We all know the main measurement of the economy is the Gross Domestic Product, or GDP, right?

So what happens when that measurement doesn’t cover the economic gains provided by Google Maps or Wikipedia or Twitter or other transformative innovations in the “information sector” that can be used for free by users? New technology that is free replacing existing technology that we paid for, is a concept the GDP may not be handling well, say a group of economists, as reported by James Surowiecki in The New Yorker.

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The enormous gains for consumers in the digital age often come at the expense of workers. Wikipedia is great for readers. It’s awful for the people who make encyclopedias. Although the digital economy creates new ways to make money, digitization doesn’t require a lot of workers: you can come up with an idea, write a piece of software, and distribute it to hundreds of millions of people with ease. That’s fundamentally different from physical products, which require much more labor to produce and distribute. And while digitization has already transformed the media and entertainment businesses, it’s not going to stop there. “There are very few industries that are going to be unaffected,” Brynjolfsson told me. The value that the digital economy is creating is real. But so is the havoc.

Read the full story: Gross Domestic Freebie (NewYorker.com)