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Kenji E. Kushida

This chapter shows how the advent of digital technologies is driving a reconceptualization of the underlying assumptions of innovation policy. The advent of digital technologies is rapidly transforming human activities, technology tools, corporate strategies, industry structures, and the dynamics of competition. Key questions for innovation policy boil down to what innovation itself looks like now, what it may look like in the near future, and most importantly, how immobile places (cities, countries or regions) that promulgate policy can position themselves to capture increasingly global and mobile opportunities. The algorithmic revolution is transforming services activities and collapsing previously distinct sectoral boundaries, shifting the targets, tools and politics of innovation policy. Information technology infrastructure, in particular the advent of global-scale cloud computing, transforms computing resources from scarcity to abundance, with a variety of implications for the transformation of work and policy. The chapter first provides an overview of how digital technologies are transforming economic activity, then discusses implications for innovation policy. This is followed by a discussion of recent changes in information technology infrastructure and platforms that play into discussions of innovation policy, concluding with a brief discussion of how digital policy tools can enable better information gathering and processing for government policy itself.