Cooperating with scientists and policymakers to measure the economy

/ Author: Masja de Ree
CBS researcher Maarten van Rossum talks about new methods to measure the economy
© Sjoerd van der Hucht Fotografie / My Eyes4u productions
Globalisation and digitisation make it increasingly difficult to measure the economy. In the expert group Adequate Measuring of the Economy, CBS explores solutions for these measurement problems together with ministries, knowledge organisations, large municipalities and banks. The group recently gathered for the second time – online in the wake of coronavirus.
The expert group held a fundamental discussion about measurement problems due to the changing economy. Are new or more detailed statistics needed in order to maintain the accuracy of measurement? Or is it better to combine information from various existing statistics?
In 2019, CBS conducted its first study (see below) exploring an alternative framework that might help monitor income. The results from this exploratory study were presented during the last meeting. The new framework is to be based on the same data sources and categories, but data are combined and presented in a different way. Maarten van Rossum, statistical researcher at CBS, explains: ‘The new framework is explicitly intended as a first exploration and far from complete. We’re looking to further develop the framework in collaboration with scientists at knowledge institutions as well as experts on this subject at ministerial and municipal level.’

 

Exploring a new framework
In the first framework study, CBS examined the impact of globalisation and digitisation on existing as well as new business models. Furthermore, relevant transactions were identified and classified which would help determine the amount of money earned in the Netherlands. The way these transactions are embedded in the present-day national accounts system was studied as well. CBS also showed the Expert Group an alternative framework which is focused on business models and income rather than on the production approach of the national accounts.

 

Building blocks

‘Measurement of the economy is too important to have it done by only one organisation,’ says prof. Marcel Timmer of The Netherlands Bureau for Economic Policy Analysis (CPB), who was providing feedback on the CBS study at the meeting. ‘That’s why this expert group is so significant. The pitfall for CBS is that it focuses purely on its legal task: rather than measuring the economy in a broad sense, it becomes more like accounting. By eliciting input from outside, CBS can guard against this situation.’
CBS boasts an enormous array of relevant figures. ‘All these building blocks are put together in the National Accounts and presented in one specific way. As part of the framework study, CBS has justifiably addressed other ways of putting these building blocks together into relevant products. In addition, new measurement methods are probably needed that will help obtain a better picture of digitisation and globalisation. The question how this should take form can be addressed in our future discussions.’ He points out that CBS is on the right track by examining a new framework, as long as it ensures the ‘building material’ remains intact: ‘I think first of all, CBS has to construct excellent building blocks – if necessary by applying new measurement methods – and secondly, that these building blocks can then be put together in different ways to produce relevant information, either by CBS or by the users of CBS data.’

‘Moving target’

A similar view on the importance of the expert group was expressed by Prof. Eric Bartelsman from VU University Amsterdam. ‘We are dealing with a ‘moving target’ here: both society and the economy are in a constant flow. This also means constant reviewing of the most suitable ways to track the developments. CBS has demonstrated that it is ready to go with the flow.’ During the expert meeting, Bartelsman elaborated on his idea about the CBS study. ‘A new framework needs to be approached very carefully,’ he stresses. ‘After all, you want to make adjustments according to changes in society, but at the same time keep the determinants stable so you can draw an accurate comparison with data from previous years. The fact that CBS is eliciting knowledge from the realms of science and policy development as well as international expertise is therefore a good sign. The national accounts system has been functioning smoothly for many decades. But there are certain areas in which digitisation and globalisation, or the greater flexibility of the labour market for instance call for some adjustments. The question then is, what is the best way to go forward in making the adjustments. I am personally in favour of a strict and ‘traditional’ system of national accounts. And in order to arrive at the appropriate policies, a set of area-specific satellite accounts.’
According to Bartelsman, investing in proper measurement of the economy is of great importance. ‘Thanks to the expert group, this view is shared by the ministries as well. Continuing investment in research on measurement methods equals investing in the future. Now more than ever, we witness the importance of being prepared for the unforeseen.’

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