How do data flows interact with servicification of the economy? This presentation explains and give the economic underpinning and regulatory incidence of data policies.

1. Data flows and servicification:
economic underpinnings and
regulatory incidence
WTO, January 26th
Erik van der Marel
ECIPE, Université Libre de Bruxelles

2. Introduction
• Why are cross-border data flows in services so important?
• How does the regulatory environment for data flows look like?
• How do regulatory measures for data flows look in trade agreements?

3. Why are data flows important?
• Data is omnipresent in production (mainly services)
• Increased importance with the notion of “servicification”
• Servicification present across the entire economy

4. Why are data flows important?
0
20406080
1990 1995 2000 2005 2010 2015
Year
Data traffic
Source: Author’s calculations using data from Cisco

5. Why data flows important?
Source: Adapteed from Opresnik and Taisch (2015)

6. Why are data flows important?

7. Why data flows important?
NACE R.2 Sector description Share
Data-intensive sectors
61 Telecommunications 0.24
63 Information services activities 0.14
58 Publishing activities 0.14
80 Security and investigation activities 0.12
79 Travel agency, tour operator reservation activities 0.12
82 Office administrative, office support, other business 0.11
69 Legal and accounting activities 0.09
62 Computer programming, consultancy and related 0.09
78 Employment activities 0.09
66 Activities auxiliary to finance and insurance services 0.09
70 Activities of head offices, management consultancy 0.08
60 Programming and broadcasting activities 0.08
74 Other professional, scientific and technical services 0.08
73 Advertising and market research 0.07

8. Why data flows important?
45
63
66
72
39
71
74
73
18
62
46
38
16
2331
69
59
75
33
77
58
15
78
61
82
70
3260
52
37
79
14
47
2213
51
27
81
20
19
25
49
36
28
17
26
2429
30
10
80
53
11
12
-6-5-4-3-2-1
Datausageshare
8.5 9 9.5 10 10.5 11
TFP Ackerberg
Goods & Services

9. Regulatory environment?
• DTE database
• From descriptive to quantitative (laws and de facto)
• Across the entire range of the digital economy

10. Regulatory environment?
Fiscal restrictions
(1) Tariff and trade defence
(2) Taxation and subsidies
(3) Public procurement
Establishment restrictions
(4) Foreign investment
(5) IPRs
(6) Competition policy
(7) Business mobility
Restrictions on data
(8) Data policies
(9) Intermediate liability
(10) Content access
Trading restrictions
(11) Quantitative restrictions
(12) Standards
(13) Online sales and transactions

11. Regulatory environment?
0
10203040
Averagenumberofmeasures
Lower middle income Upper middle income High income
Digital measures in DTE
Source: Author’s calculations using data from DTE

12. Regulatory environment?
0
20406080
NoofmeasurestoCBDF
1960 1980 2000 2020
Year enacted
Data measures over time
Source: Author’s calculations using data from DTE

13. Regulatory environment?
0
.002.004.006
PerCapitaDatatraffic
0 .2 .4 .6 .8
DTE Index on Data Policies
Data policies and Per capita data traffic
Source: Author’s calculations using data from DTE

14. Regulatory environment in trade agreements?
0.16
0.14
0.09
0.08
0.05
0.04
0
.02
.04
.06
.08
.1
.12
.14
.16
.18
.2
RCEP APEC TPP TiSA EU TTIP
Regulatory divergence
Source: Author’s calculations using data from DTE

15. Conclusion
• How are cross-border data flows in services so important?
• Services, feeds into “manufacturing of the future”, i.e. servicification
• How does the regulatory environment in data flows look like?
• Going to the ECIPE’s DTE! ;-)
• How do regulatory measures for data flows look in trade agreements?
• Difficult balance of non-economic societal goals, yet political will is important