Data privacy and security don’t have come at the expense of innovation or economic growth — they’re instrumental in driving both.
How can we maximize the good that can come from the responsible use of data, while minimizing the inherent risks of data to privacy and security? This is one of the central questions of our time in an age increasingly driven by big data.
More and more of our world today runs on the free flow of data — through smartphones, cloud computing, chip cards, biometrics, sensors and more. Data is driving more of our economies, growth, and productivity. According to McKinsey & Company’s “Global Flows in a Digital Age,” GDP growth increases between $250 billion and $450 billion annually — approximately equivalent to the GDP of Finland or Norway — when data flows freely. And countries that support cross-border data flows are reaping a 40 percent economic benefit over less connected countries.
The free flow of data helps healthcare experts track and contain the spread of deadly diseases across the globe. In the fight against the Ebola virus in West Africa, as one professor put it, “it would be tragic if, during a crisis like this, data was not being adequately shared with the public health community.”
There is tremendous good that data sharing brings about. But data sharing raises legitimate concerns about economic and national security, citizen and consumer privacy, and loss of intellectual property. Proper and effective safeguards are absolutely mission critical. It’s more vital than ever that everyone play their part in protecting the information under their control. I want to underscore that privacy and security don’t have to come at the expense of innovation or economic progress. In fact, privacy and security are instrumental in driving both. A balanced approach helps ensure the use of data is free-flowing, responsible, and secure. It’s a balanced approach that I’m advocating.
Mounting efforts to create security and safeguards in the extreme are not the answer. I’m talking specifically about what some have called data nationalization — the requirement of data to be physically stored or processed inside a nation’s borders. These restrictions often confuse concerns about access to data for national security and law enforcement purposes with commercial use of data. The outcome is the fragmentation of data that creates a “splinternet” — one that risks not only stifling economic growth but reversing it as well.
To operate effectively and efficiently, economies need reliable, continuous and affordable access to data. Laws restricting the flow of data have a chilling effect on industry and block consumer access. People can’t get products and services from other markets. Domestic economies become isolated from the growth potential associated with the rest of the global digital economy.
Data nationalization laws often create additional burdens. Increased infrastructure costs can ripple throughout the value chain, with a disproportionate impact placed on smaller businesses that cannot easily afford the additional investments. And by duplicating infrastructure, data systems can become fractured and increasingly vulnerable — an ironic unintended consequence to these laws.
Less access to data also has an unintended consequence of less access to ideas and innovation. Why? Because extreme restrictions can result in limiting access to information that can enable a simple idea to evolve into the next digital discovery — one that could in turn evolve into a game-changing innovation that creates new growth and jobs or a global solution to a public problem or challenge.
So, what do we do? The answer I believe lies in our combined leadership across public, private and civil society sectors — leadership that forgoes the easy route of saying “no” in favor of forging the harder path of saying “yes, if…” We can get to “yes, if…” by taking steps like codifying agreed-upon global principles around privacy and security that local jurisdictions can adopt; by updating existing surveillance treaties and agreements to reflect the Big Data age; and by creating standards that enable the pooling of public and private sector data to address global challenges. It’s not enough to challenge data nationalization with arguments — we have to come up with viable answers.
Just as steam powered much of the First Industrial Revolution, the free flow of data will be fundamental to powering what the World Economic Forum and others are calling the Fourth Industrial Revolution. In fact, during the World Economic Forum’s annual meeting last month, one session in particular — Internet without Borders — focused on how to avert a future of data fragmentation. This was a timely session that grappled with a key issue of the 21st century: the responsible use, protection and sharing of data. How this is addressed is the challenge and opportunity all of us share.
(Top image: Courtesy of Thinkstock)
This piece first appeared in the World Economic Forum blog.
Ajay Banga is CEO of Mastercard.