Does the New Economy demand New Statistical Approaches?

Royal Statistical Society Conference - Plymouth, September 2002Royal Statistical Society Conference - Plymouth, September 2002

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Does the New EconomyNew Economy demand

New Statistical New Statistical ApproachesApproaches?

[email protected] http://les1.man.ac.uk/cric/

http://les1.man.ac.uk/prest/


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Outline Challenge of new economy - Knowledge-

Based Society An approach to determining new directions

for activity - success scenario workshops A “thought experiment” of how it might work

for new economy statistics - statistical goals for the knowledge-based society

Some very provisional conclusions


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“Knowledge-Based Society”

Challenges to statistics associated with: Information Society Services Economy Knowledge Production and Use

Innovation Globalisation


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1960 1970 1980 1990

Millions ofInstructions

per second(MIPS)

100

10

1.0

0.1

.01

“Moore’s law”

MainframeMinicomputer

PCEmbedded

Information Society


PRESTPREST CRICCRICInformation Society

MainframeMinicomputer

PCEmbedded

1960 1970 1980 1990

Millions ofInstructions

per second(MIPS)

100

10

1.0

0.1

.01

Continuing dramatic performance trends (Moore’s Law, Gilder’s Law, Metcalf’s Law, etc.)

Rise (and rising relative cost) of software, services Hedonics Impact on economic performance (productivity

paradox, US upturn) Technology measurement Digital divide IS evolution - islands archipelago continent ??ecosystem

etc… MUCH measurement effort on some topics - esp ICT

use, ecommerce - e.g. SIBIS


PRESTPREST CRICCRICService Economy

0

10

20

30

40

50

60

70

Agriculture

Industry

Services

EU15

0

10

20

30

40

50

60

70

80

Japan

0

10

20

30

40

50

60

70

80

c. 1900 c. 1950 1971 1998

USA

Services’ Employment Growth - trend only somewhat less marked in terms of output growth; very strong trends for business services

No longer “residual”


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0

10

20

30

40

50

60

70

Agriculture

Industry

Services

EU15

0

10

20

30

40

50

60

70

80

Japan

0

10

20

30

40

50

60

70

80

c. 1900 c. 1950 1971 1998

USA

Service Economy

Problems in measuring output, quality change, and also trade etc.

Distinctive features of services organisation (though convergence?)

“Services” grow in all sectors, little track of associated service output

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


PRESTPREST CRICCRICKnowledge Production and Use

“Intangible investment”: R&D, technology payment, softwareexpenditures, public expenditure on education (proxy for training

expenditures), and advertising expenditures.

1985 1989 1991 1985 1989 1991 19921992

source: European Commission 1998source: European Commission 1998

Share Share of of

GDP:GDP:

12%12%

10%10%

8%8%

6%6%

4%4%

2%2%

0%0%


PRESTPREST CRICCRICKnowledge Production and Use: eWORK

11.8

6.8

9.9

1.4

1.4

0.9

43

11.4

34.5

18.3

5.3

15

11.1

0 5 10 15 20 25 30 35 40 45 50any eEmployeesremote back-officesmultilocational teleworkhome-based teleworkremote back-officestelecentre/telecottageany eOutsourcing

eLancerseOutsourcing/own regioneOutsourcing/other region

eOutsourcing/other countryoutsourced call centre

outsourced call centre with telecomms link

Enterprises Enterprises with 50+ with 50+

employees, employees, EU15 + 3 EU15 + 3

accession accession states, 2000states, 2000

source: source: EMERGENCEEMERGENCE

eOutsourcingeOutsourcing> in-firm > in-firm eWorkeWork

““classic” classic” telework < telework <

mobile mobile teleworktelework


PRESTPREST CRICCRICKnowledge Production and Use

Knowledge activated in distributed systems, networks: new unit of analysis?

Much effort in firms in knowledge management, rise of intangible assets and of accounting for intangibles (and their performance)

Lifelong learning and other issues for human capital; skills shortages


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Innovation Globalisation Services’ Innovation R&D as only part of

innovative effort Patents capture only

part of innovative output

Innovations are not all equal, and take many forms (not just technological)

New actors...

Expansion of global firms: where to attribute activity, how to deal with transfers

New forms of competition in network economy

...


PRESTPREST CRICCRICRole of Statistics in

“Knowledge-Based Society” Rapid change, complex relations - demand for more

rapid intelligence Using knowledge to inform decisions better -

evidence-based policy etc. But also changes in knowledge production

- “mode 2”, “distributed systems”, etc. And more uncertain, provisional, cross-disciplinary

issues - need “trans-science”, expertise Emergence of new approaches to mobilising

knowledge - and expertise


PRESTPREST CRICCRICOne Approach: Success Scenario Workshops

Essentially examine ~ What could be feasible, desirable success in the field?

Had a sponsor with demand for the process, decisions to make

Recognised need for drawing on widely-dispersed knowledge to develop viable vision and make useful plans

Use background research and analysis to inform dialogue; focus on applications and not just “disciplinary” problems


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ICT, genomics and most recently nanotechnology as subject areas.06/02 - “output” published - but

action was already underway


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NanotechnologyNanotechnology


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Workshop Preparation Define subfields - e.g. for nanotechnology, 6

application areas - drug delivery informatics, instrumentation,, new materials, sensors & actuators , tissue engineering.

Prepare background reports - benchmarking, SWOT analyses, Foresight reviews, data (even modelling), scenarios...

Select participants - researchers, policymakers, users and intermediaries (e.g. investors)


PRESTPREST CRICCRICWorkshop Structure

Starting from the benchmarking studies and “snapshots” for the application areas, break-out groups and plenary sessions consider: Where the UK stands What are Drivers and Shapers of, and Barriers to - Change? What would SUCCESS SCENARIOS look like? How to get to Success? What actions are required (by whom)? What are indicators of progress?


PRESTPREST CRICCRICHypothetical NESSS Workshop

- New Economy Statistics Success Scenario Assume that focus will be on official and semi-official data sources and

definitions - not so much on analyses, techniques (is this right?)

BACKGROUND MATERIAL 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?

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).

“Benchmarking” - review of major initiatives and efforts elsewhere Scenarios? Different prospects for role of official statistics in society?

New New StatisticsStatistics



- New Economy Statistics Success ScenarioWhat subfields to organise around?

Major areas of challenge? Our analysis of KBS sees 3-5 major elements - Information Society, Services

Economy, Organised Knowledge, Innovation, Globalisation 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)

Major application areas? 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.

Other? Major fields of statistics, or even methods of production?


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Credible, optimistic Expert consensus if possible Informed by benchmarking and other inputs

“Stretch target” Shared visions, improved understanding (break

out of “boxes”) Better indicators of progress (and projections) Action points

WHAT?

WHY?

WHAT?

WHY?


PRESTPREST CRICCRICDrivers of ChangeNanotechnology application groups’

orientation: Access to technology:

New knowledge in the UK and internationally Local & global markets & competition:

demand pull from users appreciation of opportunities from knowledge

Other issues Special features that distinguish your area ?UK’s special advantages or problems compared to competitors?



Drivers of Change Challenges associated with Knowledge BS

Rate of Change ICT and Information Society (productivity paradox, hedonic pricing...) Services and Service Economy (service quality change, role of KIBS...) Knowledge Production and Use (KM, intangible assets, network orgn...) Innovation (innovative effort, collaboration...) Globalisation (intrafirm/network trading, ecommerce...) Others?

New Demands: Changing roles of government; intersection of policy areas Legitimacy, public attitudes? Business appreciation of opportunities from data analysis Others?

Other issues: Possible new data sources, methods - new modes of dissemination? Scope for international collaboration?



Drivers of Change

Outcomes would be: Revised List of Drivers Identification of Key Factors Potentially, identification of degree of

uncertainty, need for further research, other sources of knowledge (and participants) required)

Input to next steps in process.


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What Indicators of ‘Success’? key products and applications impact of products on end-user performance local and global end-user markets - size and UK share industry structure - large firms, SMEs, spin-outs business model (e.g. high value added) where are the UK companies in the supply chain? effect on GDP/employment? And impact on inward

investment? our competitors, and how we compare where is the leading-edge research? where UK

stands? other features

How much change by 2006?


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What key new statistics? What in terms of timeliness, adaptability? What level of user uptake and impact on end-

user performance (different types of users and uses)

possible estimation of value for money of new developments?

where UK work compares with leading-edge research elsewhere

influence on EU, international practice other features??

Hypothetical NESSS Workshop Indicators of ‘Success’

How much change by

when? Quantifiable??


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New statistics: 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...

Research explicates: Valuation of intangibles; “impacts” of IT use; role of outsourcing and service

use; innovation processes in networksRoadmap for future statistics developments timetable for continuing development, benchmarkedInfluence on international processes change-enabling role in Eurostat, OECD, UN… Use of ERA… quantify??Use of statistics in UK: 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...

Hypothetical NESSS Workshop (Very) Speculative Indicators


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What Enables Change Quality of research Ownership of research Availability of skilled people Sources of finance Instrumentation, standards Infrastructure and manufacturing capabilities (e.g. fab

facilities) Structure and organisation of industry and markets Regulatory Environment Policies for Health Services and other public sector markets Intellectual Property Regimes Other issues (please add your own)



Enablers of Change Quality and legitimacy of routine statistical apparatus,

research efforts into improving data, scope for satellite accounting etc.

Links to user constituencies (need more development?) Links to social science (ESRC sees stats problems) Availability of skilled people (shortages? - interdisciplinarity?) Finance Infrastructure and technology Public sector and administrative by-product data Good examples from elsewhere Other issues ...


PRESTPREST CRICCRICIndicators of ‘competitiveness’

Performance relative to other countries: UK research recognised by global players as leading edge UK firms assembling high value added patent portfolios Venture capitalists and inward investors investing in UK start-

ups (statistics-based KIBS??) International collaborations End users seeking/ recognising value of UK products (market

share) (citation, use in social research, use overseas?) Availability/size of facilities in the UK Number of graduates and post-graduates in relevant

disciplines Other issues (please add your own)


PRESTPREST CRICCRICWhat do we do to make it happen?

Steps which need to be taken to maximise the likelihood of your success scenarios

Research People Facilities Finance and taxation Access to technology [and international collaboration] Regulatory issues Other issues

Moving from science Moving from science to commercial/socially to commercial/socially

useful applicationsuseful applications


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Hypothetical NESSS Workshop

Key Actions: Research (where priorities - problems that could be effectively tackled)

People (what skills, organisation, management, linkages with HEI research)

Facilities (IT for production, processing, dissemination) Finance International collaboration (inc privacy, survey control) Regulatory issues Other issues - political support, autonomy/ professionalism, public attitudes


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Provisional Conclusions Many pressures for change Already much clamour about specific problems

and new data requirements Despite ‘new economy’ hype, substantial

challenges are evolving Time ripe for significant initiatives on several fronts,

despite (a) inertia and (b) need for time-series Worth exploring new processes. Heavy challenges

- resource needs - need to develop case to justify effort.


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Workshop Method 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?

Would need sponsor, champion, links to change agents

Could be transnational rather than UK Need to link to ongoing efforts underway in UK

(e.g. ecommerce), OECD and EU (e.g. SIBIS), “academic” research

Who to organise?

End of PresentationEnd of Presentation

CRICSuccess in Nanotechnologies