Introduction

The UN Trade and Development has recently published the Digital Economy Report 2021, which examines the implications of growing cross-border data flows, especially for developing countries. The report emphasizes the significance of data as a vital strategic asset for creating private and social value and highlights the necessity for a comprehensive global policy approach to govern data and data flows. The report proposes innovative approaches to data governance, balancing different interests and needs in a way that supports inclusive and sustainable development..

The importance of data and cross-border data flows

Data has become a crucial strategic asset for creating both private and social value. How we handle this data will significantly impact our ability to accomplish the Sustainable Development Goals. The report emphasizes that data is multidimensional, and its usage has implications not only for trade and economic development but also for human rights, peace, and security. It is crucial to take appropriate measures to mitigate the risk of data abuse and misuse by the private sector, non-state actors, or states.

The current regulatory landscape for cross-border data flows

The report analyzes the current regulatory framework for cross-border data flows, which is inconsistent and varies widely depending on the country. It highlights the need for an international framework to address this situation and proposes new and innovative ways of global governance that are better suited for the new context. The report recommends the establishment of a new international body that focuses on data-related governance, with the full participation of all stakeholders, including developing countries.

The complexities involved in governing data and data flows across borders

The report delves into the difficulties faced when regulating the movement of data across borders in a manner that could lead to sustainable development. It highlights that there is currently a stalemate in the global conversation on how to govern cross-border data flows, with opposing views dominating discussions. The report asserts that the increasingly interconnected and interdependent global data economy necessitates a shift from an isolated approach to a more comprehensive and organized global strategy.

Bridging the data-related divide

The report highlights the significance of bridging the divide related to data, both within and between countries. It highlights that countries with limited capabilities to convert data into digital intelligence and business prospects and to utilize them for economic and social development are at a distinct disadvantage. The report concludes by urging for a more balanced approach to global data governance that can help ensure data can flow freely across borders, while ac while achieving an equitable distribution of benefits within and across countries, the need for addressing risks associated with human rights and national security.

Challenges

Here are some challenges related to cross-border data flows and development. These challenges include:

1. The report highlights the challenges in effectively governing and utilizing digital data for global benefit, particularly in achieving the Sustainable Development Goals. Data’s multidimensional nature has implications for trade, economic development, human rights, peace, and security.
2. Countries with limited capacities to leverage data for economic and social development face a significant disadvantage, which creates a data-related divide. This divide compounds the conventional digital divide and underscores the importance of addressing disparities in data capabilities between countries.
3. The international debate on regulating cross-border data flows is at an impasse, with polarized positions and a patchy regulatory landscape influenced by major economic powers. The report stresses the urgent need for an international framework to address this situation effectively.
4. There is a call for a global approach to data governance to prevent inequalities against developing countries from worsening in the data-driven digital space. Efforts are needed to ensure that developing countries’ perspectives are adequately represented in global policy discussions to address the challenges of data governance effectively.
5. Bridging the divides in the global digital economy, whether between countries or stakeholders, is crucial for inclusive development. The report highlights the importance of flexible international frameworks that complement national policies to ensure that all countries, regardless of their readiness, can benefit from data-driven digital economies..

Recommendations

Here are some recommendations related to ports:

• Develop a comprehensive and coherent assessment of the risks, vulnerabilities, and outcomes of the business models of digital platforms, especially in the context of social media platforms. This assessment should be done against a background of rising online harm at the global level.
• Ensure that global policy discussions related to data governance adequately represent the local knowledge, needs, and viewpoints of developing countries.
• Establish terms of access to data, strengthen the measurement of the value of data and cross-border data flows, and consider data as a (global) public good.
• Develop a common understanding of definitions of key data-related concepts and ensure that the future of cross-border data flows is not determined only by a small number of major countries.
• Address data-driven digitalization as a global opportunity and challenge that requires global solutions to harness the positive impacts and mitigate the negative impacts.
• Ensure that effective global governance of data is a prerequisite for data to support the attainment of the economic, social, and environmental objectives of the 2030 Agenda for Sustainable Development, with people at the center.
• Address a number of key policy areas and priorities, including developing a common understanding of definitions of key data-related concepts, establishing terms of access to data, strengthening the measurement of the value of data and cross-border data flows, dealing with data as a (global) public good, and ensuring that local knowledge, needs, and viewpoints of developing countries are adequately represented in global policy discussions.

Conclusion

The Digital Economy Report of 2021 provides an in-depth analysis of the implications of cross-border data flows, with a particular focus on developing countries. The report stresses the importance of data as a crucial strategic asset for creating private and social value and highlights the need for a comprehensive global policy approach to govern data and data flows. The report suggests innovative approaches to data governance that balance various interests and needs, promoting inclusive and sustainable development. The report also underlines the significance of bridging the data-related gap between and within countries while calling for a more equitable approach to global data governance. Such an approach could ensure that data flows across borders as freely as necessary while also achieving an equitable distribution of benefits within and across countries. Additionally, the report highlights the importance of addressing risks related to human rights and national security.

Download the full report here