miércoles, 20 de septiembre de 2017

"The rise and fall of American growth" - Robert Gordon

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil WarThe Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War by Robert J. Gordon
My rating: 5 of 5 stars

We live under the impression that never before growth of the economy and the standard of living have been so high, and we are wrong. As a matter of fact, we are in a declining phase. This is one of the central lessons of Robert Gordon´s book, which is focused in the US case but could be applicable also to the majority of the western nations. We are still leaving under the spell of what has happened between 1870-1970, the phenomenal change from a live without electricity, gas, water and communication networks to our fully connected society.

However, the second lesson of the book is the excepcionality of the century between 1870 and 1970. Growth may has declined since 1970, but has virtually no exist before 1870. The rise of growth has happened due to the great inventions of the first and second industrial revolutions, the steam machine and electricity, that has bring us the full set of facilities we enjoy in our dailiy routine and we would not be able to put aside: cars, washing machines, fridges, cheap clothing, ....

Finally, there is a warning for us. Although it looks us the other way around, ICT has not bring us as much growth us we think, except for a brief period between 1996 and 2004. Since them, after the main novelties were integrated in home and offices (PCs, Internet, substitution of the papers by bits, ...) growth has decline both in productivity and standard of living. The fall of innovation rythm has been a cause, but also the rising inequality, the demographics changes, the imbalances in the access to the different level of education, the downsides of globalisation and the failure of enviromental policies. The author undelines that unless we change these trends, growth will not return.

But the book is something more than just another book of an economy expert packed with graphics and figures that support his ideas. The book is also in great part a picture of how life was in the different periods it covers. The description of rural life by the end of the XIX century, the evolution of the urban areas, the changes in the entretaintement industry, the vanishing of horses as the main companion of human life, the blurring of distances brought by trains, planes and telecommunications, ... This is also the book if you want to get information for writing any social or non fiction paper which is set in any period after 1870.

In spite of its length, you will enjoy the book. It is going to consume may hours of your life its reading, but you will not repent. Final tip: if you are short of time, read at least the pages of conclusions of each chapter.

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miércoles, 13 de septiembre de 2017

The rising importance of free flow of data (II): How to

So data is important for growth and employment, and it is also important to promote the free flow of data in order  enable the sharing and aggregation of data  needed for the new services and products. Data and its free flow would also help for increasing the social well being through a new generation of health services and the digitalisation of government services. Therefore, it is needed to deploy the mesaures to tear down the barriers that stop the circulation of data between jurisdictions.

The European Commission is focusing on the supression of the restrictions on data localisation across the Union. The general idea is that there are unjustified legal restrictions on where the data could be stored and that these restrictions are different in each different Member State, so there is a need of a legal instrument to harmonized these restrictions. It is difficult to oppose these rationale. However, exceptions on the free flow of some kind of data is needed to be introduced. For instance, for national security reasons or maybe even taxation information.

But in spite of what many people looks to think, the elimination to localisation restrictions should be accompanied by other measures. Because the most important thing are enabling trust among the parties who intervene in the data economy and facilitate equal opportunities for all to jump on the data economy wagon. For enabling trust, on one hand, there is a need of cibersecurity standards on data storage and, in the other hand, a legal framework that defines who has the right to use, share and reuse data and under which conditions.

But we also need to establish a level playing field with the above mentioned conditions. It should be prevented that data could be used as a tool for unfair competition. We can oblige all to share data but there should be transparency on the conditions each one establishes and these conditions should be universally applied without discriminations. Also some kind of data should perhaps be universally made availaible, for instance, those generated around public and general interest services.

So, although supressing the restrictions for data localisation is important, it is difficult to imagine that data economy could flourish without accepted security standards for its storage and clear and fair conditions on the access, use and reuse of data. Free flow of data would never happened without all these things puting on the table at the same time.

miércoles, 6 de septiembre de 2017

The rising importance of free flow of data (I): Why

Enabling Free Flow of Data (FFD) in the European Union has jumped from a marginal note to a first rank priority on the European Digital Agenda. In order to appreciate this change, it is enough to compare the space dedicated to the issue in the policy documents published by the European Commission. While in the communication "A Digital Single Market Strategy for Europe" the issue was described in few more than a paragraph; in the recently published "Mid-Term Review on the implementation of the Digital Single Market Strategy A Connected Digital Single Market for All" the item was described with greatest detail accross several pages.

Why the issue of free flow of data is so important? A few figures taken from recent studies are enough to provide the big picture. On one hand, the McKinsey Global Institute has estimated a growth of 45 fold of data flows which have boosted the world GDP by 10% since 2005. On the other hand,  according with a study on the European Data Market it is expected that the value of the data economy in the EU will be around €739 billion, 4% of the GDP.

Besides the economic figures, there are also political reasons. Enabling FFD is required to updating the European project. The basis of the European Union are the so called four freedoms: the freedom of movement of services, products, capital and people.  In an increasing digitalised world, the above freedoms heaviliy depend on the free movement of data. FFD has become the 5th freedom to guarantee for an ever closer Union. 

And it spite of its importance on the digital era, only 87% of the European companies shared data with other companies. This is what can be called an economic blindness. The value of data growth with its aggregation and processing, following a recursive pattern. Therefore, promoting the sharing of data is critical to reap the full of the data economy and the distrubution of its benefits among the whole society. Namely, the dat economy enable more innovation, new business models and accessing to new markets, and better welfare services based on policy evidences.

So far is what we can obtain from the data economy and the free flow of data. What we can do for the creation of the right environment for a thriving data economy will be the focus of the next post


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