The Geopolitics of Data

Data flows through the worlds digital pipes at astonishing speeds, for decades it hasn’t been affected that much by geopolitics. Often, data has been called the new oil, but that doesn’t really work as a metaphor, since oil is a finite resource and data is infinite. But just like oil, data is becoming highly political on the global stage. How and why?

Governments around the world are starting to realize the value of data as a trade barrier, a part of sovereign rights, a taxable commodity, a means of excerpting control on multi-national corporations and more. What’s happening and what does this mean for the near future?

How Data Became a Geopolitical Tool

To understand where we are today, we have to understand how we got here. How data became a geopolitical tool.

From the early 90’s through the early 2000’s, or the early stages of the internet becoming a global technology, data wasn’t really considered in economic terms beyond growing mass adoption and building infrastructure. To most governments it was a tool of economic development.

By the early 2000’s, the internet, now interchangeable with the World Wide Web, had reached a scale of global adoption that governments began to see the value of collecting and analysing data for espionage and commerce in global trade. The events of 9/11 however, kicked this into high speed.

Then along came social media and platforms like Amazon while Google expanded its services and capabilities. Into the twenty-teens we saw the arrival of surveillance capitalism and Big Data for business purposes.

The Edward Snowden leaks and WikiLeaks events further solidified data as a tool of geopolitics. The stage was set and governments began to see the value of not just data for espionage and surveillance, but for tax revenues, national economic considerations, trade and more.

Some countries also saw the need for citizens to be protected in terms of privacy and data governance. The European Union implemented the GDPR law in 2018, designed for the protection of citizens privacy and the data around them. But that law also had a significant impact on global data flows and standards.

Data As A Tool of Geopolitics Today

And here we are today with data playing an increasingly important role in international relations, from aid to espionage to international trade and furthering a nations GDP and value on the global stage.

A number of countries such as Canada, the EU, UK, Australia, Iceland, have seen significant outflows of money to the United States where most of the largest platforms such as Facebook, Amazon, Google and Apple are located. Money they see as taxable. As a result, these countries are or have, started to implement tax regimes to capture value.

These and other governments too, feel that citizen data is being extracted from their country to another for commerce purposes and in some cases, espionage. So they are looking to find ways to create data sovereignty laws that protect citizens, business and the government itself.

This has also lead some governments to attempt to created walled gardens for some or most of the data generated in their country. Russia has been building its own internet to be able to disconnect from the rest of the world if it desires. China has built the great firewall of China and, as much as it can, monitors, censures and governs it own and citizen generated data.

Data too, is key for the successful use of algorithms, especially with various Artificial Intelligence tools. Where AI has already become a geopolitical tool for technological competition, governments are imposing regulations and rules around data to protect their technology advantages.

The EU is addressing this in part through the Gaia-X initiative, which is essentially building a Cloud infrastructure (massive data warehouses) on European soil to better protect data sovereignty for EU members.

Even smaller, developing nations, are struggling to find ways to keep citizen and business data protected within their borders. Their challenge is the cost of the infrastructure to implement these policies.

The Future of Data and Geopolitics

Since data can give countries economic and trade advantages, what we are likely to see is the evolution of data reciprocity agreements between countries. Some bilateral, others multilateral and included in trade blocks.

Data reciprocity refers to the concept that countries should grant each other similar levels of access to their domestic data and digital markets. If Country A allows data and digital services from Country B to operate freely within its borders, it expects Country B to offer the same level of openness in return.

A challenge looms when some countries may have significantly more open data sharing policies than others and may feel treated unequally, leading to potential trade disputes. There are also non-profits and international organisations that collect and openly share data, such as ODIN and others.

Another issue is around how data is valued. It will vary by country and is often down to perception. A framework has been developed for businesses called Infonomics by the creator Douglas Laney. This could be adapted and evolved for nation states as well.

We can expect to see data reciprocity agreements playing an increasingly important role in international trade and cooperation agreements. Especially so as our world is increasingly shifting away from globalization and into trade blocks influenced by value systems.

This will make such agreements even more complex as countries try to manage these new geopolitical complexities while also balancing over-regulation and the right degree of citizen rights to privacy and how their data is used.

We may well see a country like Switzerland create data neutral laws where any type of data can be stored and moved between other countries in highly secured, encrypted packets.

Data knows no boundaries beyond the machines and the aether it flows through. Only humans place boundaries and they too, are constantly shifting.