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Australian National Accounts - Information and Communication Technology Satellite Account
 
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    Australian Bureau of Statistics (ABS)

    OVERVIEW

The national accounts are a comprehensive set of economic data which are exhaustive and consistent within the boundaries of the economic activities they cover. However, there are certain limitations in what can be accounted for directly in the 'core' national accounting framework. Satellite accounts, as articulated in the System of National Accounts 1993 (SNA93), allow an expansion of the national accounts for selected areas of interest, while keeping faith with the concepts and structure of the core national accounts. They present specific details on a particular topic in a manner which is separate from, but linked to, the core national accounts. Therefore, an Information and Communication Technology (ICT) satellite account uses a national accounting framework to present a picture of ICT within the economy.

An ICT satellite account defines ICT products and identifies their supply and use, so that a comprehensive set of economic data relating to ICT activity can be compiled for the Australian economy. Among other things, this allows us to quantify the size of ICT production relative to other types of economic activity.

The scope of the ICT satellite account is dependent upon the definition of ICT goods and services utilised. While there is no formal ICT 'industry' as such, there is significant interest in those businesses predominately engaged in the production of ICT goods and services. In addition, many traditional industries also produce ICT goods and services, particularly computer software, on "own account".

The supply and use tables, which are the cornerstone of the annual and quarterly national accounts in Australia, provide the framework for the development of an ICT satellite account. The "supply" table records the total supply of products within an economy. Total supply at purchasers' prices (PP) is made up of: domestic production at basic prices (BP); imports; transport, retail and wholesale trade margins; and taxes less subsidies on products.

The "use" table shows the use of goods and services in the economy. Total use is made up of: intermediate use by industry (products that are used by industries to feed into the production process); final demand (products that are consumed by households and government and do not undergo any further transformation); gross fixed capital formation (products that are capitalised because they are used in production for more than one period); changes in inventories; and exports.

Supply and use tables provide a coherent view of the economy in which total supply of goods and services equals their total use, and industry inputs sum to industry outputs. Hence, the use of all supply can be accounted for and there are no discrepancies within the system. A feature of the supply and use system is that the supply and demand of each product are, as far as possible, independently calculated. A formal and systematic process of data confrontation then resolves discrepancies between supply and demand. In compiling the annual national accounts, this supply and use balancing process is undertaken for all products in the economy, so there is no statistical discrepancy, and the same result is derived for gross domestic product (GDP) whether it is calculated using the production, income or expenditure approach.

    PURPOSE
An ICT satellite account draws out and expands the information from the supply and use tables relating to ICT products, their supply and use. It also potentially brings to account a range of other information such as numbers of people employed on ICT-related activities. Outputs of potential interest that could be produced include:
    • estimates of total ICT value added at basic prices and share of GDP;
    • estimates of the value added of major ICT related industries (such as ICT manufacturing and computer services) resulting from ICT activity;
    • estimates of ICT value added relating to industries' own use of ICT;
    • domestic production of ICT products, by producing industry;
    • imports of ICT products;
    • the use of ICT products in the current period by each industry;
    • total household and government consumption of ICT by type of product;
    • capital expenditure on ICT products by industry;
    • exports of ICT products;
    • compensation of employees in ICT 'industries'; and
    • gross operating surplus and gross mixed income in ICT 'industries'.

The monetary aggregates described above are first dimension outputs. A feature of satellite accounts is that the first dimension outputs can be supplemented with non-monetary data, or second dimension outputs. Some second dimension aggregates of potential interest are:
    • the number of ICT firms;
    • ICT firm size; and
    • employment in ICT industries (and possibly some characteristics of employed persons).

A more detailed understanding of the sources of supply of ICT products and their use could assist government policy formation and assist research more generally. For example it would show: the level of domestic production of ICT products versus imports; which domestic industries are producing ICT products; the incidence of tax on ICT goods and services; and who is using ICT products.

A satellite account could facilitate investigation of where productivity gains arising from ICT are being achieved. In countries such as Australia which do not have a large domestic ICT manufacturing industry, productivity analyses would focus on the demand side. It is widely accepted that productivity improvements may arise from ICT use as well as ICT production. For example, the Productivity Commission has suggested that improvements in the productivity of the wholesale trade industry has been due, at least in part, to the increased use of ICT by that industry.

    SCOPE
An Information and Communication Technology (ICT) satellite account uses a national accounting framework to present a picture of ICT within the economy. An ICT satellite account defines ICT products and identifies their supply and use, so that a comprehensive set of economic data relating to ICT activity can be compiled for the Australian economy. Among other things, this allows us to quantify the size of ICT production relative to other types of economic activity.

The scope of the ICT satellite account is dependent upon the definition of ICT goods and services utilised. While there is no formal ICT 'industry' as such, there is significant interest in those businesses predominately engaged in the production of ICT goods and services. In addition, many traditional industries also produce ICT goods and services, particularly computer software, on "own account".

The supply and use tables, which are the cornerstone of the annual and quarterly national accounts in Australia, provide the framework for the development of an ICT satellite account. The "supply" table records the total supply of products within an economy. Total supply at purchasers' prices (PP) is made up of: domestic production at basic prices (BP); imports; transport, retail and wholesale trade margins; and taxes less subsidies on products.

The "use" table shows the use of goods and services in the economy. Total use is made up of: intermediate use by industry (products that are used by industries to feed into the production process); final demand (products that are consumed by households and government and do not undergo any further transformation); gross fixed capital formation (products that are capitalised because they are used in production for more than one period); changes in inventories; and exports.

Supply and use tables provide a coherent view of the economy in which total supply of goods and services equals their total use, and industry inputs sum to industry outputs. Hence, the use of all supply can be accounted for and there are no discrepancies within the system. A feature of the supply and use system is that the supply and demand of each product are, as far as possible, independently calculated. A formal and systematic process of data confrontation then resolves discrepancies between supply and demand. In compiling the annual national accounts, this supply and use balancing process is undertaken for all products in the economy, so there is no statistical discrepancy, and the same result is derived for gross domestic product (GDP) whether it is calculated using the production, income or expenditure approach.

Information will be obtained from a variety of sources to feed into the ICT satellite Account, including Economic Activity Survey suite of collections, Government (use of) Technology Survey, Household Income and Expenditure Survey, Survey of International Trade in Services and imports and exports data from Custioms system.

    DATA DETAIL

    Conceptual framework
    System of National Accounts - The national accounts are a comprehensive set of economic data which are exhaustive and consistent within the boundaries of the economic activities they cover. Satellite accounts, as articulated in the System of National Accounts 1993 (SNA93), allow an expansion of the national accounts for selected areas of interest, while keeping faith with the concepts and structure of the core national accounts. They present specific details on a particular topic in a manner which is separate from, but linked to, the core national accounts. Therefore, an Information and Communication Technology (ICT) satellite account uses a national accounting framework to present a picture of ICT within the economy.

    Main outputs

Outputs of potential interest that could be produced include:
    • estimates of total ICT value added at basic prices and share of GDP;
    • estimates of the value added of major ICT related industries (such as ICT manufacturing and computer services) resulting from ICT activity;
    • estimates of ICT value added relating to industries' own use of ICT;
    • domestic production of ICT products, by producing industry;
    • imports of ICT products;
    • the use of ICT products in the current period by each industry;
    • total household and government consumption of ICT by type of product;
    • capital expenditure on ICT products by industry;
    • exports of ICT products;
    • compensation of employees in ICT 'industries'; and
    • gross operating surplus and gross mixed income in ICT 'industries'.

The monetary aggregates described above are first dimension outputs. A feature of satellite accounts is that the first dimension outputs can be supplemented with non-monetary data, or second dimension outputs. Some second dimension aggregates of potential interest are:
    • the number of ICT firms;
    • ICT firm size; and
    • employment in ICT industries (and possibly some characteristics of employed persons).

    Classifications
    Australian and New Zealand Standard Industry Classification (ANZSIC), Australian and New Zealand Standard Product Classification (ANZSPC)

    Other concepts (summary)

The scope of ICT activity in a satellite account is bounded by the goods and services defined to be characteristic ICT products.

Australia is one of very few countries which conducts specific ICT Industry Surveys by utilising a set of ICT goods and services descriptions developed from various commodity classifications (we have been doing this since the early 1990's). Information and Communication Technology (ICT) refers to the services and technologies that enable information to be accessed, stored, processed, transformed, manipulated and disseminated, including the transmission or communication of voice, image and/or data over a variety of transmission media. Transmission media include telephone, facsimile, Internet data lines, satellite, microwave, radio, etc. ICT industries are those that manufacture and distribute ICT goods and provide a range of computer and communication services. ICT goods and services are defined to include:
  • computer hardware including laptops, notebooks, portable computers, other PCs and desktop computers, mid range multi user systems, large scale multi user systems, peripheral input-output devices such as scanners, keyboards, monitors, laser and other printer systems
  • communications hardware including radio and television broadcasting and transceiving equipment, switching and transmission equipment such as PABX, SBS and satellite equipment, fibre optic and coaxial communication cables, fixed and mobile phones and networks, data and Internet transmission apparatus, modems, LAN equipment including multiplexes, servers, bridges, routers, hubs, facsimile machines, teleprinters and other line equipment
  • selected electronic equipment including digital multifunctional photocopiers, cash registers, magnetic strip/card readers, automatic teller machines, digital television sets, digital set top boxes, digital cameras, digital MP3 players and video game consoles with internet access
  • computer and communication parts and components including capacitors, resistors, diodes, transistors, chips, printed circuit boards, integrated circuits, transformers, semi-conductors, valves and tubes
  • computer and communication consumables including storage media such as floppy disks, compact disks, magnetic tape, toner and cartridges.
  • packaged and customised software
  • computer and data processing services
  • information storage and retrieval services
  • installation and cabling services
  • hardware and software maintenance services
  • computer consultancy services such as hardware and software appraisal, facilities management, network management, etc.
  • telecommunication services such as telephony and mobile phone services, Internet services, data services, leased lines, etc.

    GEOGRAPHIC DETAIL
    1. National & State/Territory\1.01 Australia

    Comments and/or Other Regions


    COLLECTION FREQUENCY
    Once Only

    Frequency comments
    The ICT Satellite Account is being constructed for reference year 2002-03 only. While no plans have been made to undertake this project on an ongoing basis, the decision to undertake future ICT Satellite Accounts would be based on the success of the 2002-03 project and the availability of user funding.

    COLLECTION HISTORY

Supply of ICT products

A substantial proportion of ICT-related supply side data can be sourced from the ABS ICT Industry Survey. This survey is generally conducted biennially, with the next survey planned in respect of 2002-03. The ICT Industry Survey targets specific industries where it is known that significant ICT production occurs. Since it targets a narrow range of industries where the production, import or sale of ICT products are primary activities (manufacturers of ICT goods; wholesalers of ICT goods; and providers of computer hardware/software-related services and telecommunications services), this survey is unlikely to capture ICT-related activity where such activity is a secondary activity of the business.

There is no current data available for the supply of computer software produced on own account by businesses (other than those included in the ICT Industry Survey described above) or by governments. This is a major weakness in the current data set and there will be a requirement to collect from businesses and government organisations the following:
  • Capitalised wages and salaries and purchase of materials for capital work (done by own employees for own use or for rental or lease) on ICT activities (and, separately, how much on software development).

The ABS compiles annual statistics on ICT goods imported and exported (data are obtained as an administrative by-product from the Australian Customs Service). Statistics on international trade in ICT services can be obtained from the ABS Survey of International Trade in Services.

Use of ICT products

The ABS conducts a general economy-wide annual Economic Activity Survey (EAS) which covers all non-government units. This is supplemented with information collected by the Australian Taxation Office (ATO). While the data items collected are necessarily general in nature, the following ICT-specific data items are presently captured for businesses: telecommunications expenses; software purchases expensed; software purchases capitalised; and capital expenditure on computer hardware and computer peripherals. There will be a requirement to collect on EAS additional data on the demand/use side across businesses covering the following:

Expenses:
  • ICT hardware expensed
  • Payments to contractors and consultants for computing and communication services

Capital expenditure:
  • Communication equipment
  • Selected electronic equipment (covering digital multifunctional photocopiers, cash registers, magnetic strip/card readers, automatic teller machines)

Other data:
  • ICT employment (and, separately, how many engaged in software development)
  • Wages and salaries of ICT staff (and, separately, how much on software development)

The Government (use of) Technology Survey (GUIT) relates to federal, State/territory and local general government organisations (past surveys have excluded educational organisations). The current ABS strategy is to generally conduct these surveys every second or third year, with the next survey scheduled to be conducted in respect of 2002-03. While the initial cycle of this survey contained reasonable financial data, subsequent cycles collected a very limited range of financial data, instead focussing on such things as: recording the type and extent of government usage of various ICT products; measures of Internet usage; and various employee-related aspects of ICT use. The 2002-03 survey will see a return to the collection of more extensive financial data and
cover educational organisations. The range of data to be collected in respect of 2002-03 are:

Expenses:
  • Computer software expensed (including expensed computer software licensing fees)
  • ICT hardware expensed
  • Payments to contractors and consultants for computing and communication services
  • Telecommunication charges

Capital expenditure:
  • Computer software capitalised
  • Computers and computer peripherals
  • Communication equipment
  • Selected electronic equipment (covering digital multifunctional photocopiers, cash registers, magnetic strip/card readers, automatic teller machines)

Other data:
  • ICT employment (and, separately, how many engaged in software development)
  • Wages and salaries of ICT staff (and, separately, how much on software development)

A detailed survey of Retail activity is undertaken periodically in Australia, the most recent being in respect of 1998-99. This survey provides data on household expenditure on computers, computer peripherals and packaged software.

A detailed household-based survey of income and expenditure (HES) is also undertaken periodically within Australia, most recently in respect of 1998-99. It collects information on household expenditures on ICT products. The next HES will be conducted in respect of 2003-04.

    DATA AVAILABILITY
    Yes

    Data availability comments
    Publication only - no other data available


    DATE OF LAST UPDATE FOR THIS DOCUMENT
    03/03/2003 07:34 PM



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