Are people therefore making a mistake when they just look at growth as GDP? They should think about it in that broader sense, which you've just described.

I think ideally we would think about it in the broad sense, including things that are not easy to measure.

People's sense of identity, belonging in the place they live or the joy they take in the natural environment around them.

All of those things matter as well.

over obsess on the measurement and on the specific definition of measurement as well.

I suppose that's inevitable because it's an easy signal for politicians to look at and for people to understand and hold their political masters to account.

But I do think we pay too much attention to that and not enough to other things that matter but are harder to measure.

Diane Coyle again.

Given that a lot of these services jobs were previously part of manufacturing, is the difference between the two sectors really that clear-cut? One of the UK's leading economists, Professor Diane Coyle of the Bennett School of Public Policy at the University of Cambridge, told me that we need to stop thinking about them in isolation.

The distinction between manufacturing and services is historical, because obviously in the post-war era when the economic statistics were set up, we had a much more manufacturing-based economy.

And there's a difference in the sense that manufacturing involves the transformation of material, so it's got a physical element to it.

Having said that, I think the distinction is really unhelpful in thinking about the modern economy, which is now, as a share of GDP, 80% services, and so we lump everything together really in that services category, and we don't have a good understanding of how the manufacturing activities and different kinds of service activities relate to each other, and it's hard from the statistics to tell which bits of the economy are actually generating growth and good jobs.

jobs.And she says that there's a type of business that makes things but also provides a service to its customers.

In the economic literature, there's a jargon term for manufacturing companies that provide services well, and that's servitization.

But you can see how widespread it is by looking at the fact that companies are often selling solutions.

One example would be, I've seen adverts for office furniture solutions, and they're not just selling you office furniture, the desks and the chairs.

Yeah, that's one of those threats that sort of explained this sort of, in this case, negative singularity kind of outcome that might come from that.

There is the question about all the additional investments that companies need to make.

And these might be one of things like the initial integration.

It might be reskilling your labor force, changing your workflows.

So all of that business process reengineering is quite costly and takes time.

And there was a ton of research in the previous digital wave that showed that those investments actually dwarf the investments in the technology itself.

One thing that is just coming into focus, surprisingly, is actually the cost of using the systems.

So, Diane, are you convinced already or are you still on the fence when it comes to the IMI nature of GenAI?

Can you take us back to the original ideas of the people who developed the concept of GDP in the United States and in Britain in the nineteen thirties?

The, um, concept was, uh, down to [clears throat] Keynes, the famous economist, who was working with the UK Treasury during the Second World War and was frustrated because there weren't any figures that told him how the economy as a whole was doing, what its speed limit was, and what kind of consumption sacrifices would be tolerable during wartime to free up resources for the war effort.

And so he inspired what, uh, became the number we know as gross national product, then gross domestic product.

And there was a considerable debate at the time among economists about whether or not to include government spending, including on defense, in the number.

And they ended up doing so because they did not want the war effort to look like it was reducing the economy, although in some sense, it obviously was.

There was less available for consumers.

And the point this made for me was that GDP is an idea.

How would that work?

Diane Coyle is Professor of Public Policy at the University of Cambridge and a former advisor to the UK Treasury.

The UK is one of the most regionally unequal economies in the developed world.

We're right at one extreme, which is probably not a good place to be.

And the problem about that is that if you want to raise economic growth nationally and improve people's living standards around the whole country, that growth is not going to all come from London or from places like Cambridge, where I'm sitting now.

You know, obviously, it's fantastic that we've got these extremely high value, rapidly growing cities in the southeast of the country.

But that needs to happen in other parts of the country as well.

And I think there are actually some quite optimistic signs about that.

In a sense, it's been a very long

So can you share your perspective on that?

Yes.

So just as any company would have a balance sheet to reflect its sustainable financial health, as well as a profit and loss account, I argue that countries need the same.

And in economics jargon, this is often called comprehensive wealth, sometimes inclusive wealth.

But the idea is essentially that if you're interested not just in growth this year, but over future years, then you need to understand the assets that are enabling the economy to generate that growth in the future.

That would include absolutely conventional ones such as infrastructure or capital assets that companies operate, but also human capital.

We're in an ideas-based economy.

So can you explain to us, what's your approach? What would be your proposal?