The internet is a fine trade route. Technology companies ship their goods over internet networks instantaneously to any location in the world. But not all believe that this openness is altogether faultless. Some government officials are acting to ensure that a free internet does not compromise national interests or citizens’ data privacy. Will their good intentions choke innovation and growth in Silicon Valley and beyond?
Tech companies, more than those of any other sector, rely and thrive on a global ecosystem, according to Anja Manuel (pictured), co-founder and partner at RiceHadleyGates LLC. Manuel co-founded RiceHadleyGates with former U.S. Secretary of State Condoleezza Rice and former National Security Advisor Stephen J. Hadley in late 2008. The Silicon Valley-based consultancy helps tech companies expand in international markets.
“Every company we work with — even the very young ones — they’re global from the very beginning,” Manuel told Stu Miniman (@stu), host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the Nutanix .NEXT EU event taking place in Nice, France. (* Disclosure below.)
Silicon Valley-esque hubs of innovation are growing in China and elsewhere in the world, according to Manuel, who said those in the U.S. can learn much from them and vice versa, provided the lines of communication remain open. However, two governmental movements growing simultaneously may erect obstacles to sharing. One is “data localization” legislation — on the rise in a number of countries — that cuts off data flow across borders. Another is the globalization backlash fertilizing nationalist political parties, particularly in Europe. Both of these trends could have consequences for globally expanding technology companies.
This week, theCUBE spotlights Anja Manuel in our Women in Tech feature.
Data localization clashes with tech globalization
More than 30 countries now have data localization laws. These policies require data controllers to keep citizens’ data strictly within the country’s borders in an effort by lawmakers to keep data more secure, while also providing easy access for law enforcement.
China has a dozen such laws active. “I worry that if that trend really continues, you will have less interaction, for example between Chinese and Americans,” Manuel said. An avenue of communication between them is sorely needed with their governments’ increasingly frigid relations, she added.
In most instances, the efficacy of these policies for increasing security or privacy is dubious, according to Nigel Cory, a trade policy analyst at the Information Technology and Innovation Foundation. Aside from failing at their stated purpose, the laws may deal an inadvertent blow to technology companies and consumers. “This presents a real risk to the global economy and innovation,” Cory said at the International Conference of Data Protection and Privacy Commissioners in Hong Kong in September.
Europe’s General Data Protection Regulation, going live next May, seeks to restructure European countries’ data localization laws. Putting data control directly in citizens’ hands would allow cross-boarder transfer with consent. However, laws such as this may just replace explicit restrictions with implied ones, according to Pirate Party Member of the European Parliament Julia Reda.
“This would create immense transactional costs and huge legal uncertainty for anyone creating and re-using data, such as researchers or innovative startups,” Reda said. She spoke in a public consultation on an official communication from the European Commission early this year. Laws that give individuals such rights and responsibilities would protect any series of ones and zeroes like intellectual property, she explained.
“Dealing with pure data, such as access logs, sensor data or measurements, would become as complex as dealing with copyrighted works is today,” Reda stated.
Of course, there are many who welcome GDPR and similar legislation in what they see as an economy of data hoarders run amok. The idea that people automatically forfeit the right to their information when they turn on a computer is “foolishness,” according to Don Tapscott, chief executive officer of The Tapscott Group. Our data ought not to belong to anyone but us by default, he told theCUBE earlier this year.
“We create it, but these data frackers, like Facebook, own it, and that’s a big problem. Privacy is the foundation of freedom,” said Tapscott, author of Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World.
The nation and the network
Growing anti-globalist sentiment in Europe and in the U.S. with Trump’s election raises concerns for global industries, Manuel pointed out. Immigration is hotly debated in the news daily. The working classes of these nations feel that their economies are leaving them behind. This is arousing a desire to close borders — on land or otherwise — for the betterment of born-and-bred citizens, she added.
Far right parties, such as the National Front in France and Alternative für Deutschland in Germany, won significant numbers of votes in recent elections. “They’re setting the agenda much more than you would have seen 10 years ago,” Manuel said. “It’s something for the tech companies to consider as they keep expanding.”
For now, the internet is still essentially free and open. Its main governing body — Internet Corporation for Assigned Names and Numbers, or ICANN — is private and free from governmental control.
The portion of ICANN that was in the hands of the U.S. Department of Commerce transferred over to a private organization last year. “I’m quite happy that system of internet governance still stands and it hasn’t been taken over by individual governments or by the United Nations,” Manuel said.
Lessons from abroad
An open internet fosters a global tech economy where countries can share the fruits of their startup scenes. “There are some innovations coming out of China and India that are frankly really impressive, and we should adopt some of them,” Manuel said.
China’s web payment infrastructure is much more advanced than that in the US, she added. Lots of Chinese citizens use WeChat, not just for texting, but all types of transactions. “It’s a whole ecosystem,” she said.
Perhaps surprisingly, China also has a greater percentage of women in tech careers, Manuel pointed out. This and other factors suggest that Silicon Valley is stifling female talent, she stated.
Venture capitalists’ reluctance to invest in female-founded startups is one area to be examined. This is especially timely given some recent research on the subject. For example, First Round Capital has found that companies with at least one female co-founder performed 63 percent better than those with no female co-founders, according to Manuel.
“Clearly, there’s some problem going on here, and I’m happy that Silicon Valley is finally paying attention,” Manuel concluded.
Source: https://siliconangle.com/blog/2017/11/13/what-national-border-data-protections-mean-for-global-tech-economy-nextconf/