Eurostat, the statistical office of the European Union

G4: Innovation and digitalisation

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At the heart of economic changes for more than two decades, the ICT sector acts as a key determinant of the competitive power in the knowledge economy, attracting investments and creating innovation. By generating new technologies applicable to a wide range of other sectors, the sector of Information and Communication Technologies (ICT) plays a strategic role in the promotion of growth, innovation and competitiveness across European economies. Indeed, the impact of ICT industries is crucial for increased productivity and efficiency.

A developed ICT sector is essential for capitalising on digitalisation, keeping up with competitors in globalised markets, establishing Europe’s technological leadership and ensuring that the growth potential of the digital economy will benefit Europe’s economy as a whole. More recently, awareness of the importance of the ICT sector is reflected in the political guidelines of the European Commission A Europe fit for the digital age, stressing the need for Europe to lead the transition to a healthy planet together with a new digital world. This new EU digital strategy, empowering people with a new generation of technologies, aims to make this transformation work for people and businesses. While helping to achieve its target of a climate-neutral Europe by 2050, the digital strategy is centred around two objectives:

• Shaping Europe's digital future, ensuring that the digital transition solutions will benefit everyone;
• Europe’s Digital Decade, exposing the vision and avenues for Europe’s digital transformation by 2030 symbolised by a digital compass that will translate the EU’s digital ambitions in more concrete terms.

The objective of this data collection is therefore to provide information for benchmarking and monitoring developments in the ICT sector according to policy makers’ point of view, data needs being policy-driven and contextualised for policy purposes.

The data collected under ICT sector statistics contains five indicators aiming at measuring the sector's importance, and the vitality and attractiveness to capture potential innovation through R&D expenditure and personnel:

(1) Contribution to the growth of the economy: percentage of the value added for the ICT sector in gross value added
(2) Work force required to produce the wealth created by the sector: percentage of the ICT personnel in total employment 
(3) Gross value added growth: percentage change of value added by ICT sector over two consecutive years
(4) Contribution to Total R&D expenditure of businesses (BERD): business expenditure on R&D in ICT sector as a % of total R&D expenditure
(5) Contribution to Total R&D personnel: R&D personnel in ICT sector as a % of total R&D personnel

ICT sector indicators are compiled according to secondary statistical analysis. If at first, this approach has the virtue of ensuring cost-efficiency and providing high-quality data collection, it however, presents limited options for designing new indicators and controlling data quality and release timing.

These indicators presented in country/year dimensions have been created with data from the Structural Business Statistics (SBS), National Accounts (NA) and Research and Development (R&D) statistics sections of the Eurostat database. To broaden available information on the ICT sector, direct links to other source data such as Business Demography, complete the collection of data. 

All five indicators are yearly updated to present data starting in 2008 for the first three indicators and in 2005 for indicators (4) and (5), until the latest year available, to incorporate the latest observations available in the source data (SBS, NA and R&D statistics).

By construction, the metadata guidelines for Structural Business Statistics, National Accounts and R&D Statistics are applicable to data that have been extracted from the respective primary statistical sources.

The standard followed by ICT sector data collection from 2008 onwards is the Statistical Classification of Economic Activities in the European Community (NACE) Rev. 2.

Sector coverage for all collections and tables follows the allocation of the NACE economic activity sectors that are composing the ICT sector and its components, according to the OECD official definition:

“The production (goods and services) of a candidate industry must primarily be intended to fulfil or enable the function of information processing and communication by electronic means, including transmission and display” (OECD Guide to Measuring the Information Society 2011).

Codes of the relevant economic activities fulfilling the official definition of the ICT sector are detailed below.

Operational definition of the ICT sector (by economic activities in NACE rev.2)

• ICT sector – Total:  261 + 262 + 263 + 264 + 268 + 465 + 582 + 61 + 62 + 631 + 951
• ICT Manufacturing:  261 + 262 + 263 + 264 + 268
• ICT Services:  465 + 582 + 61 + 62 + 631 + 951

Besides the corresponding breakdown by disaggregated NACE activities, indicators (1), (2) and (3) derived from Structural Business statistics, are broken down into the three aggregates: 'ICT sector - Total', 'ICT Manufacturing' and 'ICT Services'. 

Indicators (4) and (5) derived from R&D statistics, are broken down by the corresponding disaggregated NACE economic activities composing the ICT sector up to 2021 data. From 2021 onwards, with the implementation of the framework Regulation (EU) 2019/2152 on European Business Statistics - EBS, source data are also collected for the three aggregates.

Being a secondary statistics product, the ICT sector domain derives its statistical concepts and definitions from the respective primary source data. 

Secondary statistics concepts and definitions of the five indicators as presented in Eurostat's database:

1. Percentage of the ICT sector in Gross value added (isoc_bde15ag):

The production value of the ICT sector is expressed as the weight of the value added of the ICT sector in Gross value added, an approximation of the GDP:

Before 2021 reference year:

where:

- 'Value Added at factor cost (ICT sector)' comes from the SBS domain (Variable '12150'; source: sbs_na_sca_r2)

- 'Value Added at factor cost (Total_all NACE activities)' comes from the NA domain (source: nama_10_a64), and is defined as:

From 2021 reference year onwards, following the implementation of the framework regulation for European Business Statistics (EBS), value added is no longer expressed 'at factor cost' but 'at basic prices'.

The indicator becomes:

where

- 'Value Added at basic prices (ICT sector)' comes from the SBS domain (Variable "AV_MEUR"; source: sbs_ovw_act)

- 'Gross value added' (B1G) expressed at basic prices comes from the NA domain (source: nama_10_gdp).

Gross domestic product at basic prices equals its gross domestic product at market prices minus taxes on products less subsidies on products, which is the gross value added for that economy (B1G). 

2. Percentage of the ICT personnel in total employment (isoc_bde15ap) is defined as the share of the ICT sector personnel in total employment:

where:

- 'Number of employed persons' in the ICT sector comes from SBS (Variable 16110; source: sbs_na_sca_r2)

- 'Total number of persons employed' comes from NA (Variable EMP_DC "Total employment - domestic concept"; source: nama_10_a64_e).

 From 2021 reference year onwards, the number of persons employed (new code: [EMP_NR]) is derived from the source database: sbs_ovw_act.

3. Percentage change of value added by ICT sector at current prices (isoc_bde15av), where the ICT sector value added growth is defined at current prices between time t and time (t-1) as:

4. Business expenditure on R&D (BERD) in ICT sector as % of total R&D expenditure (isoc_bde15ar2)

5. R&D personnel in ICT sector as % of total R&D personnel (isoc_ic_biper2)

where i refers to each sector of the NACE Rev.2 classification composing the ICT sector according to the OECD definition, are the two indicators derived from R&D domain (respective sources: rd_e_berdindr2 and rd_p_bempoccr2).

From 2021 onwards, according to the data availability, all indicators are calculated at the following aggregated levels: 'ICT Sector – Total', 'ICT Manufacturing' and 'ICT Services'.

Primary statistics concepts and definitions

Value added (Structural Business Statistics): Value added is a composite indicator of net operating income, adjusted for depreciation, amortisation and employee benefits, all components being recognised as such by the statistical unit during the reference period. Its value is given by the formula: + Net turnover + Income from product- or turnover-related subsidies + Capitalised output ± Change in stock of goods - Total purchases of goods and services.

From 2021 onwards, EBS framework introduced measuring value added at basic prices for businesses, when prior it was collected at factor cost. Consequently data on value added in businesses collected for reference year 2021 onwards are flagged with a break in series.

Number of persons employed (Structural Business Statistics) is defined as the total number of persons who work in the observation unit (inclusive of working proprietors, partners working regularly in the unit and unpaid family workers), as well as persons who work outside the unit who belong to it and are paid by it (e.g. sales representatives, delivery personnel, repair and maintenance teams). It excludes manpower supplied to the unit by other enterprises, persons carrying out repair and maintenance work in the enquiry unit on behalf of other enterprises, as well as those on compulsory military service.

Gross value added (National Accounts) is defined as output (at basic prices) minus intermediate consumption (at purchaser prices); it is the balancing item of the national accounts' production account.

GVA can be broken down by industry and institutional sector. The sum of GVA over all industries or sectors plus taxes on products minus subsidies on products gives gross domestic product.

Employment (National Accounts) based on the domestic concept, covers all persons engaged in some productive activity that falls within the production boundary of the national accounts. Employed persons are either employees (persons who work by agreement, work for a resident institutional unit and receive a remuneration recorded as compensation of employees) or self-employed (persons who are the sole owners, or joint owners, of the unincorporated enterprises in which they work, excluding those unincorporated enterprises that are classified as quasi-corporations). The domestic concept of employment includes both residents and non-residents who work for resident producer units.

Research and experimental Development (R&D) "comprise creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge" (§ 2.5, p. 44, Frascati Manual, OECD 2015).

Expenditures on research and development (R&D) for a statistical unit can be measured in three complementary ways intramural expenditures, extramural expenditures and sources of funds. Nevertheless, the basic measure for R & D expenditure is the "intramural expenditures", which are all expenditures for R & D performed within a statistical unit or sector of the economy, whatever the source of funds (for more details on expenditures in R&D (see Chapter 4 on "Measurement of R&D expenditure" Frascati Manual, pp. 109-126, OECD 2015).

R&D personnel (R&D) "includes all persons engaged directly in R&D in a statistical unit, whether employed by the statistical unit or external contributors fully integrated into the statistical unit’s R&D activities, as well as those providing direct services for the R&D activities (such as managers, administrators and clerical staff); those providing an indirect support or ancillary services, such as canteen, maintenance, administrative or security staff, should be excluded" (§ 5.6 - 5.7, p. 151, Frascati Manual, OECD 2015).

Statistical units of the ICT sector statistics are derived from the concepts used by primary data.

Structural Business and R&D Statistics are compiled according to the definition of 'enterprise' as statistical unit: "The enterprise is the smallest combination of legal units that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit."

National Accounts aim to capture economic activity within the domestic territory. Statistical units defined by the European System of Accounts ESA 2010 are of two types, the institutional units and the local kind-of-activity units (ESA 2010, § 1.54 - 1.60).

More detailed information on statistical units are available in Council Regulation (EEC) No 696/93 of 15 March 1993 on statistical units for the observation and analysis of the production system in the Community (Official Journal of the European Communities No L 076, 30/03/1993, pp.1-11, Annex Section III).

Statistical population for the ICT sector comprises the statistical units operating at the level of the following aggregates: 'ICT sector - Total', 'ICT Manufacturing' and 'ICT Services' and their corresponding disaggregated NACE Rev. 2 activities.

The data cover EU Member States, the United Kingdom, EFTA countries, candidate countries and potential candidate countries.

Some data (Business expenditure in R&D and R&D personnel by ICT sector activity) presented for Russia, the United States, China, Japan and Korea have been supplied by the OECD, without Eurostat's validation. Methodological differences may be expected.

Annual time series for indicators (1) to (3) are available from 2008 onwards. For indicators (4) and (5), the series start in 2005.

Data for all indicators are regularly updated to incorporate the latest revisions made in the source data (SBS, NA and R&D statistics).

Not applicable

Published ratios are expressed in percentages: % in gross value added, % in total employment, % change in gross value added in current prices over time, % in total R&D expenditure of businesses and % in total R&D personnel.

ICT sector data refer to the calendar year.

ICT sector indicators are, among others surveys, used for benchmarking purposes (see under point 3.1). A set of benchmarking indicators using statistical information is to be provided through the European Statistical System.

Not applicable

Being secondary statistics indicators (i.e. derived from publicly available sources), ICT sector statistics are not subject to confidentiality restrictions.

Not applicable as data are constructed from publicly available datasets.

There is no fixed release calendar. The latest available data is expected to be disseminated regularly. The publication of the annual Statistics Explained article follows the SBS annual data on special aggregates release.

See 8.1

In line with the Community legal framework and the European Statistics Code of Practice, Eurostat disseminates European statistics on its website (see item 10 - 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

Yearly

Annual news release vie Eurostat website

Statistics Explained, News items articles and generic publications

Consult Eurostat database

Not applicable

Not applicable

Definitions and more detailed explanations related to the primary data can be consulted in the SBS, NA and R&D Statistics metadata files in the ad hoc related metadata section.

Quality control of the primary data is ensured by the corresponding SBS, NA and R&D Statistics procedures.

Quality assurance heavily relies on the corresponding SBS, NA and R&D Statistics quality control practices.

ICT sector statistics has a good quality due to rigorous quality checks performed on the primary SBS, NA and R&D Statistics.

The main users of the ICT sector statistics are DG CNECT and DG JRC, who exploit the indicators for benchmarking and monitoring ICT sector developments according to EU policy priorities. ICT sector data are used in particular, in the context of the Digital Scoreboard to monitor progress of the European digital economy according to the objectives set out in Europe's digital future strategy.

User satisfaction is assessed via well-established contacts with DG CNECT and DG JRC. The main quality aspects valued by users are reliability of results, accessibility, clarity, relevance and comparability over time and between countries.

Completeness of variables and breakdowns is considered as satisfactory.

In general, good accuracy and reliability of the results are ensured by the source data-collection practices in NA and R&D Statistics. On the other hand, SBS data are resistant to accuracy assessments due to a combined use of survey and administrative sources (see the respective metadata files in the ad hoc related metadata section).

Not applicable

Not applicable

Timeliness of data publication is depending on the combination of the source data release practices (see the respective metadata files in the ad hoc related metadata section).

The deadlines for SBS, NA and R&D statistical data publication follow the respective rules of the responsible Eurostat divisions.

Geographical comparability is defined by the primary source statistics.

In the case of NA statistics, comparability is insured by the application of common definitions (see European System of Accounts ESA 2010).

For the SBS domain, some methodological factors limit the comparisons across countries. They can be consulted in the annex under SBS - Limits to comparability over time and across countries.

R&D data comparability across countries can be affected by different survey methods used notwithstanding common guidelines and definitions outlined in the Frascati Manual (consult the Annex).

ICT sector indicators are highly comparable over time since 2008 with the implementation of the new classification of economic activities (NACE Rev. 2). 

Data in the National Accounts following the common framework of the European System of Accounts ESA 2010 are comparable over time.

In business statistics, despite the introduction of the NACE Rev.2 classification, comparisons over time may sometimes be limited by methodological factors (for more information one can consult the country-specific methodological issues (for SBS) in the annex at the end of the document).  

Reference year 2021 marks the implementation of Regulation (EU) 2019/2152 (on European Business Statistics - EBS) and Regulation (EU) 2020/1197 (EBS General Implementing Act) as framework Regulations that cover, in an integrated manner, all domains of European business statistics.

In particular, this new legal environment has improved the coverage of the services sector and extended the coverage of the collected variables. In practical, applied to secondary statistics data, this resulted by the presence of a flag (:b) for 'break in series' in all three indicators derived from SBS: isoc_bed15ag, isco_bde15ap and isoc_bed15av. Similarly for reference year 2018, most countries implemented the concept of statistical unit enterprise, also represented by a break in the series.

For R&D indicators, when possible, data for the years prior to 2008 were back-casted according to the new classification NACE Rev. 2 to enhance the comparability across time to a certain extent.

ICT sector indicators are coherent with the SBS, NA and R&D data.

Coherence between indicators is ensured by the standard application of the ICT sector definition in terms of economic activities easily identified by their NACE codes.

By essence, there is no additional cost or burden for statistical respondents in collecting other data than those related to primary data sources. ICT sector statistics are a value added of re-using previously collected and validated data.

All data disseminated consist of data already disseminated in Eurobase by the following domains:

• SBS - Structural Business Statistics
• NA - National Accounts
• RD - Research and Development

The revision policy is therefore effectively the revision policy of those domains.

ICT sector indicators are final upon release. Complete time series are updated when new data are available for all Member States, subject to the data release of the latest available primary source.

The revision practice effectively corresponds to the revision practice of the domain listed under sub‑concept 17.1 (Data revision – policy).

In practical, no specific data revisions are made for secondary statistics on ICT sector. Exceptions are made when errors occurring at the primary level affect ICT indicators.

Source data come from SBS, NA and R&D statistics (more information is available in the ad hoc related metadata section). Data are extracted from Eurostat's official website and individual indicators are calculated as described in Section 3.4.

Data are collected on an annual basis.

See metadata for the respective primary sources SBS, NA and R&D (links are provided in the ad hoc related metadata section).

As secondary data, ICT sector indicators are validated using comparisons with previous years and cross-countries variations.

If atypical behaviour of a variable is discovered, it is reported back to the respective division of Eurostat dealing with NA, SBS or R&D statistics. When necessary, countries are contacted for more explanation. If a country-year indicator is considered unreliable, data are not disseminated.  

More information on primary data validation is available in the metadata of the respective primary sources listed in the ad hoc related metadata section.

Primary data from the respective data sources are re-arranged to produce secondary statistics indicators as described in Sections 3.3 and 3.4.

Not applicable

None