New Report Links Dearth of Information on Commercial Data Transfers to Spread of Policies That Stifle Digital Trade

January 27, 2020

WASHINGTON—Global trade and commerce is increasingly dependent on data flowing across borders, but a new report from the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, finds there are too few surveys that accurately measure the extent and value of these data flows, and the resulting information vacuum leaves governments blind to the potential impact of policies that restrict how data can be stored, managed, or transferred.

ITIF’s report calls on governments, trade associations, and regional and multilateral organizations to fill this gap in understanding by surveying more firms to quantify and calculate the value of their data transfers. ITIF suggests building on the few quality surveys that exist so far, such as one conducted by the Organization for Economic Cooperation and Development (OECD).

“To build support global digital trade, stakeholders need to show policymakers how much it’s worth,” said Nigel Cory, ITIF’s associate director for trade policy, who authored the report. “There is a troubling information gap in the digital economy today, and it’s leading to damaging policies, because governments often fail to appreciate how various data-protection regulations can impact companies’ ability to conduct business.”

The report analyzes the most rigorous studies that have been conducted to date, including one from Japan on the impact of Chinese and European cybersecurity and data-protection laws, and surveys by the OECD and Inter-American Develoment Bank.

Those studies give glimpses of the economic impact of policies such as China’s cybersecurity law (CSL) and the European Union’s General Data Protection Regulation (GDPR). But ITIF concludes much more extensive survey work is needed, both at the domestic level by individual countries and internationally through partnerships among governments, trade associations, and regional and multilateral organizations with an that value an open, competitive digital economy.

“Surveys can reflect biases arising from self-selection and channels of distribution,” said Cory. “But those issues can be addressed with the right structure, support, and cooperation.”

Read the report.