How Digital Public Infrastructure can serve as a building block for Data Free Flow with Trust

Digital public infrastructure (DPI) and data free flow with trust (DFFT) are two global priorities that are currently prominent on the agendas of India’s G20 Presidency and Japan’s G7 Presidency, respectively. Both DPI and DFFT intersect, and it is critical to demystify what this means for the future of digital. Not least, so that world leaders can speak with one voice on the importance of enabling people’s agency and ability to exercise rights over their data while fostering innovation.

A rights-based approach to data and empowerment is important in both domestic and international contexts. DPI and DFFT represent two critical needs of today’s new digital paradigm – sovereignty and collaboration. While some may think of these approaches as contrasting, in actuality they are complementary with significant possibilities.

Fundamentally, data flows underpin both DPI and DFFT. DPI is a set of interoperable and networked technologies that facilitate information flow with robust governance and inclusive participation of actors in the ecosystem, providing new flows and benefits that are accessible to everyone. DPI’s benefits span all 17 Sustainable Development Goals (SDGs), with early evidence indicating that countries with DPI are much more resilient in the face of crises. Most importantly, DPI can address common challenges that the global community is facing, from advancing gender equality to restoring our natural world.

Similarly, DFFT refers to a set of rules, regulations and policies to facilitate cross-border data exchange that is based on trust. As everything from government services, financial and non-financial services, to participation in markets is mediated by digital systems, both DPI and DFFT can be understood as a shared means to many ends, and are critical to the functioning of countries and cross-border exchanges.

Both DPI and DFFT seek to reduce barriers to unlock the transformative capabilities of digital to improve services, and ultimately achieve national prosperity through innovation and efficiency. To this end, DPI can serve as the necessary building block for countries considering or operationalizing DFFT. As every country is racing to build or strengthen its digital infrastructure, countries and partners worldwide have an opportunity to shape this emergent class of infrastructure – DPI as a building block for DFFT.

Under India’s G20 Presidency, there is increasing understanding that beyond sovereignty and the acceleration of the SDGs, DPI and DFFT can serve as valuable tools for collaboration across sectors within countries. They are also essential for competing in global markets.

The debate around these two concepts cannot be an either/or discussion. The success of both DPI and DFFT hinge on the common understanding that they are intrinsically linked, with DPI focused on domestic readiness and the ability of countries to engage as equal partners in DFFT. Several countries from the Global South, including India, are not signatories of DFFT due to concerns over “economic expropriation”. A number of experts argue that DFFT does not address the “central concern of developing countries” and fundamentally does not take into consideration realities such as the digital divide.

Since its introduction during the Osaka G20, there have been some reservations on creating a global DFFT.

We see four big challenges related to the push for DFFT:

1. Technical challenges: There are questions around how DFFT would be operationalized. For example, what data standards would be followed; how would the quality of data flows be verified and authenticated; how would consent be included; and how would interoperability be enabled, among others.

2. Privacy, security, trust and other safeguards: The crux of the debate for many developing countries is that there are broad differences among countries on how they approach privacy safeguards and the need for data security and sovereignty. Many countries are still coming up with their own privacy standards, without which a DFFT could risk the loss of security for their people. There are also questions around building trust between countries, ensuring reciprocity, and creating appropriate national and internal legal systems and frameworks to ensure DFFT is built safely.

3. Financing constraints: There is the question of how DFFT can be built sustainably. For countries, this would require drastic investments into their data collection and exchange systems. Yet the question remains: who would foot the bill? There are also open questions around how DFFT would compensate data owners vis-a-vis data users.

4. Digital divide: As mentioned above, several countries are concerned about the digital divide, given that a significant portion of their populations and economies exists offline. This will have implications on the amount and quality of their datasets, and, relatedly, their ability to transact on equitable terms with other countries that are more “data-rich”. Naturally, this would create new power dynamics globally.

Adopting DPI first as a building block can help address several of these challenges in setting up DFFT and unlocking global data flows that provide a safeguard for people and countries.

1. DPI can address some technical challenges. Countries with robust internal data exchanges and flows would find it easier to adapt to and harmonize with cross-border data flows given existing infrastructure. Challenges around interoperability, consent and quality of data would be solved by the existing exchanges. A DPI-first approach would also build internal capacity and capability around data exchanges and flow, further boosting adoption of DFFT.

2. There are financial incentives for countries with robust data exchange DPI. As countries create an ecosystem of DPI users and service providers, they would be able to extract greater value from DFFT as more stakeholders partake in these exchanges. In addition, countries would provide verifiable, quality data that covers a larger set of businesses, operations and individuals, making it more valuable for data users. Existing systems would also have a lower cost for countries to harmonize to DFFT standards, compared to building a system from scratch.

3. Pertaining to questions around privacy, security and trust, DPI can contribute to the development of a strong set of domestic rules and regulations, and build trust among different stakeholders. DPI can also lend support to dispute resolution among DFFT members. Finally, countries with strong privacy rules and regulations can ensure that any DFFT they partake in addresses all concerns and is safe and inclusive.

4. DPI, when implemented thoughtfully, can help ensure populations perform digital transactions in an inclusive manner, thus generating data wealth for countries that can be deployed through DFFT. DPI's bottom-up, people-first infrastructure is focused on reaching the last mile, ensuring access for all to close the digital divide.

The synchronicity between DPI and DFFT can be harnessed through global digital cooperation. This is especially significant as the priorities related to DPI and DFFT converge and take shape in the Global Digital Compact, a critical intergovernmental process. India and Japan can steer conversations to a more collaborative agenda for DPI and DFFT, and link technical, financial, policy and inclusion concerns related to both.

DPI is a step in the right direction that will allow countries and communities to partake in global data flows that accelerate their development priorities, and lead them to a greener, more sustainable, and more inclusive future for all.