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IGF 2017 - Day 3 - Room XI - OF73 Data & Trade: Identifying Win-Win Solutions for Future Digital Commerce

 

The following are the outputs of the real-time captioning taken during the Twelfth Annual Meeting of the Internet Governance Forum (IGF) in Geneva, Switzerland, from 17 to 21 December 2017. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the event, but should not be treated as an authoritative record. 

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>> MARION JANSEN: Good morning everybody!  Thank you for being here in the early hours. 

I'm Marion Jansen and the moderator of this session, Data & Trade: Identifying Win‑Win Solutions for Future Digital Commerce.

At ITC, we are active in area of technical assistance, trade‑related technical assistance.  When it comes to the digital world, we notably assist companies to start working online, to conduct eCommerce and we also assist governments in designing what we call eStrategies that can be ICT strategy, eCommerce strategies.  We're, therefore, not active in to the area of policy design directly, but many of our clients would like to understand how to think about policies around the digital trade and digital technologies.

I'm here to moderate and to learn from our distinguished participants about this important topic.  I would like to learn how important this topic really is.  I'm reading everywhere that data is the new oil of the world.  Without data nothing can happen anymore.  We're told that data has to flow freely in order for this to be functioning; and on the other hand, we would like to understand, we as consumers and also as clients, many companies, what is going to happen with this data, how protected are they; and we would like to understand what are the trade‑offs between everything should be ideally be free, but on the other hand, we need to find protection.  Trade‑offs are often difficult to design and often difficult to define. 

We have an organization called the World Trade Organization.  I have worked for that organization many years, and I have been exposed to the difficulty of finding win‑win answers to protecting only to the extent necessary, to protect while allowing for free flows and free trade.  I'm curious to understand how our panelists are thinking about this topic in the context of data and trade.

I would shortly introduce the speakers in the order we have agreed they would intervene.  I have Adam Schlosser, the project lead for digital trade and cross‑border trade flows at the World Economic Forum.  I would ask Adam to make the first intervention.

To my left, I have founding Director of the Diplo Foundation, active and based in Geneva and a key player around everything that's digital in this region.

We have ICT analysis section and key player ‑‑ Chief ITC analysis section and a key player for all initiatives at UNCTAD, Torbjorn Fredriksson.

To my right, the Netherlands, a former Dutch and European parliamentarian and member of the Board of ICANN and then the first Secretary of The Permanent Mission of Indonesia, Satryo Bramono Brotodinigrat. 

We imagine the flow of the following type with Adam and Torbjorn will set a generous stage of the issues, what are the issues, how are they being addressed in a general, global level.  Then I expect we'll have more insights into how the UNCTAD is approaching challenges that we have that we have raised in the introduction.

I look forward ‑‑ I said you are the people that are supposed to define the solutions and potentially implement them, so I very much look forward to your fourth and fifth intervention.

Each of you has 5 minutes for the first statement, and then we're going in rounds of questions and answers, notably, potentially also with an audience that's following us online.

Please, Adam, the floor is yours.

>> ADAM SCHLOSSER:  Thank you so much for including me in this exciting discussion.  I'm glad looking at the title of the session it is deemed a win‑win, good data policies will produce multiple winners and we have more wins to that, industry, government, consumer, Civil Society, there could be winners all around, it is not just a win‑loss type of game. 

When talking about trade, digital trade, we're thinking about it is not just going online, buying something, it is business to business.  That's a big aspect of the business trade as well.  Now companies that are traditionally data companies, they're not the only ones online, it is every single company across every single sector.  All trade has a digital component, containers are not just things that bring the goods but, it is also the vehicle that code is transferred and ship with multiple issues this year.

In the space of trade agreements, it is important to note while trade agreements can create and provide boundaries and guardrails for issues around data and create collaborative norms and Best Practices, they're not best suited as a primary means to answer concerns.  One, they don't move quick enough.  We had a case where there was good language in the TPP and it was potentially good language elsewhere, by the time that the agreements are finalized, if they ever are, and by the time they're implemented and you go through a dispute resolution possibly if there is a violation there will be a whole new type of technology out there.  In the most overt cases of protectionism, they can do course correcting for the practical sake it is not the best vehicle.  It is important to think of other ways to create good data policy and make sure it is in a collaborative manner between governments and governments and Civil Society and industry as well.

A second key topic that I want to bring up ‑‑ this is a bit of a personal crusade ‑‑ that data is not the new oil.  I know we like to say it, everybody mentions it, it leads to misperceptions on handling data, that you should keep it in silos like oil.  There is limitations to that metaphor.  One, data needs to be collected and maintained in a way that's usable to create new analytics and value.

Today only 10% of all data is used.  Think about that.  All of this data that's collected, you can't even do anything with it.  At some point the data turns from an asset to a liability.  It can have sensitive information, security risk.  It is important to know why you're collecting data, what you want to do with it, and ensure that you're doing it in a way that protects security and privacy of the data, otherwise you're racking up costs without adding to the benefits of it.

Second, data is not a finite resource.  You can reuse it, share it, provide it to others.  You can do duel analytics and, in fact, in the next two years the world is going to generate about 40 zettabytes of data and I'll try to come up with a useful framework to explain that, you can't, it is infinite.  It is like generating 40 million hours of video.  It is hard to grasp the amount of data that's going to be produced, it is not finite like oil. 

A point of reference:  Autonomous vehicles will generate a lot of data in coming years, and in a scenario where say a city or small city has a fleet of 300 autonomous vehicles which is fairly realistic ‑‑ San Francisco, the city where I live, they have 470,000 registered cars, a fourth will be autonomous and they'll be generating as much data as all of Twitter is this year.  Imagine that scale across multiple cities and regions, just the sheer amount of data that's collected.  It is important to put the frameworks and rules in place to allow it to be shared and used in a productive manner.

Getting to the topic of SMEs and how can they be helped by data.  There is obvious use cases, tracking, acquiring customer, streamline them, an underappreciated path for the development of this is the business to business angle.  Now the phrase is that the sun never sets on business ‑‑ it used to be the British Empire, now it is business.  It is global.  When online, you can reach customers and conduct the business all hours of the day.  That presents a really great advantage for particularly some developing economies in Asia, Africa, because businesses want to have contact points and functions at every time zone.  Those small businesses and regions could work on back‑office functions, while complex analytics, financial analysis is useful, it is also a great inroads for less‑developed businesses and less‑developed economies. 

For example, a large multinational law firm that I worked with in the past works with an SME in the Philippines formats, streamlines the PowerPoint presentations to clients.  It seems like a small function, but it is hundreds of thousands of dollars for a contract for a simple function without a lot of technical ability, education, you can do that.  It shows the opportunities out there.  You can transfer the data globally around the world.

Fitting with the title of the session, improved data protection, an increase in development can go hand‑in‑hand based on security and privacy standards.  It is important to create a floor rather than expectations for all actors in the system.  There is a great gap between no rules at all and something as complex as the E.U. general data protection, and it is important to protect the levels of resources of availability creating new data rules.  For example, SMEs without the ability or sophistication to understand various rules for compliance and GPRs and the complex systems, they're facing an uphill climb entering new markets.  Perhaps an education effort is needed to best develop the data governance strategies and the importance of how to generate growth, and I'm glad I'm not providing the solutions.  We'll get to a state of play and highlight the issues.  I wanted to throw that out there.  When you're a large multinational company, you can easily hire 60, 100, 200 lawyers to implement the GPR, but what if you only have 3 people focused on running the business. 

Developing economies can work to develop these economies among them, working on digital integration.  If they're able to create a standard allowing for data transfers to be done safely in their region, that's creating a level playing field and potential boost for the small businesses overall in consumers in the region.  You take that standard and bring it here, other jurisdictions and expand from there.  You have a baseline, you have a bunch of parties that are setting the standard, and you can grow as you have more resources overall.

I'll closeout quickly ‑‑ throwing another idea out there ‑‑ and then I'll close quickly.  Another way to help SMEs is to incent publicly accessible data.  Can you create tools that help the private sector scrub the proprietary data and have special toolkits with maybe publicly accessible APIs for the SMEs to create that data and create their own analytics?  Sound data policies is the best, important way to improve data to improve the trend development.

Thank you.

>> MARION JANSEN: Thank you, Adam.

I'll pass the floor, but maybe you want to pick up on three points that you made:

You complained about trade agreements being too slow.  We have seen some of that here in the region.  Trade agreements are international agreements, they are solutions on national law that moves typically more quickly.  We see that when we compare the competition law to trade law and that's still being handled nationally and it is being modernized at a different pace.  Maybe later we can come back to this topic and you're not happy with the E.U. law and we'll hear back about this later. 

I would like to say something on SMEs:  When we were in Developing Countries as a key ‑‑ the strong difference between those that are active players in the digital field or those who are producers of goods or services and who hope to sell online, SMEs that are supposed to take advantage of the fantastic eCommerce, we often don't know how to put a picture online or they start making their ‑‑ we're told you have to establish your own website, and they come up with a website that looks like the screen there which is something that would not attract any type of consumer.

We see in the field ‑‑ and maybe you can come back to this ‑‑ the discrepancy between the potential that Developing Countries have and actually the capacity that they seem to have to develop that.

With this, these two points I just have thrown to the floor, I pass over to Jovan.

>> JOVAN KURBALIJA:  I start to make a conversation flowing and using my few minutes to develop a few ideas with Adam's reflection on the oil metaphor. 

Yesterday over the meal with some wine we discussed the oil metaphor and there was one interesting question, I was asked how does it happen that these companies are so rich and we don't pay for the services.  You're familiar with how it is happening and we came to the question of value data.  As for any method with anything, it is commonalities and differences.  I think the economists whom I still trust out of all of the newspapers, a few months ago, data is the oil of the new economy.  They refer to the economic value they bring to operate the companies.  I would argue if you have the time to ‑‑ it is not the main aim of the session, but I would argue that the economists are right on this point on the value side.  Okay.  It is not an infinite resource, and there is many, many differences.

While with language, like with you mentioning World Trade Organization, we may coin the world trade‑off organization and I will keep the copyright of that or the creative common side.

To the last point on the language, you will notice the transcripts of the IGF, it is unique innovation of the Internet Governance forum.  It has a mix of very positive, but some people complain that, you know, that the script, what is said, it is twice and what's written, it is for prosperity, I have to refresh my Latin and we're analyzing every day the transcripts of all sessions of the IGF.  You can find them in the IGF Daily.  What we have noticed after the first few days, data is the most frequently used keyword. 

The second point, we noticed the shift from the language of efficiency, the blue sky, business opportunities, to the language of values.  Language of trust, language of equal distribution of the dividends of Digital Economy, and this is a major shift comparing to the previous IGFs.  We've been following the transcripts over the last 11 years and this is a major shift from efficiency to value. 

Back to the question I prepared for this presentation:  We're living in a decisive phrase between one can say 10,000 ‑‑ between an approach of where data was used for data mining for the insights, what companies are doing for advertising, and the shift for data is the basis of Artificial Intelligence.  Artificial Intelligence is based on discovering patterns in data.  It is going to be a major change in the way how data is used.

For this general framework, when we move, as focusing, we have the GPI, what happens on the 26th of May?  Why infinite companies are hiring big companies in Brussels?

Again, yesterday during an informal discussion I was faced with an argument from one computer scientist that nobody can stop flow of data across the national border, and it is not possible ‑‑ you know, the argument is that there are not borders of the Internet.  I'm skeptical about it.  What is happening from my notebook to the servers, to the cables, it is linked and anchored in geography.  Therefore, it is a bit of an argument which is also getting a bit tired.  It has been for 12 years around.

Whatever we can say technically, on the 26th of May, whoever operates data, European citizens will have to know where the data is stored and how they're used.  It is going to be a major challenge as indicated, probably a bigger challenge for small companies, but I would say major challenge that may affect business model of business companies as well and we should prepare for that I would say earthquake in digital policy, which is much bigger than millennial which we experienced in 1999 and 2000.  Not only because of the European Union, but countries worldwide are carefully following what's happening in Brussels. 

As you can see, Right to Be Forgotten, countries, other economies, G20 economies, they follow the same policy like Indonesia introduced Right to Be Forgotten, Korea introduced it and the countries worldwide is following what's going on.  We're facing quite a turbulent year ahead of us, mainly focused around data, on 10,000 feet of databased on Artificial Intelligence or more closer to the ground, how to deal with this worldwide.  Therefore, this is setting from the linguistic one, World Trade Organization, to the GDPR.

Over to you.

>> MARION JANSEN: I was going to retain the earthquake terminology, and I look forward to hearing more on this from Lousewies who brings two aspects in the discussion, the value of data and as an economist and then we ask the question of the price of data, if the data is so valuable, why do we give it away for free.  An important issue, one of market power, the theme, SME, small players can take so much advantage of this is brought up in a discussion a lot.  I would be interested to see your statistics on this when you analyze the transcripts from this event, but the fact is, that global market power in this field is amazing and maybe goes beyond what we have seen in terms of market power before in other markets.

With this, I'm curious to hear, Torbjorn, your view on this.

>> TORBJORN FREDRIKSSON:  Thank you. 

I think a reason why we're seeing this tremendous interest in the data flows and cross‑border data discussion, it is I think more and more people realize that we're on the cusp of what's going to become a very different Digital Economy in the coming years, and we're starting to see it very much in developed countries now, and it still has a long way to go in the poor economies.  This, of course, very much is a result of much improved computing, storage, transmission power on the Internet.  And just to give a comparison:  In 1980, it cost 400,000 to have storage space for one gigabyte, today it costs 2 cents.  It is really an enormous change and we have seen this rapid growth in data traffic and Internet traffic.

A thing that we see happening here in this new Digital Economy, it is the growing role of platforms of different kinds.  These different digital platforms, they thrive on data collection, but it is not only the data collection as was pointed out, it is the analysis of the data and turning the data analysis into business opportunities of various kinds.  We see again to touch upon this analogy to the oil, I agree also it is not a good parallel, but I agree that data is a new resource to extract and perhaps one of the more important differences between oil and data is also that a company that has a tremendous amount of oil available in the market will see the price of oil going down because there is too much supply.  If you have more data, the price, the value of the data goes up because the more data, the more diverse data that you have as a company, the more you can fine‑tune your algorithms and make use of it and the more you can compete vis‑a‑vis those that have less access to data.

As we see this being taken advantage of by some platforms like Google, Facebook, they're collecting a lot of data and using it to sell advertising space.  You have other companies that are using the data to optimize the production processes, production, supply chain processes, big manufacturing terms, Rolls Royce, Caterpillar, that have the sensors all around their equipment and they're using the realtime information to improve their competitiveness.  Then you have other players like Amazon web servers leveraging the flow of data offering Cloud space, Cloud infrastructure and they're basically charging through subscriptions.  There are different ways to look at this non‑investment. 

With increased use of Cloud computing, social, Internet of Things, this is growing tremendously, and also through AI.  For users, platforms are creating tremendous values and better search functions, social networking and so on, so forth and they're paying by giving detailed information data on their habits, activities, whereabouts, networks, et cetera which is generating a lot of attractive intelligence not only for businesses but also for governments through surveillance, so on.

So this raises a huge range of issues related to privacy, consumer protection, competition, cybercrime, et cetera.  From other perspectives, the prime concern is that we have a huge gap here, the readiness of countries to engage and prepare for what's coming.  We have big gaps in terms of affordable ICT and Cloud infrastructure between countries.  We have a lack of laws and regulations to address the potential risks involved here and to facilitate the advantages that can digitalize.  We have a lack of skills.  It is not only a question of connecting data, you need the skill source to make use of the data.  Here there is a tremendous lack of data scientists and this gap is particularly apparent in Developing Countries.

That a basically puts the Developing Countries at a disadvantage in this area.  A few words just on what we can do in that context, try to support Developing Countries in preparing, we can do research and analyze what's happening, we do the information economy report.  We try to become better at providing capacity building in key areas and not least through the partnership with all of the other players like Diplo, ITC, other organizations on the eTrade floor and to provide meeting venues, forums for countries to come together and discuss these issues, ideally in the multistakeholder setting and also where all of the countries in the world are present and to a specific activity here, it would be the eCommerce week happening in April and also the intergovernmental group of experts on eCommerce.

Thank you.

>> MARION JANSEN: Thank you.  I already noticed an advantage of the transcripts.  I have to make sure I pronounce the name correctly so that it is spelled correctly.

That you for the points, Torbjorn.  I thank you for making reference to the infrastructure challenge in the Developing Countries and the legal challenges we have mentioned and also for mentioning the skills dimension.

By talking to my adolescent daughters, I realize that even so, they are very active users of the new technologies, contrary to myself who learned how to program and write algorithms because I was exposed to the old‑fashion type of computers, they only know how to use the tools, they do not ‑‑ have not learned how the tools are programmed and how to be active and creative users of the tools.

I look forward to your points.  I would like to see the context so that when you look at the legal text and discussion coming out of Brussels, notably I see a lot of WTO terminology, I see necessity‑types of tests.  There is definitely also in this area some value for the kind of legal language that's come and is coming out of the World Trade Organization.  Please, let us know more about this earthquake that's coming.

>> LUISEWIES VAN DER LAAN:  We'll see if it is an earthquake or a slow development.  GPR will have a big impact.

I want to talk about my perspective as a former legislator and also the perspective of the consumers when you come to this.  My political background is at a social liberal, in the European context, that means something completely different than I think in an American, another kind of context.  Basically we're very much in favor of free trade and open markets, and at the same time strong on Human Rights on data protection.  I think that the two go hand‑in‑hand and that would be ‑‑ I think that's a thing that any win‑win solution would have to be a part of this.  These two are not in some way contradictory or mutually exclusive.  On the contrary, I think you can have strong economies and large global wealth only if you put consumer protection and protection of Human Rights at the forefront.  If you look at strong economies around the world, I think there is a lot of evidence for that.  Any win‑win solution, I would love to be able to take that box.

As you can hear from my accent, I grew up in the U.S.  I'm Dutch.

What I find very interesting in this whole discussion about data protection, it is that the Americans and the European Unions have a very different perspective on this.  I'm just going to dramatize it to make a point. 

Americans don't care about what's happening to their data, they don't care.  Europeans, they're the opposite.  We have the history, who has the data, what are they doing with it?  Governments can get their hands on it?  In my country in the Netherlands we have a new law on health data which keeps on being blocked because we want to know who will be able to access the health data.  We all know that if you have a general database ‑‑ it is a small country, 17 million people, you know, smaller than major Chinese towns these days ‑‑ that you put all of that data together and it is useful.  You go to the doctor.  He's got the same access to the data as the hospital has, and you're not going to get wrong medication, you can save lives. 

The idea that someone in a hospital can simply access my data and I won't know who that person is, why they're accessing it, what the affect is, that is not going to fly with most Dutch people or Europeans.  I would like to get an alert on my phone if anyone accesses my data.  If I'm sitting with my gynecologist, it pops up, yeah, that's good; if it happens in the middle of the night and I was not been to a medical situation, I want to know whose doing it and why, et cetera, I would be able to trace that to the exact person that did it.  That's another solution. 

If people are reassured that whoever is accessing their data is doing it for a valid reason, and that I'm informed when that happens ‑‑ it may sound complicated, but that way people would be much more relaxed about doing it.

Now, when you come to the new General Data Protection Regulation that's going to be ‑‑ it is already in force, but it will be applied in May and there will be major fines.  I know there is a lot of ‑‑ it is causing a lot of waves around the world.  It was set up to solve an internal European problem.  The 28 Member States had different data protection regimes, and that was complicated for our businesses. 

We thought let's see if that can be solved in some way by having some harmony there.  Then the discussion went to what about if the data is owned outside of the E.U.?  That's why we now have a system where basically the law will have extra territorial affect because if you have data on any European data subject you have to comply with this law.  It doesn't matter if you're running an eCommerce shop in China, doesn't matter if you put the offices in the U.S., it works that way.  I think this will be fascinating to see what kind of effect this has. 

The data protection standards are very high, even for European standards, they're very high, and everyone will have to comply with it or they could be fined. 

I totally understand your point, Adam.  It is complex.  Everyone is still trying to figure out how it works.  I can imagine if you're a three‑man company sitting somewhere in Idaho, how are you going to figure that out.  Yes, it will be very complicated, and we'll figure it out along the way.  I have a pretty good idea that the European Commission will not go for the three guys in Idaho when they start fining, I think they'll grab a huge one with a huge turn over that's got benefits all around.  I think the consumer aspects has to be taken into account here.

I will use my last minutes for that.

As a consumer, I find everything is happening with data both terrifying and thrilling:  The terrifying aspect, if I want to do anything, I have to click accept.  I don't know what I'm agreeing to, nobody reads those things and people that do, you know, there is nothing you can do about it.  I want to use all of those products and working with the companies, I love the innovation, I love the disruption, I cannot live without my TripAdvisor, Booking, Uber, I want that to keep going.  That's one thing I think consumers want and adore, and that's why they constantly click on accept and agree to all kinds of things.

It is terrifying because you don't know what happens with it.  The way that we can keep on having all of these benefits, and I think that the new challenges will be even more exciting because with Artificial Intelligence coming up, we have better medical help and better able to take care of the elderly and make sure certain jobs are done so it opens up more free time and wealth for all of us.  If we want to keep harnessing this, what needs to happen, we have to make sure it is not a wild west in which people feel scared.  That's when the politicians wake up. 

Politicians don't go out making laws to make people's lives complicated.  They hear a cry from society, they hear that people are worried, that there are concerns, they see that there is abuse, problems, and they feel they have to come in.

What's happening now, I feel it is a reaction to the initial wild west that there was, and then, you know, somebody feels like the sheriff has to come in, set things in order.  Maybe an overreaction, maybe not, that's what you get.

My advice, especially to the private sector representatives here, rather than enjoying the wild west and profiting from that to a maximum, why don't you start to think about the backlash, think about what the consumers need and other aspects.  If you don't self‑regulate, you're inviting governments to come in and do it for you.  In my experience ‑‑ this is where I'm more of a liberal ‑‑ I would rather have good effective self‑regulation and address the consumer needs rather than having governments come in either heavy‑handedly doing something, or in this case, having one region come in and do one thing, another region come in and do another thing and who knows when the world will get together and set some sort of global standard which is ideal for businesses, but it may not happen.  So you'll be dealing with on the global level what we were dealing with in the E.U. for a long time, 28 different regimes.  If you're a global business you're dealing with 180 different regimes. 

This would really be my plea, there is no contradiction between effective open markets that have prosperity for all of us and strong consumer and data protection of Human Rights that make sure that you take them into account as you develop the product, economies, because otherwise you are just inviting regulation in and that's not I think what most people want.

>> MARION JANSEN: Thank you very much for putting the emphasis ton consumers to come back to the WTO.

I joined in 1999 and I did a search for world consumer in existing agreements and existing legal texts and that word didn't appear.

If there has been one innovation of eCommerce and digital discussion in the trade context, it is that in the eCommerce chapters, in trade agreements, we now see the term consumer protection appearing and this is progress. 

Thank you for emphasizing the importance of consumer protection or consumer concerns to be part of the win‑win solution.  We have learned where the information asymmetries exist and they're all over the place in this field.  Markets can disappear.  If a consumer loses trust, they stop using the technology.  So definitely helping consumers to feel safe, to trust technologies, it should be a part of the win‑win solution.

And last but not least, I think that a great plea, please use this technology that apparently can do everything to send me the information that I want to have on my phone, for instance, on accesses on the data if everything else is not complicated and can be done in this fantastic field of free data flow, then maybe let's develop the technology that consumers are asking for.

>> MARION JANSEN:  Last intervention, you have the possibility to react to everything that you have heard, but also, please, a point of view from your country.

>> SATRYO BRAMONO BROTODININGRAT:  Thank you.  Thank you for the opportunity to be here, and thank you for putting me on the spot regarding the views of the Developing Countries.

Basically, if I could just begin by giving a small profile on how Indonesia is in the Digital Economy:  Indonesia is a big developing country.  It is 260 million population.  Out of that 260 million, 93.4 million are Internet users, mostly from smartphones.  The Internet penetration reached 52%, and online shoppers have reached 8.7 million with eCommerce transaction value at 8.4 million.

 There is a lot of hype about the Indonesia digital committee or eCommerce.  We're seen as in the beginning of a boom.  In 2017 alone, 3 billion U.S. dollars of investment has gone to our startups.  The potential is big.  However, as a developing country, I want to give you the sobering reality.

We have talked ‑‑ I heard a lot about data, how data should be managed, the policies regarding data protection.  When Developing Countries, there is simply no data.  I can tell you in Indonesia one of the main problems of the Digital Economy is that only 36% of population are banked, only 36% of the population have accounts in formal banking institutions, financial institutions.  Only 23% have made or received digital payments.  When you talk about SMEs, 59% of SMEs have an account at a formal financial institution.  If you talk about online presence, only 9% of SMEs have an online presence.  When we talk about Digital Economy and data policy, what's important is the tissue of financial inclusion for Developing Countries.  46% of the population having something as simple as a bank account is a major reality check when we talk about data protection.  For Developing Countries, we're not talking about protecting data ‑‑ yes, that's ‑‑ that much is very important.  More importantly, how to create data because simply in the digital data flows in this world, most of the developing country citizens are simply invisible, they don't exist.

In Indonesia, a lot of people in the private market have tried to have innovations regarding this issue.  For instance, if you don't have a bank account, you want to buy online, you go to the local convenience store with a big wide distribution around the country so you order it online and the way you pay, you go to a cashier at the convenience store and pay in cash and that store, that franchise store will pay your good for you, and then the good is sent to your home.  Basically I would also like to stress that if you talk about data policy and Digital Economy, financial inclusion and digital literacy policies go hand‑in‑hand, they're mutually reinforcing.  At least in Indonesia's experience, Digital Economy is seen as an opportunity, a transformative opportunity for development because they're mutually reinforcing.  If the economy is getting more digitalized or becoming more online, obviously market forces will compel more citizens to feel the need to create ‑‑ to make bank accounts for instance or to have access to financial instruments that could be used online.

Secondly, the rise of the Digital Economy presents opportunities for companies to create very innovative banking methods.  In Indonesia, a lot of banks are going with the idea of branchless banking through smartphones.  Big banks are hiring agents in rural areas and areas where there are no branches to provide services through smartphones to just normal consumers.  Despite the stark reality that at least in Indonesia, most people don't even have access to financial services, actually the rise of ICT and Digital Economy provides an opportunity for innovations that will bring those citizens to be included in the financial system in the formal sector.  Those are just some of my views.  Thank you.

>> MARION JANSEN: Thank you very much.  Thank you for bringing this topic of financial inclusion up.  In our own survey work we do find a possibility for ePayments particularly across borders, it is a bottle next for SMEs and that regions like Africa, mobile payments, we hear a lot about mobile payments but most payments for eCommerce are conducted on a cash basis.  As you also mentioned, we only have around 30 minutes left for the Q&A part of this.  I would like to propose to collect a few questions from the floor and also from online participants if there are questions, and then give the floor for the last one‑minute statement to each of the participants.

Please, audience in the room, the floor is yours for questions.

>> AUDIENCE: I'm not speaking for WTO, I think there is a lot of attempt to look and find Best Practice that people can draw upon and when I think about the E.U.'s new data proposal, the thing I think about, the more complex it is, the more costly it is to implement, the more it ‑‑ SMEs, they may not find it works for them and the more the implementation costs are and you have less capacity and less humans even to do this.  What ‑‑ do you think that there are ways in that the E.U. is going down, it could can be adopted in other countries or is there something else we have to come up with that may be easier to adapt in Developing Countries?

>> MARION JANSEN: Any further questions?

Online participants?

Thank you.  This gives me the opportunity to introduce Roxana from the Diplo Foundation.

>> We have two question, first, how do you think the decision to end net neutrality will affect the eCommerce data flows and trade and the second refers to the WTO rulings to limit protectionism in other areas WTO relies on the work of data setting bodies for safety and ISO for technical careers, do you see an equivalent standard set for the digital world?  Thank you very much.

>> MARION JANSEN: I thank online participants for the question.  The net neutrality theme hadn't come up yet, good to pick this up now towards the end of the session.

Any more questions from the ‑‑

>> AUDIENCE: I'm an Internet Dutch mission, Faye.  I'm a student, I studied GPR which was really released vent.  I have a reaction on Lousewies, what we saw on privacy and European spirits for more privacy, that's because our history, as during the war, Germany, we didn't trust the governments anymore.  How do you think that we can create more awareness for people around the world about privacy.

The question on the best trade‑off between complexity, possible costs of regulation, potential effectiveness in order to create a win‑win, what's the effect of the new decisions from the U.S. regarding net neutrality, again as part of what is the optimal policy setting, freedom, neutrality, market power protection, where are we positioned, where do we have to ‑‑ when ‑‑ what kind of balance do we end up.  I'm very interested on how that's written down on this.  Then what.

>> Your accent and then my accent, it is most difficult.

>> MARION JANSEN: Standard‑setting bodies.  We have heard standards from several speaker.  What is the role of standards in order to talk to each other technically or in regulations and then the role of history in different attitudes to privacy protection.

I think I give the floor back in the original order of speakers.  8 minutes, that gives you something like 1.4 minutes per speaker please.  Please stick to the time.  I think we have to leave the room really at 10:00 a.m.

>> ADAM SCHLOSSER: I will do lightning round quickly.

Responding to comments earlier:  The financial inclusion point is excellent and that brings up the point that not all data is social media search engine data providing data shows that you paid your bills on time can help build credit reporting, that's not always it included, the positive financial data is important.  GPR, it is not bad, it is polarizing I guess is the way to describe it.  What can be done is maybe like a starter pack, so for a developing economy, they can have some aspects because not only do the companies need to be trained, but the regulators do too.  They don't ‑‑ they can't just jump in literally to the deepest end possible.  There is the education capacity building for all pieces.

And then on the standards point, they do exist in the digital sector.  ISO, cybersecurity, the use around the world and standards around encryption techniques that will be useful.  Those are processes underway and they could possibly be scaled.

How did I do?

>> MARION JANSEN: Great.  I was trying to see how the program did with speed and talking.  I haven't figure that out yet.

>> JOVAN KURBALIJA:  In addition to my accent, I will try to speak fast. 

Net neutrality, one point that's very important.  I benefited a lot from the Internet and then online education.  When bringing critical points, I'm concerned that our naivety, not tackling the issues, it can endanger the big innovations.  Let's put that in clear context.  Putting the things under the carpet, thinking that nobody ‑‑ nothing is happening, it is very dangerous for the Internet.

Now, on the first point, brings me to the point on Net Neutrality.  Net Neutrality, obviously, I'm for Net Neutrality by all means, it is enabling providing traffic.  There is a problem with Net Neutrality which is economic and not transparency in sharing values.  Telecom companies all over the world are coming, pushing, trying to get bigger slice from the digital pie.  Let's be clear on that.  This is behind the move on the Net Neutrality.  If you hear more transparency and how data is the oil of the new economy, I would say that we don't come to this radical situation where the core infrastructure of the Internet could be endangered over the dismantling of the Net Neutrality.  First point.

Second point, privacy:  Privacy exists all over the world in different contexts.  African Union introduced convention which has a very interesting title, and I advise you, all of you, to consult it.  African Convention on Cybersecurity, Data Protection and Economic Transactions.  In the countries, in the conflict zones in Africa, the question of privacy and data, it is a question of life or death.  We have a different context in which privacy is considered, European context is specific, it is historically determined, but there is different context in which privacy is locally considered.

You have 2 minutes.

>> MARION JANSEN: That was 1.6 minutes.  Thank you! 

Transparency, an important point you brought up, life and death, earthquakes.  The point as said before, we may need to think about the things deeply in order to keep the tools alive.

>> PANELIST: I'm often modest.  A thing ‑‑ we should share Indonesia's great success.  Indonesia is the country with most trusted governments online in all analysis.  I'm very proud that today I'm on the panel with our Indonesian colleague.

>> MARION JANSEN: We'll come back to that.

>> PANELIST:  There are a lot of things that need to be said, and there is no time. 

I think moving forward in this area, there is no doubt that data would grow in importance so there will be a growing need to come to some kind of a common approach in the world because much of the data is flowing across borders.  We know that there is not a common approach right now, not even among developed countries like between the U.S. and Europe.  I think one needs to look carefully at different concerns of the different stakeholders from business, governments, national security issues, from consumers, from others and try to see what are the best ways of addressing the concerns without distorting trade unnecessarily. 

I think the issue that maybe I can throw also in the question to my Dutch colleague here, it is if you have looked at the European level at possible implications of the new GDPR for the ability of Developing Countries to export outsourcing services to the countries and does the E.U. have any plans for helping other countries to cope with new rules in the European Union so that it doesn't have a negative impact on the ability of Developing Countries to export to the European markets.

Thank you.

>> MARION JANSEN: That was a direct question to Lousewies, and all of the other questions that were directed to you.

>> LOUSEWIES VAN DER LAAN:  I don't know.  I don't work for the European Commission.  There are a lot of ‑‑ here.  I'll Tweet it, and I'm sure somebody will come up with an answer.

From a historical point of view, Europeans, even though they talk a lot about helping Developing Countries, we would rather close the border, be protectionists and not share in the wealth and are surprised when many migrants want to come and share in the wealth.  I have made the point of either opening up the markets or the borders, but you can't have it both ways.  I think Europe has a long way to go in that.  That's my personal political opinion.

I think what's interesting about some of the SMEs in the European Union dealing with GDPR is that it will be quite easy for them.  GDPR just basically is all European law.  Dutch companies, they comply with the Dutch Data Protection Standards.  For them, GDPR is a piece of cake because they have complied for decades.  That's relaxed.  It's much more difficult if you come from a completely different jurisdiction.  I like your idea, Adam, about saying let's see if there is a startup pack or something, I really like that idea.

What I find interesting about the notion of Europeans looking at things, additionally as you pointed out historically, the way we relate to governments, Americans trust our government less than Europeans do.  That's interesting.  They don't like to pay taxes.  There is a strong libertarian streak.  They don't come out to vote, et cetera.  Because the data is with companies, and Americans trust companies, that's why the divergence has come.  I think we have a difference there. 

You know, that cultural difference, it is interesting.  A recommendation actually is let's keep talking.  Let's keep talking about how these things affect different parts of the world, how they affect your part of the world, how they ‑‑ the differences between the U.S. and Europe, and let's come up with the best standards that actually work in practice. 

Just to go back to the way I try to do it in my private life in Holland, besides being on the ICANN board I have two activities, I'm on the Board of something called Alert Online trying to make people aware of what they do online.  The generation ‑‑ I think that your kids are about the same age as my kids ‑‑ they're cyber savvy, but totally sloppy when it comes to data.  They go on unprotected wi‑fi, they share their password, you know, they have no idea what's happening with that.  To raise awareness ‑‑ and we do that at a national level, we do that with different generation ‑‑ it is do that in organizations.  That's going to be one of the key things to keep people aware of what happens to your data and how you operate online.

The other part of what I do, I'm part of a bunch of guys who are supporting startups.  When small companies say hey, I have a great idea, most of course are working with data in one way or another.  We try to find venture capital, try to find investments to do that.  On one hand, making people aware of the risks at the same time and enabling opportunities, that's a way ‑‑ we'll do that at local, national level and then hopefully let's take the Best Practices, exchange them.  I love the idea about that.  Let's keep on exchanging them so that whatever can be leveraged either to a higher level or can be copied in other parts of the world, let's benefit from that knowledge.

>> MARION JANSEN: Thank you. 

Best Practice of trusting governments, it lies with you.  Again, you're closing.

>> TORBJORN FREDRIKSSON:  Thank you.

I just want to respond to the issue of standards.  This is where Geneva plays a big role for us, Indonesia.  We'll submit draft bill for national privacy laws to the parliament next year.  A lot of this is built in Geneva, there is a lot of work by UNCTAD providing legal framework and federal regulatory inputs.  I just want to emphasize they're that the role of international friends, international organizations, it is very important at least for Indonesia ‑‑ most trusted government, yes, thank you.  And in my past life, I did work on the open government initiative.  I'm not sure if anyone is aware of this.  Basically it is a network of governments who try to emphasize the importance of the Internet in terms of providing public services and accountability.  Just please don't mention this to my Ambassador, in terms of ‑‑

>> There's a transcript.

>> SATRYO BRAMONO BROTODININGRAT: I would share the effect of being so‑called trusted government is that for instance there's an app in Indonesia that's available to all Indonesia citizens.  Basically if an Indonesia citizen goes to my office and is treated badly, gets bad services, he can report directly to the President's office through this app, and by law when the President's office forwards that complaint to my office.  By law, our office has to respond.  That's just a little example of the work it takes to be the most trusted government.

Thank you.

>> MARION JANSEN: A disadvantage of what is technology.  Thanks to technology, it is also known throughout the developed world that I have problems pronouncing the name.  I thank the panel for the interesting discussion.  I look forward to staying in touch.

Those of you who are based in Geneva, wanting to learn more about this and related topic, consider enrolling for the Just in Time course on Digital Commerce that some of us here will be organizing starting on January 29th.  It is organized by the Geneva Internet Platform, ITC, Diplo Foundation, UNCTAD and maybe I'll see you there in the near future, before you enroll, leave the room, join me in thanking the panelists for this interesting discussion. 

Contact Information

United Nations
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