Investment law and the digital economy

Abstract

The transition to the digital economy poses significant challenges to international investment law, which was originally designed for the traditional economy. Current international investment agreements often fail to address developments in the digital economy. This article explores how the body of existing international investment law interacts with the digital economy, examining concepts such as ‘investor’ and ‘investment’. It then identifies two main challenges to investment law in the digital economy: the emergence of new digital divides and the rise of geoeconomics. The article also highlights different layers of digital investment law: the domestic layer—with measures such as data localization, technology transfer requirements, and investment screening mechanisms; the bilateral and regional layer—including new types of agreements like Digital Economy Agreements; and the potential for a new overarching framework tailored to the digital economy—drawing on initiatives such as the Cornwall Consensus along with possible design principles.