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The digital economy is carving out new divides between capital and labor, by allowing one firm, or a small number of firms, to capture an increasingly large market share.To address this phenomenon, the G-20 should create a World Competition Network to restore competition and address income inequality between capital and labor. As a larger share of total income shifts to capital across many G-20 countries, the World Competition Network would seek to reverse the decline in labor's share of GDP.Between the mid-'80s and today, labor's share of world GDP declined to 58 percent, while capital's share rose to 42 percent.Two forces in today's digital economy are driving the global decline in labor's share of total income. As a result, industries become increasingly dominated by superstar firms with a low share of labor in value added.The G-20 now needs to expand its scope, by recognizing that digital technologies are creating market outcomes that, if unchecked by a new World Competition Network, will continue to favor multinational firms at the expense of workers.
Germany: One country with
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