Fact of the Week: The Digital Economy Grew 4.3 Times Faster than the U.S. Economy Overall from 1997 to 2017

The digital economy grew 4.3 times faster than the U.S. economy overall from 1997 to 2017.

Source: Bureau of Economic Analysis, “Digital Economy Accounted for 6.9 Percent of GDP in 2017,” April 4, 2019.

Commentary: The Bureau of Economic Analysis released a paper last year in which it defined and quantified the impact of the high-tech sector in order to measure the digital economy. Last week, BEA updated its analysis to include more precise data, and it expanded the observed period to cover the years 1997 through 2017. In doing so, it found that the digital economy grew 9.9 percent annually over this 20-year period—4.3 times faster than the overall economy—and represented 6.9 percent of U.S. GDP as of 2017. The makeup of the digital economy shifted significantly over this period, with stark changes in the hardware component, which fell from 20 percent of the digital economy to 7 percent, and in e-commerce and digital media, which grew from 5 percent to 15 percent.