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Pursuing Innovation And
A Digitally-Enabled Recovery
Advancing digital inclusion, infrastructure and green technology
Singapore, 07 September 2023
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COVID-19 has accelerated digital
The COVID-19 pandemic has accelerated digital transformation and highlighted how essential digital technologies are for work, commerce and the provision of public services, including healthcare services. The digital economy will be a vital pathway to lifting regional economic growth in the aftermath of COVID-19.
Digital technologies for social inclusion
Digital technologies also have significant potential to advance social outcomes, such as financial inclusion, better healthcare, and increased sustainability. Ultimately, a digitally-enabled economy, with broad participation across society and businesses, will be better placed to recover and thrive.
Make the digital economy inclusive
While digital transformation offers great potential for economic growth and meaningful employment, it is important that the benefits are spread fairly and do not exacerbate inequality within and between economies. To make the digital economy inclusive, APEC needs to ensure that groups that have traditionally been left behind have adequate access to the tools and skills they need. These groups include small businesses, the elderly, women, indigenous peoples and rural communities. APEC can collaborate to foster innovation on issues and norms around skills and workforce development to ensure that our people can participate as fully as possible in the everchanging global economic environment. New Zealand will also promote steps to broaden participation in e-commerce, including by enhancing the participation of indigenous peoples and ethnic minorities.
Digital tech to advance sustainability
New technologies also present opportunities to advance sustainability goals. To contribute to a green economic recovery and the transition to a low-carbon future, it is important that APEC economies support the development of emerging technologies through investment and industry policy. A synchronized green and digital infrastructure investment push would invigorate growth and address environmental goals. For example, by promoting the uptake of digital technologies in agriculture and food and beverage businesses, APEC could support sustainable food production and food security objectives.
Rules for the digital economy
APEC should play an important role in supporting the development and implementation of international rules for the digital economy of which there are few. APEC members can learn from each other’s experience in developing relevant rules through policy dialogues and information sharing mechanisms with a view to minimizing the regulatory “noodle bowl” which raises the cost of doing business across the region. By promoting rules-based initiatives, APEC can help provide the predictability, certainty and trust that businesses and consumers need to make the most of digital trade. Rules around the movement and storage of data need to spur innovation while preserving consumer trust, business integrity, and maintaining future regulatory policy space for governments on issues including privacy and security.
Interoperable systems and regulatory coherence
Most businesses, even those focused on domestic markets, will have at least some engagement with digital trade tools, whether through use of cloud computing, supply chain management, data analytics, or the adoption of smart technologies. Yet there are divergent approaches to policy and regulations amongst APEC members that govern cross-border data flows and shape how digital tools are implemented. This in turn results in additional costs for firms, notably for smaller businesses, when they attempt to access global markets. Interoperable systems and regulatory coherence should be guiding principles for APEC’s work on the digital economy. For example, by ensuring that different e-invoicing systems around the region are interoperable APEC can reduce the barriers and transaction and financial costs encountered by businesses, improve their cash flow, and strengthen their resilience.
Systems to support border processing
Adopting digital technologies and processes across the border can enable more efficient and transparent international trade. Digital systems have also supported the movement of goods and services without requiring personal interactions, which has been increasingly important considering COVID-19. APEC should prioritize work on all aspects of digitally-enabled trade facilitation to make it easier to export goods and services, without creating further impediments to trade. In particular, APEC members should further harmonize customs procedures and streamlining border processing, including through greater acceptance of electronic customs and border-related documentation.
Increase regulatory cooperation
Economies will need to regulate to address some of the issues surrounding digitalization, including privacy, security and governance. But the diversity of approaches can serve as a barrier to growth in digital industries. To support recovery from COVID-19 APEC should increase regulatory cooperation and prevent digital markets from becoming fragmented. A new APEC agenda for structural reform, with a pillar focused on innovation, should be launched and support efforts to ensure that new regulation is flexible, responsive and as streamlined as possible across the region. This does not mean the adoption of a single system or policy. Instead, APEC might consider how to improve the interoperability of standards, regulations and policies.
Competition policy for the digital world
In supporting the growth of the digital economy, APEC economies need to promote innovation and ensure robust competition. Applying traditional competition policy tools to the digital world has proven challenging for a variety of reasons. In some cases, regulatory settings may be overly restrictive, in others an uneven playing field has emerged in which first-movers or incumbent firms can benefit disproportionately due to network and scale effects. APEC should assess good regulatory practices in the digital economy, including by building a better understanding of different approaches to competition and regulation in digital markets. It should also promote effective cross-border cooperation, which can be essential for effective regulatory outcomes.
Responsible new tech
Creating good governance frameworks for new technologies is another common regulatory challenge for APEC members. Many emerging technologies hold exciting potential but need to be developed responsibly to avoid unintended consequences. APEC should support efforts to strike the right balance between opportunity and risk management for new technologies. These discussions should be informed by practical case studies, research and analysis, and multi-stakeholder engagement.
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