Herman Smith UNSD 10 th Meeting of the Advisory Expert Group on National Accounts April 2016, Paris Satellite accounting 1

Background Increasing number of initiatives to measure the contributions of specific fields of interest to economic activity as satellite systems of the SNA The AEG and ISWGNA have a clear role to play in the development of guideline documents, for example, to: – ensure compliance and consistency with the 2008 SNA – address conceptual and practical issues that relate to the SNA – consider the implementation of satellite accounts as part of an integrated statistics approach – encourage the use of a satellite account framework to address specific topics of interest 2

Current initiative in satellite accounts Cultural Satellite Accounts (UNESCO) Aviation Satellite Accounts (ICAO) Handbook on Non-Profit Institutions (UNSD) System of Extended International and Global Accounts (UNSD) Guide on Measuring Human Capital (ECE) 3

Cultural Satellite Accounts (UNESCO) Built on the work of the regional organization Convenio Andres Bello (CAB) and country experience Objective to develop a standard for the cultural satellite accounts (CSA) which measures the economic contribution of culture and cultural industries An expert group meeting was organised by UNESCO from 4-6 Nov 2015 in Canada to discuss national and regional experiences on the compilation of CSA, to study the feasibility of developing international instrument on CSA, and to identify the steps for the development of an international standard on CSA Initial draft for review by a Technical Advisory Group in 2017 and final draft for adoption by the UNSC in 2019 As part of the preparation process, the AEG and ISWGNA are expected to be informed and consulted on the various drafts 4

Aviation Satellite Accounts (ICAO) Currently there is a lack of information on the role of aviation in national economies worldwide ASA expected to be the standard framework for the economic measurement of aviation activities to – Measure aviation’s contribution to overall economic activity in a country – Understand the inter-dependencies of the civil aviation sector with other sectors to sustain expected growth of economic activities such as tourism (and trades) as an export industry to the national economy – Provide an effective instrument to countries for designing and implementing policies to facilitate connectivity as well as investments into aviation, thus promoting the full economic and job creation potential offered by this activity – Create outreach and awareness among various players involved with aviation of the direct economic importance of this activity 5

ICAO will work closely with countries, Transport Ministries, UNSD and other international organizations through the formation of a Global Technical Expert Group The work of the Global Expert Group will be submitted to the UNSC for its adoption. ICAO will also conduct seminars, publish technical documents and organize assistance programs on the implementation of ASA 6

Handbook on Non-Profit Institutions (UNSD) Originally issued by the UN in 2003 Being revised mainly to incorporate changes in the underlying international economic accounting standards (e.g SNA) and classifications (ISIC Rev 4), as well as the experiences/country practices It is being prepared in close collaboration with the Center for Civil Society Studies at Johns Hopkins University 7

The Handbook is developed as a satellite system of the SNA where the focus is to identify within the sectors of the SNA the NPIs and account for their contributions Important contributions of the handbook: – Contained a detailed definition of NPIs which makes it possible to identify them as a group – Allow for a valuation of volunteer labour, which is significant in the activities of NPIs – Introduce of a detailed classification of NPIs by function It is expected to be completed in

System of Extended International and Global Accounts (UNSD) This handbook will serve as the measurement framework for international trade and economic globalization Will build on existing work in this area, in particular by the UNECE, the OECD and Eurostat, IMF, and others Will focus on major issues related to the concepts, accounting rules, classifications and accounts which facilitate the compilation of a set of regional (multi-economic territory) or global accounts Developed as a satellite system of the SNA 9

System of Extended International and Global Accounts (UNSD) The Handbook broadly aims to cover the following parts: i. Policy and statistical motivation of a global value chain (GVC) approach for measuring trade and globalization ii. General statistical framework of extended national and global accounts iii. Global value chain satellite accounts based on extended national and multi-country GVC industry related supply and use tables (SUTs) and input-output tables (IOTs) iv. A framework of integrated business, investment and trade statistics, their classifications and requirements for the national and global business registers 10

Guide on Measuring Human Capital (UNECE) Developed by the TF on Measuring Human Capital (HC) Discusses the concept of human capital, methodological and implementation issues, and challenges related to its valuation. Aim is to develop HC estimates that are as consistent as possible with national accounting concepts and comparable across economies. Proposes the set up of two satellite accounts Examples how human capital was measured by selected countries 11

Guide on Measuring Human Capital (UNECE) Satellite Account on Education and Training – Recommended as a first step – provides more detailed data on the expenditures on education, and the financing of these expenditures – using data that are largely available in the core accounts – extends the production boundary of the SNA only slightly by recognizing own account production of training. Human capital satellite account – goes beyond the current SNA – treats expenditures on education and training (including compensation for own time spent) as costs in the creation of HC The Guide will be presented to the CES for approval in April

Thank you! 13