The OECD Forum virtual event “COVID-19: The Great Digital Acceleration” took place on Tuesday, 15 December, as part of a series of events to mark the 60th anniversary of the OECD.
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By limiting our ability to carry out our daily lives in the physical world, the COVID-19 pandemic has marked an unprecedented acceleration of their migration to the digital sphere. With developments expected to take years to unroll suddenly materialising in the span of just a few months, the pandemic has certainly given weight to the claim that crises serve as powerful trend accelerators.
Digital tools have played a critical role in allowing us to navigate the health crisis. Technologies that only yesterday stood accused of undermining valuable human connections have shown their gentler side by allowing people to opt for “distant socialising” in place of “social distancing”. By helping ensure educational continuity through remote learning, digitalisation has seen its potential in education more widely recognised. Teleworking, too, has been encouraged to curb the spread of the virus, and continues to play a key role in helping lessen some of the economic cost associated with “lockdowns".
These technologies have not only helped mitigate some of the worst disruptions bought about by the pandemic, they have also demonstrated their value in the fight against the virus itself. From improved early warning tools to the acceleration of research on vaccines and treatments, there are few domains in which Artificial Intelligence (AI) and digital technologies have as much potential as in healthcare. In the words of Luciano Floridi, the COVID-19 crisis thus stands as “the first pandemic when a new habitat, the infosphere, has helped overcome the dangers of the biosphere.”
More on the Forum Network: The Green and the Blue: How AI may be a force for good by Luciano Floridi and Anna Christina (Kia) Nobre, University of Oxford
With uptake accelerating, so have the risks and challenges we face in harnessing digital technologies. The COVID-19 virus has spread across the world in just a few weeks, but the accompanying “infodemic” contaminated our online informational environments even faster. Cyber-security risks have also increased, with malicious actors taking advantage of our reliance on digital technologies for business continuity to elevate their attacks – sometimes even successfully targeting the very infrastructures core to the public health response.
Privacy concerns too have come to the fore. In a number of countries, digital solutions based on biometrics and geo-localisation data have played a critical role in “flattening the curve” without resorting to blanket mobility restrictions. The collection and use of private data was already considered a worryingly intrusive feature of our increasingly digital societies. With surveillance-camera footage, smartphone location data, and credit card purchase records now used to diagnose COVID-19 patients and establish transmission chains, many fear more general acceptance of such use of technology when the current situation has been resolved.
The pandemic has further accelerated existing trends towards greater market concentration and seemingly precipitated the future of work. Digital solutions have served as a critical lifeline for many SMEs, even allowing some of them to join forces to cope with pandemic related restrictions and compete with rivals. Yet, there is little doubt that the crisis is reinforcing the concentration of market and societal power in the hands of a few tech actors, which are best placed to conduct their operations in a pandemic stricken world, and most able to seize the business opportunities that it may offer.
Indeed, corporate actors and citizens alike are not all equal in their ability to carry out their activities through digital means. As the OECD notes, the pandemic has underscored the urgency of closing digital divides that risk accelerating the widening of inequalities. In turn, such inequalities could be further compounded by the acceleration of automation. Public appetite for the reshoring of manufacturing activities was already substantial in the face of rising CO2 emissions and trade tensions. By adding significant supply chain disruptions to the mix, the pandemic could serve as a catalysis for this trend. And even if industry does return, it risks doing so without jobs, or at least with very different ones.
Read the report: OECD Digital Economy Outlook 2020
While the pace of these developments is undoubtedly remarkable, it may still be matched by the paralleled acceleration of regulatory endeavours. In the face of events as consequential as COVID-19 and the recent U.S. Presidential elections, leading social networks have come to assume much greater responsibility in flagging misleading and divisive user-generated content, and reducing its reach on their infrastructures. Yet, this marked shift from the past has not prevented the U.S. Congress from releasing a landmark report accusing the country’s largest tech firms of engaging in a range of anti-competitive behaviours, and calling for an overhaul of existing antitrust laws. On the other side of the Atlantic, the European Commission is set to release this month two major proposals, the Digital Service Act and the Digital Market Act, with the aim to clarify the responsibilities of digital platforms and curb excessive market dominance. Of course, it cannot be guaranteed that such a convergence in regulatory approaches will continue unabated. But amidst a common desire to breathe new life into long-standing alliances, nor can a “transatlantic effort to take on Big Tech” be ruled out.
Last but not least, the OECD itself has played a leading role in addressing the tax challenges arising from digitalisation of the economy, advancing proposals to ensure that large and highly profitable multinational enterprises (MNEs) – including digital companies - pay tax wherever they generate their profits. While the conditions for a political agreement have not yet been achieved, the G20/OECD Inclusive Framework on BEPS (Base Erosion and Profit Shifting) now has a sound and solid basis for a future agreement. With the COVID-19 crisis having exacerbated tax challenges even further by accelerating the digitalisation of the economy, increasing pressures on public finances, and decreasing public tolerance for profitable MNEs not paying their fair share of taxes, a political agreement could soon be reached.
In sum, the COVID-19 pandemic has not only accelerated digital transformations and fastened the migration of many parts of our lives to the digital world. It has also made related risks and challenges more acute, and thereby provided fresh impetus for regulatory endeavours. This holds significant implications for our relationship to digital technologies both during the pandemic and for the recovery, as we strive to develop the “digital future we want”. With the OECD celebrating its 60th anniversary and reflecting on its past achievements to better look towards the future, this session will serve as an opportunity to harness the perspectives and insights of renowned experts and leading stakeholders to chart the path forward.
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