Global Governance and the Digital Economy – Prospects and challenges

Trends like e-commerce, cloud computing, big data analytics, and the digitalisation of services across all domains have started to fundamentally change the global socio-economic landscape and are bound to also profoundly affect politics from the local level up to the international relations.

To explore the impacts of these trends, Friedrich-Ebert-Stiftung Shanghai Representative Office and Shanghai Institutes for International Studies (SIIS) convened an international conference in November 2018. Among the invited experts were scholars from China, Japan, India and several European countries.

Discussions on the digitalization strategies of China and the European Union revealed significant differences in the respective approaches and together with the direction of US policies, a picture emerged of a world increasingly divided into three distinct blocks with regard to digital policy. The possibility of increased coordination and cooperation through multilateral fora such as the G20 were discussed but the rising importance of national security considerations made many participants rather skeptical about the prospects of cooperation.

Given the upheaval that many expect to occur in certain sectors of the economy due to the automatization of tasks and the reshuffling of many traditional occupational patterns, the issues of education, re-training of workers and the avoidance of digital divides in general was discussed at length. Ensuring that people can obtain the necessary skills to participate in the digital economy was stressed to be very important, both for societies (to avoid societal unrest) but also for countries and regions (to remain competitive on the global level and to counter brain drain).

The third major aspect of the discussions was the enormous economic and political influence that Alibaba, Facebook, Google and other giants of the digital economy have acquired (especially relative to their number of employees). Their dominance of a significant chunk of online interactions and digital markets coupled with their forays into other sectors (e.g. banking and automotive) present unique challenges to regulators and competitors but also to societies and political systems more generally.