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Digital Trade on the Hill: Hearing on Expanding U.S. Digital Trade and Eliminating Digital Trade Barriers

Digital trade issues continue to grow in importance to the U.S. economy as people and businesses find new and innovative ways to use data and technology to deliver more goods and services via the Internet. However, the growth in entrepreneurship and innovation so vastly enabled by digital technologies is increasingly threatened by a growing range of digital trade barriers. On July 13, the U.S. House Committee on Ways and Means Subcommittee on Trade held an important hearing on the growing significance of digital trade to the U.S. economy, the rise of these digital trade barriers, and the ways in which U.S. trade policy, including through the Trans-Pacific Partnership (TPP), can help remove existing—and prevent future—barriers. ITIF Founder and President Robert Atkinson testified, alongside representatives from IBM, the Internet Association, PayPal, and Fenugreen (a tech startup). This post captures a few of the key takeaways.

Digital trade benefits a large segment of the U.S. economy and its workforce. Digital trade and data flows often go unrecognized (as they are often hard to see) for the important role they play in helping U.S. companies and workers, whether from firms big or

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Russian Trade Policy: Veering Off the Rules of the Road

When Russia joined the World Trade Organization in 2012, observers hoped it signaled the start of a process that would bring Russia closer into the rules-based trading system that the WTO oversees and the market-based economic principles that underpin it. But four years on, it has become increasingly clear this has not happened. In fact, Russian President Vladimir Putin has turned away from the WTO to pursue mercantilist and protectionist policies as part of misguided and costly industrial development strategies.

Two clear examples from the past year were a compulsory data localization policy that forces digital service providers to store data on Russian citizens inside the country’s borders and a discriminatory industrial policy that favored domestic pharmaceutical and medical device producers over imports. These two policies earned Russia the dubious distinction of being one of the few countries with more than one listing on the Information Technology and Innovation Foundation’s list of the top 10 worst innovation mercantilist policies of 2015.

Russia’s new Data Localization Law acts as a barrier to cross-border data flows as it prevents many data-intensive firms—whether in social media, financial, medical, or other service sectors—from

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microchip

Time to Stop Blaming Manufacturing Job Losses on the (Nonexistent) Shift to Services

The U.S. lost more than 5 million manufacturing jobs since 2000 (roughly a 30 percent drop), while nonmanufacturing jobs have grown by 8 percent. Understanding why is critical to developing the right policy response.

Unfortunately, too many apologists for U.S. manufacturing decline argue that manufacturing employment loss is a natural trend. They blindly follow the assumption that as economies get richer they naturally consume a smaller share of manufactured goods and a larger share of services.  Therefore, we should expect manufacturing job losses.

New data from the St. Louis Federal Reserve Economic Data should hopefully put an end to these false claims. Recent analysis demonstrates that after adjusting for inflation, the share of real consumption of services has actually decreased slightly after reaching a peak in 1992. At the same time, durable goods manufacturing consumption is growing as a share of total consumption.

Accounting for inflation, services reached a peak of 70 percent of total consumption in the mid-1990s and have since declined to around 66 percent. This is not so different from the late 1950s when services made up 62 percent of total consumption. Meanwhile, the consumption of durable

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Cuts to the Bureau of Labor Statistics’ budget should have us all concerned.

Bring Back our National Statistics

The Bureau of Labor Statistics (BLS) is considering cutting more of its data reports, this time weighing the elimination of Import-Export Pricing Data. Far from saving tax-payers money, the potential cut will hobble the ability for both our government and our exporters to have the information they need to innovate and compete in a changing global marketplace.

The BLS’s Import-Export Pricing is a valuable part of its Price and Cost of Living report. The report collects data on goods entering and exiting the country and the prices of those goods by polling U.S. companies. The data gives producers vital information on trends in world prices and provides the public with information on U.S. inflation, economic output, and the overall well-being and competitiveness of American business.

Unfortunately, eliminating Import-Export Pricing is not an isolated example of the government’s growing information crisis. Across the board, budget cuts and sequestration has severely reduced efforts by the BLS, the Bureau of Economic Analysis, the National Science Foundation, the Department of Labor, and the Department of Commerce to produce timely and high-quality data to assess traded sector competitiveness. The BLS has already eliminated its

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Sergey Brin, co-founder of Google, and General Michael Hayden, former Director of the CIA and NSA

Privacy Advocates Set Their Sights on the Wrong G-Men

In an op-ed in last Friday’s Washington Post, FTC Commissioner Julie Brill, bemoaned the data-driven economy, equating the data scientists in Silicon Valley with the spooks at Fort Meade.

Unfortunately, she is not the first to do so. Since the exposure of the government’s PRISM program, veteran privacy activists have been conflating the intelligence community’s questionable, closed-door electronic surveillance program with the voluntary, open, and legitimate collection of personal data by the private sector. Chris Hoofnagle at the Berkeley Center for Law and Technology states, “What’s happening now is the logical outcome of a leave-it-to-the-market public policy agenda, which left the private sector’s hands unbound to collect data for the government.” And John Podesta at the Center for American Progress argues that after Edward Snowden’s revelations, the government “should not only examine NSA surveillance activities and the laws governing them, but also private-sector activities and telecommunications technology more generally.” Some critics have even gone so far as to blame innovation and technology. Writing in Salon, Andrew Leonard placed the blame directly on the technology: “By making it economically feasible to extract meaning from the massive streams of

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Book Review of “Big Data: A Revolution That Will Transform How We Live, Work and Think”

There have been a number of attempts to chronicle exactly what is “big data” and why anyone should care.  Last year’s The Human Face of Big Data by Rick Smolan and Jennifer Erwitt focused on telling the personal stories behind big data (and accompanied these stories with some great photographs). The year before, James Gleick wrote The Information: A History, A Theory, A Flood which chronicled how information (and not just big data) has changed our world. The latest entrant is Big Data: A Revolution That Will Transform How We Live, Work and Think by Viktor Mayer-Schönberger and Kenneth Cukier which focuses heavily on explaining some of the more interesting impacts of living in a big data world. (Personally, I’m still not a fan of the term big data because 1) the term scares off people who think this is equivalent to “Big Oil” and 2) the term underrepresents the innovation happening around “small” data. But since this is the term used in the book, I’ll stick with it for this review.)

The first part of this book provides a fairly compelling vision of how big data is changing how

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The Epistemic Sequester: Budget Cuts Kill an Important Statistical Program

After already slashing R&D funding, the Sequester is about to deliver another kick in the teeth to American competitiveness: it’s going to sharply reduce our ability to measure it. This one comes courtesy of the Bureau of Labor Statistics, which announced last month that the sequestration has forced it to eliminate its International Labor Comparisons (ILC) program, a neat little database that adjusts foreign data to a common framework, allowing you to compare the traded sector health and competiveness of the United States against that of other countries.

This may not sound like much, but in the nerdy world of competitive analysis economics, it’s huge. No one else provides this data to the same extent as ILC. The OECD does a bit,[i] but their data are rife with warnings about the perils of cross-country comparison among their indicators. Moreover, the OECD has little-to-no data on the big boys such as China and India, which renders its data useless for any “big picture” comparisons of our competitive health. Other organizations, such as the UN Industrial Development Organization, provide limited competitiveness data that is vastly incomplete.

In contrast, the ILC

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5 Q’s on Data Innovation with Hudson Hollister

Hudson Hollister is founder and executive director of the Data Transparency Coalition, a trade association that is advocating for policies that will require federal agencies to publish their data online using standardized, machine-readable, non-proprietary identifiers and markup languages. I asked Hudson to give me his take on how data transparency is unfolding in the federal government.

Castro: You’ve been leading the charge in the call for more open data in government. How does data transparency improve government?

Hollister: For government, data transparency means that public information is both published online and also electronically standardized in a way that makes it searchable and useful. Data transparency allows citizens to track what their government is doing. Data transparency also allows a government to better manage itself. Since there are so many separate silos within any government, the best way to make sure that public information is available to all managers and staff who need it is simply to publish it.

Data transparency isn’t merely good for government. In a democracy, data transparency is an obligation. Public information should be recognized as a public resource. The taxpayers who paid for its

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Lynn Etheredge

5 Q’s on Data Innovation with Lynn Etheredge

Lynn Etheredge is an independent consultant on health care and social policy issues and heads the Rapid Learning Project at George Washington University in Washington, DC. I asked Lynn to share with me his thoughts on how health care research is changing as a result of the increased use of data. Castro: How will rapid learning health networks change how health care research is performed? Etheredge: Traditionally, health research has relied on in vitro and in vivo methods—lab work and animal and human experiments. The rapid-learning networks add in silicoresearch—using computerized databases and networks with individual-level, clinically rich, and longitudinal data from millions of patients captured in electronic health records.Francis Collins, NIH’s director, has recently proposed a new national patient-centered research network with 20-30 million patients. As discussed in a recent report—Toward Precision Medicine (National Academy of Sciences, 2012)—this will revolutionize biomedical research, clinical practice, and public health. Read the rest

Government Opportunities to Harness “Big Data”

Recently more attention has been drawn to the emergence of “Big Data”—large scale data sets that businesses and government are using to unlock new value using today’s computing and communications power. As a McKinsey Global Institute (MGI) study recently showed, Big Data offers a wide range of commercial opportunities in virtually every sector of the economy for the United States. To take one example, the authors estimate that better use of big data in health care could generate an additional $300 billion in long-term value, with approximately two-thirds of that coming from a direct reduction in national health care expenditures.

The use of Big Data should not be confined to just the private sector; data offers incredible new opportunities to the public sector as well. Policymakers have the opportunity to use Big Data to improve government in areas such as public safety, public health, public utilities and public transportation. ITIF has discussed many of these opportunities before.

Consider the following:

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