Capturing a Digital Economy Measurement Framework for Sri Lanka

The digital economy is growing rapidly worldwide, driven by advances in information and communication technology (ICT), data analytics, and platform-based business models, creating an urgent need for reliable measurement frameworks. Traditional metrics like gross domestic product (GDP) often fail to capture the impact of digital transformation, especially in developing economies. In response, this study reviews five major frameworks for measuring the digital economy: (1) an input–output approach from the Asian Development Bank (ADB), (2) digital Supply–Use Tables by the Organization for Economic Co-operation and Development (OECD), (3) the United States Bureau of Economic Analysis (BEA)’s digital economy satellite account, (4) Huawei and Oxford Economics’ “Digital Spillover” model, and (5) the “GDP-B” welfare metric proposed by Brynjolfsson et al. (2019). The study critically evaluates each framework’s methodology, assumptions, and limitations using a rubric with five criteria: coverage, the System of National Accounts (SNA) compatibility, data requirements, replicability, and policy usefulness. The comparative analysis finds that ADB’s Input-Output (I-O)-based framework is robust and aligns well with national accounts, making it well-suited to Sri Lanka’s context, while other models offer complementary perspectives (for example, GDP-B captures consumer surplus from free digital services that GDP misses). Based on these insights, it proposes a hybrid measurement model that combines ADB’s structural approach with GDP-B’s welfare perspective to provide both market-size and welfare views of Sri Lanka’s digital economy. The paper also outlines a detailed implementation roadmap, specifying responsible agencies, data needs, and a timeline for integrating digital economy metrics into Sri Lanka’s official statistics. This study tailors global best practices to a developing-country context and offers actionable recommendations. The findings will help policymakers and statisticians in Sri Lanka and similar economies systematically measure their digital economies, enabling more evidence-based digital transformation strategies.

Keywords: digital economy, measurement framework, input–output analysis, Sri Lanka, national accounts