Defining digital trade should occur within an independent digital market.

Defining Digital Trade

There is no set definition of “digital trade“. Depending on the organization, digital trade is used interchangeably with “e-commerce.” To give you an idea of the variance in definitions, consider the following:

“The production, distribution, marketing, sale, or delivery of goods or services by electronic means.” — World Trade Organization

“Purchases and sales conducted over computer networks. E-commerce can involve physical goods as well as intangible (digital) products and services that can be delivered digitally. ” — United Nations Conference on Trade and Development

“The delivery of products and services over either fixed-line or wireless digital networks. It excludes commerce in most physical products, such as goods ordered online and physical goods that have a digital counterpart, such as books and software, and music and films sold on CDs or DVDs.” — United States International Trade Commission

“The direct exchange of digital goods, and digitally enabled exchanges of services or labour. The exchange of personal communications is included in the definition.” — McKinsey Global Institute

What strikes me about most of the definitions is that “digital” refers to an alternative method of delivery of goods and services versus the actual construction of the market itself. The value from digitization is likely lower costs to producers and distributors and to consumers likely benefits are lower costs of product acquisition, assuming the costs of shipping and handling resulting from online shopping don’t exceed the costs of shopping in person.

Where’s the Surprise?

But beyond this, where is the “surprise” from using a communications medium like the internet to engage in e-commerce? In my opinion, the real value, the surprise, should be beyond the actual goods and services exchanged.

The pursuit of time saving, one of the benefits of online trade, is nothing new. Today I saw two women walk into Starbucks and grab coffee ordered via an app. The value for them was getting in and out of the coffee shop with the coffee versus sitting down in a Starbucks at 7:45 am with a group of people admittedly looking a bit too scruffy.

But is this enough, the time saving to the consumer and the costs savings to the producer to treat digital trade separately from traditional trade?

The Value in Digital Trade is in the Independence of a Digital Market

As currently constructed, digital trade is more an infrastructure adjunct to traditional, physical trade. True digital trade will happen when there are pure digital players exchanging data that can only be created in cyberspace through cyberspace. A true digital market and the digital trade that occurs within should be separate from human intervention where machines are responsible for analyzing, organizing, and distributing information and knowledge over digital networks.

One example of this digital market independence is occurring in the financial markets. In an article for Forbes.com, Bernard Marr shares how artificial intelligence is being used by hedge funds to trade stocks. According to Mr. Marr, what is extraordinary is an artificially intelligent machine making trades without the assistance of a data scientist. Mr. Marr goes on further to say that:

“Artificially intelligent machines analyze inordinate amounts of data at extraordinary speeds that is impossible for humans. They learn from the information they analyze to improve their trading acumen. This information includes market prices to corporate financial reports and accounting documents to social media, news trends, and macroeconomic data. Once the information is analyzed by thousands of machines, the machines then “vote” on what action to take and the best trades to make. “

While Mr. Marr doesn’t go on to discuss AI machines on the other side of the trade, I can envision the next step where an AI machine for Trader x exchanges shares with an AI machine for Trader y making a market entirely without human assistance. This exchange of shares or information and the making of a market for information independent of human intervention is the true digital trade.

Conclusion

While the commercial internet is three decades old, I don’t think we are at a stage yet where we can say we have complete digital trade. At best, digital trade is a subset of cross border trade and robust markets for autonomous trade between pure digital players in cyberspace is around the corner with the innovation and inclusion of artificial intelligence. The definitions we have now for digital trade should be changed to reflect the creation of true digital markets.

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Government’s role in regulating access to personal data

Yuval Noah Harari recent wrote an article for The Atlantic where he posed the question, “How do you regulate the ownership of data?” Professor Harari argues in the article that data is the most important asset today, moving ahead of land and machinery.  “Politics will be a struggle to control the data’s flow”, says Professor Harari.

Last spring saw the United States Congress’ struggle to at least map out a course through the turbulent waters of data privacy as members of the House of Representatives and Senate took the opportunity to grill Facebook CEO Mark Zuckerberg about his company’s handling of personal data obtained from the social media giant by a consultancy.

Part of this struggle may be due in part to the popularity of social media network platforms. Facebook has climbed from a digital bulletin board developed in the early 2000s in an Ivy League college dorm room to a global subscribership of over two billion people.  Former president Barack Obama’s Twitter following is in the millions while the current president, Donald Trump, is not shy or slow to taking to Twitter to either connect with and inform his base of supporters or attack the traditional media for what he perceives as unfair coverage of his administration.

Professor Harari notes that users of social media network platforms have not reached the point where they are ready to stop feeding the “attention merchants.”  Speaking on the difficulty subscribers may have in exchanging personal data for “free” services, Professor Harari points out that:

“But it, later on, ordinary people decide to block the flow of data, they are likely to have trouble doing so, especially as they may have come to rely on the network to help them make decisions, and even for their health and physical survival.”

Professor Harari offered up one solution, nationalization of data, to stem the abuses that corporations may impart on addicted social media and internet consumers, but admits that just because an asset is in the hands of government doesn’t mean things will necessarily go well.  Hence the question, how should the ownership of data be regulated?

The question will require public policymakers and politicians go through the exercise of defining “personal data.”  Would personal data be any characteristic about you? Would it be about any marker, no matter how temporary or permanent, that can be attached to you?  Must the “data” be something that the consumer actually produced?

Politically, attention merchants would want a narrow reading of the definition of personal data.  A narrower reading of personal data means being able to obtain more information pursuant to fewer restrictions. While this outcome would be ideal for corporate entities in the business of brokering data, I don’t see Republicans, even with their mantra of promoting business, enthusiastically endorsing less restrictive collection of personal data given the public’s concern for privacy.