A roadmap for crossborder data flows: Future-proofing readiness and cooperation in the new data economy

Executive summary

The challenge

The technologies of the Fourth Industrial Revolution, including artificial intelligence (AI), the internet of things (IoT) and blockchain, are exceptionally reliant on accessing and processing data. To realize the potential of such data-intensive technologies, or to fully harness the power and efficiency of cloud computing solutions for start-ups and SMEs, data needs to be able to move seamlessly across country borders. The ability to move, store and process data across borders is foundational to the modern international data economy, and as new global growth relies increasingly on digital growth in the post COVID-19 era, progressive cross-border data flows policy has come into its own as a policy lever for ambitious governments seeking economic recovery.

Despite these benefits, laws and policies that act as barriers to this type of international data sharing are on the rise,1 threatening to undo this progress, slowing technological innovation and limiting positive societal impact. While some of this friction is based on perception, such as the myth that data is better protected by restricting it to within one country, or a perception that such policies maximize value for local populations, some of it is deliberate and misguidedly protectionist.

The opportunity

Certain regulatory differences across countries cannot be eradicated; they are necessary and appropriate because sovereign nations have different values and strategic priorities. However, in order to create trust between nations when it comes to allowing companies within them to participate fully in the international data economy, there is a clear need for interoperable policy frameworks that can streamline requirements across borders and create mechanisms to reduce regulatory overload. Doing so economies of scale, particularly at regional level, and allows governments to create a friendly policy environment for indigenous and international investment. Investment breeds opportunity, and those countries with a burgeoning technology sector can start to maximize these companies’ opportunities on a global scale, enabling them to develop cutting-edge technologies with global impact as well as experiencing potential knock-on economic and societal benefits.

The solution

Building trust between nations requires both an assurance that countries are like-minded in how they approach supporting their data economy and the implementation of a series of backstops that reduce risk. Our proposed solution is a practical Roadmap for governments of country-level policy building blocks that, when combined, are designed to harness the benefits and minimize the risks of cross-border data sharing.

Cross-border data flows policy is a foundational prerequisite to a functioning international data economy and thus requires action from the highest levels of power. In addition, as we look at all types of data in the economy, not just personal data or proprietary information, it is ultimately governments that are empowered to take action to open the gates and allow data to flow relatively seamlessly across their borders.

In the Roadmap, our project community of globally diverse industry experts proposes what bestin-class data flows policy looks like. For some countries, very little will be needed in the way of upgrading as they have inspired the core principles by their own actions, whereas for others the Roadmap may represent a full suite starting point. In order to cater for varying degrees of ambition, we first crystallize the most essential building blocks, and then offer scope for the most ambitious and advanced economies to future-proof their policymaking in this area.