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The Data Economy: Market Size and Global Trade

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  • Diane Coyle
  • Wendy Li

Abstract

Data is a key digital economy input and its use is growing rapidly. Large online platforms using data at massive scale operate globally. The data gap between them and the incumbents they disrupt, a barrier to entry in the markets they dominate, affects not only firms but also aggregate innovation, investment and trade. Valuing data is problematic, yet this information is crucial for informed policy decisions on infrastructure and human capital as well as business investment decisions. In this paper we demonstrate a novel sectoral methodology for estimating the economic value of markets for data. Our conservative estimate of the market size for data in the global hospitality industry was US $43.2 billion in 2018, and it has been doubling its size every three years. Our method can provide industry-level and country-level information on data markets. The scale of data flows affects the international division of labor in the digital economy, with important policy implications. With many jurisdictions introducing different data protection and trade regimes, affecting the data gap and data access by market participants, we present a trade typology of countries and discuss their ability to benefit from data value creation.

Suggested Citation

  • Diane Coyle & Wendy Li, 2021. "The Data Economy: Market Size and Global Trade," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2021-09, Economic Statistics Centre of Excellence (ESCoE).
    • Handle: RePEc:nsr:escoed:escoe-dp-2021-09
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    References listed on IDEAS

    as
    1. Diane Coyle & David Nguyen, 2018. "Cloud Computing and National Accounting," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2018-19, Economic Statistics Centre of Excellence (ESCoE).
    2. Benjamin F. Jones & Lawrence H. Summers, 2020. "A Calculation of the Social Returns to Innovation," NBER Chapters, in: Innovation and Public Policy, pages 13-59, National Bureau of Economic Research, Inc.
    3. David Nguyen & Marta Paczos, 2020. "Measuring the economic value of data and cross-border data flows: A business perspective," OECD Digital Economy Papers 297, OECD Publishing.
    4. Bronwyn H. Hall, 2010. "Measuring the Returns to R&D: The Depreciation Problem," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 341-381, National Bureau of Economic Research, Inc.
    5. David Byrne & Carol Corrado & Daniel Sichel, 2020. "The Rise of Cloud Computing: Minding Your Ps, Qs and Ks," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 519-551, National Bureau of Economic Research, Inc.
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    7. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    8. Carol Corrado & Jonathan Haskel & Javier Miranda & Daniel Sichel, 2020. "Introduction to "Measuring and Accounting for Innovation in the Twenty-First Century"," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 1-15, National Bureau of Economic Research, Inc.
    9. TOMIURA Eiichi & ITO Banri & KANG Byeongwoo, 2020. "Characteristics of Firms Transmitting Data Across Borders: Evidence from Japanese Firm-level Data," Discussion papers 20048, Research Institute of Economy, Trade and Industry (RIETI).
    10. Chiara Farronato & Andrey Fradkin, 2018. "The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb," NBER Working Papers 24361, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Diane Coyle & Annabel Manley, 2024. "What is the value of data? A review of empirical methods," Journal of Economic Surveys, Wiley Blackwell, vol. 38(4), pages 1317-1337, September.
    2. Koski, Heli & Fornaro, Paolo, 2024. "Digitalization and Resilience: Data Assets and Firm Productivity Growth During the COVID-19 Pandemic," ETLA Working Papers 113, The Research Institute of the Finnish Economy.
    3. Rachel Soloveichik, 2024. "Private Funding of “Free” Data: A Theoretical Framework," BEA Papers 0125, Bureau of Economic Analysis.
    4. Carol Corrado & Jonathan Haskel & Massimiliano Iommi & Cecilia Jona-Lasinio & Filippo Bontadini, 2024. "Data, Intangible Capital, and Productivity," NBER Chapters, in: Technology, Productivity, and Economic Growth, National Bureau of Economic Research, Inc.
    5. Alawadhi, Hamid, 2024. "The effects of war on the quality of higher education in Yemen: Scholars’ perspectives," International Journal of Educational Development, Elsevier, vol. 108(C).
    6. Diane Coyle, 2021. "The idea of productivity," Working Papers 003, The Productivity Institute.
    7. Qushua, Najat & Smith-Appelson, Jesse & Sarraf, Danielle & Stark, Lindsay & Seff, Ilana, 2023. "Seeking approval first: Mental health care utilization and engagements among MENA adolescents in the United States," Children and Youth Services Review, Elsevier, vol. 155(C).

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    More about this item

    Keywords

    data; digital; innovation; trade;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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