Entrants were invited to submit a 5,000-word answer to the following question:
“How would you design a new economic measure for global economies that fully acknowledges not only social and economic factors but the impact of creativity, entrepreneurship and digital skills? How should your new measure be used to improve the way we measure GDP in official statistics?”
The Indigo Prize competition saw entries from students, professors, engineers, entrepreneurs and leading academics from the UK and around the world, including entries from the UN Development Programme, Harvard University, and a sixth-form sociology teacher.
The first and second prize were awarded in an equal split, with £125,000 to be shared between teams led by Diane Coyle, Professor of Economics at Manchester University, and Jonathan Haskel, of the Imperial College Business School.
Diane Coyle’s entry ‘Making the Future Count’ was co-written with Benjamin Mitra-Kahn, board member of the Intellectual Property Institute of Australia, and as well as proposing amendments to GDP, proposed a radical replacement of GDP with a dashboard measuring six key assets: physical assets, natural capital, human capital, intellectual property, social and institutional capital, and net financial capital. They argue that this ‘balance sheet’ approach to measuring the economy will take sustainability into account, which GDP cannot do as it only records flows of income, output and expenditure.
The entry from the team led by Jonathan Haskel, ‘Improving GDP: Demolishing, Repointing or Extending?’, proposed repointing GDP in line with the transformation of economic structure, running online experiments on people’s willingness to pay for free goods, as well as extending GDP to measure economic wellbeing better, to include intangible and environmental capital.
The £10,000 third prize for a ‘rising star’ that showed promise was awarded to Alice Lassman, a 19-year old first year Geography student at Durham University. Alice’s entry, the ‘GIIP Index’ (Global Integration Individual Potential) looked at nations from two perspectives: through its individuals and the activity they generate, and by their standing on the global stage. Alice also argued that indicators of economic development should reflect the nature of development itself: dynamic, evolving, and context-specific.
Among the fifty entries that were submitted, entries included ‘The Hipster Index’, which attempted to gauge the number of hipsters in a particular area and argued that an area can be deemed developed by its proportion of hipsters – a proxy measurement for economic success as hipsters are usually tech-savvy, creative, entrepreneurial and open-minded.
, one of the Indigo Prize judges, commented “The data we currently have isn’t reflective of modern economies. Reported productivity in the UK is very weak, but that might be because we can’t measure new changes to our economy based on technological services like Uber and fast food delivery. I applaud this effort to reward people who are thinking how we can gather new data.”
, Chairman of LetterOne and Chair of the judging panel, added “The pace of change in the world is so fast that we need to adapt the way we measure GDP. The quality of the entrants has been fantastic and it’s the beginning of a great discussion.”
, ONS Deputy National Statistician said “The ONS has taken an active interest in the Indigo Prize – the ideas presented have been fascinating. The entries have been very diverse, thought-provoking, and cover the full spectrum of how to measure a modern economy. These helpful ideas feed into the work we have been conducting to create wider measures of the economy that include the impact of growth on people and the environment.”
In response to the announcement, Mikhail Fridman
, Co-Founder of LetterOne, said, “The existing model of measuring GDP is not enough. The quality of the entrants this year has been very high. I was very impressed by the depth of the entries and we’ve seen a huge amount of original thinking.”
Joint first prize winner Diane Coyle commented “I believe that GDP no longer reflects well what’s happening in the economy - it doesn’t fully measure progress or sustainability. My idea is that in order to measure genuine progress in our economy, you need to measure intangible as well as tangible assets. Winning the Indigo Prize is a tremendous boost to this intellectual agenda.”
Sharing the first prize, Jonathan Haskel said “My proposal is to extend GDP to measure intangible and free goods, and also to measure the welfare of societies. We can use the internet to run massive online experiments to test willingness to pay for goods.”
Runner-up prize winner Alice Lassman said “The state of economic indicators at the moment in the world doesn’t show the current state of development. I would love to further develop my index and perhaps get it published”.
The Indigo Prize is an evolution of LetterOne’s Global Perspectives Journal, The Indigo Era, a collection of views from global thinkers on today’s economic shifts. The Indigo Era exposed the increasing importance for 21st century economies to realise ideas as well as exploit their human, intellectual and network capital.
FOR FURTHER INFORMATION
Please contact firstname.lastname@example.org For more information on The Indigo Prize and to see all the winning entries, please visit: http://global-perspectives.org.uk/indigo-prize
NOTES TO EDITORS
• The Indigo Prize is being launched as a follow up the journal Global Perspectives: The Indigo Era. To obtain a print copy please contact IndigoPrize@freuds.com
• LetterOne is an international investment business. LetterOne’s Global Perspective series publishes and supports a range of thinking and research around entrepreneurship. The Indigo Prize is named after The Indigo Era, a new term coined for the emerging global economic renaissance by LetterOne Co-founder Mikhail Fridman
• For further information on The Indigo Era please visit http://global-perspectives.org.uk/