Is globalisation a threat to

official statistics?

Enrico Giovannini

Chief Statistician - OECD

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What is globalisation?

OECD Handbook on Economic Globalisation Indicators:

“A dynamic and multidimensional process of economic integration whereby national resources become more and more internationally mobile while national economies become increasingly interdependent …

… In a globalising economy, distances and national boundaries have substantially diminished as most of the obstacles to market access have been removed. …

…Despite the fact that economic integration is a dominant feature of globalisation, other dimensions are also of significance, including the social, cultural, political and institutional realms”.

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The value added of statistics

A formula :

VAS = N * [(QSA * MF) * RS * TS * NL]

VAS = value added of official statistics N = size of the audience QSA = statistical information produced MF = role of media RS = relevance of the statistical information TS = trust in official statistics NL = users’ “numeracy”

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The value added of statistics: were does it come from?

If we look at the statistical standards developed to measure economic activities, we find that: – according to the International Standard Industry Classification (ISIC

Rev.1), the production of official statistics is a non-market service;– according to the 1993 System of National Accounts, services are

the result of a production activity that changes the conditions of the consuming units;

– according to Atkinson (2005), “the output of the government sector should in principle be measured in a way that is adjusted for quality, taking into account of the attributable incremental contribution of the service to the outcome”.

What should the final outcome of official statistics be, considering what the SNA says? Knowledge

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The value added of official statistics

A formula :

VAS = N * [(QSA * MF) * RS * TS * NL]

VAS = value added of official statistics N = size of the audience QSA = statistical information produced MF = role of media RS = relevance of the statistical information TS = trust in official statistics NL = users’ “numeracy”

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What is the impact of globalisation?

N = size of the audience (1)

For several years the main mandate of NSOs was to serve a small, but very influential, audience (the government, academic experts, etc.) and then, only as by-product, the rest of the society.

Fortunately, this vision has been gradually replaced by a wider view of the core business of the statistical function, i.e. to foster, across the whole society, a better knowledge of economic, social and environmental phenomena.

This means that NSOs should try to maximise the audience as “core function”.

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What is the impact of globalisation?

N = size of the audience (2)

Globalisation means that the potential audience for statistics is enlarged well beyond national boundaries.

More and more people/companies are interested in comparing economic and social performances between countries when making their decisions.

International benchmarking has become a must. Opportunities:

– Serve a “global” audience– Make products accessible to and accessed by a global audience– Multi-language web sites/databases– More use of international data

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What is the impact of globalisation?

MF = role of media (1)

sources of information on statistics: TV (78%), newspapers (58%), Internet (37%), radio (34%), family/working networks (34%) and magazines (14%);

the five main TV networks report data on the unemployment rate in 83%, GDP growth in 46% and inflation rate in 35% of cases.

the 27 most popular newspapers covered 39% of the reports on GDP, 53% of those concerning CPI and 52% of those announcing the official unemployment rate;

Associated Press and United Press International typically do not mention specific source agencies.

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What is the impact of globalisation?

MF = role of media (2)

23% of Americans have never heard of official unemployment data or the source agency; the comparable figures are 34% for CPI and 40% for GDP.

“There was a tendency for newspapers to more frequently report the latest official figures when it represented an unfavourable development, which may reflect the greater importance people place on the information content of ‘bad’ news” (Curtin, 2007)

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What is the impact of globalisation?

T = trust in official statistics (1)

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Trust in national government (X axis) and trust in official statistics (Y axis)

y = 0.3664x + 37.763

R2 = 0.2731

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What is the impact of globalisation?

T = trust in official statistics (2)

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A revolution: web 2.0 the “participative” web

User-Created Content (UCC) is a phenomenon with major social implications. Changes the way in which users produces, distribute, access and re-use information.

As an open platform, UCC increases the free flow of information

and freedom of expression, as well as enriching political and societal debates and broadening diversity of opinion.

According to Time, in 2006 the www became a tool for bringing together the small contributions of millions of people and making them matter. This phenomenon has also been broadly referred to as web 2.0 and the participative web.

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How is information disseminated?

As Einstein said, “information is not knowledge”: knowledge is a complex and dynamic process involving cognitive mechanisms and the person’s interest plays a key role in activating the cognitive mechanism.

The “epidemiologic” approach states that information is spread like a virus in a society.

Therefore, data providers need to reach as many people as possible at the beginning of the chain, to “vaccinate” them against the “ignorance disease”.

To do that, they have to: – disseminate information relevant to people; – present it in a way that people can relate it to their own interests;– use language/tools coherent with those used by people in other contexts.

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The web 2.0 revolution and official statistics

Some evidence: – 95% of those who use Google do not go beyond the first page of

occurrences; – once they reach a particular site, 95% of users do not click more than

three times to find what they want;– the way in which “discovery metadata” are structured is fundamental to

be placed in the first page of Google’s results, but these metadata have nothing to do with the intrinsic quality of the information provided;

– new approaches to discovery are based on people’s opinions.

Web 2.0 tends to transform the “consumer” of a particular information/service provided via Internet into a “prosumer”

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Opportunities and risks

Reliable statistics cannot be generated using “collective intelligence”, but this approach can have a huge impact on the way in which statistics are perceived or used.

New keywords: Legitimacy, Trust, Authority, Credibility Great challenge, but also a key opportunity, for data providers

to develop a new communication strategy to reach/convince “communities” about the quality of existing sources (UN principle 4: “The statistical agencies are entitled to comment on erroneous interpretation and misuse of statistics”).

If web 2.0 is marketplace for discussion, should statistical institutions create discussion sites about the quality of data used in the public domain, including that of their own data?

Is there a risk to open a “Pandora’s box”?

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Recent experiences

“Web 2.0” sites have been launched (Swivel.com, ManyEyes.com), where people can upload, share, visualise, and comment on data;

Newsweek published an article entitled “Power in numbers”, explaining how “Wiki software is reforming bloated bureaucracies and changing the face of communication”;

Dynamic animations to present statistics in a more understandable way;

The Columbian NSO is producing short video clips; LSE recently held a public lecture on “Why thinking-by-

numbers is the new way to be smart”; An art gallery in New York hosted an exhibition “Running the

numbers”, a series of pictures looking at “contemporary American culture through the austere lens of statistics”.

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A ‘storm’ or a ‘paradigm shift’?

Some people may argue that all these “signals” are part of a “storm” and not as indicators of a paradigm shift: therefore there is no need for a radical (and quick) change in the way statistics are disseminated and communicated.

According to several people, we are facing a real paradigm shift and radical changes are necessary to stay on the market

The OECD believes that statistical data providers need to evolve from “information providers” to “knowledge builders”

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OECD experiences and projects

New Dissemination Policy: from products to services

Factbook data on web 2.0 platforms (Swivel.com and ManyEyes.com)

2008 Factbook with dynamic charts

Dynamic Country Profiles

Use of Trandalyzer (Gapminder) to produce video clips

Wikigender

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A must for the future of statistics

This revolution comes from the advances in technology, rather than from a new statistical technique: because of ICT changes, data are becoming a “commodity” and statistical analyses are no longer a kind of methodology whose results are accessible to a small audience, but a key process to produce knowledge for all people.

In this context, communication is not an just appendix of the core business focused on data production, but a key function that can determine the success or the failure of an official data provider.

Be open to the dialogue with users using the web 2.0 approach is not a choice anymore: it is a must, especially to ensure that new generations will look at official statistics as an authoritative source.