Commerce's Digital Economy Board To Examine Metrics, Skills Training

DEBA hopes to provide some initial recommendations to Commerce and NTIA before the end of the year, but its longer-term task will be to “develop an agenda that bridges not just our work” but also informs Commerce’s work during the next president’s administration, said Secretary of Commerce Penny Pritzker during DEBA’s initial public meeting Monday. DEBA’s 17 members will serve two-year appointed terms. “Part of what we are doing is laying out … an agenda that is really robust and well informed” for Commerce to tackle after the end of President Barack Obama’s administration in January, Pritzker said. “You can help us to identify” emerging digital economy challenges and “our opportunities to help shape the policy construct that will help address” major digital issues.

NTIA believes promoting trust in the Internet is “an area we have to continue to put a lot of emphasis” on, particularly given the results of an NTIA analysis of 2015 U.S. Census Bureau survey data that “indicates people who are heavy users of the Internet are starting to stop using it for particular tasks” because of concerns about data breaches and government surveillance, said NTIA Administrator Larry Strickling. NTIA’s analysis was based on a survey of 41,000 U.S. households. Sixty-three percent of surveyed U.S. households said they're concerned about identity theft, and 35 percent said they refrained from conducting financial transactions online, NTIA said. Forty-five percent of households cited concerns about credit card fraud online, while 23 percent said they're concerned about data collection by online services. The Technology Policy Institute pushed back Sunday, saying in a blog post the survey data show that “despite their privacy concerns, people increasingly engage in online activities that might involve sensitive information, like financial transactions and shopping.”

DEBA’s work will focus on “trying to make this digital economy work for all Americans,” said co-Chairwoman Zoë Baird, Markle Foundation CEO. “There is a tremendous anxiety, fear and even anger in the country because people don't feel that they are participating, that this digital economy is something where they can see themselves succeeding.” DEBA “should start this work with a very strong sense of purpose and sense of urgency because so many people in our country feel that the digital economy is undermining their success when I think we all feel that there is tremendous potential for people to succeed through the digital economy,” Baird said. “We can focus on opportunities and challenges, plus private initiative and innovation,” said DEBA co-Chairwoman Mitchell Baker, Mozilla Foundation executive chairwoman. The board can “bring an opportunity to more citizens so that the opportunities are visible and the changes less scary, because there is hope,” she said.

The growth of the digital economy “raises a whole host of new policy questions,” including the need for a single Good Housekeeping-style “seal of approval” for consumer cybersecurity, said Sen. Mark Warner, D-Va. A single standard for evaluating cybersecurity in consumer products and services is important “particularly as we move into the Internet of Things,” Warner said. “It raises a whole host of issues around security, around privacy, around questions about what happens in the aftermarket if you found out your devices have got a bug in it and somebody has hacked into it.” Warner pointed to the Digital Security Commission Act (HR-4651/S-2604), which he introduced with House Homeland Security Committee Chairman Michael McCaul, R-Texas, earlier this year. HR-4651/S-2604 would create the 16-member National Commission on Security and Technology Challenges to address encryption and privacy issues.

The digital economy’s role in increasing the frequency of “a la carte” on-demand employment “raises as many fundamental questions as anything I think that those of us on the elected side will have to deal with” in the future, Warner said. “This really shakes up at its core the social contract that was derived in the 1930s and 1940s as more and more work becomes contingent.” He also emphasized the need for increasing broadband access in underserved U.S. communities. “We lack a how-to handbook [for local communities] on how you can aggregate enough demand [to bring] last-mile providers” to areas like southwestern Virginia where a lack of incumbent providers and topography prevent widespread broadband access, Warner said.

Commerce will be able to provide valuable data from agencies like the Census Bureau and the Bureau of Economic Analysis that will be valuable in determining metrics, but DEBA will also need to seek out additional sources of information because government agencies’ measurements “are designed with the 20th century economy in mind,” said University of Chicago Booth School of Business professor Austan Goolsbee. DEBA should consider metrics for IoT, automated cars and drones, Goolsbee said. The board should also monitor international trade flows and track cybersecurity violations, he said.

The growing shift to the digital economy necessitates a focus on training and educating the U.S. workforce to have the “skills to serve the needs of business in the future,” HSN CEO Mindy Grossman said. “I think new technology cycles are going to bring new requirements and the cycles are actually getting shorter,” which increases workers’ lack of training for new jobs. “I think the [skills] mismatch is also driving up the price of labor and competition for workers in this world,” she said. The U.S. government needs to work with schools to improve curricula related to digital skills training and should encourage academic partnerships with businesses, Grossman said.