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G20 Members Renew Support for Digital Economy Role in Global Development

· August 30, 2018

Last week, global leaders confirmed the importance of the digital economy for global development. The G20’s Digital Economy Ministers met in Argentina last week to discuss how countries can better facilitate innovation in a way that will aid global development and address the changes brought on by the digital economy.

The Group of Twenty (G20) is a forum where representatives from the world’s major economies discuss critical issues affecting the global economy and policy approaches to sustaining its continued growth. G20 members account for 85 percent of global economic output, two-thirds of the world’s population, and 75 percent of international trade.

Argentina held the 2018 G20 presidency and set an ambitious digital agenda, identifying digital inclusion efforts, future jobs skills and training, promoting small and medium-sized enterprises (SMEs) and entrepreneurship, and encouraging innovation in “Industry 4.0” and emerging technologies as topics for discussion. The Digital Economy Ministers met throughout this past year to discuss outcome documents that reflect consensus positions reached. The final Declaration was accompanied by four policy paper annexes: (1) G20 Digital Government Principles, (2) Bridging the Digital Gender Divide – Delivering Impact, (3) Measurement of the Digital Economy, and (4) Accelerating Digital Infrastructure for Development.

Industry groups released a statement ahead of the meeting, offering recommendations for members of the G20 to commit to certain endeavors to fulfill many goals related to the identified priorities. It is a positive indication that many recommendations from the business community were reflected in the Declaration.

Noteworthy recommendations include:

• Recognizing that a “thriving digital economy” relies on variables including “quality, affordable, secure, accessible and inclusive digital infrastructure,” “an environment that supports innovation,” “appropriate policy frameworks,” and the “free flow of information, ideas and knowledge.”   

• Acknowledging the necessary conditions to facilitate innovation in emerging technologies such as 5G, Internet of Things (IoT), and artificial intelligence (AI), including “appropriate policy approaches and flexible legal frameworks that create an environment that empowers entrepreneurs and fosters research, innovation and competition.”

• Recognizing that while new technologies may pose challenges, they also create “opportunities to improve quality of life and foster economic growth” and recommending that G20 countries “commit to share lessons from their extensive experience and enhance partnership and cooperation in the effective use of emerging digital technologies, in particular regarding adoption and its opportunities and challenges.”

• Championing entrepreneurs & SMEs, illustrating how the digital economy increases productivity and opens up new markets for SMEs. They also underscored “the importance of promoting a business-friendly environment” and recommended that members “consider policies that encourage investment, innovation and confidence in the digital economy (including policy frameworks, reducing administrative barriers, creating tax and financial incentives, support for R&D, training, and technical assistance) in an inclusive manner, within a fair, transparent and predictable business environment and at the same time protecting the privacy and security of individuals and businesses.”

• Calling for the “development of skills required by the digital economy to enable equal opportunities for all” as members consider the future of work in the global economy.

• Supporting a risk-based management approach to “promote trust and security” as a vital step for harnessing the potential of digital governance.

One passage in the Declaration may echo some regulators’ tendency to inappropriately single out certain digital services, notably with a focus on “online platforms.” The G20’s commitment to continuing dialogue and understanding of these business models is encouraging. Many policymakers are appropriately hesitant to jump to conclusions about the competitive impact of online platforms and two-sided markets without a thorough understanding of the economics.

Overall, the Argentinian presidency should be applauded for their leadership. Looking ahead to next year, G20 members should continue to encourage others to promote policies and cooperative efforts consistent with the views agreed upon at this year’s Ministerial.

Digital Trade

Companies rely on clear, predictable rules that facilitate digital trade to export their products and services around the world. These rules include balancing the competing interests between encouraging investment and enabling information access; promoting the free flow of information online; and maintaining balanced intermediary liability regimes.