The world in which we live is changing constantly, but how can we understand whether we are making progress? In this year's Foundation Lecture, on Tuesday 9th March, Professor Diane Coyle looks far beyond the turbulence of the upheavals of recent years and asks fundamental questions of how we should tackle questions of progress.
Progress, its definition and measurement, is a theme which has long preoccupied Professor Coyle. In this year's Foundation Lecture, she explores two key questions - how can we measure progress effectively in the 21st century, and how, when faced with an overload of data in the modern age, can we make the right choices in what to include in our measurements?
As Professor Coyle explains, the traditional metrics of GDP, life expectancy or infant mortality indicate a steady improvement in living conditions. But these measurements do not tell the whole story. "GDP measures the way the economy was 60 years ago, and it is less and less appropriate for modern society." It is a paradox that many of the technological advances which have turbo-charged our capacity to collect and analyse data are themselves overlooked by the conventional measurements of progress and, as Professor Coyle summarises, "The domain of what cannot be measured is, counter-intuitively, expanding. It's actually getting harder to measure things that we think are important."
Amongst the hard-to-measure parts of the economy are many of the topics which preoccupy our minds: natural capital (the resources and services provided by nature), human capital (the accumulated skill, and the physical and mental health, of individuals), access to infrastructure and new technologies. Many parts of the economy in the 21st century are not counted by traditional measures: "A good example is that of a forest, planted up with conifers. You can count the trees, but you lose so much biodiversity. We're working on devising a better measurement [for that example], a measurement of things which aren't measured, because although it may be hard to arrive at anything definitive, we know the answer is not zero. Nature is not worth nothing."
The potential implications of this 'zero count' are unsettling: if the gold-star of progress can only be awarded to those parts of the economy which are 'within' the current standards of measurement, then those parts which sit outside straightforward measurement also risk being outside the understanding and horizon of policymakers.
As the forest example illustrates, part of the challenge is to develop new ways of measuring, but we must tread carefully here too. In the second part of her lecture, Professor Coyle will turn to the scale of the data now available to the analyst, questions of its ownership and the growing role that AI will play in its interpretation. She is particularly concerned about the problematic application of AI within the decision-making process surrounding which data is counted: "Although I think data science and AI have great potential for beneficial uses, if they're going to deliver progress in any meaningful sense to humans, then we're going to have to not to use all the data that's been collected. We must have some limits on the use of what is known about people." While a cautionary tale emerges, Professor Coyle is not pessimistic: "The lesson is not to stop collecting data but to recognise the limitations regarding how it can be and should be used".
The Foundation Lecture took place at 6pm, on Tuesday 9th March, 2021.
Coyle, D., Markets, State, and People: Economics for Public Policy, Princeton University Press, January 2020.
Coyle, D., GDP: A Brief but Affectionate History, March 2014, Princeton University Press, revised edition 2015.
Coyle, D., ‘Do-it-yourself Digital: the Production Boundary, the Productivity Puzzle and Economic Welfare.’ Economica 2019, vol. 86(344), pages 750-774..doi:10.1111/ecca.12289
Professor Coyle’s next publication, Cogs and Monsters: Economics for the 21st Century, Princeton University Press, will be published in Fall 2021.