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Sharing in the success of the digital economy

11 November 2014
Sharing in the success of the digital economy

Policy Network and the Washington-based Information Technology & Innovation Foundation (ITIF) are collaborating on a programme of work exploring how information and communications technology (ICT) and the digital economy can boost living standards by driving innovation and productivity growth.

The project aims to explore how progressives can craft approaches which embrace the power and promise of innovation through ICT and the digital economy but manage the impact on societies, particularly in terms of its ability to create winners and losers arising from the forces of ‘creative destruction’.

The programme was launched with a major conference at Campus London in October 2014.

In early 2015, Policy Network and ITIF will be publishing a major collection of essays from leading thinkers from the UK, US and Europe on how progressives should develop new approaches to radical innovation. The forthcoming volume is being published by Rowman and Littlefield.

Key themes

1.    Making the case for the progressive power of innovation

The economic evidence shows that boosting innovation – the development and adoption of new products, services, processes and business models – is vital to support rising living standards by increasing productivity and thereby by wages, and driving down prices for consumers. But making a the political case for the progressive power of innovation can be more challenging given that innovation threatens incumbent firms and can impact on jobs and radically alter types of employment, with major effects on local economies.

2.    Rethinking the rules of the game for the digital age

Given how innovation is radically altering products, services and business models, new forms of regulation, competition and tax policies are required which are fit for the digital age. These need to balance the interests of consumers, employees, and firms – both new ‘challengers’ and existing ‘incumbents’. 

3.    Tackling the disruption associated with innovation
New forms of education, training, and re-training, as well as employment and labour market policies are required to prepare people for a rapidly changing global economy, and to enable them to adapt to changing demands and opportunities. 

4.    Europe’s productivity challenge

Europe faces two key challenges: low job growth and high unemployment on the one hand, and anaemic productivity on the other. From the post-war period to the mid-1990s the EU was closing the productivity gap with the United States. Since 1995, that gap has widened steadily and shows no sign of narrowing. If Europe is going to catch back up it must consider the lessons from productivity growth in economies like the US: more ubiquitous adoption ICTs by all organisations (for profit, non-profit and government) through-out the European economy.

The following articles have recently been commissioned to debate the phenomenon of the ‘sharing’ or ‘collaborative’ economy:

The new 'New Deal'? Sharing responsibility in the sharing economy

New peer-to-peer ‘sharing’ platforms have the potential to boost living standards across the many countries which they span. But as the boundaries between the personal and commercial blur, these radical innovations can also undermine hard-fought consumer and employee protections. Governments and the market need to share responsibility for developing a new social safety net. Peer-to-peer platforms in particular have both a moral and a business imperative to protect the providers and consumers of their services.
By Arun Sundararajan

The 'collaborative economy': Competing on a level playing field?
Companies leading the ‘collaborative economy’ revolution, such as Uber and Airbnb, are harnessing technology to benefit consumers and drive productivity. But we need to see past the hype to determine whether these companies are competing fairly or merely avoiding regulations which are not fit for the digital age.
By Dean Baker

The 'collaborative economy' is growing, diverse, disruptive - and worthwhile

The ‘collaborative economy’ is unlocking new potential across a whole range of industries, helping individuals, community groups and small and large companies to radically alter how they interact. Policymakers need to make sense of these changes and refresh their approaches if they are to balance the interests of consumers, challengers and incumbents.
By Helen Goulden & Kathleen Stokes


15 October 2014
Innovation and productivity growth in the UK and Europe

Alastair Reed, Policy Researcher

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