PPI - Radically Pragmatic
  • Donate
Skip to content
  • Home
  • About
    • About Us
    • Locations
    • Careers
  • People
  • Projects
  • Our Work
  • Events
  • Donate

Our Work

Data, Trade and Growth

  • April 24, 2014
  • Michael Mandel
Download PDF

We show in this paper that the architecture of the Internet dictates that current trade statistics significantly underestimate the magnitude and growth of cross-border data flows. As a result, the contributions of cross-border data flows to global growth and to small businesses are being significantly underestimated. This suggests that trade and tax policy should place more emphasis on maintaining cross-border data flows. Moreover, policies that discourage cross-border data flows, such as data localization and high tax rates on cross-border data, should be avoided if possible. Statistical agencies should explore adding data as a separate trade category, along with goods and services.

INTRODUCTION
The architecture of the Internet is designed as a “network of networks.” As such, one of its key attributes is making the passage of data from one network to another easy. So, when a user sends an email, views a video, or downloads a file from a website, the data may pass through a large number of different networks on the way from its origin to its destination, with the routing virtually transparent to the user.

This architecture has proven to be extremely flexible and powerful, both nationally and globally. Individuals, small businesses, and corporations with Internet access can easily access data of all sorts from around the world. Similarly, companies can efficiently and cheaply provide services such as email and web search on a global basis, in many cases without charge.

One sign of the Internet’s global success is the rapid growth of cross-border data flows. Cross-border data flows are growing far faster than conventionally measured trade in goods and services. According to TeleGeography, a consulting firm that keeps track of international data flows, demand for international bandwidth increased at a compound annual rate of 49% between 2008 and 2012.1 By comparison, the overall volume of global trade in goods and services, adjusted for inflation, rose at an average rate of 2.4% over the same period.

Continue reading and download the full report.

Related Work

Op-Ed  |  June 18, 2025

Weinstein Jr. for Forbes: It’s The Early 1990s Bond Market Again

  • Paul Weinstein Jr.
Budget Breakdown  |  June 18, 2025

Senate Changes to House Reconciliation Bill Are a Mixed Bag

  • Ben Ritz Nate Morris
Trade Fact  |  June 18, 2025

One U.S. measles death from 2000 to 2024; three so far this year

  • Ed Gresser
Trade Fact  |  June 11, 2025

U.S. earnings from international student tuition above those for gold, silver, platinum, diamonds, and gems

  • Ed Gresser
Press Release  |  June 10, 2025

New PPI Report Finds Tech and E-Commerce Sectors Are a Powerful Engine for Local Resilience

  • Michael Mandel
Publication  |  June 10, 2025

The 2025 PPI Tech/Info/Ecommerce Job Index: Fighting Recession on the Local Level

  • Michael Mandel
  • Never miss an update:

  • Subscribe to our newsletter
PPI Logo
  • Twitter
  • LinkedIn
  • Facebook
  • Donate
  • Careers
  • © 2025 Progressive Policy Institute. All Rights Reserved.
  • |
  • Privacy Policy
  • |
  • Privacy Settings