Nation States Must Lead in Building Equitable Human-Centric Digital Economies
If you left your house this morning and realized you forgot your smartphone, would you go back for it? Ten years ago probably not. But if I didn’t have my phone with me this morning, I wouldn’t have been able to use contactless payment for the subway or order a ride-hail service. Once I managed to get to the office, getting in would have been a problem without my health check app. I wouldn’t have been able to use my digital loyalty card or mobile wallet at the coffee counter, use a food delivery app, or go out for lunch in a New York City restaurant without showing my vaccine passport. And worse, the only phone number I know by heart is my Mom’s and that’s only because it’s the same number we had growing up.
Spending a day off the grid to “kick it like it was 1986” would make you realize how much technology and digital information has become an integral part of our world. The introduction of information and communications technology over the past 30 years enabled globalization and enhanced productivity. It also allowed people to work from home, access information on the go, and even track their own environmental impact, leading to lifestyle and economic changes that are setting the ground for more sustainable GDP growth. COVID-19 has only accelerated this trend. As we enter the next era of innovation — the Fourth Industrial Revolution — we believe we’re on the cusp of a new economic supercycle. In addition to softening the divides between the physical, digital, and biological worlds, this information age will see data and digital services become the key driver of national economies.
But as we get more deeply immersed in the digital world, we also become more vulnerable to cyberattack, privacy intrusions, and potential mismanagement of digital transformation itself. Not just wrong interventions, but even a lack of them, could have consequences for countries and companies, causing them to slip behind in global competition and miss opportunities to benefit from sustainable growth. Concerns over the rising power of Big Tech and regulation of the use of artificial intelligence are reminders that we need to use lessons learned from previous transformations to better prepare for the new wave.
This is where digital policy comes in. But beyond setting guard rails, we believe government should develop a holistic digital policy that both: (1) realizes the full economic potential of digital, and (2) ensures the equitable distribution of benefits. If properly designed, digital policy would complement monetary and fiscal policy, and provide a third tool for governments to help manage economic growth. It would give stakeholders — from big tech companies down to individuals — much needed longer-term visibility to help them pursue their objectives. Naveed Sultan, Chairman of Citi’s Institutional Clients Group notes, “digital policy also requires a unified global response from multiple stakeholders — not only from governments, but from financial institutions, corporations, and also civil society.” In addition, by providing crucial infrastructure, technology, and security standards, holistic digital policy would encourage investment and promote healthy digitally-driven growth.
In the Holistic Digital Policy report, we provide recommendations for governments to help them embrace the digital economy as well as develop their own digital policy. We also give examples of individual country initiatives already showing success in a variety of different areas of digital transformation.
