Hearing: Digital Trade in the U.S. and Global Economies

March 15, 2013

In written testimony to the United States International Trade Commission, Stephen Ezell emphasized the importance of issues regarding digital trade in the global economy. Digital trade based on information and communications technologies (ICTs) matters because ICTs are the global economy’s strongest driver of productivity, innovation, and growth. For instance, the McKinsey Global Institute estimates that the Internet alone accounted for 21 percent of the aggregate GDP growth across thirteen of the world’s largest economies from 2006 to 2011, while the World Bank estimates that ICTs accounted for one-quarter of GDP growth in many developing countries during the first decade of the 21st century. Going forward, a March 2013 study by Finland’s Ministry of Employment and the Economy estimates that, by 2025, half of all value in the global economy will be created digitally. This growing digitalization of the global economy is reflected in the expected quintupling of global Internet traffic between 2011 and 2015 and the approximate 50 percent growth in cross-border trade in data annually. Therefore, ensuring the uninhibited flow of information, data, and ICT products and services across borders has become vital both to realizing a robust global economy and healthy national economies.