Barbara M.
Fraumeni, Bureau of Economic Analysis,
Marilyn E. Manser,
Bureau of Labor Statistics,
and
Thomas L.
Mesenbourg, Jr., Bureau of the Census
|
This paper was prepared for
presentation to the
Federal Economic Statistics
Advisory Committee
(FESAC)
June 15, 2000
Government Statistics: E-Commerce and the Electronic
Economy
The growth, integration, and diffusion
of information technology and communications is changing our
society and economy. Today, computers and other electronic
devices increasingly communicate and interact directly with
other devices over a variety of networks, such as the Internet.
Consumers and businesses have been particularly quick to
recognize the potential and realize the benefits of adopting new
computer-enabled networks. Many consumers now routinely use
computer networks to identify sellers, evaluate products and
services, compare prices, and exert market leverage. Businesses
use networks even more extensively to conduct and re-engineer
production processes, streamline procurement processes, reach
new customers, and manage internal operations. This electronic
revolution is spurring additional investments in facilities,
hardware, software, services, and human capital. Ultimately, it
may change the structure and performance of the American economy
as much as the introduction of the computer a generation ago.
While the burgeoning use of electronic
devices in our economy is widely acknowledged and discussed, it
remains largely undefined and unrecognized in official economic
statistics. This paper highlights some of the issues associated
with measuring our electronic economy, emphasizing the
measurement of e-commerce. It also describes Bureau of Economic
Analysis (BEA), Bureau of Labor Statistics (BLS), and Bureau of
the Census (BOC) electronic economy programs and initiatives,
and concludes by posing a long list of questions, the answers to
which would aid agencies in setting measurement
priorities.
I.
Definitions
Various terms are used to
describe the electronic economy and its components. These
include, but are not limited to, the digital economy,
e-business, e-commerce, e-infrastructure, and even the "new
economy." The Economics and Statistics Administration (ESA)
of the Department of Commerce (DOC), is about to issue its third
report on the digital economy.1 2 In
its measurement efforts, the BOC has found it useful to think of
the electronic economy as having three primary
components–e-business processes (how business is
conducted), e-commerce transactions (buying and selling), and
e-infrastructure (which supports electronic activities).3 A paper on measuring the new economy
recently was presented at the BEA Advisory Committee
meeting.4 BLS has discussed
e-commerce with its Business Research Advisory Committee and is
planning to do so with its Labor Research Advisory Committee in
June.5
Establishing relevant and
consistent definitions is a critical first step in developing
useful measures of the electronic economy. Policymakers,
industry, and the media use a variety of terms to describe
digital or electronic economic activity. Moreover, these terms
often are used interchangeably and with no common understanding
of their scope or relationships. Consequently, this paper begins
by defining terms to establish a common point of
reference.
-----------------------------
1 Both BEA and BOC are
within ESA.
2 Department of Commerce
(1998), ESA (1999).
3 Mesenbourg (1999).
4 Landefeld and Fraumeni
(2000).
5 Manser (2000).
IA. Digital
economy
The digital economy is comprised of
e-commerce and information technology (IT)-producing and
IT-using industries. IT-producing industries include computer
hardware, software/services, communications equipment, and
communication services industries. ESA defines industries as
IT-using if they are among the top 15 industries as measured by
either of two measures: IT net capital stock as a share of total
equipment stock or IT investment per employee. This criterion
results in approximately twenty 2-digit SIC industries being
classified as IT-using.6 E-commerce is defined
below.
IB.
E-business
E-business is any process that a
business organization conducts over a computer-mediated network.
Business organizations include any for-profit, governmental, or
nonprofit entity. Examples of online e-business processes
include: purchasing, selling, vendor-managed inventory,
production management, and logistics, as well as communication
and support services, such as online training and recruiting.
Computer-mediated networks are electronically linked devices
that communicate interactively over network channels. A variety
of electronic devices can be linked, including computers,
Internet-enabled cellular phones, personal digital assistants,
and WebTV. Such links generally involve minimal human
intervention. Networks include the
Internet, Intranets, Extranets, Electronic Data Interchange (EDI) networks, and telecommunication
networks. These networks may be either open or closed.
----------------------------------------
6 ESA (1999), pp.
15, 26-28.
IC.
E-commerce
E-commerce is any transaction completed
over a computer-mediated network that involves the transfer of
ownership or rights to use goods or services. Transactions occur
within selected e-business processes (e.g., selling process) and
are completed when the agreement between buyer and seller to
transfer the ownership of, or rights to use, goods or services
occurs over computer-mediated networks. Electronic agreement,
not payment, is the key determinant of an e-commerce
transaction. Unpriced transactions such as downloading free
software available on the Internet are excluded. Examples of
e-commerce transactions include sales of books or CD-ROMs over
the Internet, an electronic marketplace selling parts to another
business, a manufacturing plant selling components to another
plant within the company using the firm's Intranet, and a
manufacturer selling to a retailer over an EDI network.
ID.
E-infrastructure
E-infrastructure is the infrastructure
used to support electronic business processes and conduct
electronic commerce transactions. It includes hardware,
application software, telecommunication networks, support
services, and human capital used in electronic business and
commerce. Nonhuman e-infrastructure investment is produced by
the IT-producing industries described above. These industries
are thought to be a primary engine of economic growth in the new
economy.
IE. New
economy
As many analysts are unsure if we are in
a new economy, defining precisely what the term new economy
means is difficult. The new economy, if we are in one, appears
to be the product of various structural changes occurring in the
last two decades that have contributed to the recent improvement
in economic performance.
II. Measurement of
E-Commerce
There are at least four major questions
relevant to the discussion of e-commerce measurement:
- Are aggregate economic
statistics fully covering e-commerce?
- Are there particular
measurement problems associated with e-commerce?
- Should e-commerce and the
impact of the electronic economy be identified and
tracked separately?
- What are some of the major
alternatives in e-commerce measurement?
These questions form the core of this
paper and, along with the question of priorities, the debate
before FESAC.
IIA. Are aggregate
economic statistics fully covering e-commerce?
The general consensus is that the vast
majority of e-commerce activities are covered in aggregate U.S.
economic statistics. E-commerce businesses, many of which are
new companies, are included in the establishment-based data
series. While there is some lag in introducing new businesses
into the sample frames, it is not believed that this is
contributing to significant under- coverage of e-commerce
establishments. The BLS and BOC sample frames, which are based
on Unemployment Insurance and Internal Revenue Service
administrative records, respectively, capture new establishments
within a very short time period.7 Samples of
establishments are selected from these frames, and sample
rotation is carried out for different surveys on various
schedules. If surveys capture new establishments at different
rates, this could pose problems for analyses or measures that
depend upon multiple sources.8 These are essentially
the same issues that always arise for data collection in dynamic
sectors of the economy, but they could become more significant
if e-commerce business entry and growth are more rapid than the
entry and growth that have occurred in the past.
----------------------------------
7 The Business Establishment
List (BEL)-Standard Statistical Establishment List (SSEL)
discussion during this same FESAC meeting is relevant to the
e-commerce discussion as well.
8
For instance, if new
businesses were captured more rapidly in revenue and price
measures than in hours data, productivity growth could be
misstated.
IIB. Are there particular
measurement problems associated with
e-commerce?
It is much more difficult to answer this
answer than the previous question. Can all the dimensions of
what is going on in e-commerce be picked up? For example, how is
business-to-business (B2B) and business-to-consumer (B2C)
e-commerce impacting on the accuracy of labor surveys; goods and
services choices, characteristics, and prices; the difficulty of
tracking international transactions; and business costs and
productivity?
With respect to labor surveys, new types
of businesses do not seem likely to pose particular problems for
measuring some things, such as employment and hours. E-commerce
businesses, however, could pose problems for interpreting trends
in other measures, such as wages, if they are more apt to use
types of compensation, such as stock options, that are not
included in typical wage measures, or if e-commerce workers are
more likely to be self-employed.
E-commerce businesses pose additional
measurement challenges in that they can quickly expand their
product line, adding both new goods and new services, and even
enter into entirely new kinds of activities, much faster than
their retail and wholesale brick and mortar counterparts.
Amazon.com not only sells books and CD-ROMs, but also hosts
auctions, and in the beginning of May introduced its new Lawn
and Patio and Kitchen stores. Identifying and monitoring the
creation of virtual stores impose additional challenges because
many firms do not think of these businesses as separate
locations or establishments. New types of businesses, such as
info-mediaries and B2B marketplaces, and changes in the supply
chain, as well as the ability to vary activities quickly, make
industry classification and tracking difficult.
The characteristics and prices of
e-commerce products may not be the same as those sold in retail
brick-and-mortar outlets or through wholesalers. For example,
the Consumer Price Index (CPI) and resulting real personal
consumption measures do not capture all aspects of consumer
welfare from B2C transactions. E-commerce retail purchases may
involve particular amenities for the consumer (such as
convenience of shopping from home, added information that is
available on the product, or lower prices) or disamenities (such
as frustration at lengthy downloads, not being able to feel the
quality of fabric in an item of clothing, or service
deterioration). These are the types of factors that are not
captured in general in measures of prices and real GDP. It is
not clear that these sorts of problems are greater for
e-commerce than for other activities, nor even that they do not
in general wash out. In the area of B2B e-commerce, improved
speed and convenience may result in lower costs and higher
productivity, but may not be reflected in the measured
characteristics or effective prices of the goods and services
exchanged or in measures of real output.9 10
The electronic economy is complicating
international transactions measurement. Establishing the
residency of sellers and purchasers may be difficult because
firms may not know the residency of their customers, and
vice-versa. For example, customers who purchase goods or
services through the Internet may remit payment to a U.S. bank
or another fiscal agent, without realizing that their purchases
were from foreign persons. Unlike with goods transactions,
nothing is physically shipped when a customer downloads a
product from the Internet. The Internet may greatly expand
international trade in goods and services because the Internet
reduces the effective distance between buyers and sellers. In
addition, it may become more difficult to distinguish goods from
services. For example, music, books, movies, games, photos, and
computer software may soon be transmitted electronically rather
than as physical media. Many of these issues also affect
domestic transactions measurement, including state and regional
measurement.
Priceline.com's recent partnering with
some of the largest grocery chains also raises some measurement
issues. Consumers bid for groceries at Priceline's site, pay by
credit card (often 10-30% discount), and then pick up the
groceries at their local super market. Are Priceline sales
included in the grocery store retail sales? How is Priceline, a
service industry business, reporting these sales?
To complicate the measurement challenge,
as Fraumeni et al. (1999, p. 12) have noted, "[a] number of
E-commerce activities occur in industries whose output is
difficult to measure even if the goods and services are provided
through a brick-and-mortar outlet." Examples of such
e-commerce activities in IT-using industries include on-line
brokerage services and on-line bank account services. In
addition, high-tech products and services, forming the backbone
of e-infrastructure, are associated with complex quality
measurement issues.
-----------------------------------------
9 One
of the research projects examining the impact of e-commerce and
e-business activity on businesses is the Brookings project headed by
Robert Litan and Alice Rivlin.
10 The growing use of e-business
processes by more and more businesses may be raising a number of
additional issues and challenges for statistical agencies. The media is
replete with articles citing the rapid growth of electronic marketplaces
and claims that businesses are cutting their purchasing costs
significantly as a result of these marketplaces. Cisco permits customers
to design and customize products online, electronically transmits the
design to contract manufacturing plants, electronically links suppliers
with the manufacturers, monitors production in real time, tracks
shipment and delivery online, and provides much of their customer
support online. This exploitation of networked information can
fundamentally change the ways business operate and could have a
potentially significant impact on costs and productivity.
IIC.
Should e-commerce and the impact of the electronic economy be
identified and tracked separately?"
Currently, e-commerce represents a small
part of the U.S. economy, but it may represent a significant
part of the economy in the future. Under these circumstances,
what level of effort and resources should be devoted to tracking
it? Does it suffice to attempt to ensure that it is reflected in
our aggregate statistics or does it need to be tracked
separately? If e-commerce activities are very small in a sector
or are spread out among many sectors, it may be difficult and
very expensive to produce separate series. As it may be
impossible to separately identify e-commerce or e-business
processes as a source of economic growth, we may have to be
satisfied with measures that reflect, but do not separately
identify, the impact of the electronic economy.11
Only one official estimate of the size
of e-commerce exists. According to recent BOC estimates,
e-commerce accounted for about 0.6 percent of retail sales in
the fourth quarter of 1999; that percentage share would be
slightly higher if eating and drinking establishments (which
comprise a substantial part of retail trade and where e-commerce
activities are very limited) were excluded. Additional B2C
e-commerce expenditures are occurring in other industries, such
as hotels and air travel. B2B e-commerce activities are
understood to be substantially greater than B2C e-commerce
activities, but as of yet there are no official estimates. B2B
e-commerce activities occur in various industries, including
wholesale trade, transportation of products, and manufacturing.
The adoption of a major revision to the
industry classification structure, the North American Industry
Classification System (NAICS), which was first employed in the
1997 economic censuses, may help in making electronic
economy-related estimates.12 Other government data
series will change from an SIC-basis to NAICS over the next few
years. Although NAICS was path breaking in including a separate
Information industry, it was developed prior to the recent
dramatic growth of the Internet. NAICS retail industry 4541
includes electronic shopping and mail-order houses; there is no
separation. Proposed changes to NAICS for 2002 would define
three separate components of industry 4541: Electronic Shopping;
Electronic Auctions; and Mail-order Houses. A major revision to
the product classification system, the North American Product
Classification System (NAPCS), is currently in the design
phase.
In NAICS, wholesale trade categories
relate to the type of good sold; there is no distinction between
establishments that sell goods on their own account, typically
maintaining their own warehouse, and those that arrange for the
purchase or sale of goods owned by others or purchase goods on a
commission basis, generally not owning or handling the goods
they sell. Proposed changes to wholesale trade for 2002 would
split activities into industries defined as merchant wholesalers
for particular types of products and new industry 425, which
would include 42511, B2B Electronic Markets and 42512, Wholesale
Trade Agents and Brokers. There are also proposed changes to the
Information Sector, NAICS Sector 51.
Because e-commerce is changing so
rapidly, any structure adopted may become obsolete in a short
period of time. Two BOC-funded projects are assessing how well
NAICS captures the dimensions of the emerging digital economy.
Producer price index (PPI) program staff at BLS, who have been
exploring development of PPIs for wholesale trade, are
concluding that this industry is being revolutionized by
e-business processes and have formed an internal team to look at
the implications for the PPI.
Because of boundary blurring, an
establishment-based data system will not always be able to
separate store-based and online activities. For example, in
retail trade, there is overlap between online sale activities
and store sale activities that may increase as "old
economy" companies go into online sales in a more
significant way. There are reports that major brick-and-mortar
retail chains are establishing online sites that have an
interrelationship with a store. Sometimes customers pick up an
online order at a store or return online products there. The
possibility of establishing online ordering kiosks in a store or
a partner store also has been discussed. The problem of joint or
overlapping activities within activities occurs frequently, so
the issue here is whether it is likely to become unusually
significant.
All statistical agencies face
classification challenges because of the electronic economy. BEA
is a "consumer" of data collected by BLS, BOC, and
others. Accordingly, problems faced by the other agencies affect
BEA’s ability to accurately reflect economic activity in
its accounts.
---------------------------------------
11 A number of researchers have
looked at the impact of e-infrastructure on economic growth. See
ESA, forthcoming, and Landefeld and Fraumeni (2000) for a
bibliography and a summary of this research.
12 Information on NAICS and
proposed changes is available at http://www.census.gov.
IID. What are some of the
major alternatives in e-commerce measurement?
The major alternatives can be summarized
as the following:
- Do nothing.
- Engage in research on the subject
of e-commerce measurement.
- Mark data for possible future use.
- Add questions or supplements to
existing surveys.
- Design and implement new
surveys.
BEA, BLS, and BOC face resource
constraints, and these alternatives must be assessed in the
context of the many data needs and challenges facing us. No one
in the statistical agencies is suggesting that nothing be done.
Accordingly, this paper has already discussed particular
measurement problems relating to e-commerce and whether these
activities can and should be separately identified.13 All three agencies are engaged in
research on the subject of e-commerce measurement.
Marking data for possible future use
would preserve future options. Data could be recorded in a way
that would allow analysts to go back and look at it. An example
would be making a purchase by e-commerce a "price
determining characteristic" on a checklist for price data
collection.
Another alternative is to examine
specific questions relating to e-commerce by including
additional questions in a survey or adding a supplement to a
survey conducted for another purpose. BOC has been actively
pursuing this strategy.14 At BLS, there has
been interest in how the change to e-commerce has been reflected
in changes in the occupational mix of jobs; to address this, BLS
is proposing to test the feasibility of asking respondents to
the Occupational Employment Statistics (OES) Survey a few
questions concerning their e-commerce activities.15 BEA is planning to make several
changes to the international services surveys to ensure better
coverage of e-commerce transactions.
Finally, new surveys can be undertaken.
At BOC, a new survey of supply chain organizations is being
considered to help in understanding changing functions and
activities. New surveys are
the most expensive and time-consuming of
the alternatives, but the way that the electronic economy is
changing e-business processes may require them.
-------------------------------------
13
Although BEA is engaged in
e-commerce measurement research, it primarily depends on other agencies
and private groups to collect data.
14 See Mesenbourg (1999).
15
The OES is a very large
establishment survey that collects information on the number of
employees and wage distributions for detailed occupations.
III. BEA, BLS, and BOC
Electronic Economy Programs and Initiatives
Each of the statistical agencies has
programs and initiatives related to the electronic economy. BOC
has been a leader in implementing these projects, BEA has
developed and submitted budget proposals to support undertaking
such projects, and BLS is beginning to consider whether
electronic economy projects should be undertaken in the future.
Staff of the three agencies are presently working on revisions
to NAICS. In addition, the agencies have begun development of a
North American Product Classification System (NAPCS) for
products in four key service sector areas: information; finance;
professional, scientific, and technical services; and employment
services.
IIIA. BOC programs and
initiatives
This section describes BOC FY 2000 and
FY 2001 electronic economy measurement plans. Implementation of
the complete FY 2001 priority list will require approval of the
BOC budget initiative pending before the Congress.
FY 2000
programs.
In FY 2000 e-commerce measures were
introduced in a number of current economic surveys and two
research contracts were initiated.
- Began collecting monthly e-commerce
retail sales in October 1999. BOC continues to collect the
data monthly and publish quarterly estimates. The first
official retail e-commerce estimates were released on March
2, 2000, covering the fourth quarter 1999. E-commerce sales
totaled $5.3 billion and represented 0.6% of total retail
sales. First quarter 2000 estimates were available in late
May 2000.
- Added e-commerce inquiries to
several annual surveys. E-commerce sales questions were
added to annual surveys covering retail trade, wholesale
trade, accommodations and food services, and the rest of the
NAICS services sectors. Firms were asked to report their
e-commerce sales for both 1999 and 1998. Retailers and
wholesalers also were asked if they were purchasing goods,
supplies, or services over computer-mediated networks. For
nonstore retailers (catalog and electronic shopping sites)
and all computer, software and office supply firms, BOC will
collect additional information: total sales and e-commerce
by 11 commodity categories (books, CD-ROMs, computers,
software, apparel, etc); e-commerce sales by class of
customer (individuals, businesses, government); and total
foreign e-commerce sales (percent ranges). Report forms
covering reference year 1999 were mailed in March-April
2000. Data review and dissemination will occur beginning
late in the year, with data available early in 2001.
- 1999 Annual Survey of Manufactures
(ASM) Supplement. A special supplement has been developed
that will collect data from some 60,000 manufacturing plants
on e-commerce sales and purchases, types of information
manufacturers are sharing online with suppliers and
customers, and use of e-business processes (present and
planned). The supplement will be sent to plant managers in
June 2000 and results will be available next year.
- E-business research studies. BOC
has two research studies underway
- BOC has contracted with Pembroke
Consulting (Dr. Adam Fein) to study changing supply chain
industries and organizations. Deliverables for this summer
include a description of the changing supply chain,
implications for BOC measurement programs, and specific
recommendations regarding how better to capture and describe
supply chain activities in the 2002 Economic Census and in
our current economic statistics.
- BOC also has contracted with IBM
Global Services. In phase one, IBM and Dr. Jeffrey Sampler
are focusing on the information technology drivers of
e-business, and will describe how these drivers are
affecting the value-chain, identify the implications for BOC
measurement programs, and make specific program
recommendations. The second research component, being led by
Dr. Hal Varian, is assessing how well NAICS captures
e-business activities and will make specific recommendations
regarding how BOC can supplement the NAICS industry
classifications to better describe e-business activities and
support new 2002 Economic Census data
aggregations.
FY 2001 initiative.
A FY 2001 budget initiative proposes to
provide the funding needed to institutionalize the program
started this year and permit the program to be expanded and
extended. Highlights of this initiative are provided here.
Additional details are available on the BOC web site. BOC is
proposing to:
- Provide e-commerce measures for
most economic sectors and their associated industries.
- Deliver the first official baseline
measures of e-business process usage for manufacturing
industries as well as for other industries and create ASM
supplement links to full ASM data.
- Add coverage of electronic
marketplaces and other important distribution channels to
the annual wholesale trade survey.
- Develop e-business infrastructure
measures.
IIIB. BEA programs and
initiatives
Current BEA resources cannot support
major new initiatives. Such activities would require new
funding, some of which has been included in the BEA budget
request for FY 2001 currently pending before the Congress. BEA
is seeking additional financial resources to fully develop the
following new and revised measures of e-business, high-tech, and
electronic economy-related activity:
- BEA would work to develop a new
index of quarterly investment in e-business-related and
high-tech equipment and associated measures of its
contribution to real GDP growth and inflation. These data
would include:
- E-business-related/high-tech
investment index;
- Current-dollar and chain-dollar
estimates of e-business-related/high-tech investment;
- Contribution to growth and
inflation of e-business-related/high-tech investment.
- BEA would work – in
cooperation with BLS -- to develop revised quarterly price
and real GDP indexes for major e-business/high-tech-using
products and sectors, including:
- Insurance;
- Banking, brokerage, and other
financial services;
- Computer and related products
and services;
- Telecommunications equipment
and services;
- Engineering, design, management
consulting, and related services; and
- Education and other
services.
- BEA -- in part in cooperation with
BLS -- would work to develop revised estimates of employee
compensation, personal income, wealth, and saving that
better reflect the impact of stock options and capital gains
of workers in e-business-related and other high-tech
industries.
- BEA would revise and expand its
surveys of international trade in services and of direct
investment to fill gaps in the coverage of
e-business/high-tech-related transactions and to identify
e-business-related direct investment in the United States
and abroad.
- BEA would work to develop new
aggregations using earnings by place of work for
e-business/high-tech-related industries.
- BEA would attempt to develop
updated and revised "input-output" and
GDP-by-industry estimates to help disentangle the effects of
e-business and high-tech on final demand versus on
intermediate product.
IIIC. BLS programs and
initiatives
BLS has underway or in the planning
stages a number of activities that will improve data for
understanding e-business/high-tech activities, although there
have been no budget initiatives specifically focused on this
topic.
Activities underway or in
the planning stage.
- With present resources obtained
from productivity enhancements and taking sample from
manufacturing industries, the Producer Price Index (PPI)
program is planning the following:
– Develop price measures for
wholesale trade. For instance, a PPI might be produced for
"Wholesale brokerage services" though available
resources will not support any breakouts. This industry
presumably would include things like the new GM consortium.
– Test a PPI for the banking
industry.
– Publish an index for retail
trade industry 5961, Catalog sales. The sample will be very
small, however, and it will not be possible to break out
e-commerce sales.
– Improve the treatment of quality
change in the PPI for semiconductors.
– Identify e-commerce business
models currently in use and their impacts on the PPI. The group
working on this project will explore whether a price index for a
sample of current reporters shows price movements similar to
those of an index constructed for a matched sample of the
internet sites of these same reporters; this will be done for
several product lines in one or two industries.
- The CPI program has a team
examining whether changes are needed to data collection
procedures as a result of e-commerce activities and has
added an explicit question to the Point of Purchase Survey
on whether an outlet is an Internet outlet.
- The Employment Cost Index
program is exploring the measurement of stock options, which
are expected to be particularly large in e-business and
other high-tech industries.
- The OES program is
exploring the possibility of adding a few questions on
e-commerce activities.
FY 2001 initiative for expanding price,
output and productivity measures.
Funding of the BLS FY 2001 budget
initiative to expand price, output and productivity measures
will greatly increase information available on key sectors of
the economy, which is important for understanding how today's
"new economy" is performing. Among other things, this
initiative will:
- Provide new PPIs for some service
sector industries. Use of these new PPIs would be expected
to lead to improved measures of overall national output and
productivity;
- Provide for work to develop new
industry productivity measures for a number of service
sector industries.
- Enable BLS to develop and produce a
PPI for SIC 7535 -- Information retrieval services. This
category includes Internet service
providers.
IV.
Questions Related to E-commerce and Electronic Economy
Measurement
In order to assist statistical
agencies plan and refine future measurement programs, a number
of questions are posed for FESAC's consideration. It is not
expected that FESAC will be able to reflect on all these
questions during the meeting; they are intended to provoke
thought and a discussion of what are the most important
priorities. The questions deal primarily with e-commerce, but
also address some other aspects of the electronic economy.
Frequently questions in particular categories also apply to or
have implications for other categories; the categories are not
intended to be mutually exclusive. Many of the questions reflect
initiatives already underway at BOC.
IVA.
E-commerce
- Early next year BOC will have
e-commerce sales estimates available for most industries.
What additional e-commerce-related data are needed? What are
FESAC's top two e-commerce measurement priorities?
- Should there be separate accounts
for e-commerce? Does e-commerce need to be tracked
separately throughout the economy so that aggregate
statistics can be used to answer a question like: "What
is the impact of e-commerce on productivity
growth?"
- Should the advantages and
disadvantages to buyers and to sellers of using e-commerce
be examined and how should they be treated in defining
various measures? Should e-commerce goods and services be
quality-adjusted to reflect differences with other goods and
services?
- How much effort should be devoted
to the measurement of price and quantity components of
e-commerce goods and services?
- Should the OES survey be used to
determine the characteristics of workers involved in
e-commerce and to determine how, if at all, e-commerce
workers differ from other workers, e.g., with respect to
union status, or self-employment, or how workplace practices
of businesses involved in e-commerce differ from workplace
practices of other businesses?
- How should we attempt to resolve
some of the difficulties with international transactions
measurement?
- In terms of e-commerce activities,
what are the most important research questions that need to
be answered? A couple of possibilities include:
- Is e-commerce substituting for
activities within an industry or is it causing industry
growth? To what extent is it replacing things not kept track
of separately now, such as replacing telephone calls to
mail-order firms or telephone contacts of businesses with
potential suppliers?
- Will electronic activities become
such an integral part of economic processes that it will be
impossible to separate out much of this activity, at least
for B2B e-commerce?
IVB.
E-business
Statistical agencies have minimal
experience with process measures.
- Is understanding e-business
processes is an important area of research? Are there
suggestions regarding survey methods and approaches? Are
there studies that the agencies should review?
- The BOC 1999 Annual Survey of
Manufactures E-Business Supplement provides an initial list
of e-business processes; have some important processes been
missed?
- Would creation of an e-business
process taxonomy be useful? Are there selected e-business
processes that should be focused on initially? What
questions related to e-business processes should be
answered?
- Should an attempt be made to
determine the impact of e-business processes on economic
growth, or is it a change like the use of teams in the
workplace or just-in-time production methods that is
important to look at in specific studies, but whose effect
is impossible to capture and isolate in aggregate
data?
- Is the impact of e-commerce
analogous to the impact on workplace practices and
businesses of electric power, e.g., before electric power
workers worked primarily only during daylight hours and
businesses located near sources of water power?
IVC. Digital
economy
- Should an attempt be made to
improve industry-based measures of the digital economy,
e.g., measures related to IT-producing and IT-using
industries?
- Should measures of investment in
e-business/high-tech be developed along with the
contribution of these investments to economic growth?
- Should household surveys be
implemented, e.g., to look at households' access to and use
of computers, as well as to determine the extent of the
digital divide?16
- Should we be looking at how
telecommuting may be changing how businesses and workers
function?
---------------------------------------------------
16 The National
Telecommunications and Information Administration report (1999)
looks at the availability of telephones, computers, and the
Internet.
IVD.
E-infrastructure
There is a clear overlap between digital
economy and e-infrastructure measurement goals. In addition to
the questions asked above:
- Should projects be undertaken to
revise price and quantity measures for e-infrastructure
investment? How much of our resources should be devoted to
the extension of quality adjusted measures to additional
e-infrastructure-related products?
- Should e-business-related direct
investment in the United States and abroad be tracked?
- Are there human capital questions
raised by the electronic economy that should be
investigated?17
--------------------------------------------------------
17 Chapter 7 of ESA
(1998) and chapter IV of ESA (1999) discuss many of the relevant
issues that might be addressed.
IVE. New
economy
Many of the component questions of
whether new economy measures should be developed have already
been posed. These include:
- Should an attempt be made to
identify the impact of e-commerce, e-business,
e-infrastructure, and the digital economy on economic growth
and productivity?
- Should the agencies provide data
that will facilitate analysis of these phenomena?
V.
Conclusion
The electronic economy is here to stay.
What is uncertain is the extent of the changes it will bring
about. The challenge to statistical agencies is to keep up with
the evolving economy. Does this present new measurement
problems, different from those associated with previous periods
of change? Even the answer to that question is uncertain. What
is clear is that BEA, BLS, and BOC need to think about
e-commerce and electronic economy measurement priorities and the
resources to be devoted to them, given our existing measurement
programs. FESAC can provide useful input to these deliberations
and help shape the agencies' future agendas.
References
Fraumeni, Barbara M., Ann M. Lawson, and
G. Christian Ehemann, "The National Accounts in a Changing
Economy: How BEA Measures E-Commerce." Paper prepared for
the Workshop on Measuring E-Commerce, The Brookings Institution,
September 24, 1999.
Economics and Statistics Administration,
Office of Policy Development, U.S. Department of Commerce,
"The Emerging Digital Economy II," June 1999.
Economics and Statistics Administration,
Office of Policy Development, U.S. Department of Commerce,
"The Emerging Digital Economy 2000," forthcoming.
Landefeld, J. Steven, and Fraumeni,
Barbara M, "Measuring the New Economy," Paper
presented at BEA Advisory Committee Meeting, May 5, 2000.
Manser, Marilyn E. "E-Commerce and
Government Statistics." Paper presented to the BLS Business
Research Advisory Committee, May 10-11, 2000.
Mesenbourg, Thomas J., "Measuring
Electronic Business: Definitions, Underlying concepts, and
Measurement Plans." Paper presented at the Workshop on
Measuring E-Commerce, The Brookings Institution, September 24,
1999 and to the Census Advisory Committee of Professional
Associations, October 21-22, 1999.
National Telecommunications and
Information Administration, "Falling Through the Net:
Defining the Digital Divide" A Report on the
Telecommunications and Information Technology Gap in America,
July 1999.
U.S. Department of Commerce, "The
Emerging Digital Economy," April
1998. |