Fact of the Week: The Digital Economy Produced Has Produced a Real Growth Rate in the United States of 3.8 Percent Since 2019

Source: Tina Highfill and Christopher Surfield, “New and Revised Statistics of the U.S. Digital Economy, 2005–2020,” (U.S. Bureau of Economic Analysis, May 2022).

Commentary: Since an initial analysis of the years 2005 to 2019, the Bureau of Economic Analysis (BEA) has been publishing annual digital economy satellite account estimates. Constructed with supply-use tables that break down the economy by industry, satellite accounts isolate and consolidate metrics associated with a particular aspect of the economy such as tourism, or in this case, the digital economy. They are particularly informative in the case of the digital economy, whose myriad effects pervade multiple sectors. To account for this, BEA’s measures have expanded over time to include partially digital goods and services. The most recent iteration of data shows that in 2020, the U.S. digital economy accounted for $3.31 trillion of gross output, at a growth rate of 3.8 percent since 2019. Gross output, the market value of all goods and services produced by an industry, is a good metric to assess sheer volume of production as well as a means of comparison between industries.

A closer examination separates the digital economy’s 2020 output into three major activities. Priced digital services (computing or communication services available for a fee), at 44 percent of gross output, contributed $1.45 trillion in current-dollar terms. Notably, telecommunications, which constituted about half of the priced digital services category, suffered a reduction in real gross output due to a decline in the motion picture and sound recording industries. Infrastructure, which comprises the physical materials that support computer networks and other aspects of the digital economy, contributed 31 percent of gross output at $1.02 trillion. Finally, e-commerce is the online sale of goods and services. At a gross output of $831 billion, it constituted a quarter of the digital economy’s gross output. Overall, the digital economy’s real gross output growth rate between 2012 and 2020 averaged 4.8 percent, over twice that of the overall economy (at 1.5 percent).