Chapter 10. Defining a future digital agenda

Digital transformation is complex and evolving rapidly. Policy decisions must increasingly be made under uncertainty about future digital and other developments. This report underscores the necessity of working with a wide range of stakeholders and co-ordinating across policy silos and levels of government to steer policies towards an inclusive and sustainable digital future. While progress has been made in answering some of the most pressing and difficult policy questions that governments face today, more work is needed to better understand some complex issues and to design resilient policy frameworks in response. New issues have also arisen that are an important part of a future global digital agenda.

A future digital agenda

The future digital agenda must address these new and difficult policy issues to realise the immense promise of digital technologies for growth and well-being. Such issues include changing competition dynamics, privacy in the digital age, data and cross-border data flows, inequalities and digitalisation, the future of the firm, democracy in the information age, measurement of digital transformation, as well as issues that will be addressed in Going Digital Phase 2 and beyond.1

Changing competition dynamics

Firms increasingly use digital intangible assets that can be reproduced easily and at low cost. Some firms, such as those that operate online platforms, exhibit strong positive direct and indirect network effects. When coupled with economies of scale and scope and very low marginal costs, some argue that the characteristics of certain digital firms inexorably lead to so-called “winner-take-most” dynamics, whereby markets are characterised by, at most, a few major players. This changing landscape has consequences not only for competition, innovation, technology diffusion and inequalities, but also for growth and social cohesion. Such dynamics, where they exist, raise a range of questions, including:

  • Are traditional tools to assess the abuse of market dominance fit-for-purpose in the digital age? In particular, competition authorities often look at market share and indicators of market power as expressed through price. As intangible products and digital services are often offered at zero price, such considerations may become less useful.

  • Should existing intellectual property rights (IPRs) be reviewed, including by intellectual property expert agencies and organisations (e.g. the World Intellectual Property Organization)? Such a review would ensure that IPRs provide sufficient incentives for innovation and do not unduly impede the diffusion of technology across society, as well as continued protection of the fundamental right inherent in patents to exclude (e.g. the unconditional refusal to license a valid patent).

  • Do data confer market power and will the increased power of data analytics and the range of data that can be collected enable dominant players to consolidate a competitive advantage to the detriment of new entrants and other players? Issues around the opportunities for small and medium-sized enterprises to thrive and how they can best be harnessed are also important in this regard.

  • When markets are multi-sided, how should such multi-sidedness impact the understanding of competitive dynamics or what a dominant position is? For example, simply determining what the relevant market is can be difficult when firms operate on multiple sides of a market and are also able to cross-subsidise growth on any one side.

Privacy in the digital age

In view of the growing quantity, diversity and level of detail of data collected about individuals’ activities and relationships, as well as the significant advances in the capacity of data analytics to provide insights on people’s preferences and behaviours, concerns about privacy and information asymmetries are increasing. OECD governments recognise privacy as a fundamental value (OECD, 2013[1]) and have outlined principles governing privacy and frameworks for the collection and handling of personally identifiable data. However, challenges persist for several of these principles to be fully implemented, raising questions about how best to protect privacy in the digital age:

  • How can privacy provisions be adapted to better reflect the concerns of those online? In particular, how can policy help address the so-called “privacy paradox” whereby people report privacy concerns and worries about tailored advertising, but do not change privacy settings when given the opportunity to do so (European Commission, 2015[2]; Acquisti, Brandimarte and Loewenstein, 2015[3]; Barth and de Jong, 2017[4])?

  • How can terms and conditions best inform and empower people about the use of their personal data? For example, most digital applications require users to accept terms and conditions, but these have proven ineffective in communicating important information to consumers (see Chapter 7). Moreover, even if consumers are well-informed about the use of their data, the only alternatives such users may see is to use the service despite disagreeing with terms and conditions, or to fully opt out.

  • How can privacy regimes address the challenges that data analytics – and the linking of disparate data sources to individuals – pose to data protection? The linking of large datasets facilitates (re)attributing data to individuals, even if such data were previously anonymised and held in separate databases (OECD, 2015[5]). Questions remain whether inferred or observed data of this nature can be considered personal or “personally identifiable”, and therefore fall under the remit of privacy frameworks (OECD, 2013[6]).

Inequalities and digitalisation

Digital transformation holds much potential to effect positive change across the economy. For example, digital technologies make it easier to access markets and start a business, as well as increase access to goods and services – including education, health and financial services – for marginalised groups (especially those living in remote areas). Digital technologies also help governments and firms to become more responsive to citizens and consumers. At the same time, digital transformation may have unintended social consequences, including the exacerbation of inequalities, raising a number of questions to be addressed:

  • To what extent will wage inequality increase due to skill-biased technological change? Digital transformation may increase the relative demand for high-skilled workers and contribute to job polarisation as routine jobs decline, affecting mainly workers with low- and medium-level skills. At the same time, the available evidence points to a narrow rising of top earners’ wages rather than a broad increase of high-skilled workers’ wages.

  • How do digital transformation and trade with low-income countries affect labour shares and wage inequality?

Data and cross-border data flows

Data are an increasingly important resource for economies to flourish and societies to prosper (see Chapter 1). However, to unleash the full benefits of data for people, firms and governments, a range of important questions still need to be further analysed and addressed:

  • How to disentangle the different types of data collected and used? This may involve developing data taxonomies for different purposes, such as personal data protection (enforcement), data governance and trade (cross-border data flows). The question then becomes: how do these taxonomies interact when policy questions cut across different areas?

  • How to measure the value of (different types of) data and cross-border data flows? This will be crucial to understand and, if needed, steer the evolution of data markets and enhance the potential of data for production and value chains. It is also relevant in the international tax context, where identifying and measuring value creation is a key policy issue.

  • How to develop national data strategies that unleash the potential of data while effectively protecting fundamental values such as privacy and personal data protection, as well as IPRs, to achieve a digital social contract?

The future of the firm

Digital transformation decreases costs, including transaction costs (e.g. finding reliable information, bargaining prices and contracts, and monitoring and enforcing contracts); costs related to replicating and transporting digital products; and the costs of verifying the identity and reputation of economic actors. As these costs decline, new business models and organisational structures emerge. Important questions to address in this context include:

  • How will organisational models and firm-market boundaries evolve as products, processes and markets become increasingly digital? For example, where firms usually make rather than buy when information and input prices are uncertain (Coase, 1937[7]), online platforms facilitate buying rather than making by providing more information about prices, products and providers than in the past.

  • What are the implications of evolving organisational structures for labour and product markets? If firms increasingly resemble agile networks, they may be able to more easily (re)allocate resources, scale up and down, and enter and exit markets, including internationally. Depending on policy settings, this could affect the broader business environment and market dynamics, as well as the form of the work carried out in future firms and/or markets.

  • What are the broader implications of evolving firm and market organisation on society and well-being? More fluid markets and agile firms may favour mobile and flexible workers, including across jurisdictions, but many people may prefer stability and predictability, including in local communities. How can needed skills to succeed be best provided, and what broader social issues may arise, for example those affecting redistribution and social benefit policies?

Democracy in the information age

Digital technologies facilitate the faster dissemination of information to more people and places, but such information may be inaccurate or misleading. The increasing ubiquity of digital technologies like smartphones enables more and different kinds of social, political and civic connections between institutions and people. A related uncertainty is that even though societies are going digital very quickly, the norms and values governing behaviour online are still evolving. Finally, valid concerns persist regarding the use of personal data to target political messaging, raising concerns about the impact of digital technologies and data on democracy, including:

  • How can governments build trust in institutions in the digital age? Public confidence in national governments across the OECD has been declining over time (OECD, 2017[8]), but the relationship between this trend and the use of digital technologies, and the consumption of information, is unclear.

  • How to better address the spread of disinformation in the digital age? Deliberate campaigns to spread misleading or false information online with the explicit aim of influencing the democratic process have occurred in some countries, but their effectiveness or impact is not well understood. Advances in techniques to alter photographs, audio and video could potentially amplify such campaigns.

  • How can individuals, governments and firms promote fundamental values and develop new cultural norms in an era of digitally driven cultural change? The ways in which people interact have changed fundamentally, but agreed upon standards for public discourse online have not yet emerged. Online, for example, laws governing freedom of expression are at least partially dependent on private firms for enforcement, raising questions about whether and to what extent private actors should be governing speech in public spaces.

Measuring digital transformation

Measurement frameworks are challenged by the global and interconnected nature of digital transformation, but potential lies in the granular use of firm-level data to complement traditional statistics (e.g. national surveys), particularly for new digitally enabled activities that were unforeseen when developing traditional measurement frameworks. In addition, it is likely that national statistical frameworks fail to capture many of the benefits of digital transformation for well-being, leading to biases (e.g. low productivity growth may fail to reflect welfare gains from digital technologies). The following questions need to be addressed both by researchers and policy makers:

  • How to measure and track new digitally enabled activities, including e-commerce, cloud services and the Internet of Things, when their provenance may be uncertain? This may become increasingly difficult as digital activities become progressively inseparable from analogue activities.

  • How can statistical frameworks best capitalise on data in the digital age, particularly if these data are held in private hands? Digital transformation could hold new potential for the development of new proxy measures or drive changes and efficiencies in traditional data collection methods.

  • How should traditional metrics and statistical frameworks evolve in the digital age? For example, digital transformation enables more connections across borders, making it harder to allocate economic activity to a particular jurisdiction.

  • How can the impacts of digital technologies on well-being be better measured, especially in the absence of suitable prices, and how can they be better reflected in core measurement tools?

  • How can the international community best implement the Going Digital measurement roadmap (OECD, 2019[9])?

Reinforcing trust in government

Digital technologies have the potential to enhance societal well-being and help rebuild trust in government. Digital government strategies can increase civic engagement, while new data-driven tools can improve the responsiveness of both the public and private sector by helping tailor services to individuals’ needs, for example in the provision of health care. To realise this potential for greater inclusiveness, digital divides need to be reduced, opportunities of digital transformation more widely shared, and risks better managed, particularly regarding labour market impacts and access to health care. Key challenges to address include:

  • How can the provision of public goods and services evolve with changing risks and demands for protection and empowerment? The overall effects of digital transformation may be positive, but possible costs and risks may be unevenly distributed across generations (income and job tenure), regions (large and well-connected urban areas benefiting most due to agglomeration effects) and occupations (exposure to the likelihood of automation).

  • How are citizens’ expectations of government changing as a result of digital transformation? To regain public trust, governments must understand how individual needs are evolving and how public policy can best address these needs. Governments must also recognise how digital technologies are reshaping the perceptions, beliefs, values and norms that bind societies together and underpin support for tax and benefit systems.

  • How can civic engagement give rise to more inclusive forms of policy making? Digital technologies can facilitate greater participation by citizens in all stages of the policy cycle, including the design and implementation phases, but it is important to ensure that such engagement is inclusive to avoid reinforcing existing or creating new digital divides.

Going Digital Phase 2 and beyond

As many questions remain unanswered, work is envisaged to continue under the OECD Going Digital project over 2019-20. This will enable more work to be undertaken on particular dimensions of the project. It will also open up new avenues of policy analysis and research, including with respect to the implications of two emerging technologies: blockchain and artificial intelligence.

An additional component of future work under the Going Digital project will include OECD Reviews of Digital Transformation, which assess national performance and readiness for the digital future. These reviews are based on the Going Digital Integrated Policy Framework (OECD, forthcoming[10]), which lies at the conceptual heart of the Going Digital project and structures many of its synthetic outputs, including this report and its companion publication, Measuring the Digital Transformation: A Roadmap for the Future. The framework should be revisited to ensure it remains a relevant and useful guide to developing and implementing policies in the digital age.

Another stream of work in Going Digital Phase 2 includes further work on online platforms. This work could focus on some of the main policy issues related to online platforms, such as the evolving nature of platform competition around the world, and the associated questions about the interface with policies governing privacy, taxation and consumer protection. What the new competitive landscape will likely be and how policy makers can best prepare to meet new challenges is an important area to study. Other possibilities include policy challenges related to online platforms’ effects on human health, filtering to meet private and/or public standards, and the misuse of online platforms to spread misinformation and undermine democratic processes.

Finally, the Going Digital Toolkit will be elaborated. The toolkit will enable users to interactively engage with the Going Digital indicators as well as find practical advice on policy implementation, including innovative approaches and examples. Two potential promising areas to cover include:

  • Policy experimentation. Digital business models may fall between the cracks of policy and regulatory frameworks, but developing new frameworks can be difficult in a fast-moving digital landscape. Jurisdictions across the OECD and beyond are experimenting with new regulatory approaches in the digital age, such as anticipatory regulation, performance-based regulation, agile regulation and regulatory sandboxes. Future work for the toolkit will evaluate such regulatory approaches and include innovative policy practices.

  • Education and training systems. Skills have emerged as an important cross-cutting component that influences not only the use of digital technologies, but also work in the digital age and the ability to adequately participate in a digital society. However, countries are actively grappling with the question of how to develop mechanisms to build skills, not only in formal education and training systems, but throughout the life cycle. Policy approaches from across OECD countries and beyond would describe specific programmes and tools to boost skills development and the lessons learnt.


Acquisti, A., L. Brandimarte and G. Loewenstein (2015), “Privacy and human behavior in the age of information”, Science, Vol. 347, Issue 6221, pp. 509-514, [3]

Barth, S. and M. de Jong (2017), “The privacy paradox: Investigating discrepancies between expressed privacy concerns and actual online behavior – A systematic literature review”, Telematics and Informatics, Vol. 34, Issue 7, pp. 1038-1058, [4]

Coase, R. (1937), “The nature of the firm”, Economica, New Series, Vol. 4, No. 16, pp. 386-405, [7]

European Commission (2015), Data Protection, Special Eurobarometer 431, European Union, Brussels, [2]

OECD (2019), Measuring the Digital Transformation: A Roadmap for the Future, OECD Publishing, Paris, [9]

OECD (2017), Government at a Glance 2017, OECD Publishing, Paris, [8]

OECD (2015), Data-driven Innovation: Big Data for Growth and Well-being, OECD Publishing, Paris, [5]

OECD (2013), “Privacy Expert Group report on the review of the 1980 OECD Privacy Guidelines”, OECD Digital Economy Papers, No. 229, OECD Publishing, Paris, [6]

OECD (2013), Recommendation of the Council Concerning Guidelines Governing the Protection of Privacy and Transborder Flows of Personal Data, OECD, Paris, [1]

OECD (forthcoming), “Going Digital: An integrated policy framework for making the transformation work for growth and well-being”, OECD Digital Economy Papers, OECD Publishing, Paris. [10]


← 1. Important issues related to the taxation of the digital economy are currently being addressed under the auspices of the OECD/G20 Base Erosion and Profit Shifting (BEPS) project and the Inclusive Framework on BEPS (see Chapter 8).

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