You Can’t Manage What You Can’t Measure – The Problem with GDP Metrics in the New World Economy

Perry Roach, CEO of Netsweeper and Economics Graduate of the University of Western Ontario

The current method of calculating GDP is inherently flawed. The anonymity and globalization of what was once a clear concise market, easy to measure and within your jurisdictional control, has created challenges for measuring the economy, law enforcement, and tax authorities.

The Internet has revolutionized the way businesses conduct their sales. Today, eCommerce, or doing business digitally, has allowed companies to drastically reduce their costs while providing more choice and more convenience to consumers. Traditional business models are being disrupted; taxi companies have been hit with Uber/Grab/Lyft; the business model of music distribution is now totally different than a decade ago. Who has benefited most depends on who you ask. Some say eCommerce has destroyed retail shopping as we know it.

The Internet and new technology applications has also impacted productivity and the results may take us years to realize and measure. One of the many examples to look at is how navigation systems has made vehicles and people more efficient with their time resulting in better fuel economy. If half the world’s population is just 3% more fuel efficient due to GPS advancements this effects GDP metrics that may or may not be measurable.

How do we properly measure traditional GDP metrics to apply economic models when what we were measuring in the past is completely different and unmeasurable due to advance in the Internet and technology? Our governments are struggling to measure metrics everywhere especially on the Internet where the use of encryption adds another layer of complexity.

Currently, the financial banking/payments world is in change mode. Tax authorities are missing out on legitimate tax revenues due to the leakage of remittance from online sales and have no jurisdiction or ability to enforce their laws. Governments need assistance.  Societies police to the level that societies will accept, however, when the source of the issue is virtual, how does the world enforce this?

Netsweeper measures these much needed metrics for tax remittance purposes and GDP results. We can put a jurisdictional ring around your country’s virtual networks, policy manage, and apply a patented tax enforcement and collection strategy for virtual sales and eCommerce.