Measuring the value added generated by information industries only provides a partial view of their weight in each economy. In addition to final products, the output from domestic information industries is embodied via intermediate products in a wide range of goods and services meeting final demand (business capital investment, and household and government consumption), both domestically and abroad. Similarly, the output from other industries is embodied in many information products through domestic interconnections and participation in global value chains (GVCs); the glass in a smartphone screen is one example. Global demand for information industries’ goods and services through international trade and investment can drive the activities of many other upstream domestic industries. Combining the value added generated by domestic information industries with the value added of other domestic industries embodied in global demand for information sector products constitutes a first step towards defining an “extended information footprint” (OECD, 2017a).
In 2015, the United States, Japan and China together accounted for about 50% of the global extended information footprint, up from 47% in 2005, and the EU28 for a further 21%. Although the United States remains responsible for nearly 30% of the extended information footprint, its share declined alongside, Japan and the European Union, while China’s share increased from 3.4% to 14.4% over this period.
Neglecting the value added generated in other sectors of the economy to meet global demand for information final goods and services can result in under-estimation of the economic importance of these products. In the OECD, value added generated by non-ICT sectors accounts for, on average, about one- quarter of the extended information footprint, ranging from less than 20% in the United States to almost 30% in the European Union and 36% in China.
The importance of the extended information footprint can be further illustrated by considering information industries-related domestic value added as a share of GDP. East and Southeast Asian economies, for example, accounted for some of the highest shares of ICT-related value added, reaching 23% of GDP in Chinese Taipei and 18% in Singapore in 2015. Among OECD countries, Ireland, Israel, Japan, Korea, Luxembourg, Switzerland and Sweden all had shares over 10%. In general, the main contribution comes from ICT service activities, as is the case in most other OECD countries, although in Korea the largest contribution stems from ICT manufacturing and in Ireland from content and media.
Greater integration in global value chains implies that foreign demand sustains an increasing share of domestic employment. In 2015, about a quarter of OECD jobs were sustained by demand from outside the OECD, up 2 percentage points compared to 2005. The role of foreign demand reached 50% or more in small open economies, especially those with strong specialisation in the information sector. However, comparatively low and decreasing rates of foreign demand underpinned domestic employment in Canada and the United States, reflecting higher domestic orientation and outsourcing.
