Novel ideas emerge from The Indigo Prize 2017
The Indigo Prize is a new economics prize that challenges entrants to consider how to measure economic activity in a 21st century economy. The Prize aims to stimulate debate about what factors are currently measured, given evolving economies, technology and skill bases, and what should now be taken into consideration in official economic statistics that measure the health, size and growth of a modern economy.
Applicants to 2017’s competition were invited to submit an essay of up to 5,000 words, with the shortlisted candidates going on to present their concept to our eminent Judging Panel. The Indigo Prize challenged entrants to consider how to measure economic activity in a 21st century economy through 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 first and second prize were awarded in an equal split, with £125,000 shared between teams led by Diane Coyle, Professor of Economics at Manchester University, and Jonathan Haskel, of the Imperial College Business School. The £10,000 third prize awarded to 19 year-old Durham University student Alice Lassman.
You can view all three entries here.
Diane Coyle’s entry ‘Making the Future Count’ was co-written with Benjamin Mitra-Kahn, board member of the Intellectual Property Institute of Australia. Their entry 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 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.
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.