The U.S. leads the global landscape in technology innovation. The country’s competitive edge, according to the World Economic Forum’s 2018 Global Competitive Index, is due to its business dynamism, strong institutional pillars, financing mechanisms, and vibrant innovation ecosystem. Innovation is a trademark feature of American competitiveness and has powered its global dominance since the post-World-War industrial revolution. Countries that lead the world in generating advanced technologies and leveraging the full productive capacity of their digital economies can gain a strategic competitive advantage.
Digital technologies have risen to prominence as a critical determinant of economic growth, national security, and international competitiveness. The digital economy has a profound influence on the world’s trajectory and the societal well-being of ordinary citizens. It affects everything from resource allocation to income distribution and growth.
But how do we measure the digital economy and its contributions to growth and pertinent social indicators? Watanabe (2016), Brynjolfsson (2018), Nakamura (2018), Moulton (2018), and many other experts acknowledge the difficulty of precisely evaluating a digital economy characterized by rapidly changing products and services. Researchers estimate that “the digital economy is worth $11.5 trillion globally, equivalent to 15.5 percent of global GDP and has grown two and a half times faster than global GDP over the past 15 years.”