Turns out telcos are leaders in productivity since 2010 not laggards as the Office for National Statistics (ONS) – the nation’s auditor – admits huge errors.
Telecom prices and output are flagship measures of the UK economy and have been wildly inaccurately reported over 20 years. The findings are the result of a three-year investigation by the ONS.
Internet, what internet?
Apparently it had not taken into account the impact of the internet and other technological advances in telecoms on the economy. Note that its telecoms analysis falls under a category entitled “telecoms and telefax equipment and services”.
The updated calculations show that contrary to the original figures, which found prices for telecoms services falling by just over 50% between 1997 and 2016, in fact they fell by 95%.
Laggards to leaders
That moves telcos from being at the bottom of the productivity scale to the top since 2010. Just like that. Also, the ONS data showed telecoms prices were rising in its inflation statistics, which is clearly untrue.
As the Financial Times [subscription needed] put it, “The lower measure of inflation for the sector in the national accounts will mean that output for telecoms over the period will have grown eight times more than previously stated”.
Correcting the errors seems likely to have profound impact on ONS’ analysis of the UK economy over that period and in future. More accurate measurements will not be put in place until autumn 2021.