October 29, 1969 at UCLA, birth of Internet. August 3rd 2020 at NITI Aayog, birth of GDKP India, the first measure of Wealth of Nation based on Knowledge produced and circulated in Internet Age with mass participation of people to Knowledge production.
I am introducing myself. I am Honor Fellow of Digital Center for Future, Annenberg School of Communication of University of Southern California, I have a “Laurea” in Economics in Italy and an MBA from Columbia University, New York. Although I have been teaching and working in several parts of the world my basic reference has always been Universities of California, both UCLA and USC.
Now I have been appointed by the Indian Government Senior Fellow of NITI Aayog to work on a daring new project, make India calculate the first GDKP, Gross Domestic Product of Knowledge using my model. As it is well known, the GDP has been in crisis for some time. French President Sarkozy had appointed a committee of economists headed by Stiglitz at OECD to renew it, but the result was not positive. Gross Domestic Product (“GDP”) as an indicator to track the wealth of a nation’s economy is insufficiently relevant to present-day world realities. GDP was born in the late 1930s in the face of very harsh criticism from the traditional schools of economics, but fortunately politicians overruled scholars. Consequently, by the 1990s the GDP was judged by both politicians and economists, as the standard measurement of economic accomplishment. It is an economic model based on the production of material goods and for almost a century, GDP has been the dominant economic statistic. But now is clear that although GDP continues to reign, it is a dangerously inadequate economic model needing to be urgently modernized. Focused mainly on material wealth, economists have failed to value the importance of “immaterial components of production of material goods”. Those non-material essentials include the revolutionary role of digital technology in mass communications that has created daily interaction of billions of people among themselves across national boundaries and has changed forever politics, education and security. Furthermore, traditional economists have failed to take into account the dramatic changes caused by the world-wide expansion of knowledge. Due to world peer to peer interaction in instant communication, dramatic fall of cost of IT tools and overreaching amplitude of potential work made possible for individuals and companies, through those tools, the concept of Knowledge is radically changed. From high selected objects produced in a discriminating way, administered and achievable in limited institutions, provided to selected people, it has become a common goods produced by everybody, made circulate among everybody, bought and sold everywhere through internet. There is no doubt that the mass knowledge production through Internet has become by far the most important Human Made Raw Material, affecting the production of Material Goods, finance, the way of producing goods, and circulation of them. Unfortunately economists have failed to get this critical revolution into calculation of GDP. The terrible crises of Covid on world scale has made more dramatic this mistake. Now India has decided to fill up this gap and calculate GDKP using my model GDP of Knowledge based on new concept of Knowledge item produced in Internet Age and making mass participation of people a pillar of it. The objective of the model we will apply to India, is multiple but here I want to mention just those affecting directly GDP:
- Calculate the K factor of India. The ratio GDP/GDKP, K factor of India will indicate the multiplier on GDP of Knowledge Government Budgeting spending, through the India Knowledge Production Matrix
- Calculate within India the K factor of different sectors of economy. That will be a powerful market push to modernize economy. Through the India Knowledge User Matrix
There are many other objectives that the model will permit to achieve in stock exchange (P/K in addition to P/E) education, work organization, security, risk analysis (triple K in addition to triple A) etc. but here we want to focus on the potential impact on GDPK on GDP through National Budgeting and harmonization of Knowledge State Budgeting policies and private market operations, optimal knowledge capital investments, which will be greatly improve the international participation to India’s economy. Prime Minister Modi has set for 2024 a challenging goal of achieving 5 trillion $ GDP and Covid crises makes that much more difficult objective, but GDKP India, when will be calculated, will provide modern guidance and powerful indication for stimulus. But just before ending this obviously synthetic presentation, I want to focus on a another critical aspect that can make GDKP INDIA a most powerful tool. The third component of the model is the calculation of a new index, “Index of cost of learning” for rural and urban areas and for age brackets. That index facing the Index of cost of living will dramatically increase the capacity of India’s governments, national and local, to properly operate to increase the value of GDKP and consequently push up GDP.
The pillars of GDKP INDIA
Therefore they are the following
a. “INDIA KNOWLEDGE PRODUCTION MATRIX”
b. “INDIA KNOWLEDGE USER MATRIX”
c. “India Index of cost of learning” for Urban or Rural area and for Age brackets
The matrices referred to in points a) and b) will form the basis of the calculation of GDKP India, because with ad hoc techniques, too long and complex to talk about them now, the proper Indian Statistical Institutes requested by NITI Aayog will calculate the relative values.
Those matrices are based on total new concept of Knowledge items, popular and widespread. In the model 1 will be identified 4 basic categories of the new Knowledge items and consequently new Indian producers of those Items. Those categories are very important when in a more sophisticated version of GDKP India (NDM, National Digital Managed – GDKP) we will introduce the proper coefficients to appraise Digital K policy making. But that will come later, now we are at a very relevant first stage. I mentioned that in Internet Age, we need a popular vision of Knowledge Items, and that is the very first new vision of Knowledge in times of Internet.
NITI Aayog and Dr. Rajiv Kumar
NITI AAYOG is the great promoter and economic policy and scientific reference of GDKP India. In fact GDKP India could not have a better promoter for the economy and social role it covers in India and for the spectacular wide impact on India’s modernization. I am honored and grateful to be now part of NITI Aayog and to be charged to direct such a great project as the first GDKP in the world.
India has been a “knowledge focused” country since ancient times. The oldest of Hindu scriptures, the Vida, literally means knowledge. Today, India contributes significantly to the global knowledge economy, playing a dominant role in the information-communications- technology sector. No surprise that Indian government has officially taken a leadership role to transition from GDP to GDKP and commenced calculating the GDKP of its economy. Spearheading the process is NITI Aayog, The National Institute for transforming India. Chaired by Prime Minister Modi, NITI is a policy commission with broad oversite across governmental agencies.
Phase one of the adaptation of the GDKP-India is lead by Niti’s Vice Chariman, renowned Indian economist, Professor Rajiv Kumar. Dr. Kumar is a specialist in policy – oriented research and analysis and the author of several books of Indian economy which will be reference scientific for GDKP India, which will integrate GDKP metrics into all relevant cultural, business and educational sectors of the Country.
Hall of Fame of GDKP INDIA
The Director of Digital Center for Future of USC, Dr. Jeff Cole, congratulating NITI Aayog for such decision wrote:
“The USA was the first country to calculate the GDP, a monumentally important number that has so much to do in understanding economic development around the world over the past several generations. Now, the GDKP will measure knowledge, around the world serving as a benchmark and stimulus to developed and developing countries. The GDKP will measure key aspect of globalization, finance innovation and important aspects of communication and technology”.
GDKP India is indeed a real historical fact. Following a nice American habit in different areas, it will be established a Hall of Fame of GDKP INDIA to record the names of people, companies or institutions who have wanted to cooperate in the making of his greatly innovative adventure for the Country and for the theoretical fields of Economics.
Given this proper observation of Director of Center for Digital Future anybody who wants to participate to this historical operation can contact me at [email protected] they will be welcomed to be part of our team. The Center is also launching a project of GDKP World with the newly established Sulpasso Institute.