COVID-19 made clear that data flows are critical to the global economy, yet a growing number of countries are enacting new barriers that make it more expensive and time-consuming, if not illegal, to transfer data across borders. Misguided notions about how best to protect data and bolster cybersecurity are common motivations for data localization policies. But either way, their spread poses a growing threat to the potential for an open, rules-based, and innovative digital economy. Data localization also undermines the potential for countries to work together to address legitimate concerns about data transfers, such as data privacy, financial oversight, and law enforcement investigations, while still allowing data to flow freely.
ITIF hosted a panel discussion on a new report detailing global data localization barriers and what policymakers need to do to develop new rules, norms, frameworks, and agreements to support data flows. In the absence of such an effort, China, Russia, India, the European Union, and others that prioritize digital control and protectionism will make such barriers a global norm.