IMPLICATIONS OF THE DIGITAL ECONOMY ON POLICY-MAKING

Digitalization has led to fundamental changes in the way people behave and live, and the way organizations, societies and nations operate. Although digitalization has brought about enormous benefits in general, it has also made the work of policymakers ever more challenging. A key responsibility of policymakers is consumer protection and this task is made ever more complicated with issues of data privacy and data ownership since many institutions and companies are now able to gather granular consumer data over transactions and the Internet of Things (IoT). For effective policy-making, policymakers need the right data and information. This is no longer straightforward with issues of valuation and measurement — how does one measure digitalization and its outputs, particularly with some new-age products and services being free and are readily available? Moreover, digitalization has brought with it wide-ranging implications for the labor market (such as with the rise of gig economy), education, tax laws, economic policies and financial stability, which force policymakers to continuously keep abreast on emerging technological trends and to ensure their policies are up-to-date. This paper attempts to analyze various literature studies and draw some insights on issues that policymakers need to be mindful of in the digital age. Some potential recommendations will be tabled for discussion and further research.