## Conclusions ## Source details **Canonical URL:** [Conclusions](https://www.imf.org/-/media/files/publications/wp/2022/english/wpiea2022197-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/wp/2022/english/wpiea2022197-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/wp/2022/english/wpiea2022197-print-pdf.pdf.json) --- ### Background and motivation - Digitalization affects all sectors and is difficult to isolate within standard industry/product classifications (ISIC Rev. 4; CPC 2.1). - Quantifying digitalization helps analyze labor markets, inflation dynamics, technological progress, future growth, and transmission of shocks. - The paper presents experimental estimates developed by the IMF Statistics Department with NSOs of Chile, Colombia, Indonesia, Mexico, and Thailand (NESDC). ### Definition — Digitalization and the “Digital Economy” - Standard classifications are structured around what is produced rather than how; digital technologies mainly affect how goods and services are produced and delivered. - The paper follows current research recommending a set of digital indicators and experimental (satellite) estimates rather than a single “digital economy” definition. - The OECD / ISWGNA approach (Digital SUTs) and the IMF Board Paper (MEASURING THE DIGITAL ECONOMY, IMF, 2018) define the digital sector to include producers at the core of digitalization: online platforms, platform-enabled services, and suppliers of ICT goods and services. ### International guidance and conceptual framework - OECD recommends using Supply and Use Tables (SUTs) to develop a suite of digital indicators. - Digital SUTs aim to provide multiple measures including: - e-commerce transactions; - digitally delivered services; - digital intermediation platforms’ and e-tailers’ sales and value-added; - transactions in digital goods and services; - value-added of ‘digitally dependent’ and purely ‘digital’ firms; - non-monetary transactions in data and free digital services and assets. - The approach is endorsed by ISWGNA and considered for inclusion in the next System of National Accounts update. - Digital transactions: two broad categories — digitally ordered (e-commerce) and digitally delivered (e.g., streaming); cross-classification allows estimating transactions that are both. - Digital products categories: - (i) digital products (inside the SNA production boundary); - (ii) non-digital products significantly affected by digitalization; - (iii) other non-digital products; - (iv) digital products (outside the SNA production boundary). - Digital products subgroups include ICT goods (CPC 2.1), priced digital services (excluding cloud and intermediary services), priced cloud computing services, and priced digital intermediary services. - Non-digital products significantly affected by digitalization include accommodation services, food and beverage serving services, advertising and market research services, travel agencies, publishing. - Products outside the SNA production boundary include data, digital services provided by enterprises, digital services provided by communities. ### Digital industries — seven defined groups - i. Digitally enabling industries: coincide with ICT sector in ISIC rev. 4 (Internet service providers, telecommunications, software providers/developers, computer manufacturers, website developers). - ii. Digital intermediary platforms charging a fee: platforms receiving explicit payment for facilitating transactions (food delivery, travel booking portals, online marketplaces). - iii. Data and advertising driven digital platforms: online businesses primarily generating revenue via data or advertising (search engines, social media, zero-priced apps). - iv. Firms dependent on intermediary platforms: independent service providers sourcing work from digital platforms or selling via third-party digital platforms. - v. E-Tailers and digital intermediary platforms charging a fee: retail and wholesale businesses receiving a majority of orders digitally and reselling goods/services. - vi. Digital only firms providing financial and insurance services: online-only banks, online payment system providers. - vii. Other producers only operating digitally: priced digital media providers, subscription-based service providers delivered digitally. ### Method implemented for experimental estimates - Recommended bottom-up approach: identify digital firms by industry and aggregate activities to estimate value added of digital industries. - Due to lack of firm-level data, an aggregated method was used: - For ICT industries, all firms assumed digital; full industry value added counted as digital. - For other industries, digital value added estimated using ratios derived from classifying products as digital or digitally influenced. - Supplementary data (e.g., e-commerce surveys, industry-specific ratios) used to allocate proportions of industry GVA to digital activities. - Digital value added per digital-industry type aggregated to obtain total digital industries GVA; remaining industries considered non-digital. ### Illustrative example (method mechanics and example figures) - Gross Value Added of the ICT industries: - Manufacture of computers and peripheral equipment: 30 845 (2018), 34 546 (2019), 36 274 (2020) - Satellite telecommunications activities: 8 970 (2018), 10 046 (2019), 11 553 (2020) - Computer programming activities: 5 052 (2018), 5 658 (2019), 6 507 (2020) - Total Digitally enabling industries: 44 867 (2018), 50 250 (2019), 54 334 (2020) - Gross Value Added of digital intermediary platforms: - Digital Platform A: 1 563 (2018), 1 579 (2019), 1 815 (2020) - Digital Platform B: 960 (2018), 1 075 (2019), 1 247 (2020) - Digital Platform C: 1 057 (2018), 1 356 (2019), 1 548 (2020) - Total Digital intermediary platforms: 3 580 (2018), 4 010 (2019), 4 610 (2020) - Digitally ordered (accommodation services, travel agencies — ratios applied to industry GVA): - Accommodation services and Travel Agency: 33 560 (2018) Ratio 26% ; 37 587 (2019) Ratio 28% ; 33 828 (2020) Ratio 29% - Tour operator and other reservation services: 6 501 (2018) Ratio 36% ; 7 281 (2019) Ratio 29% ; 5 825 (2020) Ratio 21% - Total Digitally ordered: 11 066 (2018), 12 635 (2019), 11 033 (2020) - Gross Value Added of E-tailers (retail and wholesale trade firms receiving large shares of orders digitally): - Retail Trade: 171 395 (2018) Ratio 25% ; 186 821 (2019) Ratio 28% ; 199 898 (2020) Ratio 35% - Wholesale Trade: 135 674 (2018) Ratio 5% ; 146 528 (2019) Ratio 8% ; 153 854 (2020) Ratio 13% - Total E-tailers: 49 633 (2018), 64 032 (2019), 89 965 (2020) - Aggregated totals (example): - Gross value added, Total: 1 097 906 (2018), 1 218 449 (2019), 1 302 403 (2020) - Gross value added, Digital industries: 109 146 (2018), 130 928 (2019), 159 942 (2020) - GVA of Digital industries as percentage of the Total GVA: 9.9% (2018), 10.7% (2019), 12.3% (2020) ### Results — experimental estimates summary and country comparisons - The GVA of digital industries accounts for between 4.4 percent to 10.2 percent of total GVA across the countries studied. - Three countries reported approximately 10 percent of total GVA assigned to digital industries: Thailand, Mexico, and the United States (estimated 10 percent). - Australia, Canada, Chile, Colombia, and Indonesia have digital industries GVA around approximately 5 percent of total GVA. - The higher shares for Thailand, Mexico, and the United States may reflect better coverage of e-commerce activities in official statistics. - Growth in digital industries (average annual growth rates reported): - Mexico: 14 - Indonesia: 10.0 percent - Chile: 5.2 percent - United States: 5.2 percent - 5.0 percent. - Australia: 4.6 percent. - Thailand: 4.2 percent. - Colombia: 4.1 percent. - Series coverage by country: - Australia and Canada: 2011–17. - Chile and Indonesia: 2013–18. - Colombia: 2014–19. - Mexico: 2013–19. - Thailand and the United States: 2011–19. ### Composition and sectoral highlights - Digital economic activity grouped into three industrial groupings: - (i) Digitally enabling industries or ICT industries. - (ii) E-tailers and use of platforms charging a fee (e-commerce plus data and advertising-driven digital platforms). - (iii) Firms dependent on intermediary platforms and others (businesses that total or partially transact with consumers through a digital platform). - Digitally enabling industries contribution to total digital economic activities: - United States: 6.2 percent of total GVA. - Indonesia: 3.4 percent of total GVA. - E-commerce share of total GVA (examples): - Mexico: 4.5 percent of total GVA. - Thailand: 4.4 percent of total GVA. - Intermediary platforms: - United States activity averages 2.0 percent of total GVA (mainly due to content and media activities). - Sectoral contributions: - Manufacturing firms that enable digitalization: - Thailand: 27.2 percent. - Mexico: 20.3 percent. - Information and communication firms (share of digital industries by ISIC sector): - Indonesia: 67.0 percent. - Chile: 57.3 percent. - Colombia: 44.3 percent. - E-tailing (ISIC wholesale and retail trade) contribution to total digital activities: - Mexico: 53.6 percent. - Thailand: 46.0 percent. - Firms dependent on intermediary platforms — sectoral contributions: - Information and communication sector: - Colombia: 16.4 percent. - Indonesia: 15.5 percent. - Professional services reliant on intermediary platforms: - Chile: 15.6 percent. ### Mexico — data methodology and key estimates (Box 1) - INEGI defines e-commerce using the OECD definition (OECD, 2011). - Mexico’s approach: - Supply approach by industries covering wholesale and retail trade and the trade of other services (producer-consumer channel). - Uses Economic Census and Annual Economic Surveys with specific questions capturing the share of firms’ sales through the internet, email, or websites. - E-commerce series obtained by applying the share by economic activity to total GVA at the firm level and aggregating by industry. - Mexico digital-industry statistics: - Total digital industries average 8.2 percent of GVA. - E-commerce corresponds to 4.4 percent of GVA. - Share of e-commerce coming from non-retail and wholesale trade: 49.1 percent. - Wholesale trade digitally ordered products: 27.3 percent of total e-commerce. - Retail digitally ordered products: 23.7 percent of total e-commerce. - Mexico’s data collection includes e-commerce across other services (accommodation, transport, professional services), allowing e-commerce beyond trade activity to be measured; most countries in the study do not collect this information and therefore report lower e-commerce estimates restricted to trade activity. ### Sectoral significance, scale, and data sensitivity - Aggregated digital industries as share of GVA (examples for 2019): - Thailand: 10.2 percent of GVA (would be the third largest sector). - Mexico: 9.9 percent of GVA (would be the fourth largest sector). - Primary data sources mentioned include national statistical offices and international organizations; quality of estimates depends significantly on underlying data sources (case of Mexico illustrates sensitivity). ### Conclusions and policy relevance - An internationally agreed upon definition of digital transactions, products, and industries was critical for producing comparable estimates. - It is feasible to develop digital indicators for a select set of countries using publicly available information and limited secondary information. - Quality of estimates depends significantly on underlying data sources. - Estimates show structure and evolution of digital industries vary across countries and over time, highlighting the need for these data to assist decision makers in developing policies to leverage economic benefits of digitalization. *Source: Working Paper No. WP/2022/197, Experimental Indicators of Digital Industries in Select Countries (Conclusions, excerpt).* ### Conclusions ............................................................................................................ ### Conclusions ### Document structure and navigation - Conclusions ....................................................................................................................................................... 17 - References ......................................................................................................................................................... 18 ### Supplementary box - BOX - 1. E-commerce Estimates: Mexico’s Experience ................................................................................................ 14 ### Figures listed in this unit - 1. Value Added of Digital industries for Australia, Canada, the United States, and Participating Countries ....... 11 - 2. Digital Industries 2011–2019 for Australia, Canada, the United States, and Participating Countries ............. 11 - 3. Digital SUTs Industries. Australia, Canada, the United States, and Participating Countries, GVA Percentages per Country ......................................................................................................................................................... 12 - 4. Digital SUTs Industries: Australia, Canada, the United States, and Participating Countries, Contribution to the Total Digital Industries per Country ............................................................................................................... 13 - 5. Digital Industries as a Share of Nominal GVA Compared to GVA, by ISIC Sector: Mexico and Thailand ...... 15 - 7. Digital Industries as a Share of Nominal GVA Compared to GVA, by ISIC Sector: Indonesia ....................... 16 *Source: wpiea2022197-print-pdf - Conclusions (canonical PDF).* ### 6. Digital Industries as a Share of Nominal GVA Compared to GVA, by ISIC Sector: Chile and Colombia ....... 17 ### 6. Digital Industries as a Share of Nominal GVA Compared to GVA, by ISIC Sector: Chile and Colombia ....... 17 ### Glossary - BEA Bureau of Economic Analysis - CPC 2.1 Central Product Classification System - GVA Gross Value Added - ICT Information and communication technology - INEGI Instituto Nacional de Estadística y Geografía (National Statistical Office of Mexico) - ISIC Rev. 4 International Standard Industrial Classification System Rev. 4 - ISWGNA Inter-secretariat Working Group on National Accounts - NESDC National Economic Social Development Council of Thailand - NSO National Statistical Offices - OECD Organisation for Economic Co-operation and Development - SUT Supply and Use Tables ### Background - Digitalization affects all sectors and is difficult to isolate within standard industry/product classifications (ISIC Rev. 4; CPC 2.1). - Quantifying digitalization helps analyze labor markets, inflation dynamics, technological progress, future growth, and transmission of shocks. - The paper presents experimental estimates developed by the IMF Statistics Department with NSOs of Chile, Colombia, Indonesia, Mexico, and Thailand (NESDC). ### Definition – What is Digitalization and the “Digital Economy” - Standard classifications are structured around what is produced rather than how; digital technologies mainly affect how goods and services are produced and delivered. - Rather than a single “digital economy” definition, the paper follows current research recommending a set of digital indicators and experimental (satellite) estimates. - The OECD / ISWGNA approach (Digital SUTs) and the IMF Board Paper (MEASURING THE DIGITAL ECONOMY, IMF, 2018) define the digital sector to include producers at the core of digitalization: online platforms, platform-enabled services, and suppliers of ICT goods and services. ### Selected Country Work - BEA (2017, updated) defines three domains: Infrastructure (ICT goods and services), E-commerce, Priced digital services; later updates include “partially digital” goods and services. - Statistics Canada (2018, and updates) groups digital products into: digitally-enabled infrastructure, digitally-ordered transactions (e-commerce), digitally-delivered products; later estimates follow OECD Digital SUT guidelines for 2017–2019. - Australian Bureau of Statistics (2019, updated annually) follows BEA domains: digital enabling infrastructure, digital media, and E-commerce (period 2011–2019). ### Current International Guidance in Accounting for Digitalization - OECD recommends using Supply and Use Tables (SUTs) to develop a suite of digital indicators. - Digital SUTs aim to provide multiple measures including: e-commerce transactions; digitally delivered services; digital intermediation platforms’ and e-tailers’ sales and value-added; transactions in digital goods and services; value-added of ‘digitally dependent’ and purely ‘digital’ firms; non-monetary transactions in data and free digital services and assets. - The approach is endorsed by ISWGNA and considered for inclusion in the next System of National Accounts update. ### Digital Transactions, Products, and Industries — Conceptual Framework - Digital transactions: two broad categories — digitally ordered (e-commerce) and digitally delivered (e.g., streaming). Cross-classification allows estimating transactions that are both digitally ordered and digitally delivered. - Digital products categorized into four groups: - (i) digital products (inside the SNA production boundary), - (ii) non-digital products significantly affected by digitalization, - (iii) other non-digital products, - (iv) digital products (outside the SNA production boundary). - Digital products subgroups include: - ICT goods (CPC 2.1): Computers and peripheral equipment; Communication equipment; Consumer electronic equipment; Miscellaneous ICT components and goods. - Priced digital services (excluding cloud and intermediary services): Manufacturing services for ICT equipment; Business and productivity software and licensing services; Information technology consultancy and services; Telecommunications services; Leasing or rental services for ICT equipment; Other ICT services. - Priced cloud computing services: full suite of cloud-related services. - Priced digital intermediary services: services matching two independent parties via a digital platform for an explicit fee. - Non-digital products significantly affected by digitalization: examples include accommodation services, food and beverage serving services, advertising and market research services, travel agencies, publishing. - Products outside the SNA production boundary: data, digital services provided by enterprises, digital services provided by communities. ### Digital Industries — Seven Defined Groups - i. Digitally enabling industries: coincide with ICT sector in ISIC rev. 4 (Internet service providers, telecommunications, software providers/developers, computer manufacturers, website developers). - ii. Digital intermediary platforms charging a fee: platforms receiving explicit payment for facilitating transactions (food delivery, travel booking portals, online marketplaces). - iii. Data and advertising driven digital platforms: online businesses primarily generating revenue via data or advertising (search engines, social media, zero-priced apps). - iv. Firms dependent on intermediary platforms: independent service providers sourcing work from digital platforms or selling via third-party digital platforms. - v. E-Tailers and digital intermediary platforms charging a fee: retail and wholesale businesses receiving a majority of orders digitally and reselling goods/services. - vi. Digital only firms providing financial and insurance services: online-only banks, online payment system providers. - vii. Other producers only operating digitally: priced digital media providers, subscription-based service providers delivered digitally. ### Method Implemented in Producing the Experimental Estimates - Recommended bottom-up approach: identify digital firms by industry and aggregate activities to estimate value added of digital industries. - Due to lack of firm-level data, an aggregated method was used: - For ICT industries, all firms assumed digital; full industry value added counted as digital. - For other industries, digital value added estimated using ratios derived from classifying products as digital or digitally influenced. - Supplementary data (e.g., e-commerce surveys, industry-specific ratios) used to allocate proportions of industry GVA to digital activities. - Digital value added per digital-industry type aggregated to obtain total digital industries GVA; remaining industries considered non-digital. ### Illustrative Example (method mechanics) - Gross Value Added of the ICT industries: - Manufacture of computers and peripheral equipment: 30 845 (2018), 34 546 (2019), 36 274 (2020) - Satellite telecommunications activities: 8 970 (2018), 10 046 (2019), 11 553 (2020) - Computer programming activities: 5 052 (2018), 5 658 (2019), 6 507 (2020) - Total Digitally enabling industries: 44 867 (2018), 50 250 (2019), 54 334 (2020) - Gross Value Added of digital intermediary platforms: - Digital Platform A: 1 563 (2018), 1 579 (2019), 1 815 (2020) - Digital Platform B: 960 (2018), 1 075 (2019), 1 247 (2020) - Digital Platform C: 1 057 (2018), 1 356 (2019), 1 548 (2020) - Total Digital intermediary platforms: 3 580 (2018), 4 010 (2019), 4 610 (2020) - Digitally ordered (accommodation services, travel agencies — ratios applied to industry GVA): - Accommodation services and Travel Agency: 33 560 (2018) Ratio 26% ; 37 587 (2019) Ratio 28% ; 33 828 (2020) Ratio 29% - Tour operator and other reservation services: 6 501 (2018) Ratio 36% ; 7 281 (2019) Ratio 29% ; 5 825 (2020) Ratio 21% - Total Digitally ordered: 11 066 (2018), 12 635 (2019), 11 033 (2020) - Gross Value Added of E-tailers (retail and wholesale trade firms receiving large shares of orders digitally): - Retail Trade: 171 395 (2018) Ratio 25% ; 186 821 (2019) Ratio 28% ; 199 898 (2020) Ratio 35% - Wholesale Trade: 135 674 (2018) Ratio 5% ; 146 528 (2019) Ratio 8% ; 153 854 (2020) Ratio 13% - Total E-tailers: 49 633 (2018), 64 032 (2019), 89 965 (2020) - Aggregated totals (example): - Gross value added, Total: 1 097 906 (2018), 1 218 449 (2019), 1 302 403 (2020) - Gross value added, Digital industries: 109 146 (2018), 130 928 (2019), 159 942 (2020) - GVA of Digital industries as percentage of the Total GVA: 9.9% (2018), 10.7% (2019), 12.3% (2020) - Component breakdowns (as in example): Digitally enabling Industries 44 867; Digital intermediary platforms 3 580; Digitally ordered 11 066; E-tailers 49 633 (figures shown above by year) ### Results (experimental estimates summary) - The GVA of digital industries accounts for between 4.4 percent to 10.2 percent of total GVA across the countries studied. - Three countries reported approximately 10 percent of total GVA assigned to digital industries: Thailand, Mexico, and the United States (estimated 10 percent). - Australia, Canada, Chile, Colombia, and Indonesia have digital industries GVA around approximately 5 percent of total GVA. - The higher shares for Thailand, Mexico, and the United States may reflect better coverage of e-commerce activities in official statistics. - Growth in digital industries (average annual growth rates noted): - Mexico: 14 - Indonesia: 10.0 percent - Chile: 5.2 percent - United States: 5.2 percent *IMF WORKING PAPERS — Experimental Indicators of Digital Industries in Select Countries (excerpt).* ### 5.0 percent. Australia with an average annual growth rate of 4.6 percent, Thailand with 4.2 percent, and ### Experimental Indicators of Digital Industries in Select Countries: Definitions, Methods, and Results ### Growth and country comparisons - Average annual growth rates reported: - 5.0 percent. - Australia: 4.6 percent. - Thailand: 4.2 percent. - Colombia: 4.1 percent. - Series coverage by country: - Australia and Canada: 2011–17. - Chile and Indonesia: 2013–18. - Colombia: 2014–19. - Mexico: 2013–19. - Thailand and the United States: 2011–19. ### Digital industry groupings and aggregate shares - Digital economic activity grouped into three industrial groupings: - (i) Digitally enabling industries or ICT industries. - (ii) E-tailers and use of platforms charging a fee (e-commerce plus data and advertising-driven digital platforms). - (iii) Firms dependent on intermediary platforms and others (businesses that total or partially transact with consumers through a digital platform). - Digitally enabling industries contribution to total digital economic activities: - United States: 6.2 percent of total GVA. - Indonesia: 3.4 percent of total GVA. - E-commerce share of total GVA (examples): - Mexico: 4.5 percent of total GVA. - Thailand: 4.4 percent of total GVA. - E-commerce share is smaller in Australia, Canada, and Chile relative to Thailand, Mexico, and the United States. - Intermediary platforms: - United States activity averages 2.0 percent of total GVA (mainly due to content and media activities). ### Composition by ISIC sector and country highlights - Manufacturing firms that enable digitalization (contribution to total digital activities): - Thailand: 27.2 percent. - Mexico: 20.3 percent. - Information and communication firms (share of digital industries by ISIC sector): - Indonesia: 67.0 percent. - Chile: 57.3 percent. - Colombia: 44.3 percent. - E-tailing (ISIC wholesale and retail trade) contribution to total digital activities: - Mexico: 53.6 percent. - Thailand: 46.0 percent. - Firms dependent on intermediary platforms (sectoral contributions to total digital activities): - Information and communication sector contribution: - Colombia: 16.4 percent. - Indonesia: 15.5 percent. - Professional services reliant on intermediary platforms: - Chile: 15.6 percent. ### Mexico: data methodology and estimates (Box 1) - INEGI defines e-commerce using the OECD definition (OECD, 2011). - Mexico’s approach: - Supply approach by industries covering wholesale and retail trade and the trade of other services (producer-consumer channel). - Uses Economic Census and Annual Economic Surveys with specific questions capturing the share of firms’ sales through the internet, email, or websites. - E-commerce series obtained by applying the share by economic activity to total GVA at the firm level and aggregating by industry. - Mexico digital-industry statistics: - Total digital industries average 8.2 percent of GVA. - E-commerce corresponds to 4.4 percent of GVA. - Share of e-commerce coming from non-retail and wholesale trade: 49.1 percent. - Wholesale trade digitally ordered products: 27.3 percent of total e-commerce. - Retail digitally ordered products: 23.7 percent of total e-commerce. - Mexico’s data collection includes e-commerce across other services (accommodation, transport, professional services), allowing e-commerce beyond trade activity to be measured; most countries in the study do not collect this information and therefore report lower e-commerce estimates restricted to trade activity. ### Sectoral significance and country-level scale - Aggregated digital industries as share of GVA (examples for 2019): - Thailand: 10.2 percent of GVA (would be the third largest sector). - Mexico: 9.9 percent of GVA (would be the fourth largest sector). ### Data sources and sensitivity - Primary data sources mentioned: - Australian Bureau of Statistics, Statistics Canada, Bureau of Economic Analysis, Banco Central de Chile, Instituto Nacional de Estadísticas of Chile, Departamento Administrativo Nacional de Estadística of Colombia, Statistics Indonesia (BPS), Instituto Nacional de Estadística y Geografía of México, Office of the National Economic and Social Development Council of Thailand, OECD, and IMF staff estimates. - The study emphasizes sensitivity of estimates to available data sources, illustrated by Mexico’s more comprehensive e-commerce measurement. ### Conclusions and policy relevance - An internationally agreed upon definition of digital transactions, products, and industries was critical for producing comparable estimates. - It is feasible to develop digital indicators for a select set of countries using publicly available information and limited secondary information. - Quality of estimates depends significantly on underlying data sources (case of Mexico). - Estimates show structure and evolution of digital industries vary across countries and over time, highlighting the need for these data to assist decision makers in developing policies to leverage economic benefits of digitalization. *Source: Working Paper No. WP/2022/197, Experimental Indicators of Digital Industries in Select Countries.* --- _Source: https://www.imf.org/-/media/files/publications/wp/2022/english/wpiea2022197-print-pdf.pdf_