What Is The New Economy?

Tourism and high-tech are part of what's often called the new economy. Trends in these sectors are followed with great interest by the media and other observers of the economy.

Many see them as future, or even current, growth engines in the economy. That view may be somewhat optimistic, as both sectors are still relatively small compared to some other industries. However, some of the fastest-growing industries in the economy are in this group.

In this section, the tourism and high-tech sectors are reviewed. Some other industries that have exhibited particularly strong growth during the last fifteen years are also examined. Finally, the rapid growth in self-employment that has occurred since the 1990s is also discussed. 

Measuring GDP and employment in the tourism and high-tech sectors

Firms in the tourism and high-tech sectors don't belong to a single industry or group of industries. They produce many different types of goods and services. In the case of tourism, the element that ties them together is the clients that they serve. In the high-tech sector, the common element is the degree to which the goods and services that they produce are viewed as high-tech products.

GDP and employment data for these sectors aren't available from the usual sources, as they are non-standard industry groups. However, BC STATS has developed estimates for these sectors by attributing part of the output or employment of other (standard) industries to these special groupings.

For example, it's estimated that about 25% of the activities of the food and beverage service industry are tourism related. Virtually all of the GDP and employment in accommodation services is also attributed to this sector. The proportions that are used are based on research that's been done by BC STATS.

How should you interpret and use this data?

Because both tourism and high-tech are special groupings of industries (or parts of industries), the data for these sectors isn't independent of the GDP and employment figures published for standard industries.

This means that if you're comparing tourism or high-tech with other industries, you need to be aware of what's been included in the definition of these special sectors - otherwise you might end up doing some double-counting.

For example, computer systems design is part of the professional, scientific & technical services industry, but is also included in the high-tech sector. This means that the GDP and employment associated with computer systems design is counted in both industry groupings, and you need to keep that in mind when you're making comparisons.

Other factors to consider

There are a couple of other factors you need to be aware of when you're using this data. BC STATS estimates of GDP for the high-tech sector are based on information that was published in the fall of 2005. However, the tourism estimates were calculated using information from an earlier release which included preliminary data for 2004. For both tourism and high-tech, GDP and employment data are only available up to 2004.

Previously-published estimates of tourism and high-tech GDP and employment were derived from information that was categorized using a different industrial classification system (the Standard Industrial Classification System) than the one that is currently in use. When the North American Industrial Classification System was introduced a few years ago, not all of the data for past years was recalibrated to conform to the new definitions. As a result, it is not possible to provide consistent data for these special sectors for the period before 1997.

Employment data from different sources

There's one more twist, and it's related to the employment figures for tourism and high-tech. The employment data in the rest of this resource comes from the Labour Force Survey (LFS), a monthly survey of households.

There's another source of employment information (also from Statistics Canada) that's based on data supplied directly by employers. It's called the Survey of Employment, Payrolls and Hours, or SEPH. SEPH data is available at a greater level of industry detail than the LFS information is, and for this reason, it was used to calculate employment in the tourism and high-tech sectors.

However, there are some differences in the definitions underlying the SEPH and LFS numbers. The most important ones are that the SEPH figures don't include workers who are:

• Self-employed;
• Have jobs in agriculture and fishing; or
• Work in private households.

This means that the employment figures for tourism and high-tech don't include any self-employed workers. Self-employment is a significant factor in some of the industries included in these sectors, so the figures are very likely under-estimated.

In addition, it should be noted that when the data for tourism or high-tech is compared to total employment, the all-industry total from SEPH doesn't include agriculture, fishing or private households. This means that the share of total employment that's attributable to tourism or high-tech may be overstated. However, these industries account for a relatively small percentage of total employment in the province.

Most of the difference between LFS and SEPH data is due to the exclusion of the self-employed from the SEPH estimates. About 20% of the province's workforce is self-employed, and that is roughly the size of the difference between the two sets of employment estimates. Agriculture, fishing and private households together account for only two-and-a-half percent of total employment in BC.

Despite these data issues, the information on tourism and high-tech is useful for analyzing trends in these two high-profile sectors of the economy.

The GDP figures are calculated using the same source of data as for other industries, so they are comparable with information for other industries.

Total employment estimates from the Survey of Employment, Payrolls & Hours are about 20% lower than those from the Labour Force Survey