Accounting for Cloud Computing in the National Accounts
IMF Working Papers, July 17, 2020
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- Accounting for Cloud Computing in the National Accounts
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Bibliographic details
- Authors: Andrew Baer, Kwangwon Lee, James Tebrake
- Published: July 17, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513550459.001
Summary and central findings
- Digitalization and innovative use of digital technologies are changing how people work, learn, communicate, buy, and sell products.
- Cloud computing is an emerging digital technology of growing importance with increasing purchases of hardware and software services from a small number of large cloud computing providers by businesses, governments, and households.
- The rise of cloud computing is changing information and communication technology (ICT) investment patterns:
- From diversified ICT investment across many industries
- To a more concentrated investment pattern centered on cloud providers
- Cloud computing is affecting cross-border flows of commercial services because cloud service providers do not need to be located in the same economic territory as purchasers of cloud services.
- The paper outlines methodological and compilation challenges facing statisticians and analysts, presents tools to address these challenges, and highlights implications for users of national accounts data regarding investment and trade in commercial services.
Methodological and compilation challenges
- Identifying and classifying cloud computing transactions within national accounts frameworks when cloud providers and purchasers reside in different economic territories.
- Accounting for concentrated ICT investment that shifts from industry-level diversification to centralization around cloud providers.
- Distinguishing between purchases of hardware, software, and cloud service delivery models for correct treatment as investment, intermediate consumption, or imports/exports in the national accounts.
Tools and approaches proposed
- Provision of methodological tools and compilation approaches to help statisticians and analysts:
- Overcome classification and recording challenges posed by cloud computing.
- Adjust national accounts compilation practices to reflect concentrated ICT investment patterns.
- Capture cross-border service flows associated with cloud provision.
Implications for economic measurement and analysis
- Investment statistics:
- Concentration of ICT investment may alter industry-level investment measures and sectoral investment shares.
- Trade in services statistics:
- Cross-border commercial service flows may be understated or misallocated if cloud services are not properly identified and recorded.
- Interpretation of macroeconomic data:
- Users of national accounts data need to account for cloud-related shifts when analyzing investment, productivity, and trade dynamics.
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- Working Paper