GLOBAL VALUE CHAINS IN ICT AND ICT CONTENT IN THE ECONOMY€¦ ·  · 2016-06-03GLOBAL VALUE CHAINS IN ICT AND ICT CONTENT IN THE ECONOMY Norihiko Yamano ... (7230) Data processing

GLOBAL VALUE CHAINS IN ICT AND

ICT CONTENT IN THE ECONOMY

Norihiko Yamano OECD Directorate for Science, Technology and Innovation PREDICT 2016 TECHNICAL WORKSHOP) ICTS, R&D AND THE ECONOMY 18-19 February 2016, Seville, Spain

Recognition that current ‘gross’ measures of international trade flows may create ‘misleading perceptions’ and imperfect policies in a number of areas

Issues with traditional international trade statistics :

o Implicit multiple counting of intermediate goods and services

o Tends to hide the actual patterns of trade

o Incomplete picture as knowledge and income flows are not measured

This led to calls for new statistics that better respond to these issues

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Why measure Trade in Value Added

(TiVA) ?

• Estimate TiVA indicators and support GVC analyses

• Connecting National Accounts components of countries by sector

– value-added in basic price (industry)

– trade balances

– harmonized sector level

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Aim of OECD ICIO system

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Coverage: OECD ICIO 2015edition

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• Inter-country transaction = bilateral trade flows by end-use category (industry x final expenditure)

• ISIC rev3 two-digit based 34 industry – 16 manufacturing

– 14 services

• Country / Economy – 61 countries + RoW = World economy

OECD34, APEC19, BRIICS, G20, EU28, ASEAN 8

• Inter-country transactions are valued at basic price by industry

• Exports = Imports !

• Exports goods bp = SNA exports in goods fob pu

+ inbound TSA pu (goods) ) distribution services

- tax less subsidy margins (goods)

- re imports ) re exports

• Exports services bp = SNA exports in services fob pu

- inbound TSA pu (goods) + distribution services

+ tax less subsidy margins (goods)

Trade flows in Inter-country I-O

Note: SNA: National Accounts, pu : purchasers’ prices, bp: basic price, TSA: tourism satellite account

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ICT sectors in current OECD ICIO model Manufacturing

(3000) Manufacture of office, accounting and computing machinery

(3210) Manufacture of electronic valves and tubes and other electronic components

(3220) Manufacture of television and radio transmitters and apparatus for line telephony

and line telegraphy

(3230) Manufacture of television and radio receivers, sound or video recording or

reproducing apparatus, and associated goods

(3311) Manufacture of medical and surgical equipment and orthopaedic appliances

(3312) Manufacture of instruments and appliances for measuring, checking, testing,

navigating and other purposes, except industrial process control equipment

(3313) Manufacture of industrial process control equipment

(3320) Manufacture of optical instruments and photographic equipment

(3330) Manufacture of watches and clocks

Services

(6411) National post activities

(6412) Courier activities other than national post activities

(6420) Telecommunications

(7210) Hardware consultancy

(7220) Software consultancy and supply

(7230) Data processing

(7240) Data base activities

(7250) Maintenance and repair of office, accounting and computing machinery

(7290) Other computer related activities

(ISIC Rev.3 – 4digit code), 31xx : 7

Review: ICT output, VA, Exports and

employment (2011)

OECD Inter-country I-O database (2015) 8

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Review: ICT output, VA, Exports and

employment (1995)

OECD Inter-country I-O database (2015)

Exports of ICT products*

* Sum of reported exports all countries. OECD BTDIXE 2016ed 10

• Gross exports = cross border (cb) exports+ non-cross border (nc) exports

• VA exports = v(I-A)-1 [cb.ex +nc.ex] = v cb.ex + [v(I-A)-1 cb.ex – v cb.ex] +v(I-A)-1 nc.ex

• VA created by final demand = v(I-A)-1 [final demand]

• SNA & Trade statistics = Gross exports + re-exports + re-imports

Measuring value added embodied in trade

and foreign final demand

Direct cross border

Indirect (non-cross border)

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Domestic VA embodied in ICT exports

(% of total ICT exports)

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OECD TIVA 2015

ICT VA share

(% of total domestic VA in exports)

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OECD TIVA 2015

VA sustained by foreign demand

(% of VA, 2011 )

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OECD TIVA 2015 (FFD_DVA/VALU)

• Data

– Gaps

– Definition: product, industry

– Negatives: operating surplus, inventory

• Timeliness

• Methodology

– Balancing technique

– Leontief multiplier

Challenges

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• Countries imports ICT equipment and software

• Import contents of exports in traditional Leontief analysis underestimate (?) the imported capital

• Endogenise capital formation – Augmented method (Miyazawa approach)

– Capital formation (investment) matrix

– Capital accumulation / depreciation

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ICT Capital goods imports?

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Example: Austria 2010

(Million EUR)

Domestic Imports Domestic Imports Exports Output

C26 Computer, electronic and

optical products 285 2,770 244 2,016 1,309 4,170

J61 Telecommunications

services 3,198 621 - - 698 6,343

J62_63 Computer programming,

consultancy and related

services; information

services 4,415 800 3,901 256 3,561 9,671

TOTAL ICT 7,898 4,190 4,145 2,271 5,568 20,184

Intermediate

consumption

Gross Fixed capital

formation

Eurostat : NACE2, ESA1995, 62 sector

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Import contents of exports

Thank you!

OECD Input-Output Database

• http://www.oecd.org/sti/ind/input-outputtables.htm

OECD TiVA

• http://oe.cd/tiva

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• National Accounts harmonised constraints and intermediate balancing procedures

– Official GDP, Output and trade balances

– Bilateral trade data by end-use

– Use table at purchasers’ prices & basic price

– International use table

– Re-exports / Re-imports

• Official I-O/SUT sources

• Interpolate/Extrapolate to fill gaps

Features of OECD ICIO System (i)

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• Trade is balanced at three stages

(country total, sectoral and bilateral)

• Firm heterogeneity within manufacturing industry for Mexico and China

– Import penetration and value added / output ratio is significantly different for exporters and domestic sales dominant firms

• Direct purchases by non-residents

• “complete” basic price : distribution services are properly allocated to service providing country and industry

Features of OECD ICIO System (ii)

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Data source Country Industry

National Accounts(OECD, UNSD, National)

140-160 At least 6 Output, VA, GDP, expenditure, trade constraints, tourism

Balance of payment (IMF)

160) 180 BPM5 based

I-O / supply and use (National, Eurostat, ADB)

61 30) 500 Format, industry classification and price valuation are not harmonized

Bilateral trade in goods (UN, OECD)

Approx. 120 Approx 5000 products

Bilateral trade in services (OECD, UN, Eurostat)

70-80 EBOPS (8-12)

Other (energy, population, Customs, etc)

Where do TiVA indicators come from?

ICIO (61cou., 34 ind.)

TiVA 22

What does ICIO look like?

Re-exports

Unspecified &

Ind1 Ind2 Ind3 Ind1a Ind1b Ind2a Ind2b Ind34 Ind1 Ind2 Ind3 FD FD FD Destination Reimports

Proces

sing Non-prc

Proce

ssing

Non-

prc

adjustmen

ts

Z(1,2,A,B) - F(1,A,B) FD(1,A,B) FU(1,A) REEX (1,A)

-

-

Ind1a Processing -

Ind1b Non-prc -

Ind2a Processing -

Ind2b Non-prc -

-

-

-

-

Notes: International trade and insurance margin services are allocated in exports of service providers

Country B has 2 heterogenous sectors in industry 1 and industry 2

Z (1,2,A,B) = intermediate transaction from industry 1 of country A to industry 2 of country B

F(1,A,B) = Final expenditure of products from industry 1 of country A by country B

FC(1,A,B) = Final expenditure by non-residents from B in country A

FU(1,A) = Exports of product from industry 1 of country A to unspecified destination

REEX(1,A) = Re-exports and re-imports adjustments of Country A's industry 1

CONS

_ABR

CONS

_ABR

CONS

_ABR

Country A Country B Country C

Industry 2

Industry 2

Industry 1

Industry 3

Industry 3

Industry 1

ICIO (3 country 3 industry) Country A Country B Country C

"-" No value by definition

Final demand

Domestic transaction

International trade

(current basic price)

Country

A

Country

C

Country

B

Intermediate

Value-Added

OUTPUT

Taxes less subsidies on

products

Industry 3

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