On Economic Strategy in the Data-Driven Economy

Book excerpt: The digital transformation is creating a new kind of economy - a data-driven economy (DDE) that builds on, but differs materially from, the knowledge-based economy (KBE) that preceded it and the industrial economy on which the KBE was based. The underlying economics of the DDE gives rise to powerful incentives for strategic trade and investment policy, which are already shaping policy responses of the economies with major interests in the digital economy. This note outlines the issues and considers the implications for the small open economy.