Separately measures small merchants' production and value added
'S-GDP' developed based on national accounts system
Bank of Korea, Ministry of Statistics and other experts take part
To be compiled regularly for use in policymaking and evaluation
South Korea has stepped up efforts to develop a separate indicator that measures small merchants' production and value added in the economy, similar to gross domestic product (GDP).
The Small Enterprise and Market Service (SEMAS) said Wednesday it held its second expert advisory meeting on "Research on Upgrading and Regularizing the System for Measuring Small Merchants' Economic Value." The meeting was held at Dream Square in Mapo-gu, Seoul.
The indicator SEMAS is developing is tentatively named the "Small Merchant Gross Product Index (S-GDP)." It is designed to systematically measure the production and value added that small merchants create in the national economy, based on the System of National Accounts (SNA).
SEMAS launched an expert advisory panel on July 24 to build the S-GDP system and began related research in earnest. The panel includes experts from the Bank of Korea, the Ministry of Statistics, the Korea Development Institute (KDI), the Korean Economic Association and the Korean Association of Applied Economics.
About 15 experts from relevant institutions and academia attended the second advisory meeting. They included officials from the Small Business Policy Research Institute, the Bank of Korea, the Ministry of Statistics, the Korean Economic Association and the Korean Association of Applied Economics. Participants shared research findings compiled so far and discussed ways to regularly produce the S-GDP as well as its potential use in policymaking.
Discussions particularly focused on the structure of the S-GDP compilation system and a pilot account format. Participants also discussed ways to incorporate the indicator into the national accounts system as a satellite or supplementary account. They also reviewed expert survey questions designed to verify the indicator's conceptual validity, compilation framework, and potential for data and policy use.
Currently, the national accounts system has limits in independently capturing small merchants' economic contribution. Once S-GDP is established, it is expected to more systematically identify the scale of value added and production that small merchants generate across the economy. It could also serve as basic data for evaluating the effectiveness of support policies for small merchants. Prior research has likewise pointed out that the current national accounts system fails to independently identify small merchants' economic contribution. It has proposed creating a separate account for them using a satellite account.
SEMAS plans to reflect the opinions raised at this advisory meeting to upgrade the S-GDP's compilation system and improve its statistical consistency. It will also build a framework to continuously produce the indicator. Going forward, it will expand the scope of its research beyond economic value to also measure the social and cultural value that small merchants create.
"To properly understand small merchants' economic value, it is essential above all to demonstrate it with objective data," said In Tae-yeon, chairman of SEMAS. "We will work carefully with experts to refine the measurement system so that it can establish itself as an indicator that objectively shows the value small merchants create in our economy."
boo@heraldcorp.com
