(The following is an English translation of a speech delivered during a panel discussion at the TUAC Forum of the OECD Ministerial Meeting on the Digital Economy 2016. The original is available here.)
Q. Does an open Internet matter?
In short, free access to the Internet is key to achieving higher productivity and a fairer distribution of wealth. Let me explain.
We are now approaching the end of the third industrial revolution and are about to enter the fourth. It is being driven by the Internet of Everything (IoE) and artificial intelligence (AI). Because they interact using what are called APIs, this revolution is also known as the API economy.
As in every previous industrial revolution, we are now witnessing a rapid increase in productivity and a substantial decline in prices—digital deflation. But this is not a bad thing. Higher productivity enables us to produce more with less, making society wealthier on average, while falling prices make it possible to provide services to social groups that could not previously be served.
In finance, for example, some institutions have begun offering working-capital loans to small and medium-sized enterprises that could not previously obtain such financing. This has become possible because APIs and artificial intelligence enable the risk profile of a business to be assessed more cheaply and accurately.
As a more futuristic example, a centrally located engineer might use virtual reality (VR) equipment to give real-time instructions to an engineer on site, who would carry out repairs using parts that were also 3D-printed locally.
However, none of this can be realized without addressing the 4 critical issues identified by ITAC (the Internet Technical Advisory Committee).
Critical Issues for the Future of the Digital Economy
- Trustworthy technology
- Expanded connectivity
- An open Internet
- Improved skills for users and workers
Think back to the first industrial revolution. It brought unprecedented growth. The technologies at its heart were the steam engine and spinning machinery. Because Europe had access to these technologies, its people came to enjoy better lives. Those without access to them—primarily people in India—had to face starvation. Access to technology makes that great a difference. The key technologies driving the fourth industrial revolution are trustworthy connectivity through an open Internet and people’s skills.
It is currently estimated that approximately half of the world’s population is not connected to the Internet. This places them in the same situation as Indian cotton workers during the first industrial revolution.
We must change this situation.
We must provide them with connectivity. It must be open. Otherwise, permissionless innovation cannot be realized.
It must be safe and trustworthy in terms of both privacy and security. Otherwise, people will not use it and data will cease to flow.
And people must be trained. Otherwise, they will not be able to make full use of the technology.
That is why these 4 points are so important.
Q. What are the challenges in privacy governance?
There are several challenges to overcome in privacy governance.
- The misconception in industry that privacy impedes business
- Pervasive surveillance in the name of security
- The risk that new legislation will be used as a new tool of protectionism
- Negative externalities and the need for ethical conduct
I do not have time to discuss these in detail, but I would like to emphasize the importance of the OECD principles on both privacy and security.
From the business side, they may appear restrictive. However, an environment that is safer and more trustworthy for people is also a better business environment.
It is also extremely important to encourage ethical behavior among participants in society. For example, better user authentication and technologies for more granular disclosure of personal data have existed for at least 10 years. Yet these technologies are not widely used. This is because the cost of not implementing them is borne by individuals rather than service providers. It is much like pollution. We need policies that more strongly promote ethical behavior and advance the internalization of costs.
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