The new era of Digital economy: The GDP revision has aroused heated discussion, and the challenges and opportunities for Japan's nominal GDP to increase by 1%-2%

In today's global economic system, gross domestic product (GDP) is the core indicator to measure the size and growth rate of a country's economy, and any change in its calculation method and statistical standards may have a profound impact on the global economic pattern and economic policies of various countries. Recently, the news that the United Nations plans to revise the System of National Accounts (SNA), especially to include the value generated by the data in the calculation of GDP, has generated a lot of attention and discussion. In Japan, in particular, this revision may push up its nominal GDP by 1% to 2%, and the economic logic and impact behind this are worth exploring and analyzing in depth.

First, from the definition of GDP, it measures the final outcome of the productive activities of all resident units of a country in a given period of time, including the total value added generated by personal consumption, business investment, production and services. This indicator is not only the embodiment of economic aggregate, but also an important basis for economic growth and policy formulation. However, with the rapid development of the digital economy, the traditional GDP calculation method is beginning to show its limitations. The value created by emerging economic activities such as digital services and data trading is not fully reflected in traditional GDP accounting systems.

The United Nations Statistical Commission's plan to revise the SNA to treat data building as an investment in equipment is intended to address this shortcoming. In the digital economy, data has become a core factor of production in the modern economy, no less valuable than traditional labor, capital, and land. E-commerce purchase records, POS data, smartphone location information, etc., these seemingly intangible assets, in fact, contain huge economic value. However, in the current GDP accounting system, the value of these data is not included in the scope of statistics, resulting in GDP can not fully reflect the real situation of the digital economy.

Incorporating the value generated by the data into GDP calculations is certainly a forward-looking move. This will not only provide a more accurate measure of the size and growth of the digital economy, but also provide a more reliable basis for governments to formulate economic policies. However, this revision has also caused many controversies and doubts. Among them, the most central question is whether this revision can truly reflect the real value of the digital economy, and whether it will lead to an inflated GDP.

In the case of Japan, the introduction of the new standard would boost nominal GDP by 1-2 per cent. This growth may seem remarkable, but it is fraught with uncertainty. First, how to accurately measure the value of data is a huge challenge. Data is different from traditional factors of production, and its value is often difficult to measure in monetary terms. Moreover, the value of the data is also affected by many factors, such as the accuracy, completeness, timeliness and application scenarios of the data. Therefore, to include data in GDP calculation, it is necessary to establish a scientific and reasonable evaluation system to ensure that the value of data can be accurately reflected.

Second, including the data in the GDP calculation can lead to an inflated GDP. In the digital economy, data is produced and disseminated extremely quickly and at relatively low cost. Therefore, if the value is measured solely by the number or size of the data, it can easily lead to excessive inflation of GDP. This inflated GDP not only fails to reflect the real growth of the economy, but may also mislead the government's economic policymaking.

In addition, differences in the timing of the introduction of the new standards by countries may also have an impact on the statistical results. At the time of the last revision of the SNA, Japan lagged behind Australia and the United States in terms of the time it took for research and development expenses to be included in equipment investment, which caused widespread criticism. If the revision causes Japan to introduce a time lag again, its GDP growth could be further depressed. Because under the new standard, other countries may enjoy the economic growth dividend from the data earlier, while Japan may miss out by introducing a time lag.

In addition to the above issues, the inclusion of data in GDP calculations could raise a host of other issues. For example, data privacy protection and security issues will become more prominent. In the digital economy, data has become a core asset for businesses and individuals. If the value of data is included in GDP calculations, then the privacy protection and security of data will become more important. Once data is leaked or misused, it not only poses a threat to personal privacy, but can also have a serious impact on economic security.

In addition, the inclusion of data in GDP calculations may also have an impact on the international economic landscape. There are differences in the level of development and strength of different countries in the field of digital economy, so the implementation of new standards may exacerbate this difference. Countries with a developed digital economy are likely to reap greater economic growth dividends under the new standard, while countries with a relatively backward digital economy may face greater challenges.

To sum up, incorporating the value generated by the data into GDP calculations is a challenging move. While this revision can more accurately reflect the size and growth of the digital economy, there are many issues and challenges. Therefore, in the process of moving forward with this revision, various factors and influences need to be fully considered to ensure that the value of the data can be accurately reflected, while avoiding inflated GDP and other potential problems. For Japan, it should adapt to the requirements of the new standard as soon as possible and strengthen the construction of the data evaluation system to ensure that its GDP growth can truly reflect the actual situation of the economy. At the same time, the government should also strengthen data privacy protection and security management to provide a strong guarantee for the healthy development of the digital economy.