Our Imperial team, working with ONS and the IPO, this morning raised GDP by £3bn. Have we discovered the elixir of growth? No. We have, I think, discovered a new and improved method of counting investment in "artistic originals", that is the investment that firms make in books, music, TV programs and films (plus other artistic items like dance). This investment is hard to measure and is typically done by counting spending by companies: coming, in 2009, to around £2bn according to the official data. But the spending is, for various reasons, typically undercounted; spending on TV and films for example just considered a subset of companies. Our method tries to improve on that and estimates that a better estimate is around £5bn. If that is all incorporated into the National Accounts, GDP will rise by £3bn. That's not settled yet but expect at least some of it to be incorporated in the near future.
This is all part of trying to better understand the knowledge/creative/intangible economy and innovation in general. Great that the IPO and ONS are supporting this line of work.
Ken Jarboe (@intangibleEcon) points me to Jeff Wild at IAM Magazine -- who posts "Copyright adds £3 billion to the UK's annual accounts.Is that all?" Mr Wild wonders why the figure is so low, against UK GDP of around 1 trillion. He compares this to an report for the US IPO, giving a figure of IP intensive industries accouting for $5.06T in GFP, 35% of US GDP. That latter figure takes all industires whom they clasify as using IP intensively, around 75 out of 313 and adds their value added. Our figure just takes the investment, that is long-lived spending, on creating artisitic originals by some UK industries. The UK report on the "creative industries" follows something closer to the US method, but gets some very variable results.