China is adding new instruments to its economic dashboard that will incorporate big data to help better track innovation and entrepreneurship in the new economy.
Three indicators tracking innovation, entrepreneurship and the new economy are rolling out this year to gauge output in those fast-moving, category-bending and hard-to-measure sectors. All three will be distilled partly from massive hauls of big data from the internet.
While official statisticians are good at measuring the old drivers like factory output or coal production, it’s much tougher for smaller businesses, which make up one of the most dynamic parts of the world’s second-largest economy. It’s also trickier to assess services, which accounted for more than half of output last year for the first time and are growing at a faster pace than sectors like manufacturing or agriculture.
Here’s what’s coming:
– An innovation and entrepreneurship index developed by the State Information Centre, a think tank administered by the National Development and Reform Commission, China’s top economic planner;
– An innovation and entrepreneurship index compiled by technology website 36Kr.com, which plans to release it later this year; and
– A New Economy Index, now being published by Chengdu-based data miner Business Big Data and investment adviser CEBM Group, a unit of business magazine publisher Caixin.
All three combine data culled from social media and elsewhere online with more traditional sources to show what’s happening in start-ups, high-end services and technology.
That’s been a goal of Premier Li Keqiang, a PhD economist who has long advocated for innovation and entrepreneurship to help combat slowing growth. Such indexes can be key references for policy makers, Li said on an April visit to the southwestern city of Chengdu.
That’s also a priority for Ning Jizhe, the new head of the National Bureau of Statistics and a vice-chairman of the NDRC. He’s criticised the bureau for failing to keep up and urged officials to accelerate incorporating big data. Not long after taking over in February, he challenged his agency to improve its tracking of the new economy “as soon as possible”.
Getting a better handle on key parts of the innovation economy is increasingly crucial for economic data to reflect contributions from new companies that could soon be the next Alibaba, Baidu or Tencent. China has stepped up its game against global peers, one measure called the Global Innovation Index shows. Its ranking among nations rose to 25 this year from 28 last year and 43 in 2010, according to the gauge by Cornell University, Insead Business School and the United Nations World Intellectual Property Organisation.
Xia Junzheng, who leads a Chengdu-based subsidiary of the State Information Centre that promotes entrepreneurship, says Li’s visit spurred him and his colleagues to step up development of their local indicator and expand it to cover the country. They created the gauge to help new companies decide where to set up shop near other like-minded firms.
“The premier said, ‘this is not only useful for the companies or office parks, but it can also help the government,’” said Xia, who presented the indicator to Li early this year and later upgraded it to gauge activity in the country as a whole. “Our data are key for the government to capture subtle new developments in the economy.”
The centre gleans data from recruitment sites, online news feeds and social media, plus more staid sources like tax payments and business registrations that are provided by Chengdu’s local government offices. Regular publication hasn’t been scheduled yet.
Operators of the website 36Kr.com started their index last year. Now the Beijing-based site, which is dedicated to technology news and investor services for startups, is developing a new version tracking venture-capital investments, job creation and patent licensing plus softer measures such as atmosphere for innovation and conditions for start-ups.
“The government must be precise and rigorous when publishing data to maintain credibility, so they’re less timely,” said Cheng Guolai, chief of 36Kr’s policy research institute who is directing the compilation of the indicator. “We’ve seen demand from start-ups, investors and local governments.”