Digital Planet Backgrounder

Background Information
Digital Planet: The Global Information Economy

Q1. What is WITSAís motivation in creating this new study?

WITSA created this study to fill the gap in understanding of the role of information technology in the development of the global economy. WITSA is motivated to improve the quality of decision-making about information technology by fostering a better understanding of economic and social impacts.

Q2. Why now?

Policy decisions are being made now about the future of the Global Information Economy that will have long term impact. Until now there has been inadequate information about the social and economic impacts of information technology on a global and country basis.

Q3. How is this study different then earlier studies?

  • Digital Planet is global rather than regional or local unlike earlier studies;
  • The study is based on primary research rather than estimates;
  • The work provides actuals rather than forecasts of the performance of the industry for the last 5 years;
  • Digital Planet uses consistent definitions for measuring IT, unlike most studies which use government statistics which have inconsistent definitions across countries;
  • The study provides measures of the social as well as economic impacts of IT;
  • It contains broader and more complete definitions of IT- including the internal IT labor costs as well as software, services, computer equipment, and telecommunications. (see appendix for complete definitions).

Q4. What does this study measure? (see appendix for complete definitions)

Country level data for the largest 52 countries is provided as follows:

  • ICT/GDP: Total ICT Spending as a percentage of gross domestic product.
  • IT Spending broker in IT Hardware, IT Software, and IT Services, telecommunications, and office equipment
  • PCs installed in Schools and Homes
  • Networked PCs
  • Internet Hosts
  • Telephone lines/Household

Q5. What is the methodology of the study? How was the information obtained?

The data was obtained from three sources: 1) a survey of IT spending in 50 countries performed by telephone and in-person visits, 2) a vendor supply analysis obtained through interviews and review of financial records; 3) access to official statistics on GDP, telephone usage, and jobs from the World Bank, International Telecommunications Union, and OECD. IDCís team of analysts synthesized this broad range of data to perform an integrated analysis of the global IT market.

Q6. IDC has published statistics before. How do these statistics in the WITSA study compare with other IDC numbers?

The statistics developed by IDC for the WITSA study are unique. All earlier IDC studies use a narrow view of the IT industry. This study is the first analysis to include internal IT spending in a valuation of the ICT market. .

Q7. Why were these definitions of the ICT industry chosen?

WITSAís goal is to create the authoritative and comprehensive study of the IT industry and to make it easy to compare and contrast with other studies. The advisory committee spent months reviewing earlier studies and concluded that we needed to both tie to earlier work and improve measurement by adding internal IT spending.

Scope of this study is identical to the European Information Technology Observatory and several earlier OECD studies. (Broader in Geographical Content)

Q8. What role did WITSA and ITAA play in the development of this study?

An advisory group of WITSA and ITAA members reviewed all phases of the study. This group clarified definitions, validated the statistics, and reviewed the findings.

Definitions and Methodology

Methodology and Scope

This project provides a view of the worldwide Information and Communications Technology (ICT) spending not normally delivered in standard IDC research. In most standard research, IDC looks primarily at the External Information Technology (IT) spending by businesses, governments, educational institutions and households. For the purposes of this study, IDC has sized the sum total of External and Internal IT spending, plus Telecommunications and other office equipment. Therefore -

Total ICT Spending = External + Internal IT Spending + Telecommunications spending + Office Equipment Spending

The Total ICT Spending produces the total value of the market to the world economy. Thus, we are bringing together the tangible revenues from ICT spending upon goods and services with the spending mandated to put the goods and services into working order within a given corporation. This produces a Total ICT market that includes the "ripple effects" of traditional IT spending as outlined in IDCís Worldwide Black Book.

In the past IDC has used the Global IT survey to assess overall size of Internal IT spending in selected countries. For Digital Planet, that experience has been leveraged to ascertain the spending in 50 countries around the globe.

Upon determining the size, IDC then analyzed the impact of the Total ICT spending on the economies of 50 countries around the world. To aid in this analysis, IDC used some of its existing internal data and combined it with external sources to create new measures of the impact of ICT on the economy and society. The results assess the economic growth, job creation, entrepreneurship, societal impact, and information accessibility in each country.

Hence, both the spending data and the new measurements are unique to this study. Furthermore, by utilizing IDCís local country analysts, the research firm has added a local dynamic to this effort unsurpassed in any of its other worldwide reports. With such local expertise to tap, combined with a central collection methodology, IDC is well positioned to collect and integrate a data set of this magnitude with a high degree of accuracy.


ICT/GDP: Total ICT Spending as defined above as a percentage of gross domestic product. (Sources: International Data Corporation, World Bank and Consensus Forecasts)

IT Company: A business entity involved in the sale, distribution, or manufacture of technology related hardware, software, or services. (Source: International Data Corporation)

Telephone lines/Household: The number of telephone lines connected to household. (Source: International Telecommunications Union)

PC shipments to Schools and Homes: the sum total of PC Shipments purchased from household budgets (consumer disposable income) and PC Shipments bought for use in educational establishments, whether primary or secondary schools or universities. (Source: International Data Corporation)

Internet Hosts: a server that is assigned a domain names or number of domain names in compliance with the public network and addressing system. (Source: IDC/World Times Information Society Index, International Telecommunications Union)

Percentage of PCs on a Network: The proportion of the installed base of personal computers that are connected to a local area network. (Source: International Data Corporation)

Information Technology (IT): For the purposes of this study, information technology refers to the combined industries of hardware for office machines, dataprocessing equipment, data communications equipment, and of software and services

Information and Communications Technology (ICT): For the purposes of this study Information and Communications Technology refers to information technology refers to plus Telecommunications equipment and Telecommunications services.

External IT spending: The tangible portions of the expenditures on IT products by businesses, households, government and education. These expenses are attributed to a vendor or organization outside the purchasing entity. Business spending includes: external portion of the IS operating budget, capital budget, and external portion of the business unit IT spending. This broken into IT Hardware, IT Software, and IT Services. (Source: International Data Corporation)

  • External Portion of IS Operating Budget: All short-term spending on products and services from an external agent or corporation used to support the IS Infrastructure. Short-term may mean a few weeks to a few years. Does not include that which is spent on staff, facilities, etc., or any capital depreciation.
  • Capital Budget: A list of planned spending on large, long-term projects to be specially financed. Long-term may mean 5 to 10 year periods but with annual updates. Examples of such financing include long-term loans or extended credit.
  • External Portion Of The Business Unit IT Spending: Business Unit IT spending is defined as spending on the part of individual units within a corporation above and beyond what is allocated to IT by the Capital Budget or IS Operating Budget.
  • Government Spending: Includes all external spending by Central Governments and Local Governments on IT to support all public administration, defense, and justice activities.
    • Central Governments: The governmental structure associated with national self-identity and responsible for all citizens, typically headquartered in one or more capital cities but radiating throughout society.
    • Local Governments: Any governmental structure (state, province, county, city, town, etc.) other than and lower-ranking than the central government.
  • Home Spending: For purposes of measuring the IT market, the sale of hardware, software, and services to individual consumers, usually in a multi-person, multi-function environment (i.e., different family members can and will use the products for different purposes ranging from business use to education to games).
  • Education Spending: Spending by primary and secondary institutions dedicated to academic and/or technical/vocational instruction.

IT Hardware: Servers, Personal Computers, Workstations, Data Communication equipment and add-ons purchased by a corporation, household, school, or government agency from an external agent or corporation. Including (Source: International Data Corporation):

  • Computer system central units (basic CPU or central electronic complex, with initial memory, processor upgrades, cooling as necessary, etc.), including multi-user systems (servers) and single-user systems (PCs and workstations)
  • Storage devices, including those sold initially with systems and those incorporated later as add-ons, for both multi-user and single-user systems
  • Printers, both for multi-user systems and for PC/workstations
  • Bundled operating systems within system values, both single-user and multi-user
  • Data communications equipment, summing the total for LAN hardware and other data communications equipment

IT Software: Includes the purchase of all software products and external customization of computer programs. Excludes expenses related to the internal (i.e., wages, rent) customization of computer programs. Includes systems software and utilities, application tools, and application solutions. (Source: International Data Corporation)

IT Services: IT Services provided to a corporation by an external agent or corporation, above and beyond the services provided by an internal IS team. Includes IT consulting, implementation services, operations management, IT training and education, processing services, and IT support services. (Source: International Data Corporation)

Internal IT Spending: While external spending includes, for the most part, the tangible portions of the IT market, Internal Spending is made up of the intangible portion or the "ripple effects" of external spending. These expenses cannot be attributed to a vendor and are therefore termed Internal spending. Thus, Internal Spending includes: Internal Portion of IS Operating Budget, internally customized software, capital depreciation, any other expense related to IT that cannot be directly tied to a vendor. (Source: International Data Corporation)

  • Internal Portion of IS Operating Budget: All short-term spending on budgetary items allocated to human resources and facility rental expenses associated with supporting the products and services acquired from an external agents or corporations used in the IS Infrastructure. Does not include the external expenditure of products and services acquired from an external agents or corporations, as this is included separately in the external portion defined above.
  • Internally Customized Software: The general and administrative expenses of a business that cannot be directly allocated to a particular product or department. Internal overhead includes people and facilities.
  • Capital Depreciation: A reduction in the value of capital assets because of wear and tear from use or disuse, accident, inadequacy, or from obsolescence. Capital depreciation is taken as an annual expense from the operating budget.

Telecommunications: Brings together expenditures by businesses, household, government, and educational on Public network Equipment, Private Network Equipment and Telecommunications Services. (Source: International Data Corporation, International Telecommunications Union)

  • Public network Equipment: All Equipment used by carriers to provide voice/data network services. Includes Switching, Transmission, and Mobile Communications Infrastructure.
  • Private Network Equipment: all equipment installed at Telecommunications userís premises. Includes: PABXs and key systems, Telephone Sets, Mobile Equipment, and Other Equipment.
  • Telecommunications Services: Telephone Services, Mobile telephone services, Switched data and leased line services, and Cable TV services.

Office Equipment: Typewriters, Calculators. Copiers, and Other office equipment (duplicating equipment, cash registers, point-of-sale systems, etc.) (Source: International Data Corporation)

Back to the Press Kit

Home | About WITSA | Press Center | Calendar of Events
White Papers | WITSA Newsletter | Global IT Resources