The non-profit GSM Association (GSMA) has urged the government to speed up endorsement of data protection laws to enable the free flow of cross-border data, as Thailand risks losing competitiveness in the digital economy.
"The government needs to allow cross-border data flows through the new data protection law to stimulate growth in the digital economy," said Boris Wojtan, senior director for privacy at the GSMA.
Mr Wojtan said that with Thailand set to chair Asean next year, the government should promote a cross-border data framework in Asean to meet standards in Asia-Pacific.
He said a recent GSMA study, "Regional Privacy Frameworks and Cross-Border Data Flows", found that striking the right balance in the region between data privacy regulations in the cloud significantly enhanced economic activity and future innovation in 5G, the Internet of Things and artificial intelligence (AI).
"If any country uses restrictive policies to mandate keeping data in its jurisdiction, or keeping data physically in the country, called data residency or data localisation, this will handicap the digital economy," Mr Wojtan said.
At present, there are two different options: pro-flow of cross-border data or no-flow of cross-border data.
Many countries, however, have shown a reluctance to choose because they are unsure how to best protect citizens' data privacy.
Some countries are also concerned about foreign intelligence, as well as possible domination by global internet giants of nations' digital economies.
McKinsey Global Institute's 2016 study on "Digital Globalisation: The New Era of Global Flows" found that international data flows over the past decade elevated global GDP by 10.1% and that their annual contribution to global GDP has already surpassed US$2.8 trillion (106 trillion baht).
The GSMA study found that easing cross-border data flows may lead to the formation of 2.89 million firms worldwide. The study revealed that the Philippines' business process outsourcing industry built on efficiency data flow rakes in $25.5 billion annually.
Asian countries with data flow barriers could lose 0.5-1.7% of GDP. Data localisation raises the cost of cloud services by 30%-60% in Brazil and the EU, the study said.
Julian Gorman, head of strategic engagement in Asia-Pacific, said that the longer Thailand takes to enforce data privacy laws and cross-border flows, the higher the losses in digital economy competitiveness.
Restrictions on data flow are a type of trade barrier that will impede business or even limit the chances for SMEs and startups to access cheaper cloud-based services or free online services, Mr Gorman said.
He said harmonising cross-border data flows in data privacy will create mutual recognition among countries that have the same legal standards and will also increase consumer confidence as punishment for those who violate data protections is enforced.
Mr Wojtan said that even the EU's GDPR (General Data Protection Regulation) focuses on the protection of individuals' data but also allows cross-border data flows for countries the EU has agreements with, such as Japan.
Emanuela Lecchi, acting head for GSMA in Asia-Pacific, said restrictions on data flows make it much easier for hackers to attack.
Ms Lecchi said the GSMA encourages the use of application programming interfaces for digital identity systems to reduce the cost of new mobile services development.
