Productivity, Innovation and Digitalization: Which Global Policy - - PowerPoint PPT Presentation

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Productivity, Innovation and Digitalization: Which Global Policy - - PowerPoint PPT Presentation

Aug 03, 2023 143 likes •583 views

September 7, 2015 Productivity, Innovation and Digitalization: Which Global Policy Challenges? 10 th Anniversary Event, Bruegel Dr. Robert D. Atkinson, President, ITIF @RobAtkinsonITIF 1 ITIF: Who We Are The Information Technology and

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Productivity, Innovation and Digitalization: Which Global Policy Challenges?

10th Anniversary Event, Bruegel

September 7, 2015

  • Dr. Robert D. Atkinson,

President, ITIF

@RobAtkinsonITIF

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ITIF: Who We Are

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The Information Technology and Innovation Foundation is a think tank at the cutting edge of designing innovation policies and exploring how innovation drives boost growth and competitiveness. ITIF focuses on:

  • Innovation processes, policy, and metrics,
  • Internet, big data and ICT policy,
  • ICT and economic productivity,
  • Science and tech policy, and
  • Innovation and trade policy.
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ITIF Global Engagement

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Today’s Presentation

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Challenges to ICT Development ICT as Driver of Growth

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Challenges to ICT Adoption

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Policy Solutions

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EU ICT Adoption Performance

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The Global Productivity Challenge

Figure 2, growth in labor productivity

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EU’s Productivity Challenge is Even More Severe

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Annual Labor Productivity Growth; Source: The Conference Board, Total Economy Database

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EU’s Productivity Challenge is Even More Severe

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% EU-15 EU-13 EU-28 U.S.

Annual Labor Productivity Growth, 2000-2013, Source: The Conference Board, Total Economy Database

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“General Purpose Technologies” Drive Productivity Growth

Approximately every half-century, a new technology system emerges that changes everything.

  • Railroad and Iron: 1840’s
  • Electricity and Steel: 1890’s
  • Electro-Mechanical Systems: 1950’s

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These new technology systems impact virtually everything:

  • what we produce
  • how we produce it
  • how we organize production
  • the location of productive

activity

  • the infrastructure needed
  • the laws and regulations required

ICT as Today’s GPT

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Today’s Presentation

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Challenges to ICT Development ICT as Driver of Growth

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Challenges to ICT Adoption

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Policy Solutions EU ICT Adoption Performance

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Moore’s Law Drives ICT Tool Progress

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  • 1,215,500,000,000,000,000,000

transistors in 2014

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?: Transistor Growth Since 2000

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A. 14.3 times B. 143 times C. 1,430 times D. 14,300 times

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?: Transistor Growth Since 2000

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A. 14.3 times B. 143 times C. 1,430 times

  • D. 14,300 times
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“Moore’s Law” Progress Depends on Schumpeterian Profits

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  • Policy-induced global overcapacity, led by China

Policy Challenges to “Moore’s Law” Progress

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  • Policy-induced global overcapacity, led by China
  • Fragmented global markets

Policy Challenges to “Moore’s Law” Progress

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  • Policy-induced global overcapacity, led by China
  • Fragmented global markets
  • Weak IP protection

Policy Challenges to Moore’s Law Progress

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  • Policy-induced global overcapacity, led by China
  • Fragmented global markets
  • Weak IP protection
  • Overly aggressive anti-trust policy

Policy Challenges to Moore’s Law Progress

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Today’s Presentation

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Challenges to ICT Development ICT as Driver of Growth

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EU ICT Adoption Performance

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Policy Solutions

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Challenges to ICT Adoption

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U.S. Businesses Invest More in ICT

Share of GDP, 2010; Source: National Science Foundation, Science and En Engineering I Indicators 2014

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U.S. Exceeds EU in ICT Investment (1)

Gross fixed capital formation as a percentage of GDP (EUR-W is weighted average of major European countries Source: “ICT Capital a and P Productivity Growth,” EI EIB P Papers 16, no. 2 (2011)

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ICT contribution to annual GDP growth, 1985-2010; Source: OECD StatExtracts, C Country S Statistical Profile 2 2012

U.S. Gets More Growth From ICT

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  • US. Exceeds EU in ICT Investment (2)

ICT assets as percentage gross fixed capital formation, 2011. OECD, Science Technology a and Industry S Scoreboard 2 2013

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A Bigger Share of U.S. Investment Goes to ICT

Shares of ICT investment as percent of nonresidential investment. Source: OECD StatExtracts, Country Statistical Profiles 2012

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Today’s Presentation

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Challenges to ICT Development ICT as Driver of Growth

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EU ICT Adoption Performance

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Policy Solutions

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Challenges to ICT Adoption

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  • Favoring development over adoption

Policy Challenges to ICT Adoption

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Is it Better to Cook the Tech, or Eat it?

  • Over 80% of benefits from ICT in the U.S. are

related to its use by organizations, rather than its production by the ICT industry.

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Most U.S. Advantage Comes From ICT Use

2000 to latest year, percentage points per annum. Source: Ec Economic M Modelling 29, no. 5 (2012)

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But “Cooking” Policies Can Hurt “Eating”

  • ICT Tariffs
  • Data center and data localization requirements
  • Local content requirements
  • Procurement preferences for domestic companies

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  • Favoring development over adoption
  • Resistance to ICT-enabled creative destruction

Policy Challenges to ICT Adoption

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  • Ignoring adoption in favor of development
  • Resistance to ICT-enabled creative destruction
  • Social policy driving ICT policy

Policy Challenges to ICT Adoption

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  • Privacy

ICT as Social Policy

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  • Privacy
  • Favor small businesses

ICT as Social Policy

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EU Firms Are Smaller Than U.S. Firms (and Less Productive)

Percent of total workforce employed at enterprises by size, 2010. Source: OECD, Entrepreneurship at a Glance 2013

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The Gap Between the Most Productive Firms and the Rest is Growing

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  • Privacy
  • Favor small businesses
  • Restrictive labor market regulations

ICT as Social Policy

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  • Privacy
  • Favor small businesses
  • Restrictive labor market regulations
  • Chicken or egg issues: (mobile payments, ITS,

health IT, digital signatures, smart cities)

Policy Challenges to ICT Adoption

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Today’s Presentation

3 2

Challenges to ICT Development ICT as Driver of Growth

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Challenges to ICT Adoption

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Policy Solutions

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EU ICT Adoption Performance

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Policy Principles to Drive ICT-Enabled Growth

  • Avoid prisoner’s dilemma policies (e.g., advance

your growth at global expense)

  • Put the pedal to metal for growth and disruption

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Selected ITIF Resources

  • Raising European Productivity Growth Through ICT:

http://www2.itif.org/2014-raising-eu-productivity-growth-ict.pdf

  • The False Promise of Data Nationalism:

http://www2.itif.org/2013-false-promise-data-nationalism.pdf

  • Resolving Cross-Border Internet Policy Conflicts:

http://www.itif.org/events/resolving-cross-border-internet-policy-conflicts

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www.globalinnovationrace.com

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Rob Atkinson

ratkinson@itif.org

Thank You

Rob Atkinson

ratkinson@itif.org

@robatkinsonitif facebook.com/innovationpolicy www.innovationpolicy.org www.itif.org Follow ITIF:

Thank You