Japan has embraced the need for a “digital transformation” to boost productivity and spur regional growth. Achieving this digital transformation will require innovative and secure mobile applications in industries such as healthcare, manufacturing, agriculture, energy, and transportation.
However, the creation and adoption of the next generation of innovative and secure mobile apps could be slowed by regulations now being considered for mobile platforms in Japan, according to a new report released March 17 by the Progressive Policy Institute. Such regulations could unintentionally open the door to cybersecurity threats and undermine the very features of app stores that make them so effective in encouraging innovation and security. The result: A slower pace of digital transformation. The report is titled, “How the Economics and Regulation of Mobile Platforms Affects Japan’s Digital Transformation and Cybersecurity” and is authored by PPI’s Vice President and Chief Economist Dr. Michael Mandel.
The analysis in this report, while focused on Japan, is applicable to other countries as well. “Mobile apps are essential for digital transformation. Today’s app stores play a key role in ensuring that mobile apps are both innovative and secure,” said Dr. Michael Mandel. “Mobile platform regulations should be carefully scrutinized to avoid a ‘race to the bottom’ that would reduce cybersecurity, slow innovation and hinder digital transformation.”
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
It’s been 15 years since the 2008 financial meltdown plunged America into the Great Recession. Our economy has bounced back, but the populist fury the crisis ignited has yet to burn itself out.
It manifests itself on the far left and right as general hostility to big business and, more recently, to Big Tech in particular. Fortunately, the populists’ reckless drive to break up America’s most innovative and globally competitive enterprises seems to be sputtering.
That could prove liberating for Democrats, who will never outcompete rightwing demagogues when it comes to stoking economic grievances. Instead, Democrats need a post-populist economics that inspires hope in America’s ability to innovate rapidly, generate abundant growth and opportunity and outpace China in the race to master frontier technologies.
If you’ve kept up with my series of writings this past month, it’s easy to see a common theme emerge. February is Black History Month and over that time, I’ve touched on different areas in which the Democratic Party has let the African American community down by not embracing reforms that could truly unleash Black potential. This final installment will take a different tack: Instead of looking at what Democrats can improve on, this piece looks at the progress Democrats have made for the Black community.
It’s no secret that for decades the African American community has been a crucial component of the Democratic coalition. Ever since the New Deal, Democrats have made inroads with our community and after pushing the Civil Rights and Voting Rights acts through in the 1960s, Democrats have largely locked up the Black vote. While it’s clear that there are still areas in which government policy can both enhance and get out of the way of Black success, the Democratic Party has made strides since then towards improving the lives of African Americans and empowering their vote.
There are many lessons to be learned from last year’s midterms, but Democrats should not take the results as some broad endorsement of the economic status quo. Midterm voters identified inflation as the most important issue driving their votes. And while the latest Labor Department data shows the producer price index decreasing by 0.1% in February, prices remain 4.6% higher than a year ago, which means lawmakers still have work to do to bring inflation under control.
And as they search for ideas, they may want to examine the dog that didn’t bark – in particular, the one sector of the economy that has been an interesting counternarrative to the otherwise troubling inflation story.
Home internet service is one of the few major living costs that isn’t skyrocketing. In fact, the most popular broadband speed tier one year ago actually costs 15% less today, on average.
This success story – and the bipartisan policies behind it – offers important lessons.
In honor of Women’s History Month, the Progressive Policy Institute hosted its first annual series of policy conversations, featuring a salon dinner and a comprehensive policy forum on Capitol Hill. The events focused on health care, workforce, privacy, content moderation, and education. The panels were moderated by PPI’s women policy experts and featured special guests Rep. Suzan DelBene and Kentucky Lt. Gov. Jacqueline Coleman.
“The Progressive Policy Institute has been leading the charge in Washington to uplift diverse women’s voices to the forefront of policymaking. PPI’s leading women experts make up some of the sharpest and brightest minds in public policy, and we are proud to showcase their knowledge and expertise,” said Will Marshall, President of the Progressive Policy Institute.
“Millions of Americans do not have control over their personal data and sensitive health information. In a post-Roe era, the risks and consequences of this are only heightened. One of the most foundational things that lawmakers can do to protect our information in the digital age is pass a national data privacy standard,” said Congresswoman Suzan DelBene (D-WA). “I want to thank the Progressive Policy Institute for convening this discussion on the importance of quickly passing a strong national privacy law that puts people in control of their data.”
The salon dinner — moderated by PPI’s Director of Workforce Development Taylor Maag and featuring Kentucky Lieutenant Governor Jacqueline Coleman — focused on driving gender equity in today’s economy, bringing esteemed leaders in workforce development fields to discuss labor force participation, and persisting gender gaps in STEM and other in-demand pathways.
The policy forum hosted on Capitol Hill consisted of four panel conversations and kicked off with “A Mosaic Moment,” giving attendees the opportunity to network with PPI’s policy experts. PPI President Will Marshall provided opening remarks, and Mosaic Program Director Jasmine Stoughton highlighted how the Mosaic Project is changing the landscape for women in policy.
The “Privacy in a Post-Roe World” panel featured Congresswoman Suzan DelBene (D-WA), and was moderated by PPI’s Director of Health Care Policy Erin Delaney and Director of PPI’s Innovation Frontier Project Jordan Shapiro. The panel focused on the future of access to health care resources, the tech sector’s response to securing personal health care data, and what tools are currently available to consumers to protect their health and privacy.
The “Internet as an Organizing Tool for Women’s Movements” panel explored examples of how women have pushed back against institutional inequities and, globally, authoritarian regimes using online platforms. Highlighting the ability for women to share their stories on the internet, the panel discussed how the current model of internet regulation in the United States supports these types of voices. The panel was moderated by PPI’s Technology Policy Analyst Malena Dailey.
“The New Politics of Education” panel, moderated by Co-Director of PPI’s Reinventing America’s Schools Project Tressa Pankovits, focused on how the evolving political landscape around education and parents rights. Taking a look at how women are leading in the education space, the conversation covered how the landscape has been politicized and what elected officials and educators can do to ensure moms are heard while also putting students first.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
Thirteen years ago, President Barack Obama and Democrats in Congress fundamentally transformed the U.S. health care system by providing health insurance coverage that curbed costs and expanded access to millions of Americans. While challenges remain to strengthen the legislation, the Affordable Care Act (ACA) remains entrenched as a permanent feature of America’s hybrid, public-private health care system, and continues to deliver on its promise to provide near-universal coverage to Americans at an affordable cost.
As we look back on the successes and challenges of the Affordable Care Act, the Progressive Policy Institute’s Director of Health Care Erin Delaney sits down with former Health and Human Services Secretary Kathleen Sebelius to reflect on the landmark passage of the ACA and the critical role it played in providing essential coverage to millions of Americans during the COVID-19 pandemic. Delaney and Secretary Sebelius look back on the path — 13 years ago — that led to one of the most consequential pieces of health care legislation to be enacted in this country.
Read PPI’s Policy Brief on the Affordable Care Act here.
Learn more about the Progressive Policy Institute here.
Thirteen years ago today, President Barack Obama and Democrats in Congress fundamentally transformed the U.S. health care system by providing health insurance coverage that curbed costs and expanded access to millions of Americans. While challenges remain to strengthen the legislation, the Affordable Care Act (ACA) remains entrenched as a permanent feature of America’s hybrid, public-private health care system, and continues to deliver on its promise to provide near-universal coverage to Americans at an affordable cost.
Since its enactment, the Republican Party has unleashed relentless attacks and legal challenges to health insurance coverage while repeatedly trying to repeal and replace the ACA despite widespread and growing support for the legislation. While Republicans tirelessly work to cut insurance coverage and raise health care costs for families across the United States, the ACA continues to serve as a milestone in the Democratic Party’s century-long struggle to create a universal health care system that leaves no one out.
As we look back on the successes and challenges of the Affordable Care Act, the Progressive Policy Institute (PPI) is marking the anniversary by releasing a policy brief examining the high-level benefits of the legislation’s implementation and additional policy solutions to bolster the law. The policy brief is titled “A Public Policy Success: The Affordable Care Act and the Road Ahead,” and is authored by PPI’s Director of Health Care Erin Delaney.
In tandem with the policy brief, Delaney sat down with former Health and Human Services Secretary Kathleen Sebelius to reflect on the landmark passage of the ACA and the critical role it played in providing essential coverage to millions of Americans during the COVID-19 pandemic. In a new interview, Delaney and Secretary Sebelius look back on the path — 13 years ago — that led to one of the most consequential pieces of health care legislation to be enacted in this country.
Download the policy brief here and listen to the full podcast episode here.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on twitter.
Britain could hardly have had a less trustworthy leader than Boris Johnson, and it is tempting to see untrustworthiness as an individual failing, one that can be rectified by a person of greater character. Having worked closely with him, I have no doubt Keir Starmer possesses the integrity that the office of prime minister demands. But a search for the ideal politician can only end in disappointment. And it misses the deep crisis of trust in modern democracies.
Only 37 per cent of people in the UK say they trust government to do what is right, according to the most recent Edelman Global Trust Barometer. The Truss-Kwarteng mini-Budget debacle and the traumas of the Johnson premiership have made a bad situation worse. But comparative countries do little better. In the US, just 42 per cent trust their government; in Australia it’s 45 per cent. By contrast, faster-growing economies enjoy much higher levels of faith in their leadership – for example, 76 per cent in Singapore say they trust their government to do the right thing.
As voters we are all too aware of the multiple crises we face, both in our personal lives and as a nation. Economic confidence has disintegrated, with the UK especially badly affected. Less than a quarter of Britons expect to be better off in five years’ time, and three quarters believe the government and public services will offer little support in the years ahead, according to the Ipsos global tracker.
The Patient Protection and Affordable Care Act (ACA), signed into law by President Barack Obama in 2010, transformed the way the U.S. health care system provides health insurance coverage that curbed health care costs and modified how health care is delivered. On the 13th anniversary of the law, it’s clear that it advanced America closer toward universal coverage, but challenges remain. As lawmakers and key stakeholders address these systemic issues that contribute to more expensive, less accessible health care, it is critical that they focus on building on the law by prioritizing Medicaid expansion in non-expansion states, mitigating coverage loss from the unwinding of the public health emergency (PHE) declaration, ensuring the U.S. has the resources needed to respond to ongoing COVID-19 costs and future pandemics, boosting funding and state data infrastructure to strengthen efforts to address social determinants of health, and expanding postpartum Medicaid coverage.
The ACA has faced an obstacle-strewn path with countless legal and legislative challenges throughout the past 13 years. Only one House Republican voted for the ACA’s passage in 2010. Republicans have since been waging an implacable battle to repeal “Obamacare,” which they touted would undermine private insurance markets and raise premiums. Nearly every budget or fiscal plan of theirs since the law’s enactment has included repealing the ACA as well as cutting Medicaid. After President Donald Trump’s election, Republicans tried repeatedly to repeal and replace the ACA but failed, despite controlling both chambers of Congress. In a dramatic 2017 vote, Republicans fell one vote short of repealing the law. In the 2018 midterm elections, they lost control of the House in a Democratic sweep, attributed in part to growing public support for the ACA.
Simultaneously, the ACA has been subjected to more than 2,000 legal challenges since its implementation. The most recent notable case, California v. Texas, which was heard by the Supreme Court in June 2021, claimed that the lawsuit filed by Texas lacked standing. The Texas district court asserted that the reduction of the individual mandate in the 2017 Tax Cuts and Jobs Act to zero was justification for the ACA’s unconstitutionality as an improper use of Congress’s taxation powers. Legal experts, even those opposed to the ACA, agreed that the legal arguments to this case were absurd, as Texas ignored Congress’s decision to zero out the individual mandate but to leave the rest of the ACA in place, which is principally Congress’s decision, not the court.
Despite the at least 70 Republican attempts to repeal or modify the ACA, the law seems firmly entrenched as a permanent feature of America’s hybrid, public-private health care system. It has delivered on its promise to increase coverage and access for millions of Americans and played a key role in helping people who lost job-based insurance stay covered throughout the COVID-19 pandemic. The law also has been a milestone in the Democratic Party’s century-long struggle to create a universal health care system that leaves no one out. It’s brought our country very close to universal coverage, while also testing new ways to deliver health care and reduce its cost.
This policy brief will examine the benefits of the implementation of the ACA, how to build on the ACA’s accomplishments, and rein in high medical costs to improve community health.
The U.S. has undertaken a two-pronged effort to close the broadband digital divide. COVID-era legislation such as the Broadband Equity, Access, and Deployment (BEAD) Program is providing tens of billions to wire up unserved areas. And the Affordable Connectivity Program (ACP) provides a subsidy that effectively makes broadband free for as many as 50 million eligible households, based on an analysis of pre-pandemic data. The eligibility criteria are broad, encompassing any household with incomes at or below 200% of the federal poverty guidelines, or participation in any one of a long list of assistance programs, including Pell Grants and Medicaid.
With this sort of focused effort on providing affordable connectivity to everyone, what could go wrong? Some groups have alleged that the broadband industry is still discriminating against poor neighborhoods. Their core claim is that wealthier neighborhoods attract multiple broadband providers, and therefore the government should pay to build multiple networks in poor neighborhoods to create more competition.
For example, a recent study by the California Community Foundation and Digital Equity LA asserts that, within Los Angeles County, the price of high-speed internet is lower in higher-income areas, leaving poorer neighborhoods paying more for access. The claim is that wealthier neighborhoods reap the benefits of competition.
However, the study, while addressing an important issue, suffers from problems almost too numerous to mention. First, the study is based on only 165 non-randomly chosen residential addresses in LA County, which has more than 3 million households. Second, any disparities in advertised pricing are irrelevant, since with the ACP funding, those most in need of financial assistance can get broadband at effectively zero monthly cost. Third, the preferred solution in the study — to “support independent, community-driven options for internet service” — sounds great until you realize how much money it would cost to lay an additional broadband network in Los Angeles. Indeed, operating a broadband network is an expensive and risky activity: Starry, an independent provider of broadband services in five cities, just filed for bankruptcy.
But the biggest issue with the study is that it is conceptually misguided. With funding in the pipeline for network expansion, and the ACP subsidies widely available, it’s become clear that getting people to sign up for “costless” internet is the major remaining problem to closing the broadband equity gap — the so-called adoption gap.
There’s plenty of evidence that much of the adoption gap is not tied to price. As we noted in our October 2022 blog post, the latest NTIA Internet Use Survey (collected in November 2021, before the ACP became active) showed that only 18% of households without internet access at home cited cost as a reason for being offline. In the NTIA survey, 58% of the offline households “express no interest or need to be online.”
How can the adoption gap be closed? First, building expensive new networks in areas that already have high-speed broadband, like Los Angeles County, is not the way to go. That money could be better spent on extending funding for the ACP.
Instead, we need programs to improve digital literacy and show, step-by-step, how to get online and utilize government and private resources. The Biden Administration has pointed to education efforts as being one of the main drivers of enrollment in ACP, with examples such as a text being sent out to 1.3 million likely eligible households in the state of Michigan resulting in 25,000 additional enrollments, or 1 million SNAP and TANF beneficiaries in Massachusetts being notified about the program resulting in enrollment doubling over just the next 5 days. This kind of effort is not new in LA County where in December 2021, the County launched an outreach campaign for ACP’s predecessor program which generated over 40,000 sign-ups in one month. More recently, numerous LA-based organizations, including the County itself, received modest grants from the FCC’s ACP Outreach Grant Program. Building on these investments and leveraging outreach via multiple organizations will help educate consumers on the benefits of broadband and drive adoption of service. Continued education efforts are the key to maintaining this momentum.
But by themselves, such programs are not enough since adoption is driven by financial inclusion as well. Without a credit card or a bank account, it’s much harder to use online services such as e-commerce and ride-sharing. Indeed, it’s possible that the people who express no interest in being online are actually responding to these other obstacles. Data show that 4.5% of the U.S. population currently has no access to the financial system, and an additional 14% are “underbanked,” meaning they primarily rely on nonbank transactions. For these households, which include some of those most in need of financial assistance, this acts as an additional barrier to obtaining connectivity.
It’s true that high-speed internet is a sort of prerequisite to participate in today’s society, but if cost is not the barrier for consumers, as is the case with current subsidy programs, examining pricing diverts attention away from the real barriers. In order to fully close the digital divide, the question of internet adoption is what must be addressed by communities and policymakers.
Maybe it’s because New Jersey voters support public charter schools by a 2:1 margin. Maybe it’s because of achievement data. Maybe he’s moderating his positions in advance of a potential presidential run. Or, maybe he’s finally listening to frustrated parents. Regardless, New Jersey Governor Phil Murphy recently took a softer line on public charter schools by allowing 11 in his state to expand to accommodate wait-listed students. We applaud his decision and encourage other Democrats to follow his lead.
Charter schools are free, open enrollment public schools that operate outside of traditional school district bureaucracies. In many states, they are concentrated in cities where most parents cannot afford private school tuition if their assigned district school is lacking.
Parents love them because they generally get better results than district schools operating in poor, urban environments. For example, Camden is New Jersey’s poorest city by most measures. On the first state assessments since the pandemic began, 52.9% of Camden’s charter school students were meeting or approaching English Language Arts (ELA) state standards in the fall of 2021. On the same test, only 35.5% of traditional public school students met or approached the ELA standard. Math was even tougher for Camden’s students, but again, public charter school students outperformed their traditional school counterparts at 29.5% to just 13.7% in meeting or approaching state standards.
THE NUMBERS: World ozone-depleting substance consumption* – 19891.32 million tons 20050.25 million tons 2010 0.10 million tons 20150.01 million tons?
* Includes chlorofluorocarbons, hydrochlorofluorocarbons, methyl bromide, carbon tetrachloride, halons, and methyl chloroform. (Our World in Data)
WHAT THEY MEAN:
Here is a success story:
Chlorofluorocarbons, known for pronunciation’s sake as “CFCs,” are strings of carbon atoms joined with the halide elements fluorine and chlorine rather than their more common hydrogen-ion partners. First synthesized in 1928 by American refrigerator-makers, they were used worldwide as coolants and industrial solvents from the 1930s to the 1990s by manufacturers, building superintendents, food-service professionals, and home-owners, all of them unaware that CFCs react easily with ozone, and that this, in turn, could have large consequences.
Via eleventh-grade chemistry, meanwhile, ozone is a pungent form of oxygen arranged chemically as “O3,” as distinct from breathable oxygen “O2.” Floating in a “layer” 15-35 kilometers above the earth, ozone absorbs ultraviolet light and in doing so reduces the risk of skin cancer to people, cools lower-atmosphere temperatures, and facilitates photosynthesis in land plants and oceanic phytoplankton. CFCs are fairly stable molecules that float around for a long time — depending on the particular molecule, they can last from 100 to 200 years before breaking up and raining down out of the sky — and react quickly with ozone. Thus their release from buildings and refrigerators began an era of high-atmosphere chemical reactions, which scientists predicted in the 1970s and then detected as a fall in the atmosphere’s “total column ozone” count by 1985. This eased ultraviolet light passage to the earth, with especially large effects over Antarctica where a large “hole” of missing ozone appeared in the early 1980s, first at about 5 million square km and reaching 28 million square km by 2000.
How to respond? The Montreal Protocol, a monument of Reagan-administration and international environmental diplomacy, banned the production and use of CFCs in 1987, and has since been ratified and implemented by 196 countries and territories. Over the ensuing 35 years, production and industrial consumption of CFCs has dropped by about 100%, from 1.1 million tons in 1986 to 43,000 tons in 2005, then to a tiny 63 tons in 2010, and since then oscillating around zero. (“About 100%” and “oscillating” because sometimes discovery and destruction of unused CFC stocks create a negative output; alternatively, sometimes destruction of old buildings inadvertently releases old “banks” of CFC-containing insulation for a small positive output.)
The “Kigali Amendment” negotiated under the Obama administration in 2016 added a ban on hydrofluorocarbons — a temporary replacement for CFCs which are less potent ozone-depleters but have strong greenhouse effects — and made the sale of the next generation of chemicals conditional on participation. This went into effect in 2019, with Senate ratification last fall. The HFCs are supposed to be gone by 2030.
Two results of all this:
(1) CFC atmospheric concentration down: Near zero in 1920, the level of chlorine in the Antarctic stratosphere hit 2.2 parts per billion in 1980 and peaked at 4.7 parts per billion in the mid-1990s. Since then it has been falling by 0.4% to 0.8% per year, with NOAA charts showing “CFC-11” down from 540 points per trillion to 490 ppt since the late 1990s, “CFC-12” from 270 ppt to 220 ppt, and “CFC-113” from 84 ppt to 68 ppt. The current CFC level is about 3.5 parts per billion, and though CFCs degrade only slowly, NOAA’s projections show a return to 1980 levels by the 2070s.
(2) Ozone layer slowly recovering: As CFC levels drop, ozone levels have stabilized. UNEP believes “total column ozone” is rising by about 1% to 3% per year, and the “ozone hole” above Antarctica now oscillates in a range between 16 million square km in 2019 and 24.5 million square km in 2022. The UN Environmental Programme’s 2022 ozone assessment tentatively projects that atmospheric ozone will return to its 1980 levels sometime around the year 2040 worldwide, and in the 2060s for the Antarctic. The reduced emissions of CFC and related gases, meanwhile, appear to have averted a rise of 0.5 to 1 degree Celsius in average global temperatures; and the Kigali Amendment is likely to prevent another 0.5-degree rise.
So altogether: With good scientific evidence, commitment by governments of quite different political outlooks, implementation by bureaucracies and businesses, and some modest temporary sacrifice for the common good, policy can achieve a lot.
FURTHER READING:
Then –
From Ronald Reagan’s enthusiastic comments on the Montreal Protocol in April 1988:
“The Montreal protocol is a model of cooperation. It is a product of the recognition and international consensus that ozone depletion is a global problem, both in terms of its causes and its effects. The protocol is the result of an extraordinary process of scientific study, negotiations among representatives of the business and environmental communities, and of international diplomacy. It is a monumental achievement.”
And NASA’s ‘ozone watch’ tracks ozone density (as measured in Dobson Units) over the South Pole
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
The education of school children has long been a contentious issue in American politics. At its heart, its purpose is to prepare young people for the future. Parents, elected officials and communities grapple with how to best to do this, how and where schools should be built and how to fund them. Unfortunately, the legacy of segregation, white flight and the hollowing out of urban communities has left many low-income Black students stuck in poor, underperforming schools that don’t prepare them for the future.
Politicians of both parties have made a lot of hay about the state of inner-city and majority Black schools. As the party that largely controls many large urban centers, and overwhelmingly wins the African American vote, Democrats politically own the outcomes in most of these jurisdictions.
The Democratic Party has pushed to increase funding for low-income schools, aiming to solve a perceived lack of funding equity. However, the districts with the most income and racial segregation actually tend to spend more on low-income and minority schools than on wealthier, typically white-dominated ones.
President Biden has used his budget proposal to Congress to position himself as a champion of Medicare and Social Security. Even before the budget’s official release, Biden took to the guest essay pages of the New York Times to outline his plans to tackle Medicare’s looming insolvency.
It’s good that the administration is at least acknowledging the need for action to shore up the finances of these vital social insurance programs and has offered a few concrete proposals to do so. But the specifics of his plan are both convoluted and problematic, and the large shortfalls that would remain even if the president could enact his policy wishlist make clear the need for policymakers to consider a much broader menu of options.
Biden’s Medicare proposals are largely limited to increasing revenue for the Hospital Insurance (HI) Trust Fund, which finances Part A benefits (hospital services, nursing facilities, home health assistance, and hospice care) and is projected to run out of money in just five years. If no action is taken before then, payments would be limited to what can be financed by incoming revenue, resulting in an automatic spending cut of roughly 10%. The Biden budget would increase the dedicated taxes that finance Part A by about 30% — but only for people with annual incomes over $400,000. This is a real revenue increase that would delay the trust fund’s insolvency by several years.
Conservatives and progressives that support this kind of legislation remain ready to take the populist hammer to America’s biggest tech companies, with little regard for the long-term consequences. Each has their own seemingly separate reasons, but many of these can be traced back to political vendettas. And for what? Do we really want to risk America’s national and economic security to settle a grudge?
In 2018, the Ministry of Economy, Trade, and Industry (METI) published the “Digital Transformation (DX)” report, warning the Japanese economy would suffer from massively slower growth without increased investment in IT hardware and software. Moreover, Japanese companies were encouraged to place a greater emphasis on digital business models. A series of follow- up reports, notably DX Report 2.1, identified four different strategies companies can employ toward transforming to create a digital industry.
More recently, Prime Minister Fumio Kishida has described his vision of a Digital Garden City Nation, where investment in innovative digital technologies would help revitalize regional economies. This includes implementing digital services to solve rural issues.
An essential aspect of digital transformation and innovation is the heavy use of mobile platforms and apps to provide these digital services to users. Mobile apps are essential for the digital transformation of industries such as healthcare, manufacturing, agriculture, energy, and transportation. For example, the digital transformation of health care requires linking doctors, nurses, and other health care professionals wirelessly with patients and with electronic health records. Digital transformation of agriculture requires the use of precision wireless sensors and mobile apps to allow farmers to monitor conditions in the fields for optimal productivity. Digital transformation of manufacturing requires mobile apps that allow factory workers to monitor robots and sophisticated machinery.
How important are mobile apps and mobile platforms for digital transformation and innovation? By PPI’s analysis, roughly 25% of the help-wanted ads for tech workers in Japan mention the need for App Economy skills such as knowledge of the iOS or Android mobile operating systems. That suggests that Japanese employers see a strong need for workers who have the ability to develop and maintain mobile applications.
Indeed, the current mobile application ecosystems, built around the iOS and Android operating systems and the mobile app stores, can provide a good role model for overall digital transformations. These ecosystems have proven successful over the past 15 years in accelerating innovation and encouraging the development of new applications. First, the mobile application ecosystems provide low-cost distribution services for small- and medium-size app developers that they cannot provide themselves. Second, while the iOS and Android ecosystems take somewhat different approaches, the current mobile app stores devote large amounts of technological and human resources to screening out malware and enforcing security standards. The result is that users are willing to download and adopt innovative apps.
Given the effectiveness of the current system in encouraging innovation, this paper addresses the question of whether new regulations now being considered for mobile app stores have a negative impact on security and business activities, with the potential to delay or hinder the digital transformation of the Japanese economy. The problem is that regulators may accidentally undermine the very features of the app stores that make them so effective at encouraging innovation. In particular, regulations that mandate sideloading make it more difficult for the existing app stores to screen for malware and other security issues can lead users to be less trusting of innovative new applications that might control their homes, their cars, their medical devices, and their factories.
Already, Japanese government websites have come under attack by Russian hackers. National security considerations suggest that the security of the mobile application ecosystem should be a high priority for regulators. Less effective screening of new apps, if mandated by government regulators, will also make the digital transformation of the Japanese government more difficult.
• In section 2, “The App Store Ecosystem and Digital Transformation (DX),” we show how app innovation is essential to Japan’s digital transformation (DX). In particular, mobile apps are essential for allowing users to interact with enterprise-level IT systems.
• In section 3, “Quantifying the Economic Importance of the App Store Ecosystem for Digital Transformation and Innovation,” we estimate the contribution of the app store ecosystem to digital transformation. As noted earlier we find that roughly 25% of tech job postings in Japan require app economy skills. Our methodology is described in the Appendix to the paper.
• In section 4, “The Economic Link Between Innovation and a Secure App Store Ecosystem,” we show that developers and consumers both benefit from a secure app store ecosystem. The ability of users to download new apps in safety has fostered innovation, and the expansion of app markets, which in turn had fed back to more innovation.
• In section 5, “Allowing Sideloading and Other New App Store Regulations May Hinder Digital Transformation,” we show how new app store regulations can reduce security
and hurt developers and users. The result, from an economic perspective, will be to hinder the process of digital transformation.
• In section 6, “Why the European model of tech regulation doesn’t work in Japan,” we discuss the European model of tech regulation, and show how it has led to slower productivity growth and less innovation. This has important implications for Japan, which has been considering an even stricter version of the European approach.
