The global economy is in the throes of revolution. Big data, cloud computing, artificial intelligence, and the integrated networks of physical components are transforming every facet of economic life. Digitalization will upend supply chains, empower small businesses and consumers, rationalize energy use in the most efficient way, allow truly customized customer service, and build connections across vast distances. Soon everything from appliances to cars and even the clothes on our backs could be online as an Internet of Things crisscrosses every aspect of our daily lives.

Against this backdrop of enormous digital transformation, the United States and the European Union...

As the global economy stands at the edge of a great digital revolution, the United States and the European Union have a historic opportunity—perhaps their last— to be leaders in building the digital marketplace of the future. Together, they can give a new burst of energy to a global Internet economy centered on thriving digital commerce, innovation, creativity, online security, and citizens’ rights.

This report is a call to action. The United States and EU must quickly seize this opportunity to create a real transatlantic digital single market, stretching from Silicon Valley to Tallinn. Such a market would: accelerate...

Digital trade is slated for a significant global overhaul as the Transatlantic Trade and Investment Partnership (TTIP), plurilateral Trade in Services Agreement (TiSA), and Trans-Pacific Partnership (TPP) recast international rules for ICT regulation, e-commerce, and cross-border data flows for the twenty-first century.

The United States and EU are well positioned to use the new trade order to extend their leadership in the €12 trillion global e-commerce market.¹⁸ Digitally enabled service exports continue to power economic growth, reaching $356.1 billion in the United States in 2011. US digital trade has played a role in the creation of up to 2.4 million...

A thriving digital economy requires an interoperable system of rules that minimizes fragmentation, allows innovation to thrive, and encourages cross-border collaboration between multiple stakeholders. Without attention to the transatlantic dimension of these rules, the United States, the EU, and the EU member states risk drifting apart. With the world’s largest markets and most sophisticated regulatory systems, the United States and EU can set global regulations and standards on everything from cars to chemicals. On the whole, this capacity has acted as a global public good, benefiting international commerce. US and EU regulators—often acting alone—have been first movers in...

The EU’s Innovation Czar, Robert Madelin, recently said, “the most important thing ‘Europe’ creates is not the law but the space.” The same is true across the Atlantic. Creating the space in which innovation can flourish is the cornerstone of the digital economy, but this space is mainly nurtured in the realm of domestic policy, largely cordoned off despite extraterritorial pressures from outside partners. In this context, the United States and EU must design an innovation landscape that encourages integration and avoids fragmentation. A continent isolated from global innovation and economies of scale is, by definition, limiting its technological, economic,...

The Internet economy and open data flows are predicated, more than anything, on digital trust. Discussions on data protection and privacy are perhaps the most charged in the transatlantic digital discourse. Commercial policy and the desire to protect personal data—from identity theft, organized crime, and nefarious states—intermingle with: concerns about NSA surveillance; the European perception, accurate or not, that American tech business models render personal data a commodity; and the counter perception that European data laws are a disguised form of digital protectionism. In reality, US-European differences on data protection stem from a fundamental philosophical divergence on the...

The United States and Europe have been working to realize two mutually reinforcing objectives on the global stage: defending and enhancing a multi-stakeholder system of Internet governance so that decision-making remains with a consortium of stakeholders and not under control of governments; and unleashing the Internet’s social and economic potential—and through it, joint ownership of Internet governance—for middle- and lowincome countries and their citizens.

Even as global Internet traffic is growing at 20 percent annually, 60 percent of the global population remains offline, with Internet penetration as low as 5 percent in some of the poorest countries. ⁷⁴...

Alexander Hamilton—the visionary who saw the future of the United States shaped by a shared national financial system—would probably be hailed as the founding “disruptor” today. When others saw the United States as a country of provincial farmers, he saw a country of manufacturers, innovators, and engineers empowered by a unified financial system. When they were loyal to their states, he implored his fellow countrymen to “learn to think continentally.”

The digital world is today craving its Hamilton moment, one that will force policymakers to learn to think transatlantically or, better yet, globally. In the coming years, digitalization...