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Article Article September 7th, 2015

Digital dawn: the role of US policymakers past, present and future

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Soon there will be more than 50 billion devices sharing information without human involvement

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Government’s role in ensuring the success of the US digital sector should not be underplayed

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The right policy mix can promote investment in next generation technologies

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I am writing this on my iPad in California - certainly an apt device and location for an article about the US digital landscape. Down the road lies Silicon Valley and the headquarters of, among others, Apple, Facebook and Google and hundreds of start-ups all trying to emulate the success of their older cousins.

Of course, the power, reach and impact of these organisations stretch far beyond California. Digital is a world without borders. It is a world where billions of people are connected by the click of a mouse or swipe of a tablet; a world where we have access to more data than ever before; and a world where, by 2020, there are projected to be more than 50 billion devices continually sharing information without human involvement. Quite a revolution, and one that shows no sign of slowing down.

While 650 million internet users in China and 550 million connected consumers in India (as predicted  by 2018) will be testament to the truly global nature of the internet, the current pre-eminence of the US in all things digital rests on strong foundations. Not only is the internet itself an American invention, but the country is now established as the leader in mobile technology, which contributed $548 billion (more than 3%) to its economy in 2014 and is growing at more than 15% a year. And the digital economy as a whole is projected to contribute $1 trillion, or 5.4%, to national GDP in 2016.

These are, of course, far more than just numbers. They represent new jobs and stronger communities, dreams fulfilled and progress still untapped. It is no wonder, then, that the policymakers of Washington, DC have taken a close interest - an interest that can be traced back several decades.

Policy picture

Washington, DC's corridors of power and the internet start-ups of Silicon Valley are separated by more than just geography. Different cultures, priorities and approaches abound. However, government's role in ensuring the success of the US digital sector should not be underplayed. Its first indirect impact was through military investments in the 1960s and 1970s, which contributed to led to some of the basic technologies used in the high tech industry and, of course, the creation of the internet itself.

Theirs has also been a role that helped shape the boundaries of what has become today's digital ecosystem. In 1997, the Clinton administration went out on a limb: “Over the next decade, advances on the GII [Global Information Infrastructure] will affect almost every aspect of daily life - education, health care, work, and leisure activities. Disparate populations, once separated by distance and time, will experience these changes as part of a global community.” Acronym aside, the predictions were right on the money.

Clinton and his colleagues also set out five principles that described how governments should approach internet policy, in particular that “the private sector should lead” - another statement forecast that has been borne out by time. The internet community is made up of an eclectic blend of stakeholders large and small. From society groups to business organisations, technical bodies to governments, none in this broad community has a casting vote. Should governments seek to become a more dominant force, there would be the risk of a model developing where each country - irrespective of size or importance - would possess an equal say in how internet matters are settled. This is hardly an ideal scenario for the fast-moving and dynamic world of digital. Far better for the current model of open, participatory, multi-stakeholder and nimble policy development to continue.

Over the horizon

There are many areas where policymakers could, and should, have a greater voice - such as increasing internet usage, for example. Helping even more people and businesses get online will fuel economic growth, exports and trade. The right policy mix can strengthen US competitiveness, as well as promote investment in next generation technologies and applications.

Such an approach will help safeguard the internet as a global platform for communication, commerce and innovation, one that helps enable citizens around the world to fulfil their aspirations and ambitions. Now that's the kind of public impact any government would welcome.

Read The need for US digital engagement at BCG Perspectives



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