How Can We Quantify the Burgeoning Digital Economy?
- The Limitations of GDP as a Measure and Efforts Towards the Development of New Statistical Measures-

With the rapid spread of the digital economy, how can we gain a grasp of digital economic activity? The measurement of the digital economy is a topic of discussion both domestically and internationally. One particular focus is how to gain an overview of free digital services, which are difficult to measure in terms of the existing representative economic indicator GDP (the total value added of domestically-produced and provided goods and services).

This paper examines the value of free digital services in terms of consumers' potential willingness to pay. Based on the results of NIRA’s Questionnaire Survey on the Effects of the Spread of COVID-19 on Telework-based Work Styles, Lifestyle, and Awareness, we estimated the size of the market if companies were to charge for digital services. Under the assumption of monopoly prices, a variety of digital services would earn 84-95 billion yen per year, and the total earnings of 10 types of digital services would be approximately 900 billion yen.

Without accurate statistics, the current status of a country cannot be determined; a decline in statistical accuracy will lead to the decline of a country. The creation of new statistical measures that measure the digital economy in a multifaceted manner while maintaining the use of existing measures is an urgent task. Data is scattered throughout society, necessitating a variety of trial-and-error efforts by the public and private sectors, including the use of private-sector data and the establishment of a data market to gain an overview of data trading activities.

This is a translation of a paper originally published in Japanese in May, 2023.


Adjunct Senior Fellow, Nippon Institute for Research Advancement (NIRA) / Professor, Faculty of Economics, Keio University