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1. Assessing Digital Leadership: Is the EU Losing out to the US?

Author:
Dario Guarascio and Roman Stöllinger
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Since Leontief’s (1953) seminal work on the factor content of trade, the validity of the Heckscher-Ohlin-model has been judged not only on the basis of formal tests of the theory but also tested against prior expectation. In this vein, this paper uses the Heckscher-Ohlin-Vanek (HOV) approach to investigate whether supposed US leadership in the digital domain can be traced back to digital task endowments embodied in labour services. In a comparison between EU member states and the US, we find that the latter is more intensive in digital tasks than the EU and that this difference is explained by both an intensity-effect (US occupations being more digital-task intensive) and a structural component (relatively more digital-task intensive occupations). Viewed through the lens of the HOV theorem we find that the US is abundant in digital tasks relative to non-digital tasks, while the opposite is true for the EU. The standard tests for the predictive power of the HOV theorem are high and in line with the results for labour in previous literature.
Topic:
International Trade and Finance, Foreign Direct Investment, European Union, Digitalization, and Competition
Political Geography:
Europe and United States of America

2. Trade Balances and International Competitiveness in Cyber-physical, Digital Task-intensive, ICT Capital-intensive and Traditional Industries

Author:
Alexandra Bykova and Roman Stöllinger
Publication Date:
05-2023
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
In this report, we analyse the international competitiveness of the EU in four industry groups over the period 1995-2018. The groups are delineated by specific factor intensities, where these intensities are assessed from digital tasks performed by labour services and ICT capital stocks. The EU’s positions relating to trade balances, revealed comparative advantages and unit value ratios are assessed relative to its main competitors, such as the US, China, Japan and South Korea. The trade specialisation patterns confirm EU advantages in traditional industries, which still represent the largest part of global trade, and in the group of digital task-intensive industries. In the cyber-physical group of industries, which are characterised by both high digital task and ICT capital intensities, the EU records a trade deficit, although this has been receding in recent years. Competitiveness indicators depict heterogeneity among EU countries. The loss of international competitiveness for some technology front-runners is a worrying sign. On the positive side, however, a reduction in trade deficits or an improvement in product quality and market shares is evident for certain EU countries, especially in the Central European region.
Topic:
International Trade and Finance, European Union, Trade, Digitalization, and International Competition
Political Geography:
Japan, China, Europe, Asia, South Korea, and United States of America

3. Awareness of artificial intelligence: Diffusion of information about AI versus ChatGPT in the United States

Author:
Rajeev K. Goel and Michael A. Nelson
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper addresses the awareness about the artificial intelligence across states in the United States. We uniquely create indices of Google internet search results for general AI awareness and about ChatGPT, normalizing alternatively by internet users and land area. An understanding of the awareness about AI would provide useful insights into regulatory attempts to monitor and guard the AI technologies, besides suggesting alternatives for laggard states to catch up. Econometric results to explain the drivers of AI awareness show that, ceteris paribus, more prosperous states had greater awareness about AI and ChatGPT. On the other hand, states with greater economic freedom had a lower awareness. States with more men to women has lower AI awareness when hits were normalized by area, but the reverse was true when weighted by internet users. States with a higher proportion of the elderly population were no different from the other states, while those with greater urbanization had more AI/ChatGPT awareness when the internet hits were weighted by land area. Finally, states bordering Canada were no different from other states, while states bordering Mexico generally had a lower AI/ChatGPT awareness.
Topic:
Urbanization, Innovation, Artificial Intelligence, Machine Learning, Digitalization, Gender, and ChatGPT
Political Geography:
North America and United States of America

4. Digitalisation for Sustainable Infrastructure: The Road Ahead

Author:
Carlo Secchi and Alessandro Gili
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
In today’s tumultuous and fast-changing times, digitalisation and technology are game changers in a wide range of sectors and have a tremendous impact on infrastructure. Roads, railways, electricity grids, aviation, and maritime transport are deeply affected by the digital and technological transition, with gains in terms of competitiveness, cost-reduction, and safety. Digitalisation is also a key tool for fostering global commitment towards sustainability, but the race for digital infrastructure is also a geopolitical one. As the world’s largest economies are starting to adopt competitive strategies, a level playing field appears far from being agreed upon. Why are digitalisation and technology the core domains of global geopolitical competition? How are they changing the way infrastructure is built, operated, and maintained? To what extent will road, rail, air, and maritime transport change by virtue of digitalisation, artificial intelligence, and the Internet of Things? How to enhance cyber protection for critical infrastructure? What are the EU’s, US’ and China's digital strategies?
Topic:
Science and Technology, Infrastructure, European Union, Sustainability, and Digitalization
Political Geography:
China, Europe, Asia, North America, and United States of America

5. Decisionmaking at the Speed of the Digital Era

Author:
John Schaus and Laura Bocek
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The United States has stated it is in a strategic competition with China. Analysts and actors identify the need to rapidly iterate through concepts and capabilities to develop new, more effective means of engaging in that competition. At present, however, the Department of Defense underutilizes publicly available data and the software development community to build tools that enable faster modeling, hypothesis testing, and variability analysis than traditional wargaming or modeling alone. This brief describes the speed and utility of developing a simple software tool to stress test a hypothetical People’s Republic of China (PRC) surprise attack against U.S. facilities in the Indo-Pacific.
Topic:
Hegemony, Strategic Interests, Digitalization, and Competition
Political Geography:
China, Asia, North America, and United States of America

6. Software-Defined Warfare: Architecting the DOD's Transition to the Digital Age

Author:
Nand Mulchandani and John Shanahan
Publication Date:
09-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
The U.S. Department of Defense's (DOD) massive bureaucracy struggles with the kind of periodic “tech refresh” that has been instrumental to commercial industry success. While it is insulated from market competition within the U.S. economy, the DOD is not immune from the kind of revolutionary, secular, and wide-ranging technological changes happening outside the government. Nor is it immune from the threat of competition with other militaries around the world. In the future, warfighting will only become more complex, even more chaotic, and even faster. The only way for the DOD to stay competitive in a new warfighting environment is to ensure that it uses the most potent weapon available: technology, and more specifically, software. For the United States to retain its dominant position in the future— which is not a guaranteed outcome—the DOD needs a new design and architecture that will allow it to be far more flexible, scale on demand, and adapt dynamically to changing conditions. And it must do so at a dramatically lower cost as it delivers its critical services. This paper provides a blueprint for the way forward.
Topic:
Security, Defense Policy, War, Military Strategy, Digitalization, and Software
Political Geography:
North America and United States of America

7. Implications of the European Union’s Digital Regulations on U.S. and EU Economic and Strategic Interests

Author:
Kati Suominen
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
In recent months, the European Union has adopted several sweeping digital regulations, such as the Digital Services Act (DSA) and Digital Markets Act (DMA), while proposing a number of new measures—including the Data Act, the Artificial Intelligence Act, and the Media Freedom Act. These regulations will shape, likely quite dramatically, the environment for doing digital business in Europe and beyond. They will have profound implications on the leading U.S. digital service providers designated by the European Union as “gatekeepers”—large digital services providers that are expected to adhere to regulatory requirements—as well as these companies’ hundreds of millions of transatlantic European business and individual customers. By impacting primarily U.S. companies instead of Asian or European ones, Europe’s digital policies will also shape U.S. and European global strategic and national security interests. This study will assess the potential implications of new and proposed EU digital acts on U.S. digital service providers, on their customers in Europe and the United States, and on the EU and U.S. economies and exports.
Topic:
European Union, Regulation, Regionalism, Strategic Interests, and Digitalization
Political Geography:
Europe, North America, and United States of America

8. The Digital Silk Road and China’s Influence on Standard Setting

Author:
Alex He
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation (CIGI)
Abstract:
China is striving to become a leader in international standard setting, and the Digital Silk Road, part of China’s Belt and Road Initiative to expand its global infrastructure and markets, is key to realizing this goal. Both roads depend on standard connectivity, fuelled by Chinese private companies that are the driving force behind China’s growing role as a leader in technology development and shaping standards in both domestic and global markets. However, China faces strong competition to gain more influence in international standard-setting bodies, which are dominated by the European Union and the United States.
Topic:
Infrastructure, Digital Economy, Trade, Digital Culture, Silk Road, and Digitalization
Political Geography:
China, Europe, Asia, North America, and United States of America

9. The EU-US Trade and technology Council: Mapping the Challenges and Opportunities for Transatlantic Cooperation on Trade, Climate, and Digital

Author:
Guillaume Van der Loo, Thijs Vandenbussche, and Andreas Aktoudianakis
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
The EU-US Summit on 15 June 2021 marked the beginning of a renewed transatlantic partner- ship and set an ambitious joint agenda for EU-US cooperation post-COVID-19. The new Biden administration offers the EU the opportunity to re-establish transatlantic relations, which reached their lowest point since World War II under the turbulent Trump administration, and to address the bilateral disputes and tensions that have emerged, partly as a result of Trump’s ‘America First’ policies. One of the key deliverables of the Summit was the establishment of the EU-US Trade and Technology Council (TTC). The TTC aims to deepen EU-US relations on trade and investment and to avoid new technical barriers to trade by cooperating on key poli- cies such as technology, digital policy issues and supply chains. Despite the optimism in Brussels and Washington about renewing and strengthening transat- lantic cooperation, there are several challenges for EU-US cooperation. In the areas of trade, digital and climate in particular several differing views or outstanding disputes (most of them inherited by the Trump administration) will need to be addressed by the new TTC (the first meeting is scheduled on 29-30 September 2021) or other joint bodies. Only then will the EU and the US be able to deliver on the new ambitious transatlantic agenda. This paper will there- fore discuss the key challenges and opportunities for EU-US cooperation in the three inter- related areas of trade, digital and climate. For each of these areas, the outcome of the June 2021 EU-US Summit will be discussed and the challenges and opportunities for delivering on the renewed transatlantic agenda will be analysed. Moreover, this paper will present several policy recommendations, for the TTC or on EU-US cooperation in general, on how to advance the transatlantic partnership.
Topic:
Climate Change, Diplomacy, International Cooperation, International Trade and Finance, Science and Technology, European Union, Digitalization, and Summit
Political Geography:
Europe, North America, and United States of America

10. The Future of the Digital Order

Author:
Jeff Cirillo, Sarah Curtis, Joshua Fitt, Kara Frederick, Coby Goldberg, Ilan Goldenberg, Andrea Kendall-Taylor, Megan Lamberth, Martijn Rasser, and Dania Torres
Publication Date:
11-2021
Content Type:
Special Report
Institution:
Center for a New American Security (CNAS)
Abstract:
Nations that successfully harness the vast economic, political, and societal power of emerging information and communications technologies will shape the future of the global digital order. This future is not set in stone. A digital order defined by liberal democratic values requires U.S. leadership and the cooperation of trusted like-minded partners. In the absence of democratic leadership, autocratic rivals of the United States can fill that void—exploiting the control of information, surveillance technologies, and standards for technology governance to promote a digital ecosystem that entrenches and expands their authoritarian practices. In exploring how a closed, illiberal order is taking root in strategic regions around the world, this report offers recommendations for how to craft, promote, and preserve a more open and democratic alternative. An assessment of crosscutting trends between China, Russia, and the Middle East across three pillars—information control, surveillance, and technology governance—leads us to the following conclusions: China is the prime mover in shaping the evolving digital order in its favor. Beijing’s use of technologies such as facial recognition software and telecommunications networks allows the Chinese Communist Party (CCP) to expand control over its citizens. The CCP’s ability to promote and export this model of digital repression, in turn, gives like-minded, nondemocratic governments a roadmap for how to deploy digital technologies for control and abuse in their own countries. Russia’s model of digital authoritarianism, while technologically less sophisticated than China’s, could prove to be more readily adaptable and enduring for current and aspiring autocrats. Regional powers such as Belarus, Azerbaijan, and some Central Asian states have already incorporated elements of this model. In the Middle East, authoritarian leaders use digital tools to control internal populations by sabotaging and spying on citizens, and this contributes to the construction of an illiberal digital order that is beneficial to America’s peer competitors—China and Russia. These conclusions reveal four key trends with implications for the future of the digital order: Growing China-Russia alignment will generate dangerous digital synergies, such as (1) making digital autocracy accessible for a broader swath of states; (2) accelerating China’s and Russia’s digital innovation; (3) eroding liberal norms in international institutions; and (4) raising the prospects of a “splinternet,” a fragmenting of the internet along nationalistic, political, technological, religious, or ethnic lines. Countries around the world, particularly autocratic regimes and those flirting with illiberalism, will seek to regulate online communications platforms through (1) social media; (2) data localization laws; and (3) instigating company self-censorship, which restricts free speech and increases online control. Illiberal regimes will seek out Chinese technology to help them control social movements and civil protests. U.S. nondemocratic partners, adversaries, and even some democratic partners justify their pursuit of Chinese technology by underscoring ways the adopted technologies will contribute to economic growth, social stability, and efforts to fight crime and terrorism. The practices of illiberal regimes will reduce the efficacy of U.S. mitigation practices. Russia and China’s efforts to promote an illiberal digital order complement one another and could accelerate innovation between the two nations. The United States must craft a policy response that considers these emerging patterns and incorporates more than its usual partners in Europe and the Indo-Pacific. Shoring up the existing coalition of democratic actors to counter these illiberal trends will likely not be sufficient. This report offers recommendations that the United States can implement on three fronts: at home, while engaging with traditional U.S. democratic as well as nondemocratic partners, and when countering U.S. adversaries such as China, Russia, and Iran. The United States must take a leadership role, recognizing that the future digital order is at stake.
Topic:
Science and Technology, Governance, Authoritarianism, Leadership, Surveillance, and Digitalization
Political Geography:
Russia, China, Middle East, North America, and United States of America