The Bureau of Economic Analysis just released a report – an inaugural report on the digital economy – Defining and Measuring the Digital Economy.
The working paper set out to do a few things – define the digital economy, measure it and create conversations to move measurement and research forward.
Here are some of the economic highlights from the report:
- Digital economy real value added grew at an average annual rate of 5.6 percent, outpacing the average annual rate of growth for the overall economy of 1.5 percent
- In 2016, digital economy real (inflation‐ adjusted) value added totaled $1,302.2 billion, 82.2 percent larger than it was in 2005.
- During this economic recovery, prices for digital economy good and services decreased at an average annual rate of 0.4 percent (chart 8). Prices for all goods and services in the economy increased at an average annual rate of 1.5 percent.
- Workers in the digital economy earned average annual compensation of $114,275 compared to the economy‐wide average of $66,498.
The report also set out to define the digital economy. There has been a push for a better way to measure the economic impact of broadband for at least a year. I think this is a good first step. Here’s a brief take on what they did..
Conceptually, a digital economy satellite account should include all goods and services related to the digital economy. However, the preliminary estimates presented here are based on goods and services that are primarily digital. There are numerous challenges to estimating the economic contribution of “partially‐digital” goods and services which are laid out in this report. These challenges are opportunities for future research to expand these early estimates into a complete digital economy satellite account.
They have included things like digital‐enabling infrastructure (hardware, networks) but not peer-to-peer economy such as Uber. So I think there are ways to improve on their definition – but they do too. In fact, they ask for feedback!