Connect with Us

New BEA Estimates of International Trade in Digitally Enabled Services

Information and communication technologies (ICT) are increasingly changing how firms do business, how people communicate, and how international transactions take place. In 2014, the United States exported close to $400 billion in potentially ICT-enabled services, representing more than half of all U.S. exports of services, according a new report about trends in ICT and potentially ICT-enabled services by the Bureau of Economic Analysis (BEA). The new BEA estimates are part of a larger Department of Commerce effort to better measure the digital economy and cross-border data flows. 

The first step to measurement is to define the concept.  BEA has followed international guidelines proposed by the United Nations Conference on Trade and Development (UNCTAD) and has expanded on earlier BEA work on these services.  The guidelines define "potentially ICT-enabled services"—or digitally enabled services for the sake of simplicity—as services that can be "delivered remotely over ICT networks." These "include activities that can be specified, performed, delivered, evaluated and consumed electronically." Within the framework of BEA's estimates of international trade in services, these digitally enabled services include: insurance services; financial services; charges for the use of intellectual property not included elsewhere (n.i.e.); telecommunications, computer, and information services; and selected services in "other business services." The services included from this last category are: research and development services; professional and management consulting services; architectural and engineering services; industrial engineering; training services; and other business services n.i.e.

This specificity helps refine and improve previous estimates of trade in digitally enabled services published by the Office of the Chief Economist.  Because of data limitations, those earlier estimates included some clearly non-digitally enabled services such as construction, mining, operating leasing services, trade-related services, and sports and performing arts.  Excluding those services is more appropriate, though it lowers the estimate of digitally enabled exports in 2014 by $14.6 billion.

As the new BEA numbers underscore, trade in these digitally enabled services provides a boost to the U.S. economy. In 2014:

  • Exports of digitally enabled services totaled $385.1 billion (54.2 percent of total U.S. services exports) while imports of these services totaled $230.9 billion (48.4 percent of total U.S. services imports). This resulted in a digitally enabled services trade surplus of $154.2 billion. (See graph)
  • Charges for the use of intellectual property n.i.e. made up the largest portion of U.S. exports in digitally enabled services accounting for 33.9 percent ($130.4 billion) of the total.
  • Trade in digitally enabled services is growing faster than trade of other (non-digitally enabled) services. From 1999 to 2014, U.S. exports of these digitally enabled services grew at an average of 8.4 percent each year compared to 5.0 percent for other services.
Exports and Imports of Potentially ICT-Enabled Services, 2014

Additionally, the U.S. is engaging in digitally enabled services trade with countries all over the world:1

  • The U.S. and Europe traded $290.6 billion in digitally enabled services across the Atlantic in 2014. This amounted to almost half of all U.S. trade in these services. U.S. exports to Europe totaled $183.7 billion while U.S. imports from Europe totaled $106.9 billion.
  • The second largest U.S. trading partner region for digitally enabled services in 2014 was Asia and Pacific accounting for 24 percent of all U.S. digitally enabled services trade.

Look for annual updates to these estimates from BEA each October as part of their annual international services report

Jessica R. Nicholson, Economist

  • 1 Because of data limitations, the BEA digitally enabled services trade estimates by partner country include trade-related services, sports and performing arts, and mining from the other business services category. The inclusion of these services increases the 2014 estimates of total digitally enabled services exports to $391.0 billion and imports to $235.0 billion
Subscribe

Subscribe to Economic Indicators

Subscribe with your email address to stay up-to-date with our economic indicators!

Go to top