Digital technologies have quickly become a driving force of entrepreneurship and innovation in the 21st century. They have changed the way people live, work, and communicate; and how businesses access markets, manage supply-chains, and enable transactions. The U.S. economy is undergoing tremendous change and innovation, and shifts in the nature of work are creating both opportunities and challenges.

To ensure government and the private sector work together to capitalize on these opportunities and meet these challenges head-on, U.S. Secretary of Commerce Penny Pritzker established the Digital Economy Board of Advisors (DEBA). The DEBA is comprised of technology industry leaders, innovators, and experts, and serves as a centralized forum to help businesses and consumers realize the potential of the digital economy to advance growth and opportunity. The Board provides advice in furtherance of increasing domestic prosperity, improving education, and facilitating participation in political and cultural life through the application and expansion of digital technologies.

Today, the Board shared its findings and initial recommendations that represent the output of DEBA’s four working groups which were tasked to focus on:

• How to measure the digital economy when established metrics fall short, such as in sectors where free-to-consumer services dominate.
• The changing nature of the labor market, the growth jobs that will power the economy and the skills they require, and how to develop a robust workforce to match.
• The role of digital platforms in this economy, as a powerful tool for entrepreneurship and commercial growth, and also a potential source of new challenges.
• How to virtually reorganize the Department of Commerce to become the leading agency for the digital economy that supports commercial innovation, business growth and job creation to the benefit of all Americans.

The DEBA’s report will position the Department’s future leadership to take advantage of the digital trends that are now key to unlocking shared prosperity for all Americans. Here are some highlights form the report, organized by the recommendations from each working group:

21st Century Department of Commerce

America is at an inflection point. A new administration is preparing to take office in the face of these transformative economic trends. As the interface with the businesses driving these trends, the Department of Commerce has a key role to play in enabling the federal government to contribute to achieving the promise of the digital economy by:

• Leading the federal government in adopting an approach to operations that sees data and technology not as limited to solving specific problems, or enhancing specific programs, but rather as integral to every element of the governing process. In short, government must come to operate with the capacities of business.
•  Working to bring the perspectives and expertise of the business community into the federal government, and formalizing its role in connecting private companies that could bring useful and innovate digital solutions to pressing issues, and establish a pipeline to bring the tech community’s expertise to federal government.
• Operating at the intersection of technology, transparency, and crowdsourcing, and leverage digital platforms (modeled off Challenge.gov, USA.gov, and the White House petition platform), to invite input from all American workers, consumers and businesses.

The Future of Jobs and Work in the Digital Economy

The nature of jobs and work is changing. Alternative work arrangements – including contract work, freelancing and so-called “gig economy” work – are on the rise. Driven by new technologies, these changes are creating economic opportunities in many sectors, but are likely to involve economic disruptions as well. The Department of Commerce and other entities within the federal government must develop forward-looking policies and innovative, technology-enabled approaches that meet the learning and development needs of the American workforce amid these large-scale labor market changes. Examples of this include:

• The Department of Commerce can play a unique and important leadership role in designing new approaches to market measurements and data collection efforts and build greater capacity for timely insights in these areas. The Department can also work with private sector data sources and providers to supplement government data collection, potentially including through a public-facing “Labs.”     
• The Department of Commerce can lead in raising awareness and understanding of where there are challenges in providing and obtaining good benefits being confronted by workers and businesses, and promoting the exploration of innovative solutions that foster increased flexibility, opportunity and empowerment.

Measuring the Digital Economy

Digital technologies are changing the way we consume, transact, interact, organize, and work. Yet the economic impact of these changes is not well understood. This is in part because metrics do not fully capture the extent to which digitization has pervaded the economy and changed the nature of economic activity. As digitization continues to pervade the economy, it is essential that policymakers and business leaders have better data to develop a clear picture of the digital economy. According to the Board, the Commerce Department can:

• Gather information on the “size of the digital economy,” recognizing that the answer depends on measuring different types of digital activities such as digital consumption and digital work.
• Agree on a “Technology Taxonomy,” and a framework for updating the taxonomy, to identify emerging areas of economic activity.
• Develop metrics on newly emerging activities that rely on digital adoption and usage specific to subsectors, and leverage these metrics to create an index/indices that will track how these activities are impacting the economy.

Empowering Business to Innovate, Compete, and Scale by Leveraging Digital Platforms

Digital platforms power the digital economy. The Internet experience, for business and consumer users, as well as developers, is, to a large extent, shaped by interactions with platforms of various types. But there is not yet widespread understanding of the full scope of the concept of digital platforms. According to the Board, in order to foster the potential of digital platforms for businesses of all sizes:

• U.S. policy should aim to both encourage and facilitate the growth and usage of digital platforms by communicating their manifold benefits to businesses in the global marketplace.
• In developing its international agreements, U.S. policy should consider prioritizing increased coordination and alignment on rules regarding cross-border data flows such as privacy, cybersecurity, and government access to private information.
• As the U.S. considers its priorities and policies with respect to the Industrial Internet of Things and the Internet of Things generally, the government should examine the need for a U.S. national strategy to advance the Industrial Internet.