Significant swings in data between 2012 and 2013

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    IMPLAN Support
    Hi Marty, You are correct that this is a big change, but it's actually not a change in IMPLAN but a change in NIPA, so it's not reflected in the bridge table. Here some information as regards the NIPA change: The 2013 comprehensive revision to the NIPAs defines new kinds of investment: “Recognizing expenditures by business, government, and nonprofit institutions serving households for research and development (R&D) as fixed investment, thus improving BEA’s measures of fixed investment and allowing users to better measure the effects of innovation and intangible assets on the economy.“ [1] Since investment is not current accounts spending – i.e., not part of an industry’s production function - output, employment, payroll and spending activity for this investment must be removed from the industry and moved to sector 456 “Scientific research and development services”. This essentially doubles employment in the 2013 sector 456 when compared to the corresponding 2012 employment (sector 376 in the 440 sector scheme). A similar new redefinition was made for sector 446 (Lessors of nonfinancial intangible assets): “Recognizing expenditures by private enterprises for the creation of entertainment, literary, and artistic originals as fixed investment, further expanding BEA’s measures of intangible assets.” 1 Creation of new intangible assets in a given year is small compared to the history of such asset creation, so the redefinition’s effect on employment for sector 446 is relatively small. Please let us know if you have any additional questions. IMPLAN Support Team
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    Marty Grueber
    So does this NIPA change, in effect, also reduce every R&D performing sector (e.g., auto, aerospace, pharma, instruments) output & employment by something or does this NIPA change basically make the "whole pie" bigger and from a sector and full economy context you need to put the dollars somewhere? Are there plans to correct and/or reflect this in the bridge table or is this going to be a new baseline going forward?
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    IMPLAN Support
    Hi Mary, Thank you for your post! Employment and output are shifted from sectors that conduct R&D to the R&D sector. Whether the size of the “pie” changes depends on how you define the pie. Total output remains the same, but more of it is allocated to Value-Added/Final Demand than it is to Intermediate Purchases. The bridge is meant to reflect a given definition of GDP and to convert data between sector schemes. It is not a bridge to convert between definitions of GDP. The changing of sector schemes and changing definition of GDP are independent. So, we do not plan to change the bridge to make it convert between different definitions of GDP. Thanks!
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