A Policy Framework for Optimising the Benefits of Digitalisation for Economic Growth, Employment and Welfare

Digital technologies are fundamentally calling into question existing market mechanisms, economic policy instruments, structures as well as economic and social interactions. Whereas in traditional markets product and service prices have the central allocation function, the connection between price and value is largely resolved in the data-driven economy. The reason for this lies in the specific cost structure, which is characterised by high fixed costs coupled with extremely low marginal costs (close to zero). This cost structure favours the monetary (almost) free scaling of digital products and services on "platform markets". In the digital economy, power over data is the decisive competitive factor. In extreme cases, this results in (natural) monopolies. Based on six thematic analyses (Macroeconomics, Public Sector, Competition, Space, Social Protection, Environment and Energy), the findings on three meta-hypotheses, which set the policy framework to maximise the benefits of digitisation for economic growth, employment and welfare, are summarised: 1. The "new" economy is an economy of digital data ("digitalism"). 2. Existing structures break up ("structural break"). 3. New structures manifest themselves in extremes ("polarisation").