Regulating across the digital divide

The increasing digitization of the global economy is changing how products and services are produced, distributed, and sold across borders. Technologies like cloud computing, artificial intelligence, autonomous systems and "smart devices" are spawning new industries, and changing old ones.

But, while these changes could bring important benefits, the speed of digitization has also created daunting governance challenges, both within and across countries. Existing global rules - embedded in multilateral, regional and bilateral trade and investment agreements - are being challenged by the new processes that digitization is enabling.

This is creating more space for national governments to intervene in the digital economy. China, for example, has established its own digital industries, using policies such as internet filtering and data localization (requiring internet companies to store data on domestic servers). This has supported the emergence of major Chinese digital companies such as Tencent and Baidu.