Restrictive data transfer policies are causing some of the world’s leading economies to lose out on opportunities for digital transformation, according to a new analysis of nearly 100 global economies produced by the Global Data Alliance (GDA).

The report, which evaluated and grouped economies into categories assessing the restrictiveness of data transfer policies, found that many Western economies like Australia, Japan, Singapore, the UK benefit from policies that enable access to information. Nearly half of the other global economies have adopted policies that impede their own ability to fully utilize digital tools or to access knowledge and information from abroad.

“Too many world economies are adopting policies that impede their own ability to access information or capitalize on new digital tools,” said Joseph Whitlock, Executive Director of the Global Data Alliance. “Such self-defeating restrictions erode economic and other public policy goals. The GDA Index offers policymakers a tool to better understand how data transfer restrictions undermine the very policy goals that they seek to achieve.”

The full report can be accessed here.

The analysis prepared by the GDA – a signature initiative of BSA | The Software Alliance – found that almost half (45) of the economies examined have imposed relatively fewer limits on cross-border access to knowledge, information, digital tools, and economic opportunity for their citizens and legal persons. Many of these economies have also taken proactive steps to create a conducive environment for digital transformation.

By contrast, 33 economies in the “Restrictive” category – which includes the European Union and its member states, South Africa, South Korea, and four other economies – reflect policies that have introduced unnecessary or counterproductive cross-border barriers. Oftentimes, these restrictions have been introduced in the name of “digital sovereignty.”

Six economies are rated “Highly Restrictive” by the GDA, reflecting policies that substantially impede data transfers and severely limit access to digital tools. Economies in this category include India, Indonesia, and Vietnam. Russia and China are the only two economies rated as “Extremely Restrictive,” reflecting comprehensive, systematic, and onerous restrictions on the ability to manage data across borders.

The ability to responsibly transfer data around the globe is a linchpin of the modern digital economy. A series of reports by the Global Data Alliance has specifically outlined the impact of data transfer policies on industries including the agriculture, automotive, finance, medical device, pharmaceutical, supply chain management, and telecom sectors.

The Index examines cross-border digital barriers across 86 economies from a quantitative and qualitative perspective. The quantitative analysis calculates the number of policy barriers adopted or proposed in jurisdiction. The qualitative assessment covers factors such as the types of data involved (e.g., personal, non-personal, sectoral, or other) and the intensity and degree of the restriction (e.g., the scope of permissible exceptions from the restriction). These variables are weighted to calculate a ranking of each economy’s relative openness to data transfers.

The Global Data Alliance was founded in 2020 as a cross-industry coalition of companies that are committed to high standards of data responsibility and that rely on the transfer of data around the world to innovate and create jobs. The GDA engages with policymakers in over 60 countries and institutions worldwide on data transfer issues.

Cross-border data promotes jobs in industries including agriculture, financial services, health care, and manufacturing, and helps to support government objectives like cybersecurity, economic development, and trustworthy AI. Unfortunately, restrictions on cross-border data have skyrocketed by as much as 600% in some parts of the world.

“The GDA represents a diverse set of companies covering multiple parts of our global economy, and which depend on the ability to responsibly manage data and information across borders,” said Whitlock. “This report shows that we have more work ahead to ensure a complete and accurate understanding of the risks and costs of cross-border data restrictions. The report also shows that like-minded governments should redouble their shared efforts to ensure that any rules that affect data transfers are non-discriminatory, interoperable, and no more restrictive than necessary to achieve a legitimate policy objective.”