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Digital Economics & Policy In Focus

UNCTAD (2019), "Digital Economy Report"

The Report examines the scope for value creation and capture in the digital economy by developing countries, paying special attention to opportunities to take advantage of the data-driven economy as producers and innovators with regard to digital data and digital platforms. It finds that:

• The evolution of the digital economy calls for unconventional economic thinking and policy analysis. Policy responses need to take into account the blurring of the boundaries between sectors, as well as the increased difficulties of enforcing national laws and regulations with respect to cross-border trade in digital services and products. They should also explore new pathways for local value creation and capture, and further structural transformation through digitalization.

• Measuring the digital economy and related value creation and capture is fraught with difficulties. Firstly, there is no widely accepted definition of the digital economy. Secondly, reliable statistics on its key components and dimensions, especially in developing countries, are lacking.

• At the same time, data have become a new economic resource for creating and capturing value. Control over data is strategically important to be able to transform them into digital intelligence. In virtually every value chain, the ability to collect, store, analyse and transform data brings added power and competitive advantages.

• National policies play a vital role in preparing countries for value creation and capture in the digital era. Boosting entrepreneurship in digital and digitally enabled sectors is key to local value creation. Moreover, securing value from the digital economy requires not just a stronger digital sector, but also broader efforts to enable enterprises in all sectors to take advantage of digital technologies.

• If left unaddressed, the yawning gap between the under-connected and the hyper-digitalized countries will widen further and existing inequalities will be exacerbated. Digital divides, differences in readiness and the high concentration of market power in the digital economy all point to the need for new policies and regulations that will help create a fairer distribution of gains from the ongoing process of digital transformation.

• Several policy challenges may be more effectively addressed at the regional or international level. This applies, for example, to data protection and security, cross-border data flows, competition, taxation and trade. The development community needs to explore new ways of supporting the countries that are trailing in their readiness to participate in and take advantage of the digital economy.

• Assistance should seek to reduce the digital divides, strengthen the enabling environment for value creation in the digital economy, build capacity in the private and public sectors, and enhance trust by supporting the adoption and enforcement of relevant laws and regulations.


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