Influential OECD Report Sets Out Future Challenges for the Digital Economy

The Report identifies three broad trends for member countries and their partners to focus on in digitising their economies:

1. Realising the full potential of the digital economy

Technological developments have fuelled the growth of trade in information and communication technology (ICT) manufacturing and services, but there opportunities for further growth.  In particular, the OECD recommends that spectrum usage be planned more efficiently, to allow specialised use of fixed and mobile networks.  New technologies such as cloud computing and enterprise resourcing software are identified as a growth area for businesses, while from a social perspective more could be done to promote services like e-government and online banking.

2. National digital agendas can boost growth

The Report stresses the importance of government policy, arguing that digital policies should cut across all industry sectors.  The key recommendations are that digital infrastructure be fast, reliable and ultimately cheap enough to be accessible for businesses and individuals, and that measures be taken to remove barriers to entry in digital markets.

Ensuring that businesses and individuals trust the security of online networks and the protection afforded to privacy and consumer rights is a priority in the Report. Individuals are increasingly concerned with how secure their personal data is in the light of recent high-profile events such as the Snowden revelations, the hacking of Sony and the discovery of the Heartbleed and Shellshock vulnerabilities. Companies, by adding encryption to messaging services (such as WhatsApp, Apple’s iMessage and Google’s Gmail), and governments, through changes to privacy legislation (in Brazil, China and Russia, for example) are reacting to these changes.

Hogan Lovells’ Eduardo Ustaran is quoted in the Report, emphasising that the courts have taken an increasing role in developing the legal framework in this area. Eduardo argues that the cumulative effect of rulings on, among other things, the right to be forgotten and the striking down of the Data Retention Directive, is that the European Court of Justice is uncomfortable with society’s dependence on data, noting that the effect of the rulings goes far beyond simply the parties to proceedings.

3. Internet governance is a priority

The Report notes that key decisions about the governance and structure of the internet are a critical challenge for the near future.  Technical resources may be transferred from the United States to a global, multi-stakeholder group, while the mandate of the Internet Governance Forum, the body responsible for the internet’s governance, comes up for renewal in December 2015.

A fundamental question to be answered is about whether the inherent openness of today’s internet should continue.  On the one hand, preserving the present openness may continue to allow the innovations and advances of the last fifteen or more years, while on the other there are concerns about how this openness comes into conflict, in particular, with restrictions on the flows of data across borders.  Reaching conclusions that will help the digital economy develop in the coming years will be vital to maximising the benefits of technological change.

Paul Maynard, Trainee Solicitor in our London office, contributed to this post.

Authored by Eduardo Ustaran