Waning Global Influence on Digital Policies Threatens US Economy; New Report Details 15-Point Plan to Reassert Leadership

WASHINGTON—The United States is no longer the leading influencer of policies affecting the digital economy, taking a backseat to Europe and China after decades of successive administrations have deprioritized the issue. To maintain U.S. competitiveness and continue advocating for American values on the world stage, U.S. policymakers should reject anti-tech sentiment and prioritize pro-innovation digital policies at home, defend America’s successful light-touch regulatory approach abroad, and work with allies to advance free trade and democratic values globally, according to a new report from the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy.

“Techlash is in vogue. The belief has seeped into American policy discussions and gained a foothold around the world,” said Ashley Johnson, a senior policy analyst at ITIF who authored the report. “The global digital policy scene has lately been marked by European overregulation and overreach—which disproportionately targets American firms with costly regulation and fines; a rise in digital protectionist policies; and an increase in digital authoritarianism from China and Russia. These trends pose a threat to U.S. competitiveness and economic growth, and the government has so far failed to adequately respond to this threat.”

To restore U.S. leadership in global digital policy, the report proposes a 15-point plan that would help the federal government once again exert its influence and respond to threats of overregulation, digital protectionism, and the authoritarian influence of China and Russia. According to the plan, the United States needs to prioritize a pro-innovation agenda, cooperate with allies to advance free trade and democratic values, and push back against harmful digital narratives and policies.

The report outlines the history of American digital policy leadership, detailing policy actions taken by the Clinton administration; noteworthy laws, such as Section 230 of the Communications Decency Act and the Internet Tax Freedom Act; the United States’ role in collaborating with other nations on digital policy initiatives; and the U.S. push for a multistakeholder approach to Internet governance. ITIF then breaks down how the United States has faltered in the digital policy space in recent years and how other countries have stepped in to fill the void. The report recommends that the United States take the following 15 steps to regain the reins of global digital policy:

• The White House should make U.S. global leadership on digital policy a top priority, expanding on the Biden administration’s stated mission to restore America’s global standing and setting the tone for the rest of the federal government.
• The administration should push back against digital narratives and policies that hurt U.S. businesses and workers, including from allies such as the EU.
• The U.S. government should establish forums for multistakeholder participation on digital policy issues, particularly among democratic nations that share many of the same values.
• The U.S. government should continue to cooperate with its allies against digital authoritarianism and should seek out additional opportunities to do so.
• The State Department should lead on a global narrative arguing why the United States’ pro-innovation approach to digital policy is best for countries hoping to thrive in the digital economy and compete with China.
• The State Department should push back against the UNCTAD narrative that developing countries are victims of foreign firms, and therefore they are justified to enact protectionist measures, including data localization, to protect their interests in the digital economy.
• The State Department should stop funding organizations that misleadingly paint U.S. digital policy and performance in a bad light.
• The State Department should identify and work with a group of small to mid-sized countries that want to increase their competitiveness in the global digital economy and become digital leaders, such as Estonia, Slovenia, and the Kyrgyz Republic.
• ITA should expand its Digital Attaché Program, a network of Digital Trade Officers in U.S. embassies currently in 16 markets who help U.S. firms increase their global online market access and navigate regulatory and digital policy challenges.
• USTR should push for more countries to sign onto the ITA, a WTO agreement with 82 signatory countries that have agreed to fully eliminate tariffs on hundreds of IT products.
• USTR should collaborate with America’s allies on agreements and initiatives that facilitate cross-border data flows, such as the renegotiated EU-U.S. Data Privacy Framework that replaced Privacy Shield.
• USITC should develop a strategy to define digital protectionist actions by foreign countries, investigate these actions, and take action against offenders when appropriate.
• NIST should take on a greater global leadership role when it comes to setting voluntary standards and best practices for businesses.
• Congress and the Department of Justice should lead on addressing concrete online harms domestically to protect businesses and consumers and set an international example.
• Congress should maintain the pro-innovation approach to regulating digital policy issues that paved the way for American global leadership in the 1990s.

“Digital policy that reflects American values of democracy and innovation benefits consumers, businesses, as well as the U.S. and global economy,” said Johnson. “American leadership in this space isn’t just beneficial for the United States; it’s beneficial for the world.”

Read the report.