Queensland Chief Entrepreneur Leanne Kemp has worked with the World Economic Forum (WEF) to design the Roadmap for Cross-Border Data Flows, a guide for enabling international data collaboration and promoting innovation in data-intensive technologies.
The WEF has prioritised creating effective policy on cross-border data flows because the free flow of data is essential to the success of countries and regions that wish to compete in the Fourth Industrial Revolution and thrive in the post COVID-19 era.
A white paper on the Roadmap released by the WEF this month argues that restricting the movement of data across borders poses a serious threat to the global digital economy by limiting the ability of nations to maximise the economic and social benefits of data-hungry technologies like artificial intelligence, blockchain and cloud computing.
Despite this, data localisation requirements and barriers to data transfers are on the rise. While there are legitimate reasons for the increased localisation of data – including concerns related to privacy, security and sovereignty – there are fears that excessive restrictions could slow technological progress, deter economic growth and limit the positive social impact that data-intensive technologies could have.
Queensland Chief Entrepreneur Leanne Kemp, who is also the Chief Executive Officer of Everledger, co-chaired the Project Steering Committee for the Roadmap with Lothar Determann, a Partner at international law firm Baker McKenzie.
“Countries can attract inbound cross-border transfers of data and information technologies only if people, businesses and governments aboard trust them,” Kemp and Determann write.
“To earn a reputation as a safe data transfer destination, countries must provide for secure telecommunications infrastructure, respect individual privacy and confidentiality, exercise self-restraint regarding forced data access, and enact laws that also benefit people and organisations outside their borders, including data privacy, security, contracts and trade secret protection laws.
“Moreover, governments must be transparent, share data, and encourage their people and businesses to share data across borders if they want to participate in cross-border knowledge transfers. Open information societies thrive best in the world economy.
“Conversely, people, businesses and governments hesitate to transfer data to countries that maintain weak data security infrastructure, laws and defences; excessively spy and seize data; fail to enforce or comply with laws protecting privacy, confidentiality and contracts; cover up data security breaches and risks; suppress media reporting; or fail to offer foreign businesses and citizens due process and recourse to privacy, contracts and trade secret protection laws.
“Countries that impose local data storage and retention requirements to secure better access for themselves can expect multinational businesses to stay away and other countries to retaliate. Similarly, countries that regulate data processing too rigidly and with specific restrictions on cross-border data transfers provoke reciprocal restrictions by other countries, resulting in reduced access to global data and technology, pressures for compromises in bilateral trade negotiations, and accumulating complexities. Cross-border data transfers require give and take.”
The Roadmap is intended to serve as a guide for countries wishing to engage in cross-border data sharing while maintaining robust domestic policies that strike a balance between the benefits and risks of data flows.
Essentially, there are six steps to the Roadmap.
- Allow data to flow by default. Prohibit data localisation requirements except in very specific circumstances in order to create regulatory certainty for businesses.
- Establish a level of data protection. Establish national legal frameworks that protect the data of private individuals. Complement this with laws that protect proprietary rights.
- Prioritise cybersecurity. Enact transparent cybersecurity legislation in line with international norms and maintain robust data security infrastructure.
- Hardwire accountability between nations. Establish cooperation mechanisms between national authorities to hold governments accountable for the security and confidentiality of the data they share, while making allowances for compliance.
- Prioritise connectivity, technical interoperability, data portability and data provenance. Prioritise the development of connectivity infrastructure as a prerequisite to building a local data economy, encourage technical standards to increase interoperability, facilitate data portability at the B2B level to support SMEs, and encourage data publishers to ensure data integrity.
- Future-proof the policy environment. Allow for the possibility of future alternative models (such as federated learning models and data trusts) that can also fulfill the spirit of cross-border data flows.
The full white paper for the World Economic Forum’s Roadmap for Cross-Border Data Flows can be viewed here.