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How to unlock the benefits and mitigate the risks of our new technologies: Innovation Frontier Project

As trying as the pandemic has been, it would have been even more difficult and disruptive without the recent advancements in our information technology.

To some extent or another, we were able to adjust to distributed work, stay entertained and digitally connected and buy the things we needed online. 

And the experience of the pandemic has only accelerated these technologies and solidified these trends moving forward and into more and more areas of life and society.

These efficiencies can provide great benefits for businesses, consumers, and the economy at large. But as this paper from the Innovation Frontier Project outlines, there are potential risks alongside the opportunities.

Breaking from past trends where new technologies would diffuse rapidly, widespread utilization of these major information systems is not happening evenly throughout industries, writes James Bessen. 

Only a limited number of companies have made the investments to develop and take advantage of the new technologies, leading to large productivity gaps between the top few firms and the rest. 

Bessen lays out the policy challenge: 

“In summary, new information technology is delivering an unprecedented responsiveness to varied consumer demand, creating new well-paid jobs at highly productive firms, and contributing to overall economic growth. Yet limited access to the technology is playing an important role in many of the major economic and social issues of the day: the growing dominance of large firms, slow productivity growth, rising economic inequality, and the failure of regulation. The challenge for policy is to ameliorate these negative effects while preserving as many of the benefits as possible to consumers, to workers, and to the economy.”

He provides several recommendations to mitigate these effects:

  • Promote selective sharing of code and data,
  • Encourage open platforms,
  • Remove blocks to employee mobility.
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