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Public policy is key to the digital economy

February 7th, 2018 by Graham Attwell

Interesting research from Harvard Business Review who have introduced the Digital Evolution Index  to trace the emergence of a “digital planet,” how physical interactions — in communications, social and political exchange, commerce, media and entertainment — are being displaced by digitally mediated ones.

They outline five “features of the global digital economy”:

  • Digital players wield outsize market power.
  • Digital technologies are poised to change the future of work
  • Digital markets are uneven.
  • Digital commerce must still contend with cash.
  • Digital technology is widespread and spreading fast.

Each of these five features, they say, “contains both upsides and challenges. Moreover, how strongly each of them is felt varies depending on where you are in the world”

The report produces a map of counties digital development divided into four zones: Stand Out, Stall Out, Break Out, Watch Out.

But by far the most interesting comments come in the conclusions:

Digital innovators should recognize that public policy is essential to the success of the digital economy. Countries with high-performing digital sectors, such as those in the EU, typically have had strong government/policy involvement in shaping the digital economies.

This comes despite the popular business press obsession with so called digital disruption which poses public policy as a barrier to change and innovation.

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