Digital technologies are profoundly altering the world economy, and we need a roadmap to deal with the large-scale change that has already begun to take place. With their new book, Digital DNA: Disruption and the Challenges for Global Governance, Peter F. Cowhey and Jonathan Aronson offer recommendations and policy proposals for such a roadmap. The Information Technology and Innovation Foundation (ITIF) hosted the authors on September 7, 2017, for a discussion of their new book and the many issues they raise in it.
Robert D. Atkinson, president of ITIF, opened the event and introduced the subject of their book. He emphasized the need for an overarching logical framework to guide the global community in dealing with important tactical questions such as privacy issues, data localization and malicious software. According to Atkinson, this book is an attempt to approach the topic strategically with compelling arguments for more intellectual, institutional and organizational structure. Atkinson went on to introduce the two panelists and authors: Dr. Peter Cowhey, Interim Executive Vice Chancellor, Academic Affairs at the University of California, San Diego; and Dr. Jonathan Aronson, Professor of Communication at the Annenberg School for Communication & Journalism at the University of Southern California.
Following the opening remarks, Aronson and Cowhey took the audience through the salient points of their new book. Aronson gave a general overview of the book and its context and listed the four big takeaways while Cowhey explained the takeaways in more detail. The first part of the book deals with fundamental technological drivers of the economy, the disruption of information and production processes by digital technologies and their effect on innovation clusters and business models not just in telecommunications or information industries, but also in other service industries and even traditional industries like manufacturing. Cowhey asserted that talking about the digital economy essentially means talking about the restructuring of the world economy including traditional manufacturing and commodity production. “There is no way that you can sustain a high value-added manufacturing or commodity base for the economy without actually taking advantage of the digital infrastructure,” said Cowhey
Cowhey addressed the ubiquity of digital technologies in traditional industries like the use of robotics in fracking and biotech in agriculture and medicine. He argued that this pervasive use of technologies in traditional industries means that technology clusters will no longer be isolated in major cities. This has made it possible for states like Iowa that have substantial farming industries to become experts on technology-driven agriculture with initiatives like the Iowa AgriTech Accelerator. Another implication of the digital economy is that, in terms of governance, the distinctions between goods and services and high-tech and low-tech have started to blur; this necessitates thinking about how policies on digital transformations can be translated across industries as diverse as cloud computing and farming.
Once the significance and the pervasiveness of the digital economy were established, the authors went on to detail the three main strategies outlined in the book to deal with this massive transformation. Firstly, the book raises the idea of creating a “core ‘club’ of nations” – a global governance regime consisting of like-minded nations or “a coalition of the willing” to anchor digital governance. Aronson emphasized that the authors did not intend for the idea to be taken as a prediction of the future but rather as a framework for how one could proceed.
Second, it acknowledges that the upsides of digital technologies are intertwined with irreducible public policy problems such as digital privacy and cybersecurity. “Our approach is to suggest that we package market access arrangements with arrangements to start the process of bringing some limited coordination of privacy and cybersecurity policies,” said Cowhey.
Finally, the book recognizes that there is going to be diversity in national policy but recommends the establishing of an authoritative, or enforceable in some form, baseline to facilitate quasi-harmonization of national strategies. It discusses the hard law and soft law that could be used to set these fundamental principles and delegate authority to multi-stakeholder organizations. According to the book, these rules would facilitate the creation of a trusted digital economy. “At the present time, this maybe one of the most difficult issues that we are facing. A lot of people are accepting that the world has changed and that business models have changed, but how to then go forward is one of the real challenges that we all face,” said Aronson.
A short panel discussion followed the authors’ presentations moderated by Atkinson. He asked the authors how their framework would apply to the imposition of the right to be forgotten on countries where it does not currently exist, such as attempts in France to apply it in the U.S. Cowhey stated that the idea of honoring national diversity implied that U.S. national policies would apply unless France had a strong reason to show for the extraterritoriality. The event concluded with a round of insightful questions from the audience.
The book and the discussion provides an analysis of the changing dynamics of business models and market forces in the digital economy and suggests a strategic framework for governing this rapidly changing system. The book is available for purchase from the Oxford University Press here.