The Data-Driven Economy Raises New Challenges for Global Governance

By: Dan Ciuriak (Center for International Governance Innovation)

International institutional frameworks are creatures of their age — they reflect the political power relationships and technological and economic conditions of the day.

Three technological breakthroughs in the late 2000s — deep learning through stacked neural nets; the introduction of the iPhone; and the application of graphics processing units, or GPUs, to neural nets — sent the amount of data collected globally soaring while enabling the tools to exploit that data. Those breakthroughs transformed data into the “new oil” — the essential capital asset of what would eventually be recognized as the data-driven economy.

The implications for international governance were profound.

For one thing, the new technological conditions changed the terms for great-power rivalry. Whereas China entered the global knowledge-based economy some 30 years behind the United States (and remains at a distant remove, competitively speaking, in capturing international payments for intellectual property [IP]), it entered the data-driven economy more or less contemporaneously with the United States and, due to its size, with considerable advantages in terms of the amount of data it could capture.

The US-China relationship had by then changed from one of tacit alliance under the George W. Bush administration, to one of “frenemies” under the Obama administration (with its IP-focused “pivot to Asia” through entry into the Trans-Pacific Partnership negotiations, and the militarization of this pivot through its new “Air-Sea Battle” doctrine). When China surged into the lead in fifth-generation or 5G telecommunications networks, a critical area in the contest for dominance of the new general-purpose technologies built on the nexus of big data, machine learning and artificial intelligence (AI), the relationship was further transformed. Under the administration of Donald Trump, and since then under President Joe Biden, the dynamic deteriorated to one of all-out economic war…

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