The United States needs a more coherent national advanced technology strategy to develop policies to promote competition, growth and opportunity. Effectively crafting and implementing such a strategy requires the right kind of economic data. Better data collection can help identify weaknesses in U.S. competitiveness that policies can address, and it can help evaluate the effectiveness of those policies, according to a report published by the Information Technology and Innovation Foundation (ITIF).
To get that better data, however, a better way of collecting it necessary. In a pre-digital world, it made sense to rely solely on surveys. But now that a much larger share of data is already in digital form, government statistical agencies need to focus more on IT modernisation and directly linking through application programming interfaces (APIs) to private databases.
Another way to get better data is by standardising and linking unemployment and insurance wage claims records and adding information to them. That would let the Bureau of Labour Statistics reduce or eliminate two of its wage surveys and make many products more granular, timely and accurate, the report states. New data fields that should be added to unemployment insurance wage records include work location, job title, hours and demographics.
Government agencies should work together to better link administrative records such as tax, unemployment insurance and pollution, but the private and public sectors also should work together to ensure interoperable and consistent recordkeeping. When input data is more consistent, statistics based on it will be more accurate and useful for combining across statistical agencies and for business benchmarking. Ideally, this effort would be international, working with the International Standards Organisation.
U.S. data gaps are the result of several factors, such as funding. Years of tightening budgets have led to fewer resources for effectively measuring key elements of the economy. An effective national industrial and technology strategy requires disaggregated data that can accurately reflect state and local differences. Accurate data is necessary to inform not only federal policymakers, but also state and local officials, as all states and many localities have their own economic development programs.
For example, data based on congressional districts would help agencies understand regional economies better than data based on state boundaries. It is important because economies are not always defined by state lines. For instance, economic factors in Washington, D.C., extend into neighbouring Virginia and Maryland.
A second issue is international statistics — specifically, the fact that the nation’s statistical system was designed around collecting stats on businesses in the U.S. Now that the economy is increasingly global, more fine-grained international data is needed.
ITIF suggests several data improvements:
- A better price input index because it is currently hard to measure productivity in internationally traded sectors without the government distinguishing between price and quality. The lack of data distorts gross domestic product figures.
- High-quality international comparisons of the labour force, productivity, hourly compensation and prices for many industrialised countries.
- Industry data that is comparable to other nations’ by transitioning from the North American Industrial Classification System to the International Standard Classification System.
- National statistics, particularly data on a variety of technologies, including use of cloud, robotics, artificial intelligence and internet of things; how goods are produced and services performed; supply chains; and investments in research and development.
No companies make strategic or tactical decisions without thorough data on revenues, costs, and their competitive landscapes. Yet, people expect policymakers to build economic, technology and competitiveness policy on a shaky foundation of limited and often outdated data. At present Congress needs to make a major investment in upgrading, expanding, and modernising the nation’s economic statistical system.
