In Part 1 of our series on “How the Caribbean can leverage the European Union’s quest to promote and develop a ‘Data Economy’” we provided an overview of the European Union’s vision for the development of an agile data economy. In Part 2, let's talk about how the EU strategy can be used in the Caribbean to drive digital transformation and perhaps create a new international services sector in the region.
There are two specific areas of focus to consider when considering leveraging the European approach for a data economy:
1. Mirroring the EU approach to creating a data economy in the Caribbean
According to European Commission figures by 2025, the European digital data economy will be worth €829 billion. This figure is based on the potential market size in Europe Union with a population of 446 million people.
Depending on what is considered to be the “Caribbean market” the market size could be 18.5 or 28.5 or 285 million, depending on whether you take account of only the CARICOM block of countries, the CARIFORUM block, or the Association of Caribbean States. Based on the EU figures the cloud provides a digital data economy of between €34.4 billion, €60 billion, or 529.7 billion. Of course, this is a simple calculation as factors such as ICT maturity, GDP, etc. would need to be considered. However, it can be seen that the potential near-digital-data-market for the Caribbean will be of significant value to regional economies.
To tap into this market, however, the region needs to adopt a similar approach to the EU. In its publication: A European Strategy for Data, the European Commission notes as a matter of urgency, the need to create a cloud infrastructure. Similarly, the creation of a Caribbean-based infrastructure could be a major first step toward creating a data-focused economy. In a section dedicated to the subject, the commission tackles issues such as reliance on external cloud service providers, third-party legislative challenges, and insufficient visibility for smaller providers among other key issues. One might need only replace the term EU with the Caribbean or CARICOM to plan a similar move for the region.
In addition to strengthening the necessary ICT infrastructure, the region will also have to significantly strengthen its educational processes to ensure the necessarily qualified workforce is available to take advantage of this emerging Industry 4.0 sector.
A region-wide approach to GDPR-type legislation would also be needed. This will ensure that a region-wide digital data economy will operate on the same legislative base no matter where data is stored or processed within the region.
2. Utilizing existing trading opportunities to provide service to the European market
Access to the EU market for services, including ICT services, is covered under the ECONOMIC PARTNERSHIP AGREEMENT between the CARIFORUM States and the European Community and its Member States (as part of a wider ACP-EU EPA12 process). However, for the Caribbean or any other non-EU country/region to access this market, it must meet EU GDPR standards.
To this end, the EU has engaged in what it terms “digital Diplomacy”. This allows non-EU countries, that the EU deems as providing adequate levels of protection for personnel data, to provide digital data services to the EU market. Recognition by the EU ensures that data exchanges between recognized countries and the EU Member States are treated as intra-EU transmissions of data. Currently, the EU recognizes twelve (12) countries, as meeting its standards, none of which come from the Caribbean region.
The EU has identified the need to significantly expand the European cloud computing environment. Reliance on the current big cloud firms (which happen to be USA-based) is regarded as a significant risk to the development of a European Data Economy. This presents a great opportunity for the Caribbean to utilize the current EPA with the EU to provide such services.
If the Caribbean region can recognize that commercial cloud services provision presents a very significant opportunity to create a visionary Industry 4.0 knowledge sector, then a regional strategy must be developed covering technology, educational and legal requirements to avail of this opportunity.
It will mean a willingness:
- By the public sector to utilize local commercial cloud service providers
- To orientate education from primary to tertiary for the provision of a qualified workforce for the digital data economy
- To develop a regional approach to the legislative base, which is currently being developed at the national level.