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ICT Market266

Statistical Indicators from Latvias ICT Sector

This paper is devoted to a statistical depiction of the information and communications technology (ICT) sector in Latvia. The data come from the Latvian Central Statistical Bureau and the Latvian Information and Communications Technology Association (LIKTA). The aim of their joint project was to create a system of statistical indicators in line with international methodologies and local user needs which would allow them to characterise the sector. There were attempts to economise on resources and to avoid any excessive burden on respondents. The result is a snapshot of the existing situation, along with recommendations on how the situation can be improved.


Mra Gulbe, associate professor, Faculty of Economics and Management, University of Latvia

Statistics are an important element in describing any sector of the economy.  They help to determine the level of development in the country and the ranking of the country among others.  The ICT sector has developed very rapidly in Latvia over the last decade, and that explains the great interest in indicators which characterise the development.  The Central Statistical Bureau (CSB) first began to present certain data about the ICT sector comparatively recently, while other data can be found in other sources.  This incomplete and diverse presentation of statistics from the sector was unacceptable to many specialists in the sector, as well as other users of statistics.  That is why the Economics Ministry initiated research in mid-2007 to define a system of statistical indicators that would characterise the ICT sector one that would be in line with international methodology and the needs of national users.  The researchers studied all available information and the methodology whereby the information was extracted.  Proposals were made as to how the system of ICT indicators could be improved.

The reason why an understanding of data about the ICT sector is so important is that the ICT sector plays a very significant role in the Latvian economy.  The segmentation of GDP by sector of the economy has always been conducted on the basis of the highest level of the NACE classification.  This does not separate out the ICT sector.  The authors of this study found that the ICT sector represents approximately 5.2% of GDP in Latvia.  That is a sufficiently high percentage to allow us to say that the ICT sector makes a substantial investment in Latvias economic development and that it should have a more detailed reflection in reports on Latvias economic development.

What can we learn from statistics about the ICT sector in Latvia today?  Thorough statistical data can be extracted from six sources at this time the CSB, the Lursoft company, the Bank of Latvia, the annual reports of the European Information Technology Observatory, the annual reports titled European Electronic Communications Regulation and Markets, and the homepage of the Latvian Information and Communications Technology Association (LIKTA).
Table 1 presents leading indicators about the ICT sector.

Table 1. Major indicators about the ICT sector

Indicator

Data

Number of ICT activity enterprises

2,603

Turnover of ICT activity enterprises

EUR 2.63 billion

Personnel costs in ICT activity enterprises

EUR 147.7 million

Added value in ICT activity enterprises

EUR 670.2 million

Number of persons employed in ICT activity enterprises

23,491

Production value of ICT goods by product group

EUR 57.8 million

Source: CSB, 2005

More detailed data can be found in the annual reports of the European Information Technology Observatory (EITO).  They are also interesting in that they allow for a comparison of the situation in various EU member states.  Table 2 offers comparative data about the proportion of the information technology sector in the economic development of such countries.

Table 2. Comparative data about the proportion of the ICT in the economic development of different EU countries

Source: EITO, 2007

As can be seen in the comparative indicators, Latvia is between 19th and 24th place.  Latvia is behind Estonia but ahead of Lithuania.  Only Bulgaria and Romania are behind Latvia.
Table 3 shows the value of the European IT market in millions of euros.  We see that Latvias numbers are among Europes lowest, but market volume depends in large part on the size of the relevant country, which means that these numbers cannot be seen as representing poor achievements.

Table 3. The value of the European IT market

Source: EITO, 2007

As noted at the start of this paper, the authors of the LIKTA project assessed the share of the ICT sector in GDP.  This is not a precise indicator, because the calculations were conducted on the basis of slightly different methods in terms of calculating added value in the ICT sector than those that are used in determining GDP.  Taxation is not considered in appraising the value of the ICT sector.  The numbers should really be higher.  That is seen in Figure 1, which shows that proportion of the ICT sector in the GDP of various European countries.  Figure 1 is based on EITO data from 2007.  These also cannot be called precise, because the EITO reports are based on special surveys in which only a limited number of enterprises take part. According to these data, the ICT sectors share in GDP in Latvia is 9.89%.

Figure 1.  ICT expenditures as % of GDP

Source: EITO 2007

A key element in the ICT sector is the telecommunications sub-sector.  It is this sub-sector in which we encounter the greatest problems with specific data.  The only source of some information is the annual report known as European Electronic Communications Regulation and Markets.  Most of the data are relative in terms of market share, and they do not make it possible to see any detailed information about market volume.
Table 4. presents some indicators which can be used to assess the telecommunications market in Latvia.

Table 4. Indicators to assess the telecommunications market in Latvia

Number of fixed communications network operators

196

Number of fixed voice telephony operators

110

Number of active fixed voice telephony operators

19

% of mobile users using prepaid services

45%

% of mobile users using post-paid services

55%

Source:  European Electronic Communications Regulation and Markets, 2007

A specific situation relates to educational indicators.  Neither the CSB nor the Ministry of Education and Science collect data about the number of students in various programmes that are related to the ICT sector.  Professor Juris Borzovs, head of the Computing Department of the University of Latvia, has collected such data at his own initiative.  The data are available on the LIKTA homepage.  Figure 2 shows the number of Latvian graduates in the sector between 2000 and 2006.

Figure 2.  ICT graduates from institutions of higher education

Source: Investigation of prof. Juris Borzovs, University of Latvia (www.likta.lv)

As can be seen in Figure 2, the number of graduates in the field of ICT has increased steadily, but quite slowly in the last two years.  A survey of companies in the ICT sector shows that this is an insufficient increase in the number of new specialists.
It has to be said that the results of the research do not suggest that there is a catastrophic shortage of statistical data about the ICT sector.  Most data can be found and used, but it takes some time to do so, as they are scattered around in different sources.  One conclusion for the researchers was that the data should be correlated and made available from a single location.  The LIKTA has undertaken to organise this process.

References

1.   www.csb.lv

2.   EITO 2007

3.   www.lursoft.lv/stat

4.   http://ec.europa.eu/information_society/policy/ecomm/library/communications_reports/index_en.htm.

5.   www.likta.lv

Authors contacts: mgulbe(at)lanet.lv


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eBaltics
18.12.2017


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