This paper highlights the scale of the international digital economy; describes the current, incomplete governance framework for the international digital economy; illustrates the importance of governance in relation to private-sector innovation; and recommends incremental, doable next steps to enhance governance, close gaps and promote further innovation. The analysis finds indications that digital services market openness and framework conditions matter for the digital economy and, in particular, for innovative firms that operate with high digital intensity. Better definition and international alignment of the framework for governance of digital trade and data could lead to benefits for the regulatory objectives of privacy, trust and security. This approach could also promote development of the digital economy via reduced friction in the conduct of business and increased international openness within the bounds of appropriate regulatory guardrails.