The Inconvenient Truth About Technology Value
Most of our economic indicators — GDP, inflation, jobs reports — are outdated relics from a pre-digital world. But in a global economy driven by $10 trillion in tech spending, these metrics no longer capture the real story. Dr. Howard Rubin uncovers the inconvenient truth: our measurements are failing to reflect the digital age’s impact on society, business, and geopolitics.
Watch Episode 2 now—and return for future episodes as we unpack the truths shaping the technology economy.
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Hello, I’m Howard Rubin. I think most of you know of me through my work in the area of technology economics. And we have this whole series called Inconvenient Truth. And it just absolutely amazes me that I probably missed the biggest inconvenient truth that’s out there. And that has to do with what are the measures that are actually used to monitor our economy. And if we gave you a quick quiz on this, what should come to mind? Would you think about the GDP, consumer price index, inflation?
Unemployment jobs index manufacturing, these are things like that, but take a step back for a moment. When were those metrics developed? Let’s take the GDP. Let me just read you something that’s sort of interesting. GDP was developed by economist Simon Kucinitz in 1934 for the US Congress. Well, 1934 is pretty interesting in terms of timing. Let’s look at the consumer price index. When was that developed?
The US Bureau of Labor Statistics initiated the consumer price index in 1919 with regular publication of an index starting in 1921. When the first official CPI was released in 1919, it was released to track prices in 32 cities. So, its origin of that was 1919, national index in 1921. And clearly this stuff has evolved. And when we look at other measures like inflation, that’s why the CPI was really there, was to help us judge inflation.
Think about, and we know this stuff has all evolved, and we had headlines about the government statistics stuff is sort of falling apart around political issues, and this is not a commentary on that. But think about now, we’re in a technology-based economy. This was an industrial economy. If you go back in time, what was driving the economy? Well, in the 1800s, it was railroads. In 1900s, was automobiles and electricity. And we get up to the 1970s. And in fact,
It had a lot to do with energy and stuff like that. But where are we now? Where are we now? We’re in a technology economy. And in fact, the GDP is looked at nationally and globally in about 1944, I think was adopted worldwide. But what’s the GDP look like worldwide right now? Well, the largest GDP is about the US, followed by China. And you step down, it comes to Japan and Germany and those guys. But what’s the third largest economy in the world?
Well, it’s a virtual economy, which is totally sitting within our economy today, which is technology driven. And that is in fact, what you might call an IT GDP. It’s the worldwide technology spending on technology itself. And going back to GDP index, we like to look at GDP per capita and stuff like that. And we look at consumer price index and look at inflation. But for the GDP and IT worldwide, and there could be various values you see in the press. You’ll see various analyst firms say it’s six billion and on top of that there’s six trillion, I’m sorry, with $2 trillion of investment in data centers. If you look at the numbers that I’m looking at, it includes the in-house IT costs. So we’re talking about eight to $10 trillion a year. It’s massive. And it’s the influence of that on the economy. And we hear that through the discussions of AI and everything else in the world of outcomes. So why don’t we start thinking about what the world would look like using more modern analogs of historical indices like the GDP, consumer price index, maybe unemployment, looking at inflation and things like that. So it’s my contention that it’s time for new measures for our new economy and they have to take in other considerations. Now you hear all special kind of things in market indices and market indice historically with the Dow Jones Industrial Index, The S &P, every country sort of has its own. Here we have the Russell 2000. And now we look at the Magnificent 7. But looking at the Magnificent 7, which goes from one and everything from like an alphabet to a Tesla with Apple and other things in between like Microsoft and Meta and a whole set of seven companies there. What would the Magnificent 7 look like? We went back in time like 20 years or 30 years. Well, the technology companies would be IBM, maybe digital equipment.
Xerox, those disappear. It turns out that technology companies sort of come and go with the tides. Maybe the next magnificent seven will be 10 or two around quantum computing and around biocomputing. Who knows what’s going to happen next? So we need to get some ideas with some basic stability. We also need to look at measures that reflect a technology economy. So why don’t we start considering things like an IT GDP? IT GDP will look like
Even in the US, the production of technology in terms of its use and expenditures associated with development and use that produces outcomes and outcomes becomes key. So we start looking at instead of GDP per capita, look at IT GDP per capita, we can look at that influence on things like the UN and Human Development Index. It could look like quality of life. It could look at a government level in terms of impact on health, education and welfare.
Those some of the pieces we can consider. Let’s look at a consumer price index. Consumer price index is pretty interesting, and I have a piece of paper right here I’m just going to hold up and I hope it’s even visible. It’s hard to see this here. You can look at the colors, guess. Maybe it looks like a bad rainbow, but lo and behold, it’s not sticking out very well on the picture. But it basically, what are the components of it? It has housing, transportation, food and beverages, medical care, education, recreation, other goods, and apparel.
Well, think about for a moment what’s in the consumer price index and where your money goes. Right now, about 30 % of spending by people in the United States goes to streaming services, internet, and other pieces. We don’t even have a consumer price index that looks like a technology consumer price index for consumers, but we also have consumer confidence indices. But we think those too. Why don’t we have an enterprise consumer confidence index for technology, which looks at
the attitudes of industry and businesses and government for buying technology. Why don’t we have a technology consumer price index and consumer confidence index, which looks at the influence of inflation on those things and the attitudes toward acquiring and buying things like that. So in fact, start thinking about a new age, a new age of measures, new measures for new economy, a GDP that has not getting rid of the old measures, but in a parallel universe of what’s our IT GDP.
What’s a technology consumer price index for enterprises for individuals? What’s a technology consumer confidence index for enterprises and individuals? We can even expand that further. We have jobs reports. We have a jobs report that looks at job vacancies in the US by category. Perhaps one of the most critical aspects right now is job vacancies in the world of technology, because it’s the technology that’s changing society, generating outcomes and all sorts of things that are related to our own human welfare.
Competitiveness and nations and pieces like that. So think for a moment about a new world of measures. Those new worlds of measures have to do with new measures for a new economy. Doesn’t mean you throw out the old ones, but you’ll make a list of all the old measures aside. Take a look at the new ones we should introduce for new economy. And actually a very interesting one that I haven’t even mentioned. We watched national debt. And national debt the day before I’m doing this presentation in February, 2026, Clive Cook had a major article about. But what’s happening with technical debt?
As we start building code with AI, we’re putting out code faster. What we’re doing is we’re generating more things that have to be maintained in the future. So we’re building up technical debt at a rate that’s never seen before. So maybe we’ll look at national debt and technical debt. These are all ideas to think about. And we should start considering new measures for the new economy that maybe mirror the old measures, maybe parallel the old measures, but in fact, maybe focus on the outcomes of measures. So again, stopping thing back about the measures we’re using today.
We can wish them happy birthday. Most of them are approaching or more than a century old. But think about what we need going forward in new measures for our technology economy. And if you want to get an idea what it looks like, go to the website I have. is not an advertisement. There’s no cost in looking at this stuff. But www.techeconomists.com, you’ll see indicators, existing economy measures, potential new economy measures, and you track them. And the other thing that’s interesting to me,
is other than looking at the Magnificent 7, which are generating technology for use by companies, we have another index called the Technology Leadership Index. And that looks at companies that are making the best use of technology in terms of outcomes to the population and their shareholders. So again, think about the measures we’re using today. Think about their age and application. Think about what’s next. Take a look at www.technology, tech economist dot com. I should get my own website right.
and follow what we’re doing, see what we’re doing and start to contribute ideas. Thank you very much.