The well-known global internet giants mainly come from the US or China. This is also reflected in foreign trade statistics: digital exports from the US are more than ten times as large, and those from China are still more than twice as large as the value of European digital exports.
It was known that Europe was lagging behind, but now there is a calculation by Philipp Koch of the economic research institute EcoAustria that shows the dimensions.
Digital exports include, for example, video streaming or a cloud solution if purchased across borders. Such transactions are difficult to record because large technology companies in particular conceal their foreign transactions through local subsidiaries, according to a statement from EcoAustria.
Using machine learning combined with sales statistics from more than 15,000 companies, the team with Koch created bilateral trade estimates for 31 sectors, 189 countries and the six years from 2016 to 2021. Their results were published in the journal “Nature Communications”.
According to this study, US companies exported digital products worth $672 billion (€629 billion) in 2021, while EU companies exported only $48 billion. China was also significantly more successful than European companies during the same period, with exports of $107 billion.
Production concentrated, consumption became more widely diversified
The research also shows that production is concentrated among fewer producers than other goods in global trade, while consumption is more widely diversified. Global digital trade generated almost a trillion dollars in 2021, equivalent to about 3.5 percent of global trade. At the same time, the distribution grew annually by almost a quarter (24 percent) over the six years examined. If this growth continues, digital products could account for 15 percent of global trade by 2030.
“Key element for economic well-being”
Austria is an export country in itself, but this only applies to the digital sector to a limited extent. Digital goods accounted for just 1.1 percent of exports, or less than $290 million in 2021, Koch writes. Increased digital exports are “a key element for the long-term economic well-being of Austria and Europe on the global market.” Europe must strengthen the digital sector and invest in digital infrastructure to remain competitive.
According to the study, the figures are estimated conservatively because the definition for digital products is narrower and the estimated trading volume is therefore smaller than in other studies on this topic. The results are extrapolated based on very large digital companies, which could also distort the result.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
