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Commerce Brings Stakeholders Together to Improve Digital Economy Metrics

May 9, 2016
Guest blog post by Dr. Ellen Hughes-Cromwick, Chief Economist and Alan Davidson, Director of Digital Economy

Improving Digital Economy MetricsToday, the National Telecommunications and Information Administration (NTIA) and the Economics and Statistics Administration (ESA) convened a roundtable to discuss what data is needed to better measure the economic importance of the cross-border information flows that connect people and businesses across the globe. Representatives from the government, private sector, academia, and public interest community spent the morning going through existing resources, identifying gaps, and evaluating what the Commerce Department could be doing to improve its digital economy metrics.

The Internet has connected people around the world in new ways through the free flow of information across borders. In 2014, approximately 56 percent of services exports and 50 percent of U.S. services imports were digitally deliverable. Modern day companies of all sizes are relying on cross-border data flows for their day to day operations. This includes the ability to access global markets, interact with customers across the globe, find new suppliers, and communicate with their overseas affiliates. For example, of 271 tech‐enabled startups surveyed by 1776 and the McKinsey Global Institute, 86 percent had at least one cross‐border activity. People are using cross-border data flows to access knowledge, communicate, and participate in electronic commerce.

We know that cross‐border information flows have changed how businesses operate and people interact. A 2014 report by the United States International Trade Commission found that most firms in digitally intensive industries use the Internet to communicate internally, order physical products and services, and conduct everyday business. According to recent McKinsey research, cross-border financial flows grew from $0.5 trillion in 1980 to $5.2 trillion in 2014. However, there is only limited data available to quantify how much businesses rely on cross‐border data flows. Today experts in the field proposed new ways to measure this critical component of the digital economy.

This workshop is part of Commerce Secretary Penny Pritzker’s comprehensive effort to address 21st century trade barriers and help the digital economy thrive. As part of this commitment the Department of Commerce convened a Digital Economy Leadership Team, with working groups across the Department addressing issues such as the cross-border flow of information. Today’s roundtable is a product of that work, and part of a six-month effort to better understand the data needs of digital economy stakeholders. It is also just one example of how Commerce is embarking on research to more accurately measure and understand the digital economy.
The Department of Commerce is committed to providing timely and relevant economic information to support continued economic growth and opportunity. We continue to welcome stakeholder input on digital economy issues. A report summarizing the outcomes of this roundtable and larger research effort is planned for release this year.

(Cross-posted from