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Challenges of the Digital Economy
Some 2.6 billion people still do not have access to the Internet, leaving a third of the world unconnected. This situation presents an economic development challenge for many countries and a strategic challenge for the United States and its allies and partners. Left unaddressed, the digital divide not only imperils efforts to build a strong digital ecosystem, but also threatens to increase income inequality and instability in emerging economies. The digital divide disproportionately affects women and other marginalized groups. For example, 80 percent of women in low-income countries do not use the Internet.
As the world has increasingly digitalized, countries around the world are grappling with how to approach the digital economy in a way that takes advantages of its benefits, addresses its risks, and expands its reach to more people. Governments are developing differing regulatory approaches to a range of policy issues, such as protecting children’s safety, health, and privacy, tackling TFGBV, addressing anti-competitive behavior, guaranteeing equitable access to connectivity and technology, building trusted digital infrastructure, and promoting trusted cross-border data flows.
A growing number of countries are promoting digital public infrastructure (DPI) as critical to achieving economic growth, good governance, and the UN sustainable development goals (SDGs). The definition of DPI is evolving, but generally encompasses networked open technology standards designed for the public interest, an enabling regulatory environment, and a community of market players driving innovation. While some of the most prominent models have included digital identification, digital payments, and data platforms for sharing and storing data, there is no one-size-fits-all solution. DPI models need to be grounded in safeguards, including human rights protections, and such models should be interoperable.
U.S. government and private sector actors seek to leverage data and the digital economy for positive economic and social benefits: preserving openness while protecting privacy, promoting safety, and mitigating harms. The Department of State, working with other agencies, looks to shape markets and safeguard innovation from regulatory excesses. Although there is an increasing willingness by some countries to embrace narratives of digital sovereignty and protectionism by blocking access to their markets, unduly preventing cross-border data flows, and preferencing domestic manufacturers and service providers, we continue international engagement to enhance interoperability, security, and market access.
Many states are promoting digital technologies for economic growth while trying to maintain autonomy and neutrality. They are looking to build digital infrastructure quickly and cheaply and seeking assistance to combat cybercrime and develop cybersecurity capacities. Yet the PRC government distorts markets to advantage PRC-based hardware, software, and services suppliers that compromise the security of the customer. By contrast, the United States seeks to provide the emerging and developing world with financially sound alternatives to unsustainable initiatives. The Department of State is committed to working with allies and partners to offer and deploy secure technologies that allow countries and civic actors around the world to build digital infrastructure and improve cybersecurity across sectors, offering direct benefits to governments while helping to ensure the protection of the human rights and privacy of their citizens that will enable an inclusive digital economy.
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This post was originally published on May 6, 2024, by the U.S Department of State
