Data capital and economic growth path
【Abstract】Economic growth in the digital age differs from the past in two ways: new factors of production have been introduced and new patterns of production and economic growth have been created. A new economic growth model that takes these changes into account can help us better understand the impact of the new elements of the digital age on economic development. In this paper, we defined data capital and explained how it affected the production process. Data capital is defined as data and digitized information that are carried by modern information networks and databases, use information and communication technologies, and are processed and transformed into production factors. Data capital combined with ICT capital becomes a compound input into production, and it increases social production efficiency by improving firms’ allocation of production factors. The latter effect features two innovations: it gradually increases firms’ production efficiency through technological innovations, and it increases the industry’s ability to process new data, which indicates the efficiency of data capital formation. Given these two effects, it is important to understand the relationship among data capital growth, the digitization of production factors, and economic growth. In China’s high-quality growth stage, data capital will play a bigger role than traditional capital and ICT capital. We built an endogenous growth model to analyze the direct impact and spillover effect of data capital on economic growth. We first constructed the microeconomic structure of how data capital, as a direct input of production, affects firm production by improving firms’ business decisions. By smoothing the random innovation process, we eliminated the firm stochastic heterogeneity and built a micro foundation for the following macroeconomic analysis. The micro structure suggested that the smoothed innovation process was comparable to the “learning by doing” process in both technological changes and capital formation. Finally, we constructed a new production function with data capital and other traditional factors of production and introduced standard household preferences to build an endogenous growth model. We proved that there existed a non-balanced steady state and examined its characteristics. Using different methods to input data capital and ICT capital into the production process avoided the usual problem of exaggerating the impact of ICT capital on economic growth, which occurred because ICT served both as capital and technology in the production function. We found that in the steady state of our growth model, data capital grew faster than other types of output. The steady-state aggregate growth rate of this model lay between traditional economic growth models without data capital and ICT capital, and economic growth models with only ICT capital. This theoretical finding was in line with recent empirical studies, suggesting that the traditional ICT model overestimated the impact of ICT capital on total factor production, resulting in inflated economic growth rate forecasts. We then estimated China’s stock of data capital, first using numerical simulation with our model and then using actual data. The results were similar, but the estimation based on real data was higher, which can be mostly explained by the difference in statistics and the fact that China’s economy is in transition and has not yet achieved a steady-state of capital accumulation. This paper made three policy recommendations. First, we strongly encourage bureaus of statistics to add data capital accounting to their digital economy accounting systems and to measure firms’ data capital by their actual cost. Second, to achieve the dual circulation of the Chinese economy, the Chinese government should construct more data capital infrastructure during its new infrastructure campaign, establish a well-functioning national data market, and strengthen cooperation with other economies on data capital transactions. Third, legislators should pay more attention to the property right protection of data capital, especially regarding the prevention of data abuse and securing the proper distribution of profits, which will significantly affect the economy’s growth potential in the long term.
【Keywords】 data capital; ICT capital; economic growth;