Page 3 - FDI Alliance International Magazine | September 2018 1

MEASURING SOCIAL CAPITAL;

GOING BEYOND GDP TO LIBERATE THE GLOBAL ECONOMY

THE BIGGEST BLIND SPOTS OF GDP ARE DIGITIZATION, BIG DATA, AND THE ROLE

PEOPLE PLAY IN BOTH.

VINNY

TAFURO

Policy makers oscillate between over and under economy. It relies on the cumulative social capital
regulation while business leaders sit mostly idle of all human beings. Until now, no quantitative
because both the public and private sector have metrics have been proposed. In a digitally com-
been given only a partial picture. Gross Domes- plex 21st century society, 20th century econo-
tic Product (GDP) is the sole indicator provided mists’ lazy reliance on the easy over the accurate
by economists for measuring societal value. is criminal, and history will mark that fact.
The global marketplace runs on immediate and
deep analytics while the entire field of economics From stay home parents and community volun-
builds models on an 80 year old measurement teers, to the value of journalism and scientific re-
that cannot see a majority of societal value. search, GDP simply ignores it all. In 1968 Robert
Across the globe communities are challenged F. Kennedy succinctly noted that GDP “measures
to build attractive and energizing ecosystems The biggest blind spots of GDP are digitization, everything in short, except that which makes life
that nurture residents, draw visitors, and inspire big data, and the role people play in both. The worthwhile.”
innovation. Brain belts, innovation zones, and current limited economic paradigm of people ex-
‘Valleys’ of all types are being branded, market- isting as labor in competition with automation is Social capital today can and must be acknowl-
ed, and benchmarked. Regional competitiveness setting the global economy up for catastrophe. edged, measured, and cultivated. Economists
reports fueled by data attempt to assess strengths People are being liberated by automation, not have access to social capital metrics where all
and weaknesses to serve as frameworks for pros- displaced. Wikipedia for example has provid- human value creation is appropriately quantified.
perity. ed billions of people with free knowledge while Where our employment and education crises are
simultaneously eliminating the encyclopedia in- resolved by expanding our definition of compen-
Today’s civic and corporate leaders know the dustry. However, with no professional writers or sable work. Where economic growth is guided by
importance that education, workforce develop- product to sell, Wikipedia is an industrial age a Social Capital Index based on big data. An in-
ment, and civic quality play in sustaining prosper- economic failure. dex to augment GDP and modernize economics;
ous communities. Yet, despite holistic questions, to first stabilize, then liberate the global economy.
robust datasets, and wise leadership there are This failing is not Wikipedia’s for not monetizing
few viable solutions for cultivating these basic so- itself but rather a failure of economics for not
cietal building blocks. Digital literacy and kinder- identifying the natural value of Wikipedia within
garten preparedness, skills training and higher society. Whether contributing to articles or read-
education, and health and wellness at all levels ing them as preliminary research, time spent on
are indispensable parts of a building a strong Wikipedia is simply categorized as leisure time.
society. Foundational parts that cost a lot of mon- Time that has no economically quantifiable val-
ey. Money that economic development agencies ue. This complete disregard for the natural value
and professionals don’t have access to. in human activity as social capital is a fundamen-
tal flaw of economics.
This acknowledgement of needs with no clear
mechanism for funding is the biggest challenge Societal social trust between humans is the foun-
faced by agencies looking to nurture growth. dational yet unmeasured ‘dark matter’ of the

FDI ALLIANCE | SEPTEMBER ISSUE 2018 3