Businesses and federal statistical agencies have a long history of working together to produce something that is vitally important to both groups: the nation’s economic measurement toolkit.
Steve Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, charted the history of this collaboration and underscored the importance of continuing that partnership during a panel session Tuesday at the National Association for Business Economics’ (NABE) annual meeting in San Francisco.
This public-private partnership has produced concrete results over the years. For example, BEA partnered with IBM to develop a new type of price index that captured the effect of changes in technology. And BEA worked with Chrysler to develop a new price index for motor vehicles. The Chamber of Commerce has also hosted conferences that led to important changes in the way the United States and other countries measure their economies. NABE has served as an important forum to spur additional ideas on the measurement front.Why do businesses care?
Official federal statistics provide businesses with information on the performance of the overall economy, the industry in which they compete, as well as regional, national, and international markets they operate in or are considering entering. Each year federal statistics help guide:
• $1.6 trillion in business investments in plant, equipment, and intangible assets such as research and development (out of a total capital stock of $35.2 trillion).
• $1 trillion in domestic financial investment (out of a total portfolio of $15.5 trillion).
• $554 billion in foreign direct investment in the United States and abroad (total ownership, $8.4 trillion).
• $340 billion in investments in corporate stocks and bonds in international financial markets (total portfolio, $14.4 trillion).
• $4.8 trillion in international trade in goods and services for 50 countries.
• 650,000 new business establishments.
Federal statistics are important to companies’ customers, too.
More than $926 billion in household investments (out of a total portfolio of $55.6 trillion) are guided by federal statistics’ impact on markets, interest and exchange rates and on stock and bond prices. Federal statistics also inform the spending decisions made by consumers, who ring up $9.8 trillion in spending.
So, where do we go from here?
Businesses can work with statistical agencies to further clarify instructions for filling out and filing surveys, explore options to reduce filing burdens, and look for ways to bolster accuracy.
Business economists, for instance, can start the process by checking with their accounting departments to make sure the questions on, and responses to, federal surveys are clear.
And, businesses and government can work together to more fully utilize the benefits of comprehensive, accurate statistics.
To access the U.S. Department of Commerce post, click here.