

2000 1900 1800 1700 1600 1500 1400 1300

Souce: Ward, A., M. Zinni and P. Marianna (2018), "International productivity gaps: Are labour input measures comparable?", OECD Statistics Working Papers, No. 2018/12, OECD Publishing, Paris, https://doi.org/10.1787/5b43c728-en.

estimated national measures of hours worked using a direct approach and a (simplified) wusing information available in LFS and complementary sources. The results from this exercise revealed that estimates of actual hours worked directly sourced from LFS are systematically higher than those derived using the simplified component approach, and almost always higher than the national accounts estimates of countries adopting component methods, providing strong evidence of upward bias in direct methods. Note, however, that this applies to levels of labour productivity only and the evidence does not indicate upwards or downwards bias in current national estimates of productivity growth rates.

Figure 1 presents official estimates of hours worked in countries’ national accounts, and compares them with OECD simplified component method

estimates only for those countries that currently use a direct method with minimal or no adjustments in their official statistics.

The corollary of lower hours worked of course, is higher labour productivity levels. Figure 2 shows labour productivity levels, referenced to the United States, using official national accounts average hours worked estimates, and average hours actually worked estimated with the OECD simplified component approach for those countries that produce their estimates with the direct method.

Overall, the results point to a reduction in relative productivity gaps of around 10 percentage points on average compared with current official estimates, with notable international ranking changes for some countries. The United Kingdom for example moves

Figure 2. International productivity gaps, levels, 2016 GDP per hour, Index United States = 100

Using official estimates of hours worked

Using OECD revised estimates of hours worked

150

140 130 120 110 100 90 80

70 60 50 40

Souce: Ward, A., M. Marianna (2018), "International productivity labour input measures comparable?", OECD Statistics Working Source: Ward, A., M. Zinni and P. Zinni and P. Marianna (2018), "International productivity gaps: Are labourgaps: Are input measures comparable?", OECD Statistics Working Papers, No. 2018/12, OECD Publishing, Paris, Papers, https://doi.org/10.1787/5b43c728-en.

No. 2018/12, OECD Publishing, Paris, https://doi.org/10.1787/5b43c728-en.

Issue No. 69, December 2018 - The OECD Statistics Newsletter 7

above Italy, while Austria moves ahead of France, the Netherlands, Switzerland and Germany.

The way forward at the OECD To improve the international comparability of labour productivity estimates, the OECD will implement the simplified component approach, conditional on data availability, in its releases of labour productivity levels for those countries that currently apply the direct method with no or minimal adjustments to estimate hours worked.

It is important to stress that this is to be considered only as a stop-gap for those countries. In this respect, it should be noted that most countries are already

beginning to work towards improving their methodologies in line with the recommendations made by the OECD in this exercise, and others will begin to do so.

References: Ward, Zinni and Marianna (2018), “International productivity gaps: Are labour input measures comparable?”, OECD Statistics Working Papers, No. 2018/12, OECD Publishing, Paris, https://doi. org/10.1787/5b43c728-en.

For the first time, the International Association for Official Statistics (IAOS) organised its biennial conference together with the OECD. The event, which took place on 19-21 September at the OECD headquarters in Paris, examined the key current and emerging issues in official statistics, particularly with a view to improving the use of official data in policy making. The organisation of the conference was also supported by the Mexican Statistical Institute, INEGI. The 300 participants from around 70 countries attended sessions which were grouped around five main themes: (i) sustainability; (ii) well-being and quality of life; (iii) the future role of official statistics; (iv) communication and statistical literacy; and (v) the measurement and impact of digitalisation and globalisation. More than 100 selected papers were presented in 3 plenary sessions and 31 parallel sessions, with an additional poster session including 20 papers.

Participants enjoyed thought-provoking keynote speeches: Walter Radermacher, President of the Federation of European National Statistical Societies, discussed the role of official statistics in a risk society, while, Eduardo de Sojo, the General Director of Mexico’s National Laboratory Public Policy, gave a user’s perspective of the Sustainable Development Goals indicators. Selma Mahfouz, the Director of Research, Studies and Statistics at France’s Ministry of Labour, presented on measurement and policy implications of changes in the labour market.

More information on the conference, including the programme and all papers and presentations can be found here: www.oecd.org/iaos2018.

The conference was made possible with kind financial support from Eurostat, ESRI and INSEE.

8 The OECD Statistics Newsletter - Issue No. 69, December 2018

Developing digital economy satellite accounts for macro-economic statistics Nadim Ahmad (nadim.ahmad@oecd.org) and Peter van de Ven (peter.vandeven@oecd.org) Statistics and Data Directorate, OECD

D

igitalisation is everywhere and is continuously redefining and transforming our economies and indeed our lives but there are increasing concerns that, as ubiquitous as it is, it is in large part absent from our statistics. For example, the advent of new digital innovations was expected to spark off a new wave of productivity growth, but this has not, at least yet, materialised, raising a number of questions, some of which, and increasingly so, relate to measurement.

Is the conceptual framework robust?

When questions are asked around measurement, they generally take two broad forms: •• The first concerns the conceptual boundary of GDP, and whether it is well equipped to capture increases in utility and consumer surplus generated by the explosion in free services provided to consumers (e.g. through search engines, on-line media etc.), or indeed the free services provided by consumers (e.g. their data).

These concerns are of course understandable. The scale and pace of digitalisation impacts not only on the way in which businesses operate but also on the •• The second relates to the difficulties involved in way in which consumers engage with differentiating between price and Digitalisation is businesses and with each other. For quality change in products that are businesses, digitalisation provides rapidly changing. Digitalisation has everywhere and is scope for improvements in production continuously redefining led to a proliferation of new products, processes and access to new markets, or combinations of products (e.g. and transforming our telecommunication services combining but digitalisation itself has also spawned many new businesses, and economies and indeed telephone, internet, navigation tools, ways of doing business, whilst also our lives but there are camera, etc.) and new ways of providing significant scope for profit conducting business, from high street increasing concerns shifting across international borders. sales to e-commerce transactions, or that, it is in large Moreover, digitalisation has also booking taxis and accommodation part absent from our services via digital platforms. All of impacted on the role of the consumer, statistics. with households increasingly engaging these are likely to have had an impact in intermediation services that blur the divide between on the quality of the goods and services delivered, and pure consumption and participative production. therefore the way we measure inflation and economic growth. Indeed, digitalisation may also have had an To address the broader issues concerning the Digital impact on the quality of other, non-digital, services, Economy, in January 2017, the OECD launched for example, the effect of using algorithms and digital a horizontal project “Going Digital: Making the tools on the quality of health and education.

Transformation Work for Growth and Well-being”, with Both of these issues have been investigated in some the aim “to help policymakers better understand the depth. Ahmad and Schreyer, (2016), for example, digital transformation that is taking place and create concluded that the GDP accounting framework a policy environment that enables their economies remains robust to the challenges of digitalisation, and and societies to prosper in a world that is increasingly that while digitalisation may have exacerbated, and digital and data-driven” (see www.oecd.org/going-digital/ increased the impact of, long-standing measurement project). Measurement forms an important component challenges around, for example, price measurement, of this effort and this short note provides an overview informal employment, and the treatment of free services, of work conducted by the OECD Statistics and Data these are not entirely new. For example, from a GDP Directorate, over the last two years in this area. perspective, the impact of advertising based models that provided viewers with free TV or radio services in the

Issue No. 69, December 2018 - The OECD Statistics Newsletter 9

analogue era were little different to those in the digital era. An important factor driving many of the questions around the conceptual boundary of GDP relates to the confusion between measures of welfare (in particular consumer surpluses generated by digitalisation, for example through the explosion of free media services, search engines, social media, cloud services etc.) and GDP (where these free services are consumed at zero cost).

Ahmad, Ribarsky and Reinsdorf (2017) also looked at a range of areas where mismeasurement is likely to have an impact on prices, to assess their potential impact on estimates of GDP and productivity growth. Whilst it is clear that digitisation does appear to have exacerbated longstanding measurement challenges, particularly with regards to price and quality changes in rapidly changing industries and products, these effects are mitigated when looking at broader measures of economic activity and inflation (see also Reinsdorf and Schreyer, 2017), and cannot explain the current slowdown in productivity growth. Moreover, they also concluded that even if imputations were included for the most popular forms of ‘free’ services, these too would not have a significant impact on GDP or productivity growth rates.

That being said, what is clear from this earlier work, is that it is the inability to articulate the actual size of the digital economy – through references to actors, products, transactions etc. – that has, at least in part, generated questions and challenges about measurement. The absence of this information in the core accounts continues to create confusion about what is and is not captured in macro-economic statistics and how these are measured; in turn, fuelling the broader mis-measurement hypothesis.

For example, it is clear that the digital economy also raises questions about the ability of current measurement techniques, statistical business registers and surveys to exhaustively capture many of the new digital players that have emerged and are likely to have grown over the last decade; ranging from the workers engaged in the gig-economy to large digital intermediation firms, in particular those with little physical presence in the countries where they engage. It is also probable that digitalisation has exacerbated the scale of long-standing challenges related to the measurement of intellectual property transactions, particularly where these are driven by fiscal optimisation (Base Erosion and Profit Shifting) Developing a digital satellite account In response, in 2017, the OECD Statistics and Data Directorate (SDD) created an Informal Advisory Group on Measuring GDP in a Digitalised Economy (see OECD,

10 The OECD Statistics Newsletter - Issue No. 69, December 2018

2016), to develop new classifications and accounting tools that are better equipped to show the digital reality and provide metrics that highlight the scale of the digital transformation. At the same time, and in response to a request from the G20 for improved measures of digital trade, SDD, together with the WTO, as co-chairs of the Inter-Agency Task Force on International Trade Statistics, created an informal group of over 25 developed and emerging economies to begin to develop guidelines, best practice and a Handbook on Digital Trade.

From the outset, the emphasis in both groups – that have continuously worked together - was to design an accounting framework able to provide a broadly holistic view of the digital economy that could respond to the multitude of questions asked by analysts and policy makers, notably those that current mainstream statistical information systems cannot respond to. In other words, a satellite account to the conventional national accounts.

The multi-dimensional nature of these questions meant that the framework could not be built exclusively around mono-dimensional aspects such as industries (producers), or consumers (households and industries), or products (digital and non-digital) or transactions (digitised and non-digitised), as each approach, on its own, only provides a partial view. That being said, a central unifying theme, broad enough to reflect the multidimensional policy needs, concerns the nature of transactions.

A consensus has emerged around the idea that any framework needs to be able to separately identify transactions based on their “digital nature”, i.e. that are digitally ordered, digitally delivered, and/or digital intermediary platform-enabled (partly because of their different economic impact but also because of the different ways in which transactions are recorded in the accounts). It is this view that has shaped the definition of digital trade as any international trade flow that is either digitally ordered, digital-intermediary platform-enabled, or digitally delivered. An overview of the conceptual unifying framework is described in Figure 1.

Importantly, the framework has been designed to capitalise on blocks that can, at least in theory, be readily derived from current information sets and in line with current international accounting standards.

But, as depicted in the first column of Figure 1, it also goes further through its inclusion of many non-monetary digital transactions that are typically not included in GDP but that may have important economic implications, for example in considerations of measures of welfare.

A special mention in this respect concerns the explicit reference to data; see the third column of Figure 1.

In the current international accounting standards the

Figure 1. Conceptual unifying framework

Product

Nature

Users

('Who')

('what')

('how')

('who')

Corporations

Excluded in the SNA production boundary

Digitally

Households Government

ordered

Services

Digitally delivered

NPISH ROW

Corporations

Goods

Information / Data

acquisition of data without a monetary transaction is treated as “free”, therefore, in the accounts much of these data neither appear as a good or a service. There is however considerable interest in monetising these flows, and indeed the value of the databases they form part of; especially as these databases are often a crucial part of firms’ business models and, so, factors of production (see also Ahmad and Van de Ven, 2018).

The operationalisation of these principles to develop a digital satellite account builds on national supply and use tables (a core part of current national statistical information systems), which provide detailed information on the production process, the origin of various goods and services (supply) and the destination of these goods and services (use) (see Ahmad and Ribarsky 2018 and Mitchell, 2018).

The digital satellite account goes further by requesting more detailed breakdowns of goods and services based on the mode of ordering and delivery, providing more information on probably one of the most visible manifestations of digitalisation, i.e. electronic ordering (e-commerce), electronic delivery and platform-enabled transactions; and recommending breakdowns and new groupings of producers more relevant for the digital economy, e.g. digital intermediary platforms, e-sellers, and firms dependent on intermediary platforms. In addition, the framework separately distinguishes digital enablers, in both the producers’ and the products’ dimension.

Moving Forward The proposed template for capturing information on the digital economy within a macro-economic framework,

Digital intermediary platform-enabled

Included in the SNA production boundary

Producers

Households Governmemt NPISH

ROW

i.e. the digital satellite account, received positive support from the Informal Advisory Group of experts and the Advisory Expert Group (AEG) on National Accounts and is expected to gain formal agreement from the relevant OECD bodies in 2019.

Countries will be requested to start populating the proposed template in the beginning of 2019. Due to its complexity, and the novelty of information required, including the requirement to make new delineations in actors, and modes of supply (the “how” in Figure 1 above), it is not expected that countries will be able to fully populate the template immediately. However, the template is intended to motivate the up-take and development of changes in statistical information and classification systems that will be required in the medium term. That being said, even a partial approach in the short-term will be able to deliver significant new insights as the template deliberately builds on work already undertaken or initiated by countries and the international statistical community that aims to separately identify key elements of the digital economy. Some countries have already started to populate parts of the satellite account and have developed indicators on topics such as e-commerce, digital enabling industries, and consumer use of digital products and services.

Completion of the digital template, which is the first step in creating a more comprehensive satellite account, will be supported by exchanging country practices and information on ongoing initiatives, such as those used in developing the Handbook on Digital Trade, which builds on two OECD-IMF stocktaking exercises involving more than 70 countries (statistical offices and central banks).

Issue No. 69, December 2018 - The OECD Statistics Newsletter 11

The Handbook is scheduled for on-line release as a living document in Q1 2019, (when it will be submitted to the UN Statistical Commission –UNSC- for information).

It will contain 5 substantive chapters, comprising: a definition of digital trade; best practice on measuring cross-border digitally ordered goods and services; best practice on identifying digital intermediary platforms; best practice on measuring digitally delivered services; and, recommendations to estimate trade in digital goods and trade in digital services.

More generally, the UNSC considers digitalisation, next to globalisation and well-being and sustainability, as one of the three priority areas for further research in the context of the enhancement of the 2008 System of National Accounts (2008 SNA), the current international standards for compiling national accounts. The UNSC has requested the Inter Secretariat Working Group on National Accounts (ISWGNA), in close cooperation with the Advisory Expert Group on National Accounts, specialists in other statistical areas and user communities, to start developing guidance notes that support countries in dealing with issues emerging because of the digital transformation.

Mitchell, John (2018), “A Proposed Framework for Digital Supply-Use Tables”, Paper prepared for the OECD Working Party on National Accounts, SDD/CSSP/ WPNA(2018)3, www.oecd.org/officialdocuments/publ icdisplaydocumentpdf/?doclanguage=en&cote=SDD/ CSSP/WPNA(2018)3 OECD (2016), “Proposal to Create an Informal Advisory Group on Measuring GDP in a Digitalised Economy”.

Reinsdorf, Marshall and Paul Schreyer (2017), “Measuring Consumer Inflation in a Digital Economy”.

Paper presented at the 5th IMF statistical forum, available here www.imf.org/en/News/Seminars/ Conferences/2017/05/03/5th-statistical-forum

oe.cd/GoingDigital References: Ahmad, N. and P. Schreyer (2016), "Measuring GDP in a Digitalised Economy", OECD Statistics Working Papers, No. 2016/07, OECD Publishing, Paris, https:// doi.org/10.1787/5jlwqd81d09r-en.

Ahmad, N. and J.Ribarsky (2018), “Towards a Framework for Measuring the Digital Economy”, Paper prepared for the 35th IARIW General Conference, www.iariw.org/copenhagen/ribarsky.pdf Ahmad, N., J. Ribarsky and M. Reinsdorf (2017), "Can potential mismeasurement of the digital economy explain the post-crisis slowdown in GDP and productivity growth?", OECD Statistics Working Papers, No. 2017/09, OECD Publishing, Paris, https://doi.org/10.1787/ a8e751b7-en.

Ahmad, Nadim and Peter van de Ven (2018), “Recording and Measuring Data in the System of National Accounts”, www.oecd.org/officialdocuments/publicdisplaydocument pdf/?doclanguage=en&cote=SDD/CSSP/WPNA(2018)5.

12 The OECD Statistics Newsletter - Issue No. 69, December 2018

#GoingDigital

Bridging the gap between statisticians and policy-makers: The IEAforEU4Energy experience from Eastern Europe, Caucasus and Central Asia Since 2016, the International Energy Agency (IEA) has led a project to strengthen the energy statistics of 11 countries in Eastern Europe, Caucasus and Central Asia, as part of EU4Energy (www.eu4energy.iea.org), a fouryear European Union programme to promote evidence-based energy policy making in the region. Specifically for statistics, the challenge is how to make policy makers aware of the value added of these statistics for policy analysis and decision making.

Now halfway through the programme, participating countries are producing more energy data and making it more visible, including to policy makers. The key to this success has been the extensive consultation the IEA carried out with the countries’ statistical offices, each of which designed an action plan that combined individual priorities with a shared strategy (Strategic Actions for Energy Statistics: www.eu4energy.iea.org/Documents/ Strategic-actions-Stats-Low-Def.pdf). As one statistician put it: “what we need the most is help to explain energy data to non-specialists”.

Odessa, Ukraine, 12-16 March 2018. – Over 55 participants from 10 countries, statisticians and data users from ministries and stock holding agencies attended a training event on monthly energy data, a key foundation of energy security policies (Photograph: IEA)

From its inception, the IEA-led programme has focused on building links between data producers and data users, by organising meetings in each country between the two groups, integrating ministry officials in all statistics training events, and ensuring statisticians are in the room when policy priorities are discussed. One statistician said “Thanks to this programme, there is a now a total different attitude to statisticians in the Ministry. But the mentality of statisticians has also changed. There is an awareness of the use of this data. Before we were just seeing our data as a long list of reports they were asking from us”.

As part of the programme, the IEA organised events that showed statisticians how they have a role to play in informing energy policy making. For example, the Issyk-Kul forum on energy subsidies proved that statisticians can open new perspectives in difficult policy debates, in this case by increasing policy makers’ understanding of how households use energy and explore alternative ways of reducing household spending on energy products.

To help statistical offices reaching out to wider audiences, IEA statisticians worked to develop prototype communication materials targeted at non-specialists. These included the How to read an energy balance factsheet (www.eu4energy. iea.org/Documents/Energy-Balances-Factsheet.pdf) and accessible infographics on the energy context of each country.

These infographics were translated (www.eu4energy.iea.org/Documents/Armenia-Infographic-Final-Armenian.pdf) by statistical offices into national languages and have been featuring in news articles. They are now being adapted (www.eu4energy.iea.org/PublishingImages/Belarus_Infographic_english-final.jpg) by participating countries to make them suitable for their own national data releases.

Nowadays, more energy data for these countries are available on national statistics websites, as well as in the IEA/OECD databases (World Energy Statistics, Energy Efficiency Indicators Highlights, World Energy Balances).

Further efforts aim to advise statisticians on how best to raise support for energy data collection in order to fill the remaining data gaps and to ensure the work continues when the support project ends.

For questions and comments, please write to IEAforEU4Energy.data@iea.org. For more information on energy statistics, please visit www.iea.org/statistics.

Issue No. 69, December 2018 - The OECD Statistics Newsletter 13

Recent publications Settling In 2018: Indicators of Immigrants Integration Many countries have made important improvements in integrating immigrants and their children into the labour market and day-to-day life of their country. However, many challenges remain and much of the potential that migrants bring with them remains unused, hampering both economic growth and social inclusion, according to a new joint OECD-EU report.

Settling In 2018: Indicators of Immigrant Integration finds that the proportion of highly educated immigrants has grown in virtually all OECD and EU countries, rising by 7 percentage points over the past decade in both areas. At the same time, in all countries, most immigrants express a strong sense of belonging to their host-country, with more than 80% reporting feeling close or very close to this country..

OECD/EU (2018), Settling In 2018: Indicators of Immigrant Integration, OECD Publishing, Paris/EU, Brussels. www.oecd.org/publications/indicators-of-immigrant-integration-2018-9789264307216-en.htm

Revenue Statistics 2018 Tax revenues in advanced economies have continued to increase, with taxes on companies and personal consumption representing an increasing share of total tax revenues, according to new OECD research.

The 2018 edition of the OECD’s annual Revenue Statistics publication shows that the OECD average tax-to-GDP ratio rose slightly in 2017, to 34.2%, compared to 34.0% in 2016. The OECD average is now higher than at any previous point, including its earlier peaks of 33.8% in 2000 and 33.6% in 2007.

OECD (2018), Revenue Statistics 2018, OECD Publishing, Paris www.oecd.org/tax/revenue-statistics-2522770x.htm

OECD Pensions Outlook 2018 Improvements in the design of pension systems over the last decade in OECD countries have made them more financially sustainable and governments should now focus on ensuring they provide people with an adequate retirement income, according to a new OECD report.

The OECD Pensions Outlook 2018 says that governments face challenges including population ageing, low returns on retirement savings, low growth, less stable employment careers and insufficient pension coverage among some groups of workers. These issues have eroded the belief that pension systems, pay-as-you-go or funded, will deliver on their promises once workers reach retirement age.

OECD (2018), OECD Pensions Outlook 2018, OECD Publishing, Paris. www.oecd.org/finance/oecd-pensions-outlook-23137649.htm

14  The OECD Statistics Newsletter - Issue No. 69, December 2018

Forthcoming meetings Unless otherwise indicated attendance at OECD meetings and working parties is by invitation only.

OECD Date

Meeting

7 February 2019

Workshop on Comparative on International vocational education and training (VET) Indicators, Directorate for Education and Skills OECD, Paris, France The Post-2020 Biodiversity Framework: Targets, Indicators and Measurability Implications at Global & National Level, Environment Directorate, OECD, Paris, France Working Party on Indicators of Educational Systems (INES), Directorate for Education and Skills OECD, Paris, France 4th Ministerial Meeting of the Regional Development Policy Committee (RDPC). Athens, Greece www.oecd.org/cfe/regional-policy/rdpc-ministerial-meeting.htm Working Party on International Trade in Goods and Services Statistics (WPTGS), Statistics and Data Directorate, OECD, Paris, France Working Group on International Investment Statistics (WGIIS), Directorate for Financial and Enterprise Affairs, OECD, Paris, France G20 Workshop on Institutional Sector Accounts, Statistics and Data Directorate OECD, Paris, France Working Party No. 2 on Tax Policy Analysis and Tax Statistics, Centre for Tax Policy and Administration, OECD, Paris, France OECD Week, OECD, Paris, France

26 February 2019 18-20 March 2019 19-20 March 2019 25-29 March 2019 26-28 March 2019 24-26 April 2019 13-16 May 2019 20-23 May 2019 24-25 June 2019 24-25 June 2019 9-10 September 2019 9-11 October 2019 22-24 October 2019 4-8 November 2019 11-14 November 2019 11-13 December 2019

Working Party on Tourism Statistics - 3rd Session, Centre for Entrepreneurship, SMEs, Regions and Cities, OECD, Paris, France Meeting of the Committee on Statistics and Statistical Policy (CSSP), Statistics and Data Directorate, OECD, Paris, France Expert Group on Extended Supply-Use Tables, Statistics and Data Directorate, OECD, Paris, France Task Force on International Trade in Service, Statistics and Data Directorate, OECD, Paris, France Working Group on International Investment Statistics (WGIIS), Directorate for Financial and Enterprise Affairs, OECD, Paris, France Working Party on National Accounts (WPNA) and Working Party on Financial Statistics (WPFS), Statistics and Data Directorate, OECD, Paris, France Working Party No. 2 on Tax Policy Analysis and Tax Statistics, Centre for Tax Policy and Administration, OECD, Paris, France Working Party of National Experts on Science and Technology Indicators (NESTI), Directorate for Science, Technology and Innovation, OECD, Paris, France

Other meetings 22-25 January 2019 5-6 April 2019 12-14 April 2019 28-29 June 2019 18-20 October 2019

World Economic Forum Annual Meeting, Davos, Switzerland www.weforum.org/events/world-economic-forum-annual-meeting World Economic Forum on the Middle East and North Africa, Dead Sea, Jordan www.weforum.org/events/world-economic-forum-on-the-middle-east-and-north-africa Spring Meetings of the World Bank Group and the International Monetary Fund, Washington, D.C, United States G20 Summit & Ministerial Meetings, Osaka, Japan, www.japan.go.jp/g20japan Annual Meetings of the World Bank Group and the International Monetary Fund, Washington, D.C, United States

Issue No. 69, December 2018 - The OECD Statistics Newsletter  15

The Statistics Newsletter

for the extended OECD statistical network Issue 69 - December 2018 http://oe.cd/statisticsnewsletter To receive the OECD Statistics Newsletter by email, you can subscribe to OECDdirect e-mails: www.oecd.org/about/publishing/oecddirect.htm

@OECD_STAT