The Internet Economy: Generating Innovation and Growth

June 30, 2011  • Idea Project Editor

IDEA Chairman Reed Hundt speech gave a speech at the June 29, 2011 OECD High Level Meeting entitled “The Internet Economy: Generating Innovation and Growth”, in Paris, France.  The aim of the High Level meeting was to reach a consensus on how best to ensure the continued growth and innovation of the Internet economy.

The text is below and also published at Talking Points Memo.

“Great congratulations are due to the OECD for the remarkable communique to which so many have agreed as the culmination of the two-day high level meeting here in Paris on the growth and development of the Internet. I’m here as chairman of the Aspen Institute forum called IDEA: International Digital Economic Accords. We are a multistakeholder group of the sort the OECD communique has endorsed as the fit and proper form of governance that ought to keep the whole Internet project advancing into the future and around the world. Our meetings and working groups have been underway since last year; we have had plenary meetings in October in Washington; January in Los Angeles; March in Brussels. We have been privileged to have had in attendance many of the leading figures from government in the United States and the EU. We are funded by four wonderful foundations: Markle, Knight, Ford, and MacArthur. We count four dozen major technology, media, and communications firms, along with leading NGO’s, as our membership, but we are –appropriately, necessarily — open: you are all welcome to participate. Our next plenary meeting will be in Washington DC on November 1-2, 2011.

We started IDEA because of worry and hope. Our hope is that the Internet community of 2 billion will become 7 billion, leaving no one out. Our worry is that this won’t happen: that the Internet will fragment, or fail in its destined purposes, or lose its unique culture, or give into conventional rules of ownership and control.

Our goal, fundamentally, is to do our part in having the Internet fulfill all the dreams everyone here has for it. That goal has been immeasurably advanced by the OECD communique. Of the many accomplishments of negotiation and reason manifested in this remarkable document at least three echo very happily the direction of our IDEA process: the collective commitments to openness, multistakeholder governance, and interconnectedness as the fundamental principles of the global Internet.

If the cream of the world’s bankers and finance ministers were to step into this conference, they would wonder if they were still on the same planet. They would ask what brave new and frightening world this Internet is. Closed, centralized, and disconnected seem to the leaders of global finance as characteristics they desperately need to protect the global economy from contagion and chaos.

The more they would learn about the Internet as an economy or a society, the more they would be stunned at its contrasts with the rest of the world. The rest of the developed world is suffering terribly from lack of demand; in the Internet economy new demand burgeons seemingly daily. When it turns out that millions want to milk virtual cows while watching advertisements to the extent that Zynga may launch a public offering at a 20 billion dollar market capitalization, everyone can see that only imagination constrains growth in our sector.

The rest of the developed world is desperate for the new investment opportunities that will put our legions of unemployed back to productive work. In the Internet economy, we know the specific needs for investment, and are only searching for the best ways to meet the needs. We have a nice problem to solve: the rest of the economy has problems so severe the solutions appear far off and painful.

In the global financial sector, the case for international regulation and state intrusion on the private sector has never been so compelling. In the Internet community, the commitment to international deregulation, distributed entrepreneurship, and private sector stewardship has only gained force as our culture has gained hundreds of millions of new adherents and our technological prowess has swelled.

As our Internet community expands its scale and scope, we cannot expect to keep our ways and means to ourselves. Everyone outside is peering inside our big tent. We must welcome in health care, energy management, education, and government itself. We must include not 2 billion but 7 billion in our community. We have much to learn from the new businesses and new people who will connect.

The great challenge we face, of course, is that the new arrivals must come to accept our principles and values, or the Internet will not thrive. We cannot know with any certainty what the Internet will be used for in ten or a hundred years. But we can act with conviction on the belief that its values are right for the global economy and global society. After all, at its core the Internet culture believes in benign and shared growth, collective responsibility, individual personal and property rights, and a rejection of violence as a means or end. Like a chosen route for a stream of packets, values can be right or wrong. The details are critical and debatable, but as basic statements of values who would say these are not right for the world? Not everything is relative.

The Internet’s future will be determined, of course, not by what we say here, but by the wishes of the next 5 billion who connect. So too the globe’s fate will be determined by all humanity, and not just one country or continent. And as we recognize that the new arrivals to the Internet will shape this medium, so we ought to recognize that not everyone regards it as a friend or ally. That is because the Internet is inherently disruptive, and unpredictably powerful.
All know that somehow the Internet fosters the expression of individual rights. To some that is a threat.

All know that in some ways the Internet puts at risk property rights and safety. To all of us those are major concerns.

All know that the Internet is a platform for entrepreneurship, entry into adjacent markets, and the creation of new markets. For incumbents and those invested in changelessness, the Internet represents risk with uncertain reward.

All get that the Internet is largely technology determined.  As such it may sometimes overwhelm human agency. It may erode the efficacy of pre-Internet institutions that populate the social landscape.    

These and other concerns are motivating a reaction against our culture. That reaction is manifested in the plain facts that more than four dozen nations at this time act in ways that undercut the principles of the OECD communique. The examples grow more dramatic with every news cycle. National leaders wall their people off from the Internet because they fear that its workings translate to their overthrow. Countries single out major Internet firms for attack, bar others from market access, and plainly favor national champions.

The corollary for us is clear. We have to argue persuasively for our principles. This OECD communique is not self-enforcing or already globally adopted.
One of our methods of going forward is to use the OECD as a platform. More gatherings like this are already planned. Another way we must proceed is to support multiple multistakeholder processes. No one should rule all; all ought to compete to make a distinctive contribution to the future of the Internet.
At our Aspen Institute IDEA forum, my hope is that we will be able to build a consensus around principles relevant to at least three topics: (1) open market access, (2) sustainable support for civil society’s continued participation in the Internet’s evolutionary path, and (3) ex ante commitment to collective action when the Internet’s open, interconnected and multistakeholder governance is put at risk. In their detailed form, our principles themselves could build, in a technical and trade-oriented direction, on the OECD communique. But the eventual outcome of our process — as with the future of the Internet — depends on the participants themselves. So come and join the show.”