A session on the ‘Conceptual Framework of Gross Domestic Knowledge Product (GDKP) Measurement’ was recently conducted by The Ministry of Statistics and Programme Implementation (MoSPI)

• Chairman: The session was chaired by the Principal Scientific Advisor.
• Knowledge Partner: Pahle India Foundation
• Aim: To discuss the existing framework of measuring knowledge products within the Gross Domestic Product (GDP) and to deliberate on conceptualization of a fresh approach to measure India’s Knowledge Economy.

Gross Domestic Knowledge Product (GDKP)

• The GDKP will be a dedicated metric for the measurement of the contributions of India’s knowledge economy ie. comprising, innovation, intellectual assets, intangible assets to the Gross Domestic Product (GDP).
• First Discussed: The idea of measuring GDKP was first discussed earlier in 2021 with NITI Aayog making a presentation on the concept note.
  • The idea was shelved as the concept note did not provide the methodology for capturing the data and computation of GDKP as pointed out by the The National Statistical Commission
• MoSPI will form a technical committee to evaluate the proposal and provide guidance on measuring the knowledge economy.
• Present Status: All  expenditures on Intellectual Property Products (IPP) are recorded under Gross Fixed Capital Formation (GFCF) ie.  the indicator for capital investments in the GDP dataset for the economy. 
• Approach: The ministry may consider using a “satellite account” approach, similar to how they account for tourism or culture, ocean and blue economy, to capture the knowledge base of the economy.
• Goal: It is to move from purely economic indicators to a more knowledge-centric approach.
• Framework: The measuring of knowledge framework will be based on four pillars of knowledge i.e.
  • The knowledge items, The knowledge producers, The knowledge distributors, and knowledge users (consumers and enhancers).
• Significance: A well-defined GDKP could help the government,
  • In formulating better policies for sectors like education, research, technology, and entrepreneurship. 
  • To guide investment in knowledge infrastructure, such as R&D, digital connectivity, and skill development.
  • To capture the impact of knowledge on economic and social life
• Key Challenges:
  • Methodology: Defining a clear and objective methodology for measuring knowledge is required which includes identifying relevant parameters and finding ways to quantify them to ensure accuracy and avoid perception-based estimations.
  • Data Availability: Data on Knowledge parameters like, intellectual property, research output, digital innovation, and human capital development is fragmented and difficult to quantify therefore a constraint on measurement.
  • Integration with GDP: Integrating GDKP with GDP without duplication will be a challenge as some aspects of knowledge contribution are already captured in GDP (e.g., Intellectual Property under Gross Fixed Capital Formation)
  • Subjectivity: To define and quantify knowledge parameters is highly subjective and requires extensive refinement as specified by the The National Statistical Commission earlier 
  • Measuring Welfare: Although GDKP would serve as an indicator supplementing the GDP measure, but it is not clear how it is going to supplement the GDP in measuring welfare