Digital Economy

Many firms that provide social media and email services to the public at no charge are often funded by advertising and marketing arrangements. In the national accounts, BEA captures the output of these service providers as intermediate consumption of the unit that pays for the advertising. However, the digital economy estimates published by BEA in August 2020 do not include this revenue. BEA currently does not have the data needed to identify what portion of advertising revenue is associated with these websites.

Some NAICS-based goods and services categories include digital goods and services as well as non-digital goods and services. While BEA's conceptual definition of the digital economy includes all digital goods and services, BEA's initial digital economy estimates excluded any goods that have any nondigital components and many services that have nondigital components.

BEA's initial measures of the digital economy are prepared within an economic accounting framework that is fully consistent with how the GDP accounts for the nation are constructed. This framework also underpins the estimates of BEA's “satellite accounts,” such as that for arts and cultural production, outdoor recreation, and for travel and tourism. These initial estimates include measures of gross output, value added, compensation of employees, and employment for subgroups of the digital economy and the overall digital economy.

The advantage of constructing estimates on the digital economy within the framework used for BEA’s GDP accounts is that the overall digital economy can be compared to GDP for the nation. This includes as a percentage of GDP as well as whether GDP for the digital economy is growing faster or slower than the overall U.S. economy. In the initial digital economy estimates, BEA provides a measure of “value added” by each industry in the digital economy, by groups of digital economy goods and service types, and for the digital economy overall.

BEA includes in its definition:

Economic activity associated with the digital economy is already embedded in BEA’s core statistics, including data on production, GDP, employment, and compensation. The digital economy estimates pull these embedded data elements out of the core accounts and combines them in a unified framework that separately highlights activity associated with the digital economy.