Data NeedsRoundtableU.S. Department of CommerceMay 9, 2016 data is imprecise. The statistics were not developedwith cross-border data flows in mind and informing Working Towards Better Data toMeasure the Economic Impact ofCross-Border Data Flows decisions about the digital economy is not theirprimary purpose. For example, BEA’strade inservices datais used to estimate services that havethe potential to be delivered digitally. However, wedo not know the extent to which these services areactuallydelivered digitally. Additionally, someservices trade, such as that which relies on non-traditional business models, might not be captured atall in the official trade statistics. In the case of theCensus Bureau’se-commerce statistics, the dataindicate the value of retail, wholesale, manufacturing,and service sector digital sales, but do not provideinformation on which sales are domestic and whichcross borders through international trade.What arethe official statistics failing to capture about cross-border data flows? What data do we need to informour macro-level economic indicators? The Department of Commerce (Commerce)recognizes that worldwide data flows betweencountries are growing and becoming an increasinglyimportant component of international trade. Data isalso key to communication between individuals andbusinesses worldwide. It is generally accepted thatcross-border data flows increase economicopportunity and restrictions to these flows areeconomically detrimental. However, there isrelatively little supporting data or evidence. Commerce’s Digital Economy Leadership Team(DELT)is convening a roundtable, “Measuring Cross-BorderData Flows: Unmet Data Needs,” to identify gaps inmeasuring cross-border data flows and the economicimpact of restrictions to the free-flow of data. This isthe first step in improving the information that isavailable to data users and other stakeholders. Theinformation below offers some considerations for thediscussion. Additionally, the forthcoming“MeasuringCross-Border Data Flows: Data, Literature, andConsiderations”will include more details on theexisting data and literature, as well as theirlimitations. Outside of Commerce, numerous point-in-timestudies and statistical models have been developedthat attempt to quantify how restrictions to cross-border data flows impact GDP, employment, andtrade. These sources rely on data from Commerceand other government agencies, as well as privateindustry. In some cases, these glimpses at cross-border data flows may be sufficient to informdecisions or policy, but in other cases, recurring andcurrent information will be needed.When mightone-off studies be sufficient, and when do we needmore official statistics? What data is needed tocreate better and more accurate models? Cross-Border Data Flows and the DomesticMacro-Economy Commerce currently collects data that informs ourunderstanding of cross-border data flows, but this Cross-Border Free Flow | Data NeedsRoundtable May 9, 2016 border data flows affect different facets of thedomestic economy, there is a need to understandhow these flows and the restrictions to them impactother countries. To effectively negotiate tradeagreements and deter foreign governments fromenacting policies that block the flow of data, the U.S.government needs data and quantitative analyses onhow the free flow of information benefits othercountries’ economies. Cross-Border Data Flows and Domestic Firms Businesses of all sizes and in almost all sectors of theeconomy rely on the free flow of cross-borderinformation in some capacity. Each day, businessessend billions of emails and transfer data to otherbusinesses or internally that do not directly result inmonetary transactions. However, these data flowsserve numerous business functions. Intra-firm datatransfers—containing information about productionprocesses or human resources or something else—enable multinational firms to communicate internallywith their overseas affiliates.What do we need toknow about commercial data and services that have$0 market price, but are critical for businessoperations? Although Commerce’s role in collecting data on othercountries is limited, the statistics on internationaltrade,direct investment statistics, andactivities ofmultinational enterprisesare Commerce datasetsthat help measure the impact of data-related policieson foreign economies.Additionally,Commerce andother U.S. government organizations might alsoparticipate in international working groups, topromote the collection of data on the digitaleconomy and cross-border data flows. Many small and large firms rely on the Internet todeliver services to and collect payments fromoverseas customers. Some small businesses havebuilt their success on exports, facilitated by the abilityto market their goods and services online.What dowe need to know about the impacts on businessesof all sizes of proposed policies and legislation thatlimits or cuts off the flow of data across borders? What d