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Challenges and opportunities in the digital era
The “New Digital Domain” report released by the IE Centre for the Governance of Change analyses the implications of digital transformation, which has been accelerated during the Covid-19 crisis, and proposes a series of recommendations for global and economic governance, identifying opportunities to improve the social contract in the digital era.
The report reviews the main technological trends that were well in the making before pandemic, with implications in many different fields: from the new economic and geopolitics order to the redefinition of privacy or the need of a new social contract, policies and regulations.
According to the authors (Oscar Jonsson, Ulrico E.Campanella and Taylor Owen), questions about digital governance will be central to how we rebuild our post-pandemic world, especially if we consider that so far “for too long, about too many issues, governance of technology have been left solely to those who design it”.
Among the main proposals and conclusions of the report, the following stand out:
- European Union: The region needs to assert its strength as a geopolitical actor and its digital sovereignty, as geopolitical competition is increasingly playing out in a technological arms race involving private companies (for instance US-China tensions seen in the 5G-case)
- New digital governance: The report proposes a new forum for global coordination to overcome current geographic balkanization of data governance, a universal declaration on AI, a global protection against fake news and a new Digital Stability Board to shape global standards, regulations, and policies across the platform economy.
- Competition and digital disruption: It is necessary to create a level playing field for innovators and laggards through fair taxation of large tech and smart/agile regulations to tame the negative aspects of technological disruptions in more traditional sectors.
If we fail to address these challenges, according to the authors tensions within and between societies could be exacerbated, even more so considering that governments will emerge from the pandemic with historic levels of debt while the digital firms that have captured the majority of recent growth remain largely untaxed.
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According to Kristalina Georgeva IMF Managing Director, lifting growth requires three things: one, regulatory housecleaning to unleash private enterprise; two, deeper regional integration; and three, preparedness to harness AI.
According to The European House – Ambrosetti, the European Union has an opportunity to boost competitiveness and growth by simplifying regulatory and supervisory frameworks, particularly in the areas of sustainability and the financial sector.
According to Ramón Casilda Béjar, Spain, in today’s complex geopolitical landscape, has the opportunity to strengthen its role as a bridge and connecting country between Ibero-America and the European Union, revitalizing investment flows in both directions.
According to @ECB, in moments of acute stress, the public often turns to physical currency as a reliable store of value and a resilient means of payment, underscoring the crucial role it plays above and beyond everyday transactional convenience
According to Juan S. Mora-Sanguinetti, in Spain a 10% increase in regulatory volume leads to a 0.5% drop in employment in companies with fewer than 10 employees.
According to Hélène Rey “In a world where stablecoins, particularly those pegged to the dollar, become an important global payment tool, we must brace ourselves for substantial consequences”.
@judith_arnal proposes reforms for the EU to advance regulatory simplification, starting with consensus on its meaning, with competitiveness as a pillar, plus coordination mechanisms and a governance rethink.
According to @iee_org, Spain has one of the most demanding tax environments for businesses within the European and international context, which may have significant implications for competitiveness, foreign investment attraction, and business expansion.
According to Christine Lagarde for the euro to gain in status, Europe must take decisive steps by completing the single market, reducing regulatory burdens and building a robust capital markets union.
According to the Bank of Spain, in a context of strong growth in transactions and prices, the conditions under which new mortgage loans are granted currently show no signs of easing in lending standards.
McKinsey notes that European private capital is half the size of the U.S. and must play a key role in boosting competitiveness, by driving innovation, scaling firms, and mobilizing the investment needed to close the gap with other regions.
IMF states that global financial stability risks have grown significantly, driven by tighter financial conditions and heightened trade and geopolitical uncertainty.