towen1_Spencer PlattGetty Images_tech companies nasdaq Spencer Platt/Getty Images

How to Govern the New Digital Domain

For too long, and on too many issues, policymakers have left the governance of technology in the hands of those who design it. Governments face three imperatives in mitigating the digital economy’s negative effects, and they can no longer afford to stand by.

MADRID/MONTREAL – Today, as our economic and social lives increasingly move online owing to the COVID-19 pandemic, the digital and physical domains are becoming more integrated than ever. And now more than ever, governance and regulation of a hyper-powered digital world must catch up.

Besides triggering the most severe economic crisis since the Great Depression, COVID-19 is also accelerating technological trends that were already well underway. One of the most notable is that big tech is getting bigger. The tech-heavy NASDAQ index is up by 30% so far in 2020, while the combined market capitalization of Apple, Amazon, Facebook, and Alphabet (Google’s parent company) has passed $5 trillion. As a result, Amazon CEO Jeff Bezos’s personal fortune has increased by over $70 billion, or 68%, since the pandemic began, while Facebook CEO Mark Zuckerberg’s net worth has risen by $30 billion to $87.8 billion.

This growing concentration of power and wealth in the hands of a few global digital firms will shape national and international politics as we emerge from the pandemic. The big tech companies gain value from intangible assets such as data, algorithms, and intellectual property, rather than just tangible assets such as physical labor or goods and services, and have taken advantage of weak digital governance to avoid paying taxes and social-security contributions. Our global governance system was built for the tangible world, and governments have been far too slow to adapt laws and regulations to build an equitable digital economy.