3. November 2003

[ English , Oekonomie ]

Knowledge Economy and GDP

In her talk at the "KM in NGOs"-Workshop in Brussels last week, Verna Allee talked about the value of intangibles and stressed that a lot of exchanges in the knowledge economy were exhanges of intangibles like favours, information, networking that were never measured.

At lunch, I discussed that with John Moore and Ton Zijlstra and came up with the following thought/hypothesis:

"As we progress towards a knowledge-based economy, more and more exchanges become exchanges of intangibles, so ceteris paribus measured GDP decreases."

I assumed an economy that is not growing. I am not sure that that is necessary for this idea.

I hope you can understand what I am thinking of without the context of Verna's talk and our discussion. (If not, John and Ton will explain to you in more detail. ;-)) What do you think? Is there something fundamentally wrong about my hypothesis? And what if it contains a little truth? What would that mean for policymakers? How do you do economic policy if you can't measure economic exchange?

[Trackbacks to this entry:] knowprose.com: Knowledge Economy and Intangible Exchange Metrics


Indeed these intangibles are un-assessed, but I do not neccesarily agree that they are signals of a 'knowledge economy'. favours and networks are regularly displayed across all cultures and nations.

Aren't these 'intangibles' measured perhaps even more in a knowledge-based economy than one that is not? I have heard that 'the Invisible Economy' in the UK (Banking, Insurance, Law etc.) is possibly the UK's strongest income generator. Do consultants not charge for their time to the minute?

I would suggest that perhaps as we progress to a knowledge-based economy, traditionally intangible things like networks become increasingly monetarised (eg. paying to be included in YASN) and integrated into the GDP etc... ?

ed am 15.09.04 12:33 #

An interesting thought! You are right: If we monetarise exchanges of intangibles, like we do in consultancy for example, then they are included in the GDP. Verna Allee's starting point was the thought that more and more exchanges that took place were _not_ measured. Maybe that is not right?

Martin Röll am 15.09.04 12:57 #

I would like to add to this discussion that we need to distinguish between intangible goods (e.g. software, music, e-books) and intangible services (e.g. healthcare, consulting, education).
There are different kinds of services (low-tech: like hairddresser, cleaning) and high-tech(knowledge-intensive)

Amir Fazlagic am 15.09.04 13:23 #

I dont believe that Verna Allee's starting point was as stated, and I find the implied assertion that makes the GDP figures correct difficult

An exchange map enables you to look at value multiplication as opposed to value separation. This is vital wherever systems compound relationships, and essentially for all network age possibilities to go above zero-sum economics rather than to spin below. Its an over-simplication but unlike eating chocolate that gets used up, learning (also relationship permissions of social networks) multiplies in use. Of course, learning can be to a destructive end like a terrorist multiplying network as well as to hopefully good ends of most schooling and communal equities developed around transparent exchanges directed at improving context competences.

One more question for you from another angle. What value do you feel the web's contents have - and whose GDP is that in?

Chris Macrae am 16.09.04 18:05 #