Digital globalization

In recent years, a growing number of governments have adopted policies aimed at supporting the transition towards a digital economy. The World Trade Report 2020 looks at these policy trends and at how trade and the WTO fit with them.
Trade and trade policies have historically been important engines for innovation. In particular, the multilateral trading system has contributed significantly to the global diffusion of innovation and technology by fostering predictable global market conditions and by underpinning the development of global value chains. As data become an essential input in the digital economy, firms rely more on intangible assets than on physical ones, and digital firms are able to reach global markets faster without the amount of physical investment previously necessary in other sectors. Success in the digital economy will depend on openness, access to information and communication technology (ICT) goods and services, collaboration on research projects, and the diffusion of knowledge and new technology.

Digital skills are vital for individuals and national economies to prosper in a rapidly-changing world, benefiting from the opportunities of digital and remaining resilient to potential risks. More than 90 per cent of jobs in some categories now demand digital skills. Yet in 2016, just 56 per cent of Europeans had adequate digital skills for the world they live in, and 37 per cent of the workforce lacked adequate digital skills. In this project we examined the development and approach of Grow with Google, a project which operates through national programmes matched closely to the contexts and needs of individual countries, in six case study countries (Sweden, Germany, France, Spain, Italy and Nigeria) in order to identify key themes and learning to support ongoing good practice in growing a digital skills ecosystem.

The world is embracing a truly digital future. Upwards of one billion new users and 20 billion devices are forecast to be online within five years. However, for this future to deliver its promise of greater digital freedom, security, trustworthiness and accessibility for all, governance of the Internet across all its dimensions must be an obvious priority around the world.
In only a few decades, the Internet has grown to be a truly transformative phenomenon, with the capacity to touch nearly every aspect of life. The Internet now connects almost half of the world’s population and connectivity rates continue to expand apace, empowering users for both good and ill. The Internet is unquestionably the most powerful information system the world has yet seen, but the digital world is only just past its infancy. As the digital world evolves, the Internet is poised to be the superstructure underlying all other infrastructures.
The Internet has become such a part of our lives that we take it, and our access to it, for granted. Maintaining and preserving its open and accessible qualities — the very qualities that encourage creativity and connectivity — present a challenge. It is vital that the rules and safeguards of Internet governance keep up with the pace of digital innovation, particularly in the sphere of the IoT. At the same time, the process of governance must not inadvertently slow down the spread of the Internet’s benefits, reduce creativity or inhibit its global reach.

The United States and the European Union (EU) have a historic opportunity—perhaps their last—to be leaders in building the digital market of the future. To do so, they must seize the opportunity to create a transatlantic digital single market stretching from Silicon Valley to Tallinn, Estonia. Together, they can give a new burst of energy to a global Internet economy centered on thriving digital commerce, innovation, creativity, online security, and citizens’ rights. The newest report of the Atlantic Council’s Future Europe Initiative, “Building a Transatlantic Digital Marketplace: Twenty Steps Toward 2020,” evaluates the state of play on the most pressing digital policy issues across five interlocking areas, and identifies twenty steps that the United States and the EU can begin to take between now and 2020 to build a transatlantic marketplace, encourage trust, and preserve the Internet as a global commercial commons and a public good.

Conventional wisdom says that globalization has stalled. But although the global goods trade has flattened and cross-border capital flows have declined sharply since 2008, globalization is not heading into reverse. Rather, it is entering a new phase defined by soaring flows of data and information.
Remarkably, digital flows—which were practically nonexistent just 15 years ago—now exert a larger impact on GDP growth than the centuries-old trade in goods, according to a new McKinsey Global Institute (MGI) report, Digital globalization: The new era of global flows. And although this shift makes it possible for companies to reach international markets with less capital-intensive business models, it poses new risks and policy challenges as well.
The world is more connected than ever, but the nature of its connections has changed in a fundamental way. The amount of cross-border bandwidth that is used has grown 45 times larger since 2005. It is projected to increase by an additional nine times over the next five years as flows of information, searches, communication, video, transactions, and intracompany traffic continue to surge. In addition to transmitting valuable streams of information and ideas in their own right, data flows enable the movement of goods, services, finance, and people. Virtually every type of cross-border transaction now has a digital component.