Public-private-people partnership model for digital economy recovery
This paper has been authored by Apoorva Lalwani and Jhanvi Tripathi.
The onset of the Covid-19 pandemic hastened the widespread adoption of digital technologies across the globe. The pace of digitalisation—from the micro levels of education and e-commerce to the macro levels of supply chains and production networks—has galvanised governments to advance digital regulations. The tightrope walk of creating policies that enable digital innovation and ensure regulations are in the larger public interest have led to intense debate. What is clear is that digital regulations are necessary to enable a complete economic recovery and secure humankind’s common future. It is important to reconcile the competing visions of digital regulations to find the right balance and create policies and institutions that are responsive to the needs of citizens. This report discusses the growth of the digital economy and the renewed importance of digital public goods (DPGs). It highlights the competing visions for digital regulations, and recommends a public-private-people partnership (4P) for digital governance. Using DPGs built through this 4P partnership model is good for the economy as it increases the number of stakeholders consulted in the creation of digital regulation.
The ‘digital economy’ is an all-encompassing term that refers to any economic activity that uses digital information, knowledge, or tools as a factor of production and consumption. This typically indicates specific parts of the economy, such as e-commerce or trade in cross-border digital services. The extent to which the digital element has become omnipresent across economic sectors and human lives was largely beyond the imagination of policymakers until recently. This is exemplified by the fact that even until the late 2000s, discussions on digital trade at the World Trade Organization (WTO) were limited to the Moratorium on Customs Duties on E-Commerce transactions. The widening definition of the digital economy and its pervasiveness have also caused wariness at the level of multilateral policymaking related to the digital economy.
Digitalisation and digital innovation have been identified as the next frontiers in the industrial growth story, and governments have now started recognising the importance of regulating and perhaps even monetising this aspect of the economy. The 2019 Digital Economy Report by the United Nations Conference on Trade and Development (UNCTAD) notes the difference between traditional economic value creation and value creation in the digital economy—the main actors in the exercise of value creation are producers, consumers, and the government; in the digital economy, there are two additional forces in value creation: platformisation and the monetisation of data.
In The Great Tech Game, Anirudh Suri argues that technology should be treated as a factor of production and not simply a sector of the economy. Suri compares the accumulation of technology and data to the accumulation of capital as an asset for both the public and the private sector. Notably, the meaning of ‘technology’ has evolved to coincide with the digital sphere. At one point in history, the printing press was the frontier of technology, given that it democratised knowledge. Today, technological innovation is almost coterminous with digital technology. The deployment of (digital) technology, as Suri argues, boosts the productivity of the other factors of production as well. Eventually, he indicates, this implies a link between capital and technological innovation, as one attracts the other. Countries wanting to progress technologically require capital, and capital is attracted to growth sectors of the economy (in this case, technological innovation).
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This paper has been authored by Apoorva Lalwani and Jhanvi Tripathi.
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