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Session 1: The Promise of the Data Revolution
February 15, 4:00-5:30pm, Belfer 503 (M-RCBG conference room)
Session 2:The Struggle to Balance Privacy, Security and Growth
March 1, 4:00-5:30pm, Belfer 503 (M-RCBG conference room)
While trade and taxes remain at the heart of the difficult economic conversations between Europe and the United States, a third issue has emerged as a potential source of even greater friction: the rules that will govern the collection, transmission and storage of personal and commercial data. This is perhaps one of the more surprising controversies in the trans-Atlantic relationship. Similar liberal democracies with similar geostrategic interests might be expected to approach the handling of personal, corporate and government data in more or less the same way. And yet the United States and its key European partners have been striking different sets of balances in the tradeoffs between national security and citizens’ rights, between freedom of expression and personal privacy, and between free enterprise and market regulation.
Embarrassing leaks, careful denials and endless lawsuits will continue to shape the awkward efforts of policymakers to find common ground around issues of cyber-espionage, network hacking and the sharing of personal data with law enforcement. Cyber attacks on governments to influence political events will add still further pressures. These will all serve as a noisy backdrop to a related, but separate debate over how commercial firms should exploit the opportunities of global networks and Big Data analytics while protecting national interests and privacy. Setting common guidelines for commercial data transmission and storage will be crucial to supporting the next generation of Western productivity gains and business opportunities. Above all, global firms yearn for clarity and predictability as they organize themselves to make the most of the data revolution, but neither is likely soon. The EU’s new General Data Protection Regulation will take effect in 2018, but its implementation will inevitably be colored by the fact that American firms dominate the information technology business. Last year’s “Privacy Shield” agreement between the U.S. and the EU renews the permission for firms with trans-Atlantic business interests to transfer data, but it remains highly vulnerable to European court challenges. Britain’s decision to leave the EU adds a further complication in what remains a regional or global headquarters for many firms. Meanwhile, the World Trade Organization continues to grapple with new rules for digital trade, even as markets like China, Russia and Brazil make up their own.
This Study Group will examine how policymakers on both sides of the Atlantic are establishing frameworks to manage commercial data.
In Session 1 we will explore the promise of data analytics in driving new productivity growth across the economy with a more detailed exploration of two key economic sectors. The Industrial Internet of Things will dramatically expand the monitoring of everything from aircraft engines to gas pipelines. This can make complex systems safer and more efficient, but it poses difficult questions for regulators about how data on sensitive operations can be stored securely and compared to similar installations in other countries. There are similar challenges ahead for financial services, which have come to depend on its ability to operate across borders, even while complying with the rules of individual jurisdictions. Global networks help drive down costs and Big Data analytics offer tantalizing marketing and investment opportunities, but these must be carefully balanced against the need to preserve the confidence of both clients and regulators.
In Session 2, we will look at the policy context and political forces shaping data policy in the United States and in Europe. Each jurisdiction takes the issue seriously, but each has inevitably developed responses that grow from a particular history and political context. We will also explore a framework for cooperation between U.S. and European governments, including general principles to guide their choices on regulations and laws as well as recommendations for better institutional cooperation as they continue to struggle with emotional political forces, dynamic technological developments and the relentless pressures to support productivity and economic growth.
Christopher Smart, PhD, CFA, has spent the last six years in the Obama Administration as a senior policymaker for international economic affairs. As Special Assistant to the President at the National Economic Council and the National Security Council, he was principal advisor on trade, investment and a wide range of global economic issues. From 2009-13, he was Deputy Assistant Secretary of Treasury, where he led the response to the European financial crisis and designed U.S. engagement on financial policy across Europe, Russia and Central Asia. Before entering government, Dr. Smart was Director of International Investments at Pioneer Investments where he managed top-performing Emerging Markets and International portfolios. Following the collapse of the Soviet Union, he worked in Moscow, advising Russian government agencies on economic policy and financial market reform. Earlier in his career, he was a journalist in St. Petersburg, Florida and Paris, France. Dr. Smart is also the author of The Imagery of Soviet Foreign Policy and the Collapse of the Russian Empire (New York: Praeger Publishers, 1995) and numerous analytical and opinion articles. He earned a B.A. in History from Yale University and a PhD in International Relations from Columbia University.
M-RCBG Senior Fellow Christopher Smart