About the author: David Schwimmer is the CEO of LSEG, a global financial markets infrastructure, data and analytics company.
A new U.K.-U.S. data bridge opened to traffic last week. The bridge, announced by President Joe Biden and Prime Minister Rishi Sunak, will enable certified businesses and organizations in both countries to transfer data seamlessly. This agreement will materially reduce costs and speed up workflows for businesses on both sides of the Atlantic. It will also be vital to driving the next era of technological innovation. This is essential at a time when heightened geopolitical tensions are leading to a rise in digital protectionism.
Generative AI, the groundbreaking technology that can create sophisticated models, text, code, and images in a way that mimics human ability, relies on large sets of data from jurisdictions around the world to produce new and original content. If we are to take full advantage of this new technology’s potential, the global community must come together to protect the cross-border data flows that make these data sets possible.
Cross-border data flows already underpin how we all work and live. They facilitate the orderly and efficient operation of the world’s financial markets, including LSEG’s global trading platforms. Whether it’s accessing the cloud or facilitating remote working, the need for cross-border data flows is ubiquitous in organizations of all sizes, sectors and geographies.
We are experiencing many paradigm shifts right now and the open global economy is increasingly at risk, especially when it comes to data. Governments around the world are asserting greater data sovereignty, through laws and regulations that set conditions on when and how data may flow across borders. That trend threatens to fragment the global open data ecosystem. We must act decisively in pursuit of a more open digital economy—failure to do so could undermine the potential benefits of new technologies like AI for economies and society.
New data sovereignty requirements may also weaken the ability of organizations with a global presence to provide seamless and consistent services across countries. More broadly, estimates show that data localization measures and data flow restrictions could lower the GDP of some countries by 0.5% to 2%. This could exacerbate already fragile economic conditions and negatively impact businesses, consumers and workers.
It doesn’t have to be this way. The digital economy drives innovation, empowering businesses and communities to create solutions for society’s greatest challenges. Cross-border data flows have the power to drive sustainable and inclusive economic growth, helping countries around the world raise living standards and improve the lives of their citizens.
Governments must come together to advance international cooperation and trust on digital-governance issues. Japan has advanced an important initiative called Data Free Flow with Trust, which attempts to set digital-governance standards. The U.K. and U.S. have taken an important lead by building on that concept. Now, others need to step up to ensure that cross-border data flows can be used safely to drive innovation and growth. It is only through a coordinated global effort that we can unlock the technological capabilities with the potential to transform our economies and solve some of the world’s most pressing challenges.
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