NEW YORK -- The U.S. Bureau of Economic Analysis (BEA) plans to adopt a new gross domestic product (GDP) measure in July, which treats spending on research and development as investment. The world's largest economy will thus become 3 percent larger or so.

Some experts believed it is sensible since intangible assets have been playing an important role in economic growth. In their opinion, other countries should follow suit to more accurately portray the evolving economy.

REASONS TO ALTER GDP MEASURE

"The BEA is planning to begin treating expenditures in research and development and artistic originals as investment. In the past, they have been treated as expenses, not investment," Thomas Dail of the BEA told Xinhua.

GDP is calculated by adding up the total amount of private consumption, investment, government spending, and net exports.

BEA produces some of the most closely watched economic statistics, such as GDP, as part of the Commerce Department's Economics and Statistics Administration. The cornerstone of BEA's statistics is the national income and product accounts (NIPAs), which feature the estimates of GDP and related measures.

"We're constantly improving economic measurement -- and not just us, the world System of National Accounts (SNA)," David Backus, professor of New York University's Stern School of Business, told Xinhua.

The SNA is an internationally agreed standard set of recommendations on how to compile measures of economic activity, established by the United Nations Statistical Commission.

Backus said: "One of the things people have mentioned for years is the importance of intangible assets: things like inventions, songs, education, and so on. We invest in these things because they have value, so they should be treated the same way by our measures of economic performance."

The BEA has predicted that the account changes would potentially raise the GDP level by about 300 billion dollars for 2007, which account for about 3 percent of the GDP, according to Dail.

But he emphasized that it is just the impact on GDP level, and they don't really have estimates on how account changes will have on GDP growth rate.

The new measure will have a small impact on the whole economy, Backus predicted, while admitting that the impacts are probably bigger in some industries than others.

"It's not that GDP goes up 3 percent, just that our measure does. Most of the time the focus is on growth rates anyway, and they won't change much," he said.

U.S. NOT THE ONLY TO ADOPT NEW APPROACH

"What BEA is planning to do is in line with the recommendations in the 2008 SNA," Dail said. The 2008 SNA is the latest version of the international statistical standard for the national accounts.

Dail said the account changes in definitions and classifications are planned for BEA's 2013 comprehensive revision of the NIPAs which will be released on July 31.

Comprehensive revisions happened every four to five years. The last comprehensive revision was released in July 2009. In the 1999 revision, computer software was first included in GDP.

The new revision will make the United States one of the first countries to adopt the most important of the major changes introduced in the 2008 SNA, including the recognition of research and development expenditures as fixed investment.

"What the U.S. is proposing is consistent, I believe, with recent changes to international standards and a sensible step forward. It's not a particular big change, but it's a useful one. I'm sure more changes are coming," Backus said.

Most other developed economies, including those of Europe, will have incorporated most of the major changes included in the 2008 SNA into their economic accounts by 2014, the BEA said in March.

"I think we'll see other countries do similar things. The challenge is measuring these things accurately. I'm sure countries will share ideas and eventually spread the best ones around the world," Backus said.