Digital innovation and cross border algorithmic inter-dependence

Published : 05 Jan 2021 07:26 PM | Updated : 06 Jan 2021 12:25 AM

Every country in this digital world, particularly those who have already gained recognition as developed countries or are on the doorstep of such a scenario, or striving to be a part of the accepted digitalized world of middle income countries are seeking not only a format of digital interactive sovereignty but also cooperation which will assist them in their quest for further growth.

However, one aspect is slowly emerging within this horizon of digitalization that is driving major transformations in economics, politics, and the balance of power in global affairs. It relates to the ability to cope with the diverse nature of the current wave of technological innovation and also with its geo-economic and geopolitical implications. Analysts are consequently highlighting the need for a digital policy that can contribute to the development of global digital governance and also foster multilateral cooperation.

In this regard attention is being drawn by strategists that there is a need to address hidden challenges created by foreign technologies and growing unfair competition in digital markets that are the result of infrastructural vulnerabilities. That would include unfair competition in digital markets and infrastructure vulnerabilities. 

There is also a growing focus on addressing the issue of expanding funding for innovation with a focus on small- and medium-sized enterprises, and enhancing the digital skills of the workforce. This aspect of the paradigm is particularly being outlined to sustain competitiveness and economic growth.

We have seen that the whole world, depending on the skill factor, is trying to develop digital technologies to meet their growing requirements that have surfaced as a consequence of the Covid Pandemic. Digital solutions are being innovated to empower their lives. This is being done to enable them to work from home, to carry on home-schooling, e-banking, commerce, and social networking.

Most of the digital solutions that originate abroad: Gmail, video calls on Zoom, Skype, cloud services provided by Amazon, Microsoft, and networking by Facebook, Instagram as well as deliveries and commuting by Uber. These ingredients, possessing their inherent technological sovereignty help us to find solutions to societal challenges, from health to farming, from security to manufacturing. However, we are then subject to their conditions relating to technological integrity and their networks and communications regime. This matrix has raised questions about strategic autonomy in several countries.

This situation has also persuaded many global players to openly state that there is now a growing need to refer to the intensifying competition within this arena and try to find solutions not only with respect to data storage and infrastructure but also the arrival of new technologies such as Artificial Intelligence (AI) within the digital economy. If not undertaken, at a faster pace, there is a growing possibility of becoming more reliant on foreign technologies. This awareness is also slowly emerging in South Asia, including Bangladesh. 

It would be interesting to see what is happening in this regard within the European Union and how they are trying to tackle their digital sovereignty. The EU prides itself as a dynamic group that is not inferior to the USA or China. This has resulted in the European Commission as well as the European Council creating digital expertise groups to tackle in particular needs associated within the following areas-: cloud and data infrastructure; business-to-government data (B2G); business-to-consumer data (B2C); 5G connectivity; and AI. 

Cloud storage has assumed particular significance as in a majority of areas EU lacks direct command control over data that is produced in the EU but stored under the jurisdiction of the USA. As a result European governments and businesses have expressed concerns over using cloud storage and other data services originating abroad. They feel that this places citizens, businesses, and public authorities in a vulnerable position given that their data is stored under potentially conflicting jurisdictions. 

The security of the data, its protection from undue access, also sometimes become uncertain due to conflicting regulations contained in the US Cloud ACT or due to the lack of effective enforcement/compliance. Many EU countries are consequently drawing the attention of the relevant authorities of the EU that through the storage of EU data abroad, Europe’s digital economy cannot fully benefit from the wealth of information that this data contains to improve supply chains, minimize costs, and foster innovation and competition.

It has recently been revealed that the global cloud storage services market is largely dominated by US and Asian companies. The leaders in this market are Amazon (45%), Microsoft (17.9%), Alibaba (9.1%), Google (5.3%), and Tencent (2.8%). While an estimated 92 % of data produced in the West is currently located in the US, only 4% is stored in Europe.

One consequently wonders what it is like for South Asian, African and Middle Eastern countries who don't have the necessary cloud storage services. They are as such living in a world without any required management. I am however optimistic that our digital infrastructure is trying to create its own matrix of regulatory privacy required for competition as well as integration.   

There is a growing degree of concern about the manner in which personal data is handled by big tech companies, also known as ‘GAFAM’ (Google, Apple, Facebook, Amazon, and Microsoft). Some activists have in the recent past have noted that these tech giants need to show greater regard for fundamental rights rather than behaving just as gatekeepers related to their areas of interest. 

In the recent past we have noticed instances of not only some third parties abusing such data but also some platforms’ algorithmic decision-making systems curating and removing online user generated content. There has also been unnecessary interference through a dramatic increase of cyber-attacks on various sectors all over the world. Such action in many cases has led to undermining potential investment.

This evolving dynamic has led Scandinavian countries and also China, Republic of Korea, Singapore and Japan to focus in depth on building their economies through the boosting of AI within the parameters of their economies. They feel that this will assist in the escalation of not only their data economy but will also enhance private investment, growth, and innovation in terms of automated industrial prospects. Among them China currently leads the race on integrating the power of data in its economic and industrial model – the essential elements for the development of AI technologies.

One believes that time has now come for South Asia and its different Chambers of Commerce to sit together and try to create a Council which can carefully monitor what measures are being taken particularly by the European Union to safeguard their economic interests and digital integrity. It may be noted here that recently, the European Commission has published its Data Governance Act. This has been a follow-up of the European Strategy for Data initiative undertaken in February 2020. 

The Data Governance Act has now proposed rules for the reuse of public sector data that is subject to protection, such as intellectual property or commercial confidentiality; a notification and supervisory framework for data sharing services. It has also called for the establishment of a European Data Innovation Board in the form of an expert group from member states, with representatives of data spaces from different sectors; and a framework enabling individuals and companies to consent to having their data accessed by non-profit organizations, that conduct research in the public interest, based on the principle of ‘Data Altruism’.

Economists are also referring in this regard to the Gaia-X cloud infrastructure initiative initiated by France and Germany which is slowly transforming into a Europe-wide project that aims to offer a European alternative to US cloud providers by early 2021. Gaia-X will be fully compliant with common EU certification requirements for data storage services. This initiative could give EU industry, and the business sector greater control and profits from the data it generates. 

Gaia-X is expected to also provide an infrastructure platform, enabling smaller and medium-sized European cloud providers to compete with gatekeepers in this sector in a fair manner. Thus, as things currently stand, the Gaia-X framework makes data portability and interoperability top priorities in order to create incentives for users (companies, organizations, industry etc.) and providers to join the initiative. The initiative is open to other EU members, as well as international companies and organizations.

India and Bangladesh can jointly work out the least common denominators within this equation and try and see if they can create a similar measure in South Asia. Algorithmic transparency will however have to be given through the creation of an ethical and fair regulatory framework that will act as a catalyst for supercomputing, blockchain, quantum technologies and AI’s smooth uptake by business, financial and industrial institutions.

It is being hoped that the incoming Biden administration will be willing to discuss with other countries climbing the ladder of digitalization. We should aim to capitalize on this opportunity. This should help us to identify shared interests and define mutually acceptable solutions. At the same time we also need to decrease any overdependence on foreign technologies and digital services.

Muhammad Zamir, a former Ambassador, is an analyst specialized in foreign affairs, right to information and good governance