Data governance – International Chamber of Commerce

Report on the Importance of Global Data Flow in International Trade and Sustainable Development

Introduction

The digital economy has experienced significant growth in recent years, offering Small and Medium-sized Enterprises (SMEs) unprecedented opportunities to access global markets. Digitalization plays a critical role in fostering innovation, growth, and success across various business sectors by enhancing efficiency, productivity, and customization. This report emphasizes the importance of global data flow in international trade, with a focus on its alignment with the United Nations Sustainable Development Goals (SDGs).

Role of Global Data Flow in International Trade

Global data flows are essential for conducting cross-border transactions, which increasingly occur via electronic platforms. The integration of digital technologies into trade systems is inevitable and necessary for a fully digitally-enabled trading environment.

• Companies depend on data flows to manage daily operations with customers, partners, and suppliers.
• Data facilitates innovation in business processes and operations.
• It supports cybersecurity by detecting threats and intrusion patterns.
• Data-driven competition enhances performance in diverse sectors such as agriculture, healthcare, manufacturing, banking, and shipping.

Global Value Chains and Data Flow

Global Value Chains (GVCs) are pivotal in today’s economy, driven by technological progress, cost efficiency, and resource accessibility. Seamless and uninterrupted cross-border data flow is critical for the effective functioning of GVCs, enabling all stakeholders to collaborate efficiently.

• Trusted environments for Information and Communication Technologies (ICTs) and data flows mitigate negative impacts on economic growth.
• Building trust reduces uncertainty and encourages participation by individuals, businesses, and governments in the global digital economy.

Challenges and the Need for Trust

Lack of trust in cross-border data flows creates legal uncertainties, particularly regarding government access to personal data across jurisdictions. This uncertainty can lead to data localization measures that hinder the global digital economy.

1. Establishing clear rules and parameters for government access to personal data is essential.
2. Consensus on trusted government access principles will facilitate data transfers between jurisdictions.
3. Such measures will generate positive economic and social outcomes.

Economic Impact of Data Transfers

Data transfers contribute approximately $2.8 trillion to global GDP, surpassing the value of global trade in goods. This contribution is expected to grow to $11 trillion by 2025. Traditional industries such as agriculture, logistics, and manufacturing benefit significantly, realizing 75% of the value generated by data transfers.

Policy Recommendations and SDG Alignment

The International Chamber of Commerce (ICC) advocates for government policies that:

• Create favorable conditions for the digital economy.
• Encourage data-driven innovation.
• Protect personal data irrespective of storage, processing, or transfer location.

These policy directions support several Sustainable Development Goals, including:

• SDG 8: Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.
• SDG 9: Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.
• SDG 16: Promote peaceful and inclusive societies, provide access to justice, and build effective, accountable institutions.
• SDG 17: Strengthen the means of implementation and revitalize the global partnership for sustainable development through enhanced data sharing and cooperation.

Additional Insights

Non-Personal Data and Societal Impact

Non-personal data plays a transformative role in addressing global challenges and driving positive societal impacts. Its effective use supports sustainable development by enabling innovative solutions across sectors.

Trusted Government Access to Personal Data

Building trust in government access to personal data held by the private sector is crucial to encourage participation in the global digital economy and to reduce uncertainty in cross-border data flows.

Conclusion

Global data flows are indispensable for international trade and economic development. Establishing trusted frameworks for data exchange aligns with the Sustainable Development Goals by promoting innovation, economic growth, and inclusive participation in the digital economy. Policymakers are encouraged to support data-driven trade while safeguarding personal data to maximize economic and social benefits worldwide.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 8: Decent Work and Economic Growth
   • The article emphasizes the importance of digital economy and global data flows in boosting productivity, innovation, and access to global markets for SMEs, which aligns with promoting sustained economic growth and productive employment.
2. SDG 9: Industry, Innovation, and Infrastructure
   • Focus on digitalization, ICTs, and data flows to enhance innovation and infrastructure development in various sectors such as agriculture, healthcare, manufacturing, and banking.
3. SDG 16: Peace, Justice, and Strong Institutions
   • The article discusses the need for trusted environments, clear parameters, and rules for government access to personal data, which relates to building effective, accountable, and transparent institutions.
4. SDG 17: Partnerships for the Goals
   • Emphasis on international cooperation and consensus on data governance to support cross-border data flows and global digital economy.

2. Specific Targets Under Those SDGs Identified

1. SDG 8 Targets
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.
   • Target 8.3: Promote development-oriented policies that support productive activities and entrepreneurship.
2. SDG 9 Targets
   • Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure.
   • Target 9.5: Enhance scientific research, upgrade technological capabilities of industrial sectors.
3. SDG 16 Targets
   • Target 16.6: Develop effective, accountable, and transparent institutions at all levels.
   • Target 16.10: Ensure public access to information and protect fundamental freedoms.
4. SDG 17 Targets
   • Target 17.6: Enhance North-South, South-South and triangular regional and international cooperation on and access to science, technology and innovation.
   • Target 17.8: Fully operationalize the technology bank and science, technology and innovation capacity-building mechanism for least developed countries.

3. Indicators Mentioned or Implied to Measure Progress

1. Economic Contribution of Data Transfers
   • The article mentions data transfers contributing $2.8 trillion to global GDP, expected to grow to $11 trillion by 2025, which can be used as an economic indicator of digital economy growth.
2. Participation in Global Digital Economy
   • Indicators related to the number of SMEs accessing global markets through digital platforms and the level of cross-border data flows.
3. Trust and Legal Frameworks for Data Flows
   • Indicators measuring the existence and effectiveness of legal frameworks and international agreements on government access to personal data and data localization policies.
4. Innovation and ICT Usage
   • Indicators on ICT infrastructure development, usage rates in sectors like agriculture, healthcare, manufacturing, and banking.

4. Table of SDGs, Targets, and Indicators

Source: iccwbo.org