Value added
For the aggregate of the 40 countries surveyed by PREDICT, in 2013 the ICT sector generated a value added of about 2.6 trillion PPS (or about 2.2 trillion euros), corresponding to slightly more than 4.5% of their GDP. Its annual growth rate at current prices stood around 5%, as in the previous year.
More recent information suggests a moderation of global growth of ICT industries in 2014 and a new upturn in 2015, dragged by software and emerging service activities. Computer (IT) services are the most dynamic and, since 2011, also the largest aggregate, with a quick recovery from the crisis and a value added approaching 1 trillion euros. The dynamics of value added was slowest in Telecommunications, due to sluggish or negative growth in advanced economies.
Value added of the ICT sector
(*) All PREDICT economies combined
- (*) the PREDICT aggregate includes the 28EU member states plus Norway and Switzerland in Europe, Australia, Brazil, Canada, China, India, Korea, Japan Norway, Russia, Switzerland, Taiwan and the United States.
- To net for the effect of differences in price levels across countries and of movements in exchange rates, in the computation of global shares in GDP and industry dynamics values in national currencies were converted in Purchasing Power Standards (PPS), an accounting unit based on current euros.
- To incorporate all non-EU economies, this chart is based on an operational definition of the ICT sector, which does not include the Manufacture of magnetic and optical media (ISIC rev.4 code 268) and the wholesale of ICT products (ISIC rev.4 code 465). Canada and Japan: 2012 instead of 2013
Employment
In the aggregate of the 40 PREDICT economies employment in the ICT sector was resilient to the crisis and continued to grow at a faster pace than total employment. In 2013 it reached 38 million, or 2% of total employment, with a yearly increase of 2.4%, against 0.6% for the whole economy.
Employment expanded in all the three main constituent industries and particularly in Computer services. In 2013 this industry reached 13.6 million workers (an increase of 4 million over 2006), overtaking manufacturing where instead employment diminished, albeit slightly, for the first time since 2009.
Employment in the ICT sector and constituent industries
Note: Operational definition of the ICT sector.
Source: JRC, PREDICT Database (May 2016), available at https://publications.jrc.ec.europa.eu/repository/handle/JRC102368
Labout productivity
In 2013, value added per worker in the ICT sector for the PREDICT aggregate stood at 68 thousand PPS (close to 57 thousand euros), ranging from nearly 85 thousand PPS in Telecommunications (more capital intensive) to just above 50 thousand in manufacturing activities (where a large part of production today is commoditised). The level for the ICT sector was about 2.3 times that for the whole economy, down from a ratio of 3.0 in 2006. This reflects the stagnation of nominal productivity in past years in ICT sector industries, while since 2006 value added per worker increased about 30% for the whole economy.
On the other hand, labour productivity in volume from 2006 to 2013 increased around 10% in both the ICT sector and the whole economy (chart 2), with ICT industries taking divergent paths. In particular, productivity stands still in IT services and progresses 20 to 30% in ICT manufacturing (depending on whether we adjust for cross-country differences in price levels or not), likely for the effects of technology advances and competition on unit prices and quality improvements.
Value added per person employed in the ICT sector and constituent industries
(*) All PREDICT economies combined
- (*) the PREDICT aggregate includes includes the 28EU member states plus Norway and Switzerland in Europe, Australia, Brazil, Canada, China, India, Korea, Japan Norway, Russia, Switzerland, Taiwan and the United States. Employment in these economies totalled about 1.93 billion.
- To incorporate all non-EU economies, this chart is based on an operational definition of the ICT sector, which does not include the Manufacture of magnetic and optical media (ISIC rev.4 code 268) and the wholesale of ICT products (ISIC rev.4 code 465).
Business expenditure in R&D (BERD)
The group of 40 countries surveyed by PREDICT accounts for about 90% of global BERD. In 2013, the R&D expenditure of ICT enterprises in these countries was close to 200 billion PPS (175 billion euros), corresponding to about 24% of their BERD. Since 2006 ICT sector BERD grew about 30% in nominal terms against about 45% for total BERD, corresponding to a loss of nearly 3 percentage points in share.
In 2013, however, ICT BERD in current PPS increased 7% (down to 1.3% in euro terms, due to currency appreciation), a higher rate than both total BERD and GDP growth rates. ICT manufacturing is by far the main industry in ICT BERD performance. However, it is worth noting that BERD grew faster in ICT services than in both manufacturing and telecommunications, reflecting the remarkable shift in the composition of the ICT sector towards these activities (see global trends in value added).
BERD in the ICT sector and constituent industries
(*) All PREDICT economies combined
- (*) the PREDICT aggregate includes the 28EU member states plus Norway and Switzerland in Europe, Australia, Brazil, Canada, China, India, Korea, Japan Norway, Russia, Switzerland, Taiwan and the United States. Employment in these economies totalled about 1.9 billion
- To incorporate all non-EU economies, this chart is based on an operational definition of the ICT sector, which does not include the Manufacture of magnetic and optical media (ISIC rev.4 code 268) and the wholesale of ICT products (ISIC rev.4 code 465).