U.S. Must Consider New Policies to Retain Data Flow Dominance, Panelists Say
The U.S. must shift its global data flow approach if it wants to remain a major participant in the global economy, said industry representatives and academics at a New America Foundation event Thursday. Ongoing trade negotiations present some promising opportunities to establish the U.S.’s footing in the international data flow economy, but “we need the political will to push these through,” said Bradford Jensen, a professor at the McDonough School of Business at Georgetown University.
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"Choosing where and how you participate in these global flows can be the difference between economic prosperity, and frankly, falling behind,” said James Manyika, director of the McKinsey Global Institute, which recently released a report on global data flows (http://bit.ly/PtaKW0). In 2012, global data flows accounted for $26 trillion in business. Such flows contribute 15 to 25 percent of gross domestic product growth, said McKinsey Global Institute Partner Susan Lund. “That’s staggering.” It’s not slowing, Manyika said. He expects the value of global data flows to double or triple by 2025.
U.S. policies must lean into this inevitable growth, said Google Executive Chairman Eric Schmidt. The government is “not preparing people to participate” in this globalized economy, he said. “The core problem is, how are you going to get people in economies productive so they create jobs?” To manage and harness global information, he said, U.S. policy must train entrepreneurs and analytical thinkers, while allowing more immigrants into the country.
The government’s economic paradigm is antiquated, Jensen said. It’s no longer about valuing exports over imports, he said. “Exports are good” and “imports are good,” he said. “It’s the people that are not connected that are in trouble,” he said. “Irrespective of policy, this revolution is happening,” said Donna Harris, co-founder of startup incubator 1776. With the emerging Internet of Things, the economy can’t be viewed as goods being transferred from one country to another, she said. “How we engage in every industry is about to be dramatically disrupted."
The recent White House big data report revealed the administration’s misguided focus, said Karen Kornbluh, Nielsen executive vice president-external affairs. The report (WID May 2 p1) briefly delineated the benefits of big data, but then “the entire report was about mitigating the downsides,” she said. Kornbluh found the balance “unsettling as somebody who cares about growth.”
Jensen cited three ongoing trade negotiations that could help cement the U.S. position in the global data flow economy: The Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TISA). Each would expand previous trade agreements with countries in the Asia-Pacific region (TPP), the European Union (TTIP) and elsewhere (TISA). He was not hopeful. “Negotiations will be stillborn,” Jensen said.
Engaging other countries on these issues has beneficial effects, Kornbluh said. She pointed to recent U.S. government and industry work “behind the scenes” with Brazil when that nation was trying to pass laws requiring “data localization” for businesses interacting with Brazilians. With U.S. input, she said, the government eventually proposed “a really good piece of legislation that says as long as you respect Brazilians’ [privacy] with respect to their data ... you can provide services to Brazilians.”