Earlier today in Congress, Daniel Hamilton, executive director of the Center for Transatlantic Relations SAIS, presented the 2017 Transatlantic Digital Economy publication with remarks from Antoine Ripoll, Director of the European Parliament Liason Office, Congressman Erik Paulsen (R-MN) and Congresswoman Suzan DelBene (D-WA), Co-chairs of the Digital Trade Caucus.
The Transatlantic Digital Economy 2017 is the first study of its kind to measure the digital connections that bind Europe and the United States.
Whether through digitally-enabled services, e-commerce, the growing app and bot economy, data flows, social media, or submarine cables crisscrossing the Atlantic, the transatlantic digital economy has quickly become a major force in global commerce.
Every year, the amount of digital data grows by 50%. Mobile data traffic has grown 4,000-fold over the past 10 years and almost 400 million-fold over the past 15 years.
Social media – a European phenomenon?
Typically associated with the U.S. and Silicon Valley, the best-known social media platforms seem more popular elsewhere in the world.
Even though Facebook derives greater revenue from the U.S. and Canada, the website (and app) records more active daily users in Europe. Similarly, Twitter users outside the U.S. accounted for 79% of all monthly active users in the last three months of 2016. Keep in mind that Twitter remains blocked in China. But, like Facebook, Twitter gets most of its revenue from U.S. based advertisers.
Alphabet, the parent company of Google and YouTube generated 53% of its $90.3 billion in 2016 revenue from markets outside of the U.S., primarily Europe and Japan.
Digitization, a huge boost for jobs
“The digital economy is both strengthening the transatlantic economy and transforming it. This digital transformation is creating new jobs that were unimaginable only a few years ago,” said Hamilton.
McKinsey estimates that by 2025, digitization could boost the European Union’s GDP by up to $2.5 trillion and U.S. GDP by up to $2.2 trillion.
U.S. exports of digitally-enabled services in 2015 represented 53% of overall U.S. services exports, and imports were 61.6% in the same year. Roughly 65% of U.S. overseas investment in the “information” industry was in Europe.
It is not merely that digitalization is inevitable. It is reducing costs, too. “The internet reduces trade cost by 26%,” said Hamilton. The digital economy is not just connecting billions of people to each other, it is connecting them to billions of things, and it is connecting those billions of things to each other as well.
As Hamilton put it, “the digital economy is not a sector of the economy, it is becoming the economy.”
The book is available online at www.transatlanticrelations.org