The Digital Economy: A Look Into the 2022 Digital Frontier
The COVID-19 pandemic has fueled and accelerated digital transformation and introduced new economic opportunities by transforming existing markets.
Air Date: May 11, 2022
Moderator: Sean Heather, Senior Vice President, International Regulatory Affairs & Antitrust
Featured Guests: Caroline Louveaux, Chief Privacy Officer, Mastercard, Rich Carter, Chief Digital Officer, Eli Lilly
In recent years, massive digital transformations have taken place worldwide. These transformations have been accelerated by the COVID-19 pandemic, heavily impacting the economy, consumer behaviors, and business operations.
At the U.S. Chamber of Commerce’s 2nd Annual Global Forum, experts discussed the new digital frontier and how global businesses and leaders are meeting the challenges and opportunities presented in 2022.
Optimizing the Benefits of Digitalization
Mathias Cormann, Secretary-General for the Organization for Economic Cooperation and Development (OECD), provided insight into the changes that are altering the global economy and creating new markets.
“An increase in digital connectivity between two countries leads to increased export of goods and services,” Cormann said. “Digitalization also facilitates border processes, reducing the cost of doing business when [they] are automated.”
However, maintaining these economies comes with risks. Cormann describes what is needed from governments to ensure policies are in place to aid small and medium-sized businesses during the transformation.
“Responsible governance … is critical to optimizing the benefits [of advanced technologies] by better managing the potential risks associated with the digital transformation of our economies,” Cormann explained. “Digitalization has disrupted and reshaped competitive dynamics — ensuring that policies and regulations remain appropriate and well adapted is key.”
How Digital Transformation Is Shaping Businesses
Looking at digital transformation from a business perspective, two experts explained its impact in their respective industries.
“Data is really at the center of commerce,” said Caroline Louveaux, the Chief Privacy Officer at Mastercard. Louveaux described how today’s data is leveraged to create tools that protect consumers from fraud in real-time and promote open banking while discussing the benefits of ideal privacy law.
“I think a good privacy law provides meaningful protections and rights for people,” she said. “At the same time, [it] allows businesses to innovate responsibly with data. ... A good privacy law is principle-based because it has to be able to quickly adjust as consumers' expectations and technologies evolve.”
Speaking to the healthcare industry, Rich Carter, the Chief Digital Officer at Eli Lilly, discussed the future of data governance and the impact regulators, like the FDA, have on digital transformation.
“As things like software as medical devices… and digital biomarkers become more prevalent, I think what we're seeing is a need to actually collaborate and work together to [not only] understand both what's possible and what's feasible, but how we actually do that in the right way,” explained Carter.
Modern Digital Trade Limitations Are Increasing
In looking at the global regulatory environment for digital trade, Cormann noted that the restrictiveness index on digitally-enabled services shows that rules have become more restrictive since 2014.
“This means unnecessarily higher costs for businesses and consumers, and it means limiting access to greater economic opportunity,” said Cormann. “We need to reverse this trend and unleash the full benefits of the digital transformation … [while] appropriately and efficiently mitigating any risks.
To do so, said Cormann, a coordinated response is needed to address a range of policy areas, ensuring businesses have better opportunities with fewer restrictions.
“Our response must also reflect and embed a set of core values rooted in protecting human rights, as well as championing democratic values and open markets,” Cormann said.
How OECD Is Setting Digitalization Standards
Sitting at the forefront of international standard-setting, Cormann discussed the impact that OECD policies have had on the digitalization of the global economy. Observing the standards it has set, he shared how OECD is continuing to ensure fair competition by helping level the playing field.
“We are the home of landmark standards on artificial intelligence, on privacy in the digital economy, on data governance, and consumer protection in e-commerce,” Cormann said. “The standards are ensuring fair competition between actors on the international arena and also feeding into ongoing discussions such as emerging e-commerce chapters in trade agreements and negotiations in the WTO joint statement initiative on e-commerce.”
As digital trade continues to be adopted and gain traction throughout the world, Cormann believes that the standards of the OECD can create a more inclusive and prosperous life for many.
“The OECD stands ready to work with all stakeholders and to continue to promote international cooperation and dialogue for global solutions to make digital trade more inclusive, more sustainable, and more resilient,” Cormann explained. “Digital trade will continue to play an essential role in our road to recovery, and more so, in the context of the reconstruction of Ukraine.”