Posted at 10:00 AM
In the past, as with goods, the provision of a service either required the physical delivery of information via traditional shipping options or required travel by the purchaser or provider. Now, businesses and consumers are increasingly using the internet to purchase services. While most commodities must still be physically delivered, there are a number of services that can be delivered almost instantaneously online at a relatively small cost, not only domestically but across the globe.
This report, which adds to prior work in the Office of the Chief Economist and the Bureau of Economic Analysis, provides estimates of international services trade in the European Union (EU) that has the potential to be delivered remotely over information and communication technology (ICT) networks – or that are potentially ICT-enabled services. These estimates of ICT-enabled trade underscore the importance these new forms of cross-border services may have to countries across the European Union and are important for understanding how restrictions on the flow of data across borders may impact countries’ economies. It finds that in 2014:
- The 28 EU member states collectively exported $1.2 trillion and imported $935.1 billion in ICT-enabled services, to countries both inside of and outside of the EU.
- Excluding intra-EU trade, EU member states exported $569.6 billion and imported $418.0 billion in ICT-enabled services, resulting in a surplus of $151.6 billion for these services. ICT-enabled services trade represented 56 percent of all services exports to non-EU countries and 52 percent of all services imports from non-EU countries.
- The largest shares of all EU ICT-enabled services exports and imports, and in trade of these services with non-EU countries, were in “selected other business services” which includes: research and development services (R&D); professional, management, and consulting services; architectural, engineering, scientific and other technical services; and other business services not included elsewhere.
- The EU member states with the largest estimated value of ICT-enabled services exports were the United Kingdom (UK) ($159.0 billion), Germany ($149.2 billion), France ($128.0 billion), and the Netherlands ($115.3 billion).
- Some member states, like the UK, the Netherlands, and Sweden transmitted more than half of their ICT-enabled services exports to destinations outside of the EU. Other member states, like Poland, Austria, and Belgium, were more likely to export to other EU member states.
- The largest non-EU consumer of EU ICT-enabled services exports was the United States, which purchased 16 percent, or $179.9 billion, of total EU exports of these services.1
- The United States exported approximately $147.6 billion in ICT-enabled services to EU member states.
1 This value is calculated using export data compiled by the Organisation for Economic Cooperation and Development (OECD) from national statistical agencies of European Union member countries and differs from estimates calculated using import data available from the Bureau of Economic Analysis. See box on Data Limitations for more information.