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The Clash of the Data Titans

Most economic activity today depends on data, much of it gathered and analyzed across borders. And yet the European and American policymakers now deciding the rules on how data should be exchanged and stored are focusing more on privacy considerations and national-security concerns than on efficiency and innovation.

LONDON – Relations between the United States and Europe are already strained over issues such as taxation, trade, and climate change – not to mention US President Donald Trump’s general unpredictability. But they are about to become even rockier, owing not to populist forces in the US and Europe, but rather to the rapidly expanding flow of data between the two jurisdictions.

Data collection and analysis are rapidly becoming the key driver of global economic innovation. Even as the growth of international trade has slowed, the exchange of personal, commercial, and industrial data among countries continues to increase at a stunning speed. And although endearing videos of pets account for a large chunk of these flows, an even larger and growing share comprises information used to make better medical diagnoses, ensure safe air travel, and improve mining efficiency, to name just three examples.

Almost any economic activity today – whether in financial services, manufacturing, or transportation – depends on data, much of it gathered, compared, and interpreted across borders. And yet the European and American policymakers now setting rules on data movement and storage are focusing more on privacy considerations and national-security concerns than on innovation. Without a more systematic approach, the primary source of economic progress in the twenty-first century could end up being smothered in its cradle.

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