How Barriers to Cross-Border Data Flows Are Spreading Globally, What They Cost, and How to Address Them
July 19, 2021
Nigel Cory and Luke Dascoli
Data-localization policies are spreading rapidly around the world. This measurably reduces trade, slows productivity, and increases prices for affected industries. Like-minded nations must work together to stem the tide and build an open, rules-based, and innovative digital economy.
For centuries information has flowed around the world, steadily increasing with the rise of international mail, the first transatlantic cables in the 1850s, and the first transatlantic telephone cable in the 1950s. What is different now is that the Internet creates the potential to send large amounts of data quickly and at virtually no cost to almost any part of the world. Moreover, on this global network, sending data abroad costs no more than sending data domestically. COVID-19 has made clear that data flows are critical to the global economy, enabling both economic responses (e.g., data sharing for medical research, the monitoring and automated control of vaccine production facilities, and the adoption of digital services for business continuity) and societal responses (e.g., family video calls, contact tracing, streaming content for entertainment, and online shopping). Data flows will only continue to rise as more countries and sectors embrace digital transformation.
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