CBS investigates imports of digital services

/ Author: Jan Hendriks
Person behind computer wants to book a digital service on Airbnb
The past decade has seen our economy undergo a metamorphosis thanks to digitisation. Phenomena such as globalisation, digitisation and the shift in the economy towards services are causing completely new business models to emerge. This begs the question of whether existing measurement and registration methods are still sufficient for capturing these rapidly growing trends in statistics. Statistics Netherlands (CBS) is conducting research in this area, as evidenced by its recently published report on imports of digital services.

Advent of digitisation and consumers

According to CBS director Sandra Wilms, measuring new phenomena is becoming more challenging for the statistical office. ‘The Netherlands is a true trading nation. We have an open economy and earn our money for a large part from international trade. Trade in goods has traditionally been important, but with the advent of digitisation we are seeing the share of services in international trade increase rapidly. A further factor is that whereas trade was originally conducted mainly between companies, the rise of the internet has made it possible for consumers to play an increasingly important role in international trade.’

Products and services via the internet

Wilms gives the example of a consumer who purchases some extra gigabytes of cloud storage from a foreign provider. ‘That is certainly an economic transaction, but one that is not reflected in our statistics. But this is not merely about the fact that, for consumers, it is increasingly easy to buy products and services abroad via the internet. We are also seeing all kinds of new constructions emerging, where the consumer often does not even know the actual identity of the vendor. Take the leasing market for example: when a consumer takes out a lease contract for a car, he often does not know whether he is entering into an agreement with the garage, a Dutch lease company or a central hub somewhere in Europe. The same goes for subscriptions.’ According to Wilms, this makes it difficult to question people when conducting research. ‘For example, does someone know if he has a subscription with Netflix Netherlands or Netflix Europe?’

New phenomena

According to Wilms, the world of statistics by definition lags somewhat behind reality. ‘Look at the composition of the 10 000 or so commodity codes that are prescribed internationally. The majority are for goods that we were already trading 100 years ago. Relatively few codes have been added for new services and products.’ In view of this problem, CBS has concluded that it is valuable to research new phenomena in the economy before they eventually might be recorded in standard statistics. This realisation led to the establishment of the 'Adequate Measuring of the Economy' programme in 2018.’ In this programme CBS, together with a focus group of external experts, deliberates on solutions for new phenomena, current research themes and existing measurement problems in statistics.

In this programme CBS, together with a focus group of external experts, deliberates on solutions for new phenomena, current research themes and existing measurement problems in statistics

Imports of digital services

One of these current themes is imports of digital services, an area into which CBS has conducted experimental research. The aim of this research is to make better estimates of imported digital services and to add more details to existing estimates. ‘We will not be able to quantify these flows with 100 percent accuracy, but we do want to approach reality as closely as possible,’ explains project leader Roos Smit. ‘As part of this research, we looked for suitable sources with which to produce better statistics.’ Six different types of digital services during the period 2010–2016 were examined. ‘The results of this research will be used to produce better estimates of imports of digital services for the 2021 revision of the National Accounts.’ Yet finding suitable sources was no simple task. 'And that is mainly due to the impalpability of digitisation. While it sounds like a well-defined phenomenon, it is very difficult to capture in figures. We already capture a lot with our statistics, but the level of detail is often insufficient. For example, if a Dutch person rents a house abroad via Airbnb, does he book it with a person or with a company? And what part of the booking fee goes to Airbnb and what part to the host?’

Insufficient insight into consumers

The study confirmed CBS' suspicion that digital service transactions involving consumers are not yet adequately monitored. ‘During the study we found 15 to 20 valuable sources that – often combined with CBS data – help us to establish a better picture of these flows of digital transactions,’ says Smit. Examples of these sources are studies by Hotrec, Thuiswinkel.org, Kantar TNS Netherlands (formerly: TNS Nipo) and the German statistical office (Destatis). In addition, we also used data from publications by large companies themselves, such as Uber, Airbnb and SunnyCars. According to director Sandra Wilms, reliable data on digital services can help policymakers gain insight into the ever-faster changing economy. ‘The way digital services develop has consequences for occupations, jobs and tasks, etc. Consider what a phenomenon like Uber means at the sector level, for example. A large increase in the number of taxi drivers and positions such as telephonist or switchboard operator perhaps becoming redundant.’

The research report, in which the OECD (Organisation for Economic Co-operation and Development) has also shown interest, was presented by CBS to the European statistical office Eurostat in December 2020. Eurostat has made a grant available for this experimental research.