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Digital Governance in 2023: Revisiting ‘1998 Deals’ and 12 Main Trends

At the beginning of 2023, the good news is that, in spite of all geopolitical tensions, the Internet infrastructure built around TCP/IP continues to carry emails, web pages, videos, and podcasts across the globe. Technically, the Internet remains robust.

The bad news is that more and more digital borders will continue to affect the global nature of international digital communication by filtering traffic, banning competing services and apps, censoring, etc. Politically and economically, the Internet is fragmenting.

In 2023, the underlying tension will be between forces seeking to preserve the Internet as a global public good and forces seeking to fragment it along national and corporate borders.

In addition to the Internet protocols, the Internet governance architecture has been robust. In 2023, we will mark the 25th anniversary of a handful of frameworks that laid the foundation for today’s internet and/or digital governance (whatever term you prefer to use).

In 1998, the Internet governance architecture was developed only in a few months.

In September 1998: Google and the Internet Corporation for Assigned Names and Numbers (ICANN) were established; discussions were initiated under the UN’s ‘information security’ track that led to the creation of the UN GGE and OEWG; the World Trade Organization (WTO) set in motion e-commerce rules.

In November 1998, the International Telecommunication Union (ITU) Plenipotentiary conference in Minneapolis, USA, decided to host the World Summit on the Information Society (WSIS), initiating a process of digital policy discussions which is active today with the work of the UN Internet Governance Forum (IGF) and the WSIS Forum. You can consult a detailed Digital cooperation timeline.

The ‘1998 deals’ laid a discrete but effective governance framework for the fast growth of the Internet from 3.6% of the world’s population in 1998 (147 million internet users) to 69% of the world’s population (5.4 million internet users) in July 2022. So far, the ‘1998 deals’ have stood the test of time.

Will it remain so? The answer to this question will be shaped around a few issues that are emerging in public debates: (a) creating mechanisms to make decisions and recommendations on digital policy issues (potentially through a strengthened IGF), (b) creating holistic mechanisms of global data governance, (c) making inclusive cybersecurity negotiations with application of existing norms, and (d) avoiding fragmentation trends in the digital economy, currently being brewed by disparate national laws or trade agreements.

An upgrade of ‘1998 deals’ is likely to happen over the next few years as the main economic and political actors have the interest in doing so. This is expected for two main reasons:

For tech companies, international rules now can mean a more predictable business environment, especially on the global level, where fragmented regulations increase compliance complexity.

Parallel to this, especially after the pandemic, governments have become less ‘shy’ in digital governance. They are under increasing pressure to protect the public interest and citizens in the digital space. Clarity has increased in terms of issues, powers, and divides in the digital realm.

Within this overall framework of revisiting the ‘1998 deal’, the 2023 predictions identify several main trends in digital governance and diplomacy.

1. Digital Technologies: Less hype, more impact

Last year started with a few big promises. Web 3.0, the metaverse, and AI in decentralised blockchain networks promised us astonishing feats. Enthusiasm dwindled towards the end of the year. The only major exception is AI’s steady momentum. AI may avoid sliding into disillusionment and move towards the plateau of productivity. Other technologies are likely to follow the usual Gartner hype cycle pattern, as it has been the case since 2011 when I started making annual predictions.

This year started without any announcements about the next big thing in technology. This was obvious at CES 2023 in Las Vegas, where we mostly saw ‘more of the same’: bigger screens, nicer cascades, smaller screens.

A quiet year in technological developments will create the space to take a step back and see how we would like to shape our digital future.

2. Digital geopolitics: From submarine cables to satellites

Digital geopolitical tensions are showing no signs of easing in 2023, especially between the USA and China. Worse, global conflicts and tensions could trigger the fragmentation of the Internet. Digital geopolitics will be centred around the protection of submarine cables and satellites, the production of semiconductors, and the free flow of data.

3. IBSA digital moment(um): Linking development, democracy, and diplomacy

IBSA, which stands for India, Brazil, and South Africa, is a group of democracies and developing economies with vibrant digital scenes. IBSA countries will have the G20 presidency in the next 3 years (2023 - India, 2024 - Brazil, and 2025 - South Africa). India started its presidency with a strong focus on digitalisation and data. It is expected that Brazil’s new administration will be active in digital diplomacy, as it was the case in 2010s. South Africa’s 2025 G20 presidency will sync with the growing continental digital dynamism in Africa.

The IBSA digital momentum’s most important contribution would revolve around three important aspects: development, democracy, and diplomacy.

4. Digital cooperation: Build-up for Global Digital Compact and the ‘digital 2025’

Digital cooperation has gained momentum with the appointment of the UN Secretary-General’s Envoy on Technology and the preparations for the Global Digital Compact (GDC). In 2023, digital cooperation processes will accelerate the build-up for 2025 when the World Summit on the Information Society (WSIS) implementation will be revisited, including the future of the Internet Governance Forum (IGF). Also, in 2025, the Open Electronic Working Group’s (OEWG) discussions on cybersecurity should evolve into taking action through the UN Programme of Action (PoA). The next few years will further bring digital cooperation around Agenda 2030 closer, as digitalisation will become critical for the realisation of the 17 sustainable development goals (SDGs). An important stop on the way to 2025 will be the adoption of the GDC during the UN Summit of the Future in 2024.

5. Human rights in the digital space: Protecting what makes us human

Human rights are both enabled and endangered in the digital space. These two extremes will shape digital rights in 2023 with the following specific developments:

Deeper implementation of the first generation of human rights online, such as freedom of expression and privacy protection

Wider protection for the second generation (economic, social, and cultural rights, galvanised around digital inclusion) and third generation (environmental, intergenerational, cultural rights) of human rights

The emergence of a fourth generation: Protection of human integrity and free will as they will be affected by AI and neuroscience developments

The main challenge will be to strengthen the application of existing human rights rules online while charting well-balanced regulations for new areas (e.g., regulations that encourage ethical neuroscience developments while protecting human dignity and integrity).

6. Content: The Twitter experiment and content governance

In 2023, Elon Musk’s Twitter experiment will remain its focus. If he succeeds in advancing effective and rights-respecting content governance at Twitter, it will be a strong argument in favour of the self-governance tech platforms. If he fails, which is more likely, it will also signal that content governance should be sorted out beyond companies in parliaments and international bodies. Whether the name of the game is success and failure, Musk’s experiment will score one major win: providing clarity on what, who, and how can govern content on the Internet.

But the world won’t wait for Twitter to sort itself out. The EU’s Digital Services Act enters into force with far-reaching consequences for content regulation. In 2023, UNESCO will host the conference Internet for Trust: Regulating Digital Platforms for Information as a Public Good in February 2023 as the next step in developing content governance around its Guidance for regulating digital platforms: A multistakeholder approach. The UN Human Rights Council will discuss content in the context of freedom of access to information.

7. Cybersecurity: Preserving the Internet in difficult times

The Ukraine war will impact cybersecurity for a long time. And even if peace is reached soon, the impact on cybersecurity will extend far beyond, as it happened with all wars in history. New weapons (and technologies) will emerge. Cyber warriors and mercenaries are likely to put their new skills to use in lucrative cybercrime.

As a result, the world should begin preparing for the “day after” the conflict, when cyberspace will be less safe and secure.

There is some good news. The UN cybersecurity processes continue. And cybersecurity takes on a more prominent role among the priorities of developing countries. For example, African countries are building cyber diplomacy strategies and skills so they can take part in multilateral processes like the OEWG and the creation of a UN cybercrime convention.

8. Digital economy: Trade, taxation, and cryptocurrencies

The digital economy will face the full brunt of the economic crisis, with a possible recession in 2023. There will be less money for the next big thing—whatever it may be. As investors opt for safe economic options, digital investments are unlikely to be on their list of choices.

Bitcoin, dubbed the “new gold,” has lost its allure as a result of recent cryptocurrency failures. The Web 3.0 dynamism has slowed down. Quantum computing is too far on the horizon to make a major economic impact. With so many daunting prospects for the economy, out of many governance issues for the global economy, three main areas will dominate in 2023: digital trade, online taxation, and cryptocurrencies.

Digital trade

The World Trade Organization (WTO) will double down on e-commerce negotiations this year. 2023 will bring some progress within the Joint Statement Initiative (JSI) on e-commerce (where 87 countries are involved). There are a few ‘low hanging fruits,’ including spam, electronic signatures and authentication, open government data, consumer protection, and transparency. However, as 2022 stocking taking shows, differences are still major on questions of data flows, data localisation and privacy. JSI negotiators may reach a compromise around a ‘tiered outcome,’ starting with more modest agreements around the low hanging fruits, while continuing negotiations on data and other controversial issues in 2024.

Along with the talks at the WTO, bilateral and regional agreements on digital trade will pop up all over the world. In most digital trade negotiations, the two ‘elephants’ in the room will be data flows and the development aspect of e-commerce.

Online taxation

The Organisation for Economic Co-operation and Development (OECD) taxation agreement is taking shape around the two-pillar structure: Pillar I focuses on the reallocation of profits from tech companies to countries where digital activities take place, and Pillar II dedicated to setting a global minimum tax of 15% for tech companies in order to prevent them from taking ‘refuge’ in low-tax jurisdictions.

While there is consensus on a global minimum tax of 15% (Pillar II) among the 130 countries participating in OECD negotiations, the main controversies will be around Pillar I for the allocation of taxes to countries where digital users are located. Even if a political deal is made, it is a very complex administrative matter to create mechanisms for the reallocation of taxes. But there will be a lot of pressure on the negotiators because countries like Canada and France are threatening to put online taxes in place on their own if a deal on tax reallocation is not reached soon. Whatever outcome the OECD negotiations will have, 2023 will be a decisive year for arrangements on online taxation.

Cryptocurrencies

In a matter of one year, the value of bitcoin dropped almost 3 times. This has led to decreased trust in cryptocurrencies and increased pressure for necessary regulation.

The pressure for governance solutions further increased as the industry’s big players faced major breakdowns.

In 2023, the growing attention to cryptocurrency regulation will start with applying and adjusting existing rules on, for example, consumer protection. New rules will be needed for digital assets. It remains to be seen how monetary authorities will deal with the macro-financial risks that cryptocurrencies create.

9. Digital standardisation: Governance through technical means

In 2023, the relevance of digital standards as a ‘soft governance’ approach will increase. Standards provide alternatives to the lack of multilateral policy agreements.

Standards are also practical, useful, and directly relevant for citizens. For example, in 2023, new iPhone users will be able to use standard USB-C for charging iPhones after Apple had to give up its proprietary plug following pressure from the EU. In 2023, the first home devices built around Matter standards will come to the market. Lightbulbs, thermostats, and other internet of things (IoTs) devices will become interoperable and simpler to use.

The lull in fast tech developments will provide an opportunity to set standards for the future tech growth of AI, the metaverse, and quantum computing, among others.

10. Data governance: Moving away from a one-size-fits-all approach

The stage is set for intensive data governance negotiations in 2023. At the e-commerce negotiations at the WTO, data flows will be the main open issue. India, who opposes the WTO e-commerce negotiations, will push during its G20 presidency for new ‘gold standards for data,’ which should anchor data governance in a wider development agenda. Japan, which will host IGF 2023 in Kyoto, is likely to push for the Osaka agenda on free flow of data.

At the same time, 2023 will see a departure from the one-size-fits-all approach toward conversations on how to regulate the different types of data, such as personal, corporate, public, health, etc. In parallel, this will require a holistic approach that takes into account standardisation, security, human rights, and legal perspectives.

For governments worldwide, 2023 could be a landmark year in their search on how to reconcile two aspects: The need to ascertain sovereignty over critical and sensitive data that needs to be stored physically on national territories (registries, health data, etc.)

The fact that free flow of data across national and corporate borders facilitates economic development and contributes to the public good (e.g., environmental data)

11. AI governance: From debates on ethics to practical governance solutions

As AI becomes more prevalent in everyday life, questions about how to govern it will become more important. 2023 will also mark the end of the ‘ethics washing’ trend, which brought inflation of declarations and guidelines on AI and ethics. While ethical issues remain important, AI brings more immediate issues to be addressed.

The good news is that we will not need to start from scratch. There are numerous ongoing national, regional, and global policy and regulatory processes.

In 2023, Europe will keep its tradition of being a trendsetter in digital governance (think of data, cybersecurity, and anti-monopoly) by advancing the work on the EU’s draft AI Act and the Council of Europe’s Committee on AI’s work on a draft convention on AI and human rights.

Within the EU, there’s a good chance that the AI Act may be adopted in early 2024.

12. The future of work: Hybrid is the new normal

The year 2022 brought us a revenge of meetings as people reconnected in physical spaces and meetings worldwide. At the same time, after discovering the benefits of online work and interactions during the pandemic, there was also a push towards more of these.

In 2023, work and meetings will ‘settle’ to a hybrid format, combining elements of online and in situ interactions.

Along with Zoom and online meetings, new virtual reality tools will be made to make online communication flow more smoothly. The focus will be on new routines, procedures, and rules for hybrid interactions, from regular work to diplomatic negotiations.

Next steps?

You can dive deeper into these 12 predictions by visiting our 2023 predictions portal.

You can also join the 2023 predictions webinar (12th January 2022 at 13.00 UTC).

E-see you soon for an interesting discussion.

Best regards,
Jovan

By Jovan Kurbalija, Director of DiploFoundation & Head of Geneva Internet Platform

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Co-designer of the TCP/IP Protocols & the Architecture of the Internet

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