Capturing the Value of Technology—in Economic Terms

When you look at economic statistics like G.D.P. and productivity, what gets overlooked? According to a New York Times column by Eduardo Porter, these key measures fail to capture the value people get from digital technologies. But leading academics from the University of Chicago, Stanford, M.I.T., and the University of Michigan are developing metrics to assess the overall value of technology on our lives, trying to put numbers around key pieces of the puzzle, like the value of the Internet and the value of free online services.

When you look at economic statistics like G.D.P. and productivity, what gets overlooked? According to a New York Times column by Eduardo Porter, these key measures fail to capture the value people get from digital technologies. Porter writes:

“GDP misses what Americans gain from sharing information on Facebook or finding information on Google or Wikipedia. It misses how dating sites reduce the cost and increase the odds of finding a mate. It misses the time saved by drivers who use Google Maps and the time gained by consumers from shopping online. Measured in money—what it contributes to GDP—the record industry is shrinking. Yet never before have Americans had access to so much music.”

But leading academics from the University of Chicago, Stanford, M.I.T., and the University of Michigan are developing metrics to assess the overall value of technology on our lives, trying to put numbers around key pieces of the puzzle, like the value of the Internet and the value of free online services. Why is this so important? “If we really want to understand the impact of information technology on our future well-being,” writes Porter, “we first need to find a consistent way to measure it.”

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