Why Localization Will Not Help In Monetizing Data

cybersecurity

The most popular argument concerning data in the public domain is the ‘oil’ argument. Data is globally regarded as the next best commodity to oil.

Experts and leaders across the world have increasingly begun to recognize the power of data. This is why the issue of data is not just a matter of technology, it is now a leading domestic policy matter (with great geopolitical and strategic implications) that sovereign nations aspire to get right. The power of data resides in its commercial exploitation and strategic advantage. It can bring fundamental changes to democratic setups and drive long-term impact. Industries such as healthcare, infrastructure, agriculture etc are already witnessing the impact of data. Insights and analytics that are generated by controlling and processing data can shape the future of the world.

Therefore, it is not surprising that governments are vying to control the flow of data. India is an important global player that is surging ahead with a growing internet base. With the fast-paced growth in the number of internet users, businesses can innovate greatly in technology and overtake their competition.

While analytics promises great economic growth, the strategic advantage of data trumps everything else. Geospatial and satellite enabled technologies are at the core of monitoring of adversarial activities driven by non-state actors. Internal security can be greatly enhanced with the smart deployment of data analytics tools. Like corporate, governments also collect and process data to defend the borders and safeguard the privacy and security of its citizens. In lieu of ensuring free movement of information, one cannot forget the criticalities that revolve around data’s national importance.

Will storage help in increasing India’s analytics footprint and bringing home strategic advantage? To realize the dream of ‘data is the new oil’ and to maximize national security potential, local storage of data is not fundamental to achieve this said objective.

Securing Privacy 

For any access to data, governments have to comply with a due process of law, mandated by the local privacy laws. Mere storage will not guarantee access because even if the data is stored domestically, user privacy must be protected under data protection laws, which is the same for data stored abroad.  This is exactly the case with India, which is going to enact a privacy law very soon. 

Processing is key to Analytics

The right to process is fundamental to drive analytics for commercial and strategic gains. Storage has nothing to do with the power of processing. Just because the data may be stored in India, it doesn’t mean that Indian tech companies will get access to do analytics on it. This is an important issue as ‘data monetization’ has significant potential to drive economic growth.

Presently, Indian customers are catered largely by international service and solution providers across the range of services available on the internet. This includes social media, payments system, e-commerce platform, search engines for research purpose, cloud computing and storage as well as storage and transfer of data. From a data consumer, India needs to emerge as a data processor oriented economy. To achieve this objective, data localisation is not the answer, but self-reliance through developing indigenous services is the way to move forward. 

Access does not depend on storage

Access to data for law enforcement has little to do with the physical location of data. Certainly, its important from a security standpoint, but in order to satisfy the domestic legal obligation, storage is not the critical aspect. The depth of bilateral, domestic privacy regimes and the internet freedom index are the real leverage points for accessing data for law enforcement. In fact, enforced storage will only deter companies and threaten to create unwarranted rift between companies and governments. From a strategic perspective, the real ownership does not reside with that jurisdiction that stores data, but the jurisdiction that mandates processing. For India to realize this potential, the government should invest in developing local talent that can provide services akin to what American and European companies are, at similar quality levels.

Conclusion

For India to truly monetize data and exploit its potential, policy makers should focus at enabling growth of Indian service providers rather than forcing foreign solution providers to store data in India. At the end of the day, processing is what drives monetization, and not storage. We should think of progressive policy mechanisms that support the growth of ‘Make In India’ tech companies that are able to venture into different solutions and services, akin to their American counterparts. This will not be achieved by mandating localization, but by enabling an atmosphere of trust and faith between Indian and foreign companies to share knowledge and technical know-how that can support the rise of Indian made tech start-ups. To build trust, we need to ensure free flow of data across borders, as that will be fundamental to helping India to maximize its potential in the coming years.

(Kazim Rizvi is a public policy entrepreneur and founder of an emerging policy think-think, The Dialogue. Previously, he worked in the office of Mr. Jay Panda and then lead energy policy communications at the British High Commission, New Delhi. Kazim is also the Co-Chair, Public-Policy, Indian National Bar Association.)