National goals around digital
Developments in digital technologies are taking place not only because of market forces, but also due to state policies that support firms and build national capacities.
With the growing importance of digital, many countries are seeking to expand their digital economies. For countries who are behind in advanced technologies, there is also fear of lagging behind nations with more advanced digital sectors.
Digital policy was originally focused on basic regulation, but as digital grows more important, national digital policy can have trade and economic objectives. China, EU and some digital latecomer nations are places where this type of national digital policy is growing.
With a lack of clarity in trade agreements, we have seen a growth in national digital policy. Nations have more ‘policy space’ in digital areas compared to other areas of trade – that is, there are fewer international barriers to prevent them from making local rules.
Industrial policy and digital protectionism
In some cases, national digital policy has been market-driven, but there is also the growth of policies which resemble industrial policy. This means that nations may take more interventionist approaches.
Rather than thinking solely within market mechanisms they may look to policies that are more active in shaping rapid transformation of the economy and driving technological catch-up.
For nations with leading digital industries, particularly the US. Interventionist national policies are seen as problematic as they limit the global expansion of their digital firms.
Some in the tech sector have argued that such policy should be seen as “digital protectionism” – a new type of problematic protectionism. From this view, national policy is seen as unfair barriers to global expansion and they need to be removed.
The idea of “digital protectionism” need to be questioned though. Is it appropriate to compare such digital policies with previous forms of protectionism? If nations are trying to upgrade their economies, and protect them from problematic foreign firm activity, are these policies not important in some cases?