Working Papers

M. Savona, F. Bontadini – Digital Industrial Policy: What are the future challenges?

The digital transition is based on the emergence of digital automation technologies, including, but not limited to, Artificial Intelligence (AI). Most of the emerging digital technologies are based on the use of large amount of data, including, but not limited to, personal data of consumers and workers. This raises issues of asymmetries between individual consumers and workers, as personal data subjects, and the public and private actors (large tech, platforms, public administrations and governments that acquire and manage data for different purposes). These asymmetries are – for instance - related to value distribution, information, exposure to harmful effect of technologies, countries geopolitical relationships. To effectively address the governance of emerging digital automation technologies and data, a multidisciplinary approach is crucial. This requires expertise spanning across technical, legal, geopolitical, and economic fields. This working paper highlights some areas where these asymmetries remain relatively under-researched and insufficiently addressed by current European Union (EU) digital regulations, including the recent AI Act. One such area is data sharing, where further research is needed to explore governance mechanisms for both individual and business-to-business (B2B) data sharing. This could involve either mandatory rules or the creation of incentives that encourage sharing. Another area of concern is the uneven geographic distribution of digital infrastructure. A further area is the EU digital regulatory framework. Here we consider whether the AI Act will trigger a new wave of what has been termed the "Brussels effect," which refers to the EU's ability to influence global regulatory standards. While the EU's approach is commendable, there remains room for improvement, further research, and greater public scrutiny to ensure that the regulations are both effective and equitable. Ultimately, the goal is not to propose specific policy instruments, but to highlight the potential risks associated with failing to design appropriate tools for digital industrial policy.

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