Supporting countries to measure the digital economy for development

02 December 2022

The booming digital economy has heightened the need for new data and measurement tools to strengthen evidence-based policymaking.

Supporting countries to measure the digital economy for development
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Digitally deliverable services – those supplied remotely using information and communications technologies (ICT) – have helped cushion the COVID-19 pandemic’s blow to services trade.

New UNCTAD statistics show that global exports of these services grew from around $3.3 trillion in 2019 to $3.8 trillion in 2021. This growth helped to offset sharp declines in exports of other services during this period. As a result, overall services trade fell by 3.5%, much less than would otherwise have happened.

While the pandemic has seen the resilience of e-commerce and the digital economy, it has also laid bare digital and data divides.

“Some countries have huge advantages in a new world of digital trade while others still face great challenges,” said Shamika N. Sirimanne, UNCTAD’s director for technology and logistics.

“Supporting all countries to develop the statistics needed to monitor and manage their performance in the global digital economy is crucial to levelling the playing field,” Ms. Sirimanne added.

UNCTAD's work on measuring e-commerce and the digital economy aims to build the capacity of countries to produce official statistics in this area to inform policymaking. The lack of such information is a significant gap in the toolkit governments need to design and implement ICT policies for development.

Getting the full picture

While statistics on digitally deliverable services exports provide valuable insights on digital trade, they’re only a partial perspective. The effects of the digital transformation extend far beyond trade, impacting businesses, individuals and governments the world over.

UNCTAD has spotlighted the need for a wide range of complementary statistics – such as on business ICT usage, e-commerce uptake and the value of e-commerce transactions – to gain a better understanding of the digital economy and how it affects employment, productivity and economic development in different countries.

The core indicators set out in the UNCTAD Manual for the Production of Statistics on the Digital Economy available in English, French, Spanish and Portuguese are a key reference. Nevertheless, it’s important to continue efforts to define and measure further aspects of the digital economy.

Enhancing global cooperation

A dedicated UNCTAD working group meeting held on 28 and 29 November explored ways to build on existing data sources to measure e-commerce and the digital economy. The discussion focused on improving the availability of indicators and statistics to navigate the rapid digital transformation.

Topics discussed included measuring the value of e-commerce, using big data sources and web scraping to obtain insights on the digital economy, using statistics to examine the different experiences of men and women in the digital economy, and how to develop the capacity of developing countries in these areas.

Internationally comparable and timely statistics, along with cross-country analyses, can strengthen the foundation for designing and implementing national digital economy policies.

The group includes developed and developing countries with varying statistical systems and infrastructure. It promotes cooperation to enhance the availability, quality, comparability, usability and relevance of statistics on e-commerce and the digital economy, supporting evidence-based policymaking, particularly in developing countries.

Participants recommended the creation of a task group to develop statistical guidelines for measuring the value of e-commerce transactions. These guidelines will provide a valuable basis for the compilation of statistics crucial to understanding the role of e-commerce in economic activity, employment, trade and development.

Rising share of global digital services exports

While the COVID-19 pandemic greatly disrupted trade in other services such as transport and travel, digitally deliverable services remained resilient, increasing as a share of total services exports.

These services include telecommunications, computer and information services, financial and insurance services and various business services such as professional and management consulting.

Worldwide, their share rose from 52% in 2019 to 64% in 2020, sharply accelerating the previous upward trend. This increase was largely sustained into 2021 at 63%.

Regions have fared differently

The share of digitally deliverable services in total services exports has increased across all regions during the pandemic.

Digitally deliverable services approached, respectively, 80% and 70% of total services exports in North America and Europe in 2021.

Asia and Latin America and the Caribbean also had steep increases in the share of total services exports between 2019 and 2020.

In Oceania, the share surged from 24% in 2019 to 42% in 2021.

By comparison, regions with relatively low pre-existing digitalization levels – including digital connectivity and digital skills – went into the pandemic with lower levels of digitally deliverable services trade, and total exports of digitally deliverable services declined in 2020 before rebounding in 2021.

In Africa, digitally deliverable trade varied widely during the pandemic. While countries in Northern Africa saw the strongest growth of any region, their less digitalized Sub-Saharan counterparts experienced the strongest decline from 2019 to 2020.

Least developed countries (LDCs), which generally have the lowest levels of availability, quality and affordability of digital technologies and digital skills, were on a markedly different trajectory, seeing no rebound to digitally deliverable services trade during the period.

LDCs sorely need international support to take the actions needed to seize the opportunities of digital trade, including resilience during crises.