Liu Taoxiong: Data is an Entirely New Element

DATE: 2021-04-16

        At this year's China Development Forum on March 20, 2021 in Beijing, on the topic of 'New Patterns of Global Digital Governance,' Liu Taoxiong expounded upon the new characteristics of data elements and several principles of data governance.

        Data is the core element of the digital economy era, but it has two important characteristics that separate it from traditional elements. First, from a cost perspective, it is non-competitive—data can essentially be copied for free. Second, from a revenue perspective, it can have incremental payoffs of scale. In other words, a lone piece of data is almost worthless, but the data of 100 million people is much more valuable.

        On the topic of global cooperation in data governance, Liu Taoxiong proposes the following three principles:

        First, the fundamental goal is to enable the global data market to function effectively. If governance is such that the global data market becomes fragmented and the scale effect is canceled out, then global data governance measures will be a failure. These measures must include policy tools, which China has already begun to explore, on topics such as data validation and the necessary standards and structures for data market transaction contracts.

        Second, we must embrace an innovative philosophy for regulation. Data is an entirely new element that cannot be regulated under traditional reasoning. For example, countries around the world, whether in Europe, the US, or China, have all encountered the issue of monopolization in the data industry. We can see many anti-monopoly reports and analyses focused on scale as a measure of monopoly market dominance. However, from the perspective of the digital economy and the data industry, scale is not a rational measure of monopolization. With a larger scale of data can come greater efficiency, and we must leave space to allow for the scale effect. Therefore, we need a new philosophy of anti-monopoly supervision.

        He pointed out that there is also a need for new thinking on the topic of data transaction contracts. For example, everyone uses software, and during the installation process, it can be easy for the software to get you to agree to share your data. However, there is no standard measure to determine exactly how many data rights you have handed over to the software.

        Third, we must recognize the urgency of international cooperation on data governance. Liu Taoxiong explained that many of the current international cooperative governance mechanisms were based on industrial civilization for the purpose of its expansion across the globe, and that parts of the international order were established through colonial expansionism and other painful lessons. Today, the world has entered a digital civilization, and it is necessary to have stronger foresight so that we can successfully explore and cooperate on the international governance mechanisms of the digital civilization era.

        He pointed out that data has incremental payoffs of scale, so topics such as how to make data flow across borders and how to find data standards that can be shared globally are extremely pressing matters.

        'I think that now, even more important than the World Trade Organization is the need for a World Technology Organization or World Data Organization to form some consensus on a basic system for global cooperation on the digital economy in this stage, when the digital economy has not yet reached its peak of development. This will help us avoid such detours as those experienced during the establishment of the corresponding rules for industrial civilizations,' he said.

        Liu Taoxiong: Party Secretary of the School of Social Sciences at Tsinghua, Executive Director of the Tsinghua Institute for Innovation and Development

Source: Sina Finance

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