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Digital Transformation

New Research Reveals ‘Open’ Cross-Border Data Transfer Policies Drive Economic Growth

Data beyond borders

  • Salesforce’s new Data Beyond Borders 2.0 report shows data-transfer related policies are increasing in restrictiveness with the expansion of data localization requirements
  • The result is increased complexity of data management for multinational organizations 
  • Ongoing digitalization and integration of economies means that cross-border data flows will play a pre-eminent role in restoring economic growth and recovery  
  • Approaches that encourage regulatory interoperability must build trust, confidence, and predictability in cross-border data transfers 

Throughout the COVID-19 pandemic, we’ve seen our reliance on digital tools, services, and infrastructure grow and become the key way to maintain business and connection with others around the world. This rapid digital transformation has improved the reliability and flexibility of vital services — when movement of data across borders is possible.

At the same time, the increasingly complex data transfer landscape across G20 economies has made operations more challenging for global businesses, according to new research from Salesforce and Access Partnership, a leading public policy consultancy focused on technology.

The Data Beyond Borders 2.0 report updates and expands on 2019’s report, helping to show how data transfer policies are evolving. It ranks eight regulatory dimensions that either restrict or enhance the volume and variety of cross-border data flows for G20 economies, and identifies opportunities for governments to create accessible and interoperable policies to optimize global data transfer while protecting privacy. 

The new report also shows that, in turn, more predictable and open data transfer policies correlate to stimulated economies, increased competitiveness, and new opportunities. 

These insights come at a time when optimizing data transfer policies is more important than ever due to the increased digitization of economies, and as we collectively work towards fostering a global economic recovery.

Data Beyond Borders 2.0 report: Key findings

Similar to the first edition of the report in 2019, the Cross-Border Data Flows Index (CBDFI) assesses the G20 economies’ approach to cross-border data flows. Japan once again topped the CBDFI by providing the most consistent policy and regulatory framework for optimizing cross-border data flows, while also providing a commitment to the critical importance of privacy protections. The United Kingdom, and Singapore — in its inaugural year — are leaders as well, with the second- and third–highest scores. 

At the core of our analysis of these economies is a close correlation between maximized cross-border data flows, economic growth, competitiveness, and opportunity. 

Additional key findings include: 

  • Restrictions on cross-border data flows are on the rise. Across the G20, data transfer-related policies are both complex and fragmented. In the two years since our last report, these policies have, in many cases, become more expansive and restrictive with classifications of data. This prioritizes issues of data localization and the storage and processing of data within borders.
  • Diversity in cross-border data flow requirements is increasing. Privacy laws throughout the G20 have a high degree of variance in the requirements for cross-border transfers of personal data, and this variety of restrictions is increasing, even as cross-border digital consumption has skyrocketed through the pandemic. These differing requirements add to regulatory complexity and uncertainty, resulting in less transparency, as well as less clarity on rules.
  • International cooperation on data flows has shown limited progress. Although some international commitments have promoted cross-border flows, there is little tangible progress in either reducing localization mandates or aligning regulations to support international interoperability. Commitments toward maximized flow of cross-border data and minimized data localization made in Free Trade Agreements and Digital Economy Agreements, however, show more promise.

With our analysis, we also identified actions countries can take to support cross-border data transfers and encourage innovation. Together, these recommendations will play an important role in turbo-charging economic recovery, and create urgency for G20 economies to align on more consistent and interoperable cross-border data flow policies.

Creating a stronger economy with data

In an increasingly digitalized global economy, we must understand and appreciate the importance of data utilization and data flows to global economic recovery and growth.  

We must also continue the work to preserve and evolve trusted data transfer mechanisms. 

Salesforce is committed to help create awareness of the benefits both of data privacy policies and practices, and also of effective data transfer policies.  

We look forward to the ongoing work with all stakeholders to drive awareness, understanding, and progress on these policy topics that are critical to our customers and the countries in which we operate.

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