Strengthening America's economic infrastructure: a report on the conference of the U.S. Chamber of Commerce and the Bureau of Economic Analysis

Survey of Current Business, August, 2005 by J. Steven Landefeld, Rosemary D. Marcuss, Kerry Sutten, Cindy M. Vojtech, Matthew R. Balazik

ON July 14, 2005, the U.S. Chamber of Commerce's National Chamber Foundation and the Bureau of Economic Analysis (BEA) jointly hosted a national conference on the U.S. economic accounts. The goal of the conference, entitled "Strengthening America's Economic Infrastructure," was to give data users from business and government an opportunity to share how they use the economic accounts and how the accounts can be strengthened to make their jobs easier. More than 150 people attended the event, including senior business leaders, trade and economic development experts, congressional staff, Government officials, academics, and members of the media. Together, they provided a broad perspective on the future of BEA's economic accounts.

BEA has taken seriously the suggestions for strengthening its accounts. It is incorporating specific recommendations into its statistical research and implementation plans for the next 5 years.

Ten years ago, the U.S. Chamber and BEA held a similar conference to review the programs and services of BEA as they stood in 1995. That conference resulted in substantial changes that improved the accuracy and relevance of the economic accounts. Since then, BEA has further integrated the use of strategic planning into its operations. It annually reviews and updates its 5-year strategic plan. This year's conference will inform that process.

In his opening remarks to the 2005 conference, U. S. Chamber President and CEO Thomas J. Donohue remarked: "We need to look for ways to work together and figure out how to make smart decisions, to use limited assets, and to improve the data that is going to be available for all of us to use." These themes emerged from the conference--the need for data that fit the needs of users and the need for BEA to continue to find efficiencies in using its resources.

U.S. Chamber Vice President and Chief Economist Martin A. Regalia emphasized the fundamental role that accessible statistics play in the U.S. economy, stating: "One of the true public goods, like education or a solid infrastructure system, is infrastructure in data." Conference panelists praised the enhancements to the Nation's statistical infrastructure that BEA has recently delivered. They also noted that the U.S. economic accounts hold their place as world leaders for timely, accurate, and reliable estimates.

Participants made a number of recommendations for new data series and for ways BEA can improve its existing statistics. The recommendations can be grouped under the following topics:

* Improving efficiency: More statistical integration, data sharing, and increased communication with data users and other statistical agencies.

* Measuring change in the economy: Better measurement of services, offshoring, investments in information technology, and health and pension benefits.

* Providing more detail: Better and more detailed measurement of economic activity by industry and geographical area.

Improving efficiency

Participants complimented recent efforts by BEA, the Census Bureau, and the Bureau of Labor Statistics (BLS) to communicate better with the public and to integrate statistical methodologies among themselves, despite the decentralized status of the statistics production system. They did not advocate combining the agencies, pointing to the current system's ability to adapt and supply diverse products. Several panelists noted that the current decentralized system encourages specialized expertise within the agencies, which is important given the size and complexity of the U.S. economy. The Department of Commerce Under Secretary for Economic Affairs Kathleen B. Cooper referred to the statistical agencies' strong customer ratings as evidence of a high level of user satisfaction but noted that continued success depends on maintaining cooperation.

Integrating economic accounts. Many participants applauded the rich supply of data available in the United States. However, several pointed out that on occasion the trend in an economic statistic from one agency will differ from the trend in a related statistic from another agency. To address that unintended outcome, conference participants called on BEA to continue integrating its accounting methods with those of its statistical partners, in particular, the Census Bureau, BLS, and the Federal Reserve Board (FRB). Improved measurement of productivity, saving, and investment must be addressed through such integration. It was pointed out that a unified statistical architecture, which is the goal of the integration effort, will simplify interagency cooperation. Several participants commented on the central role that BEA plays in the statistical system as the producer of the national income and product accounts (NIPAs), the double-entry economic "books" of the U.S. economy that incorporate components of almost all other statistical efforts.

Data sharing. Some participants mentioned the need for agencies to cooperate better through increased data sharing initiatives. They urged BEA to continue advocating for the passage of legislation that would allow for more data sharing among Federal statistical agencies, including specific business data from the Internal Revenue Service. The Confidential Information Protection and Statistical Efficiency Act of 2002 allows for some data sharing but stops short of allowing BEA, the Census Bureau, and BLS to share tax-related data. Senator Robert Bennett took a dim view of the current barriers to data sharing, stating, "Failure to share data creates more problems than hanging onto it solves."