Digital Union

Knowledge Across Borders

  • Why it matters

    Why it matters

    A free flow of data across the European single market would create jobs and employment – and save lives, the author argues.

  • Facts

    Facts

    • The European Parliament adopted the Directive on security of network and information systems (NIS) in July 2016.
    • European Commission concludes a public consultation on building Europe’s data economy this week.
    • Security concerns are prompting some European countries to regulate for data localization.
  • Audio

    Audio

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British flag disconnected from European Union flag on circuit board
Let's get better connected. Source: Getty

The European Union was supposed to be celebrating 2017. On July 1 50 years ago, the European Coal and Steel Community, European Economic Community and EURATOM were merged into the European Community. From there, customs duties were soon abolished and the decision made to create an economic and monetary union. But signals over trade policy from abroad, Brexit and internal conflicts have dampened the celebratory mood. It is more important than ever to show strength and work toward unity.

Digitalization, high on the EU agenda, offers one opportunity to do this. At the beginning of January, the European Commission proposed political and legal concepts to advance Europe’s digital economy. The goal is to allow the free flow of data across EU borders and eliminate redundant barriers.

Andrus Ansip, vice-president of the European Commission and commissioner for the digital single market says making data available will create growth and employment. He argues that the free flow of data is a natural next step to the free movement of persons, services, capital and goods. Data, he says, will determine the value creation of European companies – whether in the industrial sector or among Europe’s urban creatives.

Healthcare is a prime example. The Irish Center for Fetal and Neonatal Translational Research has developed a system that analyzes data from premature babies in a critical condition around the clock, compares it with similar cases and can recognize neurological changes “automatically.” With a free, pan-European data flow, the database becomes much larger, boosting babies’ chances of survival. Personalized cancer treatment can use data in a similar way. And it could soon help with the early diagnosis of illnesses like Alzheimer’s and Parkinson’s.

Precisely because we have common European standards, we don’t need data storage bound to one country.

The free flow of data doesn’t mean anything goes. Of course, we still need high standards of data protection, privacy and security, which member states have agreed on with data protection regulations and the guidelines set out by the NIS Directive on cyber security. These common rules must make things as difficult as possible for potential attackers. But precisely because we have common European standards, we don’t need data storage bound to one country.

So far, the European Commission has failed to overcome the resistance from several member states who want to stop the free flow of data at national borders. Regulations to localize data are actually increasing in Europe and throughout the world. Many European companies and investors don’t see the logic in this. Their sales area isn’t Baden-Württemberg but Europe and beyond. Their suppliers operate not just out of Bielefeld and Böblingen, but also from Bratislava and Lisbon. Data security can’t be prescribed by the state through protective measures like the use of local computing centers. It has to be shaped case by case.

Europe would lose 1.1 percent of gross domestic product if all 27 member states required local data storage. That doesn’t sound like much, but with high youth unemployment and enormous economic challenges, it’s a loss we can’t afford. The single digital market is an important step toward linking economic growth and innovation and improving citizens’ lives – first and foremost, their health, mobility and security. And it is with this in mind that the legal transfer and handling of data must be regulated.

 

To contact the author: gastautor@handelsblatt.com

 

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