The UK must harness the potential of big data to improve economic statistics, says a report launched at Imperial's Data Science Institute today.

Professor Sir Charlie Bean – former Deputy Governor of the Bank of England and author of the independent report, said that UK economic statistics need to be transformed in order to fully capture all the activity in the economy.

Current statistics, designed more than fifty years ago, do not adequately reflect Britain’s modern economy – where technological advances and the digital revolution have transformed the way business operates, the report concludes.

If the digital economy was fully captured by official statistics, it could add between one-third and two-thirds of a percent to the growth rate of the UK economy, it claims.

The report is the result of an independent review, launched in August 2015, which was commissioned by the Government to consider how to ‘future-proof’ UK economic statistics so that they best reflect Britain’s complex and fast-changing economy.

Recommendations of the report include establishing a data science hub to provide the Office for National Statistics with technologies and the skills to harness the potential of big data and make the most of the weakth of information already held by the government.

Back to the future

Professor Sir Charlie Bean said: “We need to be candid about the limitations of UK economic statistics. The UK was one of the original pioneers of national accounting. We need to take economic statistics back to the future or we risk missing out an important part of the modern economy from official figures.

“There is also a need for culture change in ONS, to bolster economic capability and place users’ needs at the heart of everything it does. ONS needs to be innovative enough to produce the statistics we need for the future.”

"Imperial College London's world-class data science research shows several ways in which we can enhance the use of economic statistics."

Among the expert contributors to the report was Professor Jonathan Haskel, Chair in Economics at Imperial College Business School. The report cites his research, which highlights the importance of including intangible assets - those relating to the investment in knowledge, such as software, design and research and development – in the measurement of our modern economy.

Professor Haskel said: “Our economy is changing, and measuring it has never been more difficult. Knowledge-based assets are increasingly important in driving our economic growth. If our statistics are to properly represent our modern economy, they must take this into account.

"The report cites Imperial College Business School's research in this area and recommends the Office of National Statistics further develop these measures in collaboration with researchers.  This is a compelling example of how Imperial’s academic research can directly affect real-world practice.”