Opinion

The Great Debate

Don’t let data protection turn into protectionism

By Jim Hagemann Snabe
January 9, 2014

We live in a global, digitally networked world. Cloud, mobile and in-memory technologies are its engines. Our new world has no boundaries; there is a huge potential for growth, employment and new business models. But it also comes with challenges for policy and industry.

In response to leaks about the U.S. National Security Agency’s widespread surveillance, there have been lots of understandable concerns globally. Unfortunately, some parties have suggested building fortresses around national data.

I believe that the new technologies and the free flow of data are essential to spurring innovation and expanding international trade. This is only possible if consumers and citizens trust the digital economy and use it extensively. We in industry must work with policymakers in all markets to create clear and transparent rules that both protect the legitimate rights of citizens, consumers and companies and promote cross-border data flows.

We urgently need an internal harmonization of security and privacy regulations in Europe, but these cannot lead to building data barriers around the continent.

On the contrary, Europe should work toward a global solution with other partners, starting with the United States. As both continue their transformation into digital economies, policymakers and industry representatives from both continents should come together and take an ambitious approach to creating joint standards and procedures that enable cross-border data flows under the Transatlantic Trade and Investment Partnership.

In so doing, we should also strengthen the Safe Harbor agreement between the European Union and the United States, which facilitates data transfers between businesses in both areas.

Of course, such agreements should include provisions that reaffirm each party’s right to protect its citizens’ private data as well as sensitive government or business data. With this we also need to jointly address challenges in privacy, cyber-security, and protection of intellectual property. Important work needs to be done to establish due-process norms and enforceable rules regarding government access to private and industry data. But all this should also be done with an eye to boosting global commerce and facilitating data flows.

We have already seen this work successfully in the past when an innovation like containerized shipping boosted global trade. The invention of the standardized metal shipping container decreased the time and costs for loading and unloading a ship. As a result, ships finally spent more time at sea than docked. Containerized shipping boosted bilateral trade by almost 800 percent over two decades, according to a recent study of 22 industrialized countries.

This explosion in global commerce was also supported by trade agreements such as the General Agreements on Trade and Tariff (GATT), which preceded the World Trade Organization. While there have always been safety and security concerns associated with containerized shipping, these have been well-managed through strong cooperation among governments.

The McKinsey Global Institute estimates that electronic commerce accounts for $8 trillion annually worldwide and Gartner analysts forecast that companies will spend about $154 billion on cloud services in 2014, 60 percent more than in 2011.

The flow of information clearly is the new currency of global trade today and there’s a huge opportunity in creating a new “GATT” for the data economy.

Exciting innovation is taking place around new technologies today. In the future, companies could improve economic efficiencies, deliver breakthroughs in public health and create new models for social welfare — all through the aggregation and analysis of data.

This innovation will mainly come from smaller companies and startups that are building their solutions on the latest technology. But these companies will not be able to handle the necessary investment and cannot take advantage of the opportunities that come with new technologies as long as rules vary by country and we have not established reliable global standards.

Instead of building fortresses around information, we should work on laying the necessary groundwork around security and trust — so that we can embrace the global economic opportunities unleashed when data travels unhindered across borders.

PHOTO: An illustration picture shows a network cable wrapped around to a pack of smartphones in Berlin, June 7, 2013. REUTERS/Pawel Kopczynski

Comments
18 comments so far | RSS Comments RSS

Another PAID article by a corporate CEO! Please Reuters, is it worth it?

Posted by tmc | Report as abusive
 

“Our new world has no boundaries.”

Well, do you want it to have borders? If so, raise the tariffs back up to what they historically were here (20 -40%). If not, prepare to share your lawn with Haiti.

Posted by AlkalineState | Report as abusive
 

The reason people are talking about balkanisation and national fortresses in the first place is that there has so far been failure to reach agreement on these issues.
This pressure/threat is a direct result. Take it away and the pressure for change is removed.
If anything what we need now is more pressure to create greater urgency in creating better privacy protections for everybody.

Posted by TheCookieCrunch | Report as abusive
 

Your article is either INCREDIBLY naive or disingenuous!

Posted by EconCassandra | Report as abusive
 

The author fails to explain:

Has the touted ‘explosiion in global commerce’ equated to a better standard of living in the United States?

Simple question, and I know he checks his own blog. So does he have an answer? Hello?

Posted by AlkalineState | Report as abusive
 

“…clear and transparent rules that…protect [both] the legitimate rights of citizens, consumers…”. YES!

“Important work needs to be done to establish due-process norms and enforceable rules regarding government access to private and industry data.” YES!

The other day, trying to resolve an issue with Medicare (after a 45 minute wait to speak to a functionally useless idiot with no authority and no accountability) I decided to try their “Live Chat” option. Here’s the three-paragraph Disclaimer that popped up:

“You are accessing a U.S. Government information system which includes: (1) This computer, (2) this computer network, (3) all computers connected to this network, and (4) all devices and storage media attached to this network or to a computer on this network. [snip] By using this information system, you understand and consent to the flowing:

You have no reasonable expectation of privacy concerning any communication or data transiting or stored on this information system. At any time, and for any lawful Government purpose, the Government may monitor, intercept, and search and seize any communication or data transiting or stored on this information system.

Any communication or data transiting or stored on this information system may be disclosed or used for any lawful Government purpose.”

Unless one clicks the “Accept” button, they are denied access to information collected for public access and use that is maintained at taxpayer expense. We must agree that OUR computer hard drives, cloud storage, etc. become part of “this information system”.

We thus give up all rights to such previous privacy as required search warrants, warnings, etc. without any public debate and or vote. “We, the people” are denied meaningful voice when faceless, unelected bureaucrats unilaterally impose such conditions on us.

Here in post-Snowden America, BIG BROTHER is not only alive but apparently in charge!

Posted by OneOfTheSheep | Report as abusive
 

@AlkalineState,

“Has the touted ‘explosiion (sic) in global commerce’ equated to a better standard of living in the United States?”

The United States has long been a economic cornerstone of global commerce. Our “standard of living” here has historically been so much higher than elsewhere as to appear excessively so to others.

Can you explain your apparent expectation that it rise even as other healthy economies seek their “natural level” globally for the first time? We can’t turn back the clock to protectionist tariffs and an American market essentially a “private economic lake” to satisfy those with an “entitlement mentality”.

Such economic warfare is not the way to a globally peaceful and prosperous future. There are none better than Americans at innovation, ingenuity and productivity, but it has been necessary for us to identify and “play” to America’s distinct advantages as others become more capable and competitive for a “piece of a growing pie”.

For many years we have encouraged the rest of the world that “you, too, can succeed with persistence and hard work. Those newly on the carousel have legitimate expectations as they finally reach for the golden ring. Any who would act the bully or the spoiler may find themselves in the dirt.

Posted by OneOfTheSheep | Report as abusive
 

@AlkalineState,

“Has the touted ‘explosiion (sic) in global commerce’ equated to a better standard of living in the United States?”

The United States has long been a economic cornerstone of global commerce. Our “standard of living” here has historically been so much higher than elsewhere as to appear excessively so to others.

Can you explain your apparent expectation that it rise even as other healthy economies seek their “natural level” globally for the first time? We can’t turn back the clock to protectionist tariffs and an American market essentially a “private economic lake” to satisfy those with an “entitlement mentality”.

Such economic warfare is not the way to a globally peaceful and prosperous future. There are none better than Americans at innovation, ingenuity and productivity, but it has been necessary for us to identify and “play” to America’s distinct advantages as others become more capable and competitive for a “piece of a growing pie”.

For many years we have encouraged the rest of the world that “you, too, can succeed with persistence and hard work. Those newly on the carousel have legitimate expectations as they finally reach for the golden ring. Any who would act the bully or the spoiler may find themselves in the dirt.

Posted by OneOfTheSheep | Report as abusive
 

OOTS, in that over-simplified view, what is the purpose of borders? And why would any international business wish to see them strengthened?

Posted by AlkalineState | Report as abusive
 

@AlkalineState,

Borders serve the purpose of defining the area under the purported control of a given nation-state society. The United States has a vested interest in limiting the benefits of said society to those citizens who have borne the costs to make it what it is. It will be incredibly expensive over time to grant such benefits to anyone and everyone who gets here and squats.

Contrary to the opinion of some, “international business” is not a political philosophy or party. There is no identifiable “organization of corporations” whose agenda is to destroy the American middle class. American businesses have plenty “on their plate” coping with ever more competition, unnecessary regulation, the ebb and flow of good times and bad, and maintaining sufficient efficiency to survive

America is, and has always been, a fundamentally capitalist society. Such economic philosophy is today embraced by all prosperous nations as well as those who would be prosperous. Commerce is the beating heart of capitalism, and competition it’s circulating life’s blood.

Successful commerce involves adherence to certain specific or implicit “rules”, somewhat flexible, under which all increasingly agree not to take undue advantage of others. Dealing with each other in good faith is slowly replacing the days of “buyer beware”. It should be increasingly apparent that only a path of common overall interests and goals can lead to a prosperous and peaceful world for one and all over time.

Our world economy remains a “work in progress” that is doing better year after year with Utopia an appropriate aspiration. Those who expect or demand “Utopia now” are an unfortunate diversion from real progress that serves NO legitimate purpose. One should lead, follow, or GET OUT OF THE WAY!

Posted by OneOfTheSheep | Report as abusive
 

And what is the purpose of a ‘nation-state society.’ In this beautiful unfettered ‘global community’ of yours, OOTS? Don’t the nations and their borders just serve as a net drag, a market distortion? They are inefficient and unnecessary, no? And so, what market forces keep them intact?

Posted by AlkalineState | Report as abusive
 

@AlkalineState,

Wonderful question. In the same sense, of what “purpose” is the cosmos, the Earth, the sun, the moon and the wind? Some things just “are”, existing in some form presently definable and observable yet seldom utterly without eventual change.

To my knowledge there is no unchallenged “purpose” yet universally accepted for humanity in general. History tells us if there be a natural “state of affairs” in human events, it is war. War is one way humans in number seek to accrue and consolidate influence and power over themselves and the various resources which serve to amplify influence and power. Commerce is another.

What is the “purpose” of the many different languages? As science advances our understanding of ourselves and our abilities and physical surroundings, those languages which are “unscientific” become less and less relevant and eventually cease to be spoken. Each evolved to ease the constant challenge of people communicating because it is through communication that people move beyond self to work collectively with or against each other.

What is the “purpose” of differences among us? Some are (comparatively) smart, some dumb, some in between. Some have been termed “red”, “yellow”, “black”, brown”, white, etc., although such distinctions are socially of less distinction than in the past.

As man progresses beyond pettiness towards understanding it is to be hoped that war can be left behind and the natural ebb and flow of commerce will result in a more efficient and comfortable “standard of existence”. It is by no means certain, however, that man has the capacity to master the many weaknesses that comprise his individual egos and associated desires.

Only as he can and does focus his collective long term influence to better harmonize with his surroundings will the passage of time advance mankind’s average comfort and contentment. It should be obvious that any path forward must be based on the positive acts of responsible creation, as opposed to the negative acts of taking or destroying that which others have created.

Posted by OneOfTheSheep | Report as abusive
 

But we don’t spend a trillion federal dollars a year to defend the sun or the ‘cosmos.’ This is real money in real money and real people dying. Are borders necessary in your age of globalization or not?

Posted by AlkalineState | Report as abusive
 

@AlkalineState,

America, as the sole combined military-economic superpower has an ongoing interest in “maintaining substantial peace” across the globe. The whole world benefits from wars nipped in the bud and a relatively uninterrupted flow of oil, even if they don’t pay their proportional fair share of the cost.

We forged our swords into plowshares immediately after both WWI and WWII, in each case only to be caught flat-footed by regional tyrants with greater ambitions; in the latter case by the North Korea/China/USSR communist alliance of the Korean “conflict”. It should be obvious to even the most obtuse that if our great nation is ever stupid enough to allow the long honed skills of our military-industrial complex to deteriorate or be lost the oceans will never again buy us enough time to recover to meet the next unexpected major military challenge.

With even so-called allies changing their permission to host U.S. bases with the political winds, the U.S. is increasingly dependent on our carrier groups to “hold the line” with wannabee tyrants until an appropriate response can be decided, organized and dispatched. That’s a capability no other nation has (or needs), but China increasingly seems determined to develop a credible challenge for purposes not obvious and as yet undeclared.

“…real people dying…”? Please. In WW I, WW II and Korea anyone who trumpeted daily “lives lost” would have been hauled out from behind their desks and from in front of their microphones or cameras, charged as traitors, and SHOT! In each of these conflicts, the “price paid” was whatever was necessary, whatever it took. That has not changed.

What has changed is that too many idiots see themselves as armchair generals with the benefit of 20-20 hindsight at the end of each and every day. In the real world, pivotal decisions must be made at a time all cards are NOT yet on the table. Sometimes you’re right, sometimes you’re ineffective, and sometimes you’re just plain wrong. Such risk goes with the territory, and all must play the cards they’re dealt; good or bad.

The United States loses far more lives to crime and traffic accidents than war these days. More than 6,800 combat deaths occurred in just five weeks of battle on Iwo Jima in WW II, less than 5,800 in the three decades of the post-Vietnam era. In appropriate perspective, each is a “cost of doing business” that can never be reduced to zero.

As I said before, Utopia is a worthwhile goal but man is not there yet. So, YES, borders remain necessary to physically separate third-world riff-raff from diluting and then overwhelming the individual economies of those societies sufficiently prosperous to contribute to the fivefold increase in GWP (gross world product, total of all goods and services produced) between 1975 and 2012. Such unprecedented worldwide economic progress has required no “giveback” on the part of most Americans, only increasing thought and effort to stay WELL ahead of everybody else.

Do you REALLY believe Americans can again be privileged economic exceptions to an incredible majority of humans elsewhere condemned by an accident of birth to a lifetime of grinding poverty without hope? If so, you will live the rest of YOUR life in denial of reality. Don’t feel too bad. It’s not uncommon.

Posted by OneOfTheSheep | Report as abusive
 

You think we oppose regional tyrants? Have you been to Latin America?

Do you remember anyone named Pinochet? :)

Posted by AlkalineState | Report as abusive
 

@AlkalineState,

The United States does not, nor should it, oppose regional tyrants of no consequence beyond the simple fact that they either turn their own countries into cesspools or keep them that way.

We militarily opposed genocide in Kosovo with success. We removed Noriega from power. We frustrated with Socialists grasping for power in Grenada. Kadaffi is through playing the “spoiler” in Libyia.

We “opposed” Saddam Hussein because he launched his fourth largest military in the world (at the time) on a war of conquest into Kuwait to thus plant his boot on the jugular of Middle Eastern oil. He thought the world would let him do that, and he was wrong; later hanged by his own people.

We went into Afghanistan because terrorists based and training there carried out an unprovoked attack on these United States on 9/11. While we were no more successful than Diogenes in finding an “honest man” to then take charge, I doubt that the Taliban will again allow terrorists sufficient free reign to bring us back.

Those of no particular concern like Castro, Pinochet and Chavez we just watch closely; like the sickness-carrying mosquitoes that they are. What’s your point?

Posted by OneOfTheSheep | Report as abusive
 

I think you need to review your history, OOTS. We did not watch pinochet ‘closely.’ We installed him :)

The U.S. government has become a tool of international business to set up puppet regimes and take out other regimes unfriendly to international business. Problem is, the bill goes back to the taxpayers, not those businesses. It was not always this way. But since WWII, that has been the case.

And that’s right around the time we started amassing accelerated debts.

Posted by AlkalineState | Report as abusive
 

@AlkalineState,

Your penchant for switching subjects is apparently without end and becoming boring. Throughout history nation-states have engaged in commerce or, as you term it “international business”.

The United States has a predominately capitalist economic system of which commerce is the beating heart and “life’s blood”. Why would it come as a surprise that our long term interests require genuine and enthusiastic support for “globalization”? In such context I have no idea as to your point when you say “The U.S. government has become a tool of international business…”.

Our world economy is a composite of prosperous, not-so-prosperous and failed states. Yes, the United States has influence and it has not been bashful in the exercise of same. Our Marshall Plan rebuilt Europe after WW II and Japan has worked out well. From WW II to 1975 circumstances that will not repeat made the American economy and way of life the envy of the rest of the world.

We supported the Shah of Iran (under whose rule both boys and girls were educated, an essentially Bronze age country was brought rapidly into the twentieth century, and the standard of living of average people increased rapidly). The USSR is no more and China is a work in progress. But we do not always cover ourselves with glory.

I recall the saying that Batista (before Castro in Cuba) “may be a bast**d, but he’s OUR bast**d.”
Yeah, we supported Ngô Đình Diệm in the Vietnam debacle, Saddam (for a time) over theocratic Iran, Malaki in Iraq and Karzai in Afghanistan. Could we have done better? I don’t know and neither do you. You do what you can where you are with what you have.

Since 1975, as earlier mentioned, America’s leadership has contributed significantly to the the fivefold increase in GWP (gross world product, total of all goods and services produced) through 2012. Bottom line…in the overall a majority of the world is infinitely better off than any credible alternative even given 20-20 hindsight. Whining and complaining without credible suggestions for improvement are a waste of everyone’s time.

Today all feel their way forward blindly because for the very first time SEVEN BILLION humans (and countless “buns in the oven”) already present have forever ended any possibility that additional population growth will translate into greater prosperity. That worm has turned, forever.

Simultaneously the world is more at peace in larger area for longer periods than at most any time in history. Without the destruction and mass murder of large scale warfare fewer and fewer people are needed to do what societies need done. Economists have not yet drunk the tea brewed from leaves too fresh to read.

Posted by OneOfTheSheep | Report as abusive
 

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