Measuring digital trade (UNCTAD)
4 Dec 2023 16:30h - 18:00h UTC
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Alexis Grimm
The Bureau of Economic Analysis (BEA) plays a vital role in providing official statistics on trade in Information and Communication Technology (ICT) services. These statistics have been published since 2016, with data dating back to 1999. In 2022, exports of potentially ICT-enabled services reached an impressive value of approximately $626 billion.
One of BEA’s areas of focus is improving the response rate to surveys that gather information on digital activities. While the desired response rate was not met, BEA is actively working to enhance its efforts and increase participation. This reflects BEA’s commitment to accurate and comprehensive data collection in the rapidly evolving digital landscape.
Another noteworthy finding is that a portion of the sales made by U.S. parents and foreign affiliates were digitally delivered or ordered. Roughly 25% of sales reported by U.S. parents and approximately 35% of sales reported by foreign affiliates were made or received through digital means. Interestingly, the share of digitally delivered sales was higher for foreign affiliates, indicating potential differences in the digital engagement strategies of U.S. businesses and their international counterparts.
However, it is important to note that BEA acknowledges the limitations of its existing statistics in capturing digitally delivered trade comprehensively. While the current statistics provide valuable insights into ICT services and potentially ICT-enabled services, BEA considers them a stepping stone towards understanding digitally delivered trade. BEA aims to be transparent and clear about the coverage of its statistics, emphasizing that they are not synonymous with digitally delivered trade.
In conclusion, the BEA’s production of official statistics on trade in ICT services and potentially ICT-enabled services offers valuable insights into the digital economy. The agency’s efforts to improve the response rate to digital activity surveys demonstrate its commitment to capturing a comprehensive understanding of the evolving digital landscape. By recognizing the distinction between existing statistics and digitally delivered trade, BEA paves the way for further research and analysis in this field.
Barbara D’Andrea Adrian
Digital trade is a complex concept with various definitions created by different institutions, leading to confusion among statistical compilers and data users. This lack of uniformity in definitions has hindered the accurate measurement and understanding of digital trade. However, digitally delivered trade, which involves remote international trade transactions conducted over computer networks, has gained importance. To accurately measure digital trade, factors such as digital skills, infrastructure, and regulatory environment need to be considered. Digitally delivered services have been growing at a faster rate than goods trade, emphasizing their significance. The Handbook on Measurement of Digital Trade has provided clear guidance and launched a capacity-building program to support countries in measuring digital trade. Regional workshops have been organized, and ongoing negotiations at the WTO focus on e-commerce rules and potential customs duties on electronic transmissions. Aligning with the WTO’s definition of e-commerce is crucial, as it covers the cost of marketing incurred in trading goods. In conclusion, while the multiple definitions of digital trade have caused confusion, accurately measuring digitally delivered trade and aligning with the WTO’s definition will help countries harness the potential of digital trade for economic growth and development.
Daniel Ker
Ruth Bicepi has recently been appointed as the head of the newly established Bank of Botswana Digitalisation and Innovation Hub. This Hub has been created with the objective of monitoring and responding to fintech developments, promoting financial inclusion, and leading the measurement of fintech activity in Botswana. Bicepi brings extensive experience in central banking and digitalisation, having held executive and leadership positions throughout her 25-year career. Notably, she has demonstrated strong knowledge and expertise in multiple areas, including information and communication technology (ICT) at the Bank of Botswana. Bicepi has also led various digitalisation projects, including the SADC fintech landscape mapping survey.
The Bank of Botswana Digitalisation and Innovation Hub aims to foster financial inclusion and encourage fintech activity within the country. To achieve this, the Hub plans to establish a regulatory sandbox, which will serve as a platform for testing and implementing innovative fintech-driven digital payment solutions. This initiative aims to catalyse and accelerate the adoption of such solutions, enhancing financial inclusion in Botswana. The Hub will also take the lead in measuring fintech activity in the country, ensuring that accurate data is available to inform policy-making and strategic decision-making processes. As part of their research priorities, the Hub will explore fintech-related topics, such as central bank digital currencies, regtech, subtech, and virtual assets.
In the realm of e-commerce, it is highlighted that ordering is a fundamental aspect of this digital trade practice. It encompasses both domestic and international components. Businesses, particularly those involved in production and selling, are the main users of e-commerce. This applies not only to domestic transactions but also extends to the international arena. A significant observation is that cross-border trade still predominantly revolves around the exchange of goods, rather than services, in many countries. However, some nations have successfully modified their customs reporting procedures to identify and flag digitally ordered shipments crossing their borders. This adaptation accommodates the growing influence of e-commerce in international trade.
Daniel Ker emphasises the importance of measuring digital trade and engaging in capacity-building efforts. He underscores that it is crucial for potential beneficiaries to initiate conversations, as this facilitates the allocation of resources and donor support. Ker notes that capacity-building requests can be made at both the regional and bilateral levels, encouraging interested parties to reach out via the provided email addresses.
In terms of data collection, there is a high degree of confidence in the received data from respondents. Questionnaires undergo qualitative testing and are designed to ensure the accuracy and consistency of the collected information over time. This meticulous approach contributes to reliable and robust data analysis.
Regarding digital trade, it serves as a global shop window for businesses worldwide, offering them the opportunity to expand their reach and access new markets. Digital ordering plays a central role in facilitating business-to-business transactions, especially in manufacturing industries, where a significant volume of goods is exchanged. The integration of supply chains has led to an increased number of digital orders.
Overall, Ruth Bicepi’s appointment as the head of the Bank of Botswana Digitalisation and Innovation Hub represents a significant step towards promoting fintech activity and financial inclusion in the country. The Hub’s focus on monitoring and responding to fintech developments, along with its commitment to measuring fintech activity, will play a pivotal role in shaping the future of the digital economy in Botswana. Additionally, the insights gained from the analysis highlight the importance of e-commerce, cross-border trade, capacity building, and accurate data collection in understanding and harnessing the potential of digital trade.
Audience
During the discussion, several concerns and points were raised regarding the measurement, accuracy, and clarity of digital trade. An audience member, working as an analyst in a policy management consulting group, questioned the policy objective of measuring digitally ordered trade, seeking further clarification on the purpose and goals of such measurement.
Another concern raised in the discussion related to the clarity and accuracy of responses in a survey about digital trade. Specifically, participants questioned whether respondents understood which means of communication were excluded from the survey. Furthermore, doubts were expressed regarding the trustworthiness of the responses, citing a previous presentation where 90% of participants provided the same answer. These concerns highlight the need to ensure the validity and reliability of data collected through surveys.
The discussion also highlighted the importance of measuring digitally ordered trade in business-to-business (B2B) transactions. It was noted that a significant portion of sales made through digital orders are in the context of B2B transactions. This underscores the need to understand the means and cases used in such transactions when they are conducted digitally.
Furthermore, the potential of digitally ordered and delivered trade to help countries overcome geographical isolation and integrate into the global economy was emphasised. The speakers highlighted the importance of measurements that allow for a better understanding of the barriers and opportunities countries face. Digitally ordered trade and digitally delivered trade can contribute to economic growth and the achievement of Sustainable Development Goals (SDGs), including SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure).
In addition, a member from the Ministry of Trade of the Republic of Turkey criticised the outdated definition of e-commerce by the Organisation for Economic Co-operation and Development (OECD), arguing that it fails to consider modern practices such as social media and fulfillment. This highlights the need for an updated and comprehensive understanding of e-commerce that encompasses contemporary business practices.
In conclusion, the discussion covered various aspects of digital trade, including policy objectives, survey data accuracy and clarity, B2B transactions, and the importance of digitally ordered and delivered trade in overcoming geographical isolation. The critique of the outdated definition of e-commerce drew attention to the necessity of adapting definitions and frameworks to reflect the evolving nature of digital trade. Policymakers should address these concerns and incorporate modern practices to better understand and leverage the opportunities presented by digital trade for economic growth and development.
David Brackfield
The second edition of the handbook on measuring digital trade provides statisticians with clearer and more specific guidelines. This edition is an improved version, offering richer guidance for compiling data on digital trade. The handbook aims to assist in accurately measuring digital trade by providing clarification and definition.
Digital trade is defined by the nature of the transaction, encompassing all international trade that is digitally ordered or delivered. This includes transactions conducted through various channels, such as sellers’ own websites or apps, third-party marketplaces, or even through voice commands issued to virtual assistants. The handbook emphasizes the importance of considering these different channels when measuring digital trade.
Businesses are identified as the main users of e-commerce, making their contributions to digital trade crucial. Measuring digitally ordered trade by businesses is considered a priority. The handbook highlights that both domestic and international transactions can be measured, underscoring the importance of accurately capturing this data.
Digital intermedia platforms (DIPs) play a significant role in facilitating digital trade and have a notable impact on the economy. These platforms enable new activities and business models and serve as intermediaries for digital transactions. They are essential in connecting buyers and sellers, contributing to the growth of digital trade.
To accurately record transactions, the handbook emphasizes the need to distinguish the supply of goods and services from the intermediation services provided by DIPs. It is essential to break out the fee charged by these platforms and track its allocation. The handbook provides examples and compilation guidance on how to effectively break down and track these fees, ensuring accurate measurement.
Lastly, the handbook states that transactions intermediated by DIPs should be included in international trade statistics. By recognizing the significance of these transactions, international trade data can better reflect the true scope of digitally enabled trade.
In conclusion, the second edition of the handbook on measuring digital trade provides statisticians with clearer guidelines, contributing to an improved understanding and accurate measurement of digital trade. It highlights the importance of businesses as key participants and emphasizes the role of digital intermedia platforms in facilitating digital trade. By distinguishing intermediation services and accurately tracking fees, the handbook ensures comprehensive and accurate data collection. Including transactions intermediated by DIPs in international trade statistics enhances the recognition of digitally enabled trade’s impact on the global economy.
Mark Uhrbach
Canada has two main e-commerce survey programs: the Canadian Internet Use Survey and the Survey of Digital Technology and Internet Use. These surveys provide statistics on household and enterprise e-commerce in Canada. The ICT use and e-commerce survey focuses on measuring the impact of digital technologies on Canadian enterprises across all sectors.
E-commerce sales in Canada are flourishing, with a projected $400 billion in sales for 2021. The majority of these sales come from the manufacturing, wholesale trade, and transportation sectors. Business-to-business online sales account for 72% of the value of online sales, while retail trade contributes approximately 9% of all e-commerce trade.
When it comes to online purchasing habits, physical goods make up the majority of online sales in Canada, with six out of every $10 spent online going towards physical goods. Additionally, while 80% of the value of online sales from Canada stays within the country, 16% of the value is directed towards customers in the United States, highlighting the international reach of Canadian e-commerce.
The role of social media in e-commerce is expanding, with platforms like Facebook integrating instant buy now systems and serving as an online marketplace. As a result, the definition of e-commerce has evolved to include these transactional aspects.
In summary, Canada’s e-commerce landscape is experiencing significant growth, driven by various sectors. The Canadian Internet Use Survey, the Survey of Digital Technology and Internet Use, and the ICT use and e-commerce survey provide valuable insights into the extent and impact of e-commerce in the country. The evolving role of social media underscores the need for a comprehensive understanding of the definition and boundaries of e-commerce.
Ruth Baitshepi
The analysis of the given information highlights the importance of measuring digital trade and fintech activities. It emphasizes the need for aligning these measurements with recommended frameworks and standards to ensure accurate and consistent data. The Bank of Botswana Digitalisation and Innovation Hub has taken a proactive step in this regard by establishing a Fintech Landscape Mapping Survey to measure digital economy activities in Botswana. This survey aims to provide visibility, inclusion, and coverage of digital trade in macroeconomic statistics.
Furthermore, effective regulatory policies are crucial in further catalysing the digital economy. In Botswana, digital payment services and mobile money issuance are the most predominant fintech activities. To manage the risks posed by the fintech sector to the financial system, the Hub has set up a regulatory sandbox, providing a controlled environment for testing and assessing innovative financial technologies.
Continuous measurement and monitoring of the digital economy are also essential. The Bank of Botswana Digitalisation and Innovation Hub conducted a survey, which revealed a significant adoption of Fintech-driven services by the financial services sector in Botswana. This indicates the growing importance of fintech in shaping the country’s economy.
Another notable observation is the rise of digitally deliverable services, which need to be included in macroeconomic statistics. It is suggested that customs forms should be modified, if necessary, to accurately capture these digital trade activities.
To assist in the measurement of digital trade, a handbook has been developed, providing comprehensive guidance on the identification and measurement of digitally ordered and delivered services. International organisations such as the OECD, IMF, UNCTAD, and World Trade Organization are open to requests for capacity building in this area, reflecting their recognition of the importance of accurate measurement in understanding and facilitating digital trade.
In conclusion, the analysis emphasises the significance of measuring digital trade and fintech activities, highlighting the need for alignment with recommended frameworks and standards, effective regulatory policies, continuous measurement and monitoring, inclusion of digitally deliverable services in macroeconomic statistics, and the availability of a comprehensive handbook for measurement guidance. These factors are essential for better understanding and promoting the digital economy.
Speakers
AG
Alexis Grimm
Speech speed
151 words per minute
Speech length
2093 words
Speech time
830 secs
A
Audience
Speech speed
117 words per minute
Speech length
359 words
Speech time
184 secs
BD
Barbara D’Andrea Adrian
Speech speed
146 words per minute
Speech length
3973 words
Speech time
1637 secs
DK
Daniel Ker
Speech speed
148 words per minute
Speech length
1339 words
Speech time
541 secs
DB
David Brackfield
Speech speed
162 words per minute
Speech length
2415 words
Speech time
894 secs
MU
Mark Uhrbach
Speech speed
160 words per minute
Speech length
1867 words
Speech time
700 secs
RB
Ruth Baitshepi
Speech speed
132 words per minute
Speech length
2097 words
Speech time
950 secs
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