U.S. trade in services enabled by digital technologies grew at a faster pace than trade in all other services in recent years, a new analysis by the Bureau of Economic Analysis (BEA) shows. Information and communications technologies (ICT) play an important role in cross-border trade in services, and improvements in these digital technologies and reductions in their costs have played an important role in contributing to growth in trade in services.
Several organizations, including the United Nations and the Organization for Economic Cooperation and Development (OECD), have defined ICT-enabled trade in services. From these definitions, BEA has identified the categories of ICT-enabled services in its own trade in services statistics as royalties and license fees; insurance; financial services; telecommunications; and business, professional, and technical services (except construction). Isolating these categories of services shows that as digital technologies have advanced and become cheaper in recent years, trade in ICT-enabled services has shown strong growth and increased as a share of all services trade.
From 1998 to 2010, ICT-enabled services exports grew at an average annual rate of 9 percent, compared with a growth rate of 3 percent for all other services exports. During this period:
- The share of private services exports composed of ICT-enabled services increased from 45 to 61 percent.
- The fastest average annual growth was in insurance services (13 percent) and financial services (12 percent).
From 1998 to 2010, ICT-enabled services imports grew at an average annual rate of 10 percent, compared with a growth rate of 3 percent for all other services imports. During this period:
- The share of all private services imports attributable to ICT-enabled services increased from 34 to 56 percent.
- The fastest average annual growth was in insurance services (17 percent) and business, professional, and technical services (11 percent).
A similar analysis of OECD trade in services data indicates that worldwide trends in ICT-enabled services trade have been moving in the same direction as those of the United States. From 2002 to 2008, for a set of countries responsible for the majority of worldwide trade:
- The share of global services exports attributable to ICT-enabled services grew from 47 to 52 percent.
- The share of global services imports attributable to ICT-enabled services grew from 43 to 46 percent.
For the details behind the analysis and to learn more about the recent trends in ICT-enabled trade in services, read the full report.