Each of the opportunities discussed above helps to boost competition within the country in which data is stored as well as throughout the world. A country that protects data localization strategies indirectly contributes to that country’s overall competitiveness in digital industries. While data localization has its challenges, organizations that can balance data protection through innovation are well-positioned to capitalize on consumer demands for personalized data storage, job creation and incentivized benefits for employees, growth of local digital industries, accelerated data sharing, and reputational advantage. The ultimate benefit of data localization is that it enables control over personal and financial information. Therefore, the localization of data privacy carries the potential for safeguarding the country’s national and international economic interests while allowing local organizations to gain a competitive advantage.

1. LOCALIZATION OF DATA PRIVACY
LAWS CREATES OPPORTUNITIES
FOR COMPETITION

2. D
ata localization, the practice of storing and processing data in the same country where
that data was collected initially, is increasingly becoming important due to a rapidly
interconnected world that enables a free flow of information. However, this free flow of
information increases the flow of private data, which negatively affects consumer trust in a busi-
ness, leading to loss of sales and diminished reputation of that organization. This is where data
privacy laws can be helpful to organizations as well as create opportunities for competition.
The ultimate benefit of data localization is that it enables control over personal and financial
information. Therefore, the localization of data privacy carries the potential for safeguarding
the country’s national and international economic interests while allowing local organizations to
gain a competitive advantage.
Around the world, data localization laws have been implemented. For example, in 2011,
China’s central bank stated that financial information collected in China’s territory had to be
stored, processed, and analyzed within China’s borders. Since 2013, Nigeria’s National In-
formation Technology Development Agency (NITDA) has required local ICT companies to store
subscriber, consumer, and government data within the country. In 2015, Germany’s data reten-
tion law mandated telecom companies to store data in the country rather than anywhere else in
the world, including within the European Union. Data localization in India is also gaining im-
portance as a policy issue. India is poised to change their data privacy policies, which would
significantly influence the growth of start-up data companies and tech industries.
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3. Each of these cases points to strict enforcement of data localization privacy laws. Critics who
point to the harmful effects of data localization in damaging global innovation and hindering
free trade neglect from considering its opportunities for competition. Apart from the increased
security that comes with storing data in the same country where it is collected, localizing data
allows for better visibility of data centers, faster accessibility of data, and easier maintenance of
storage facilities.
Innovation and personalization:
Data localization can improve customers’ personalized experience. If data is collected and
stored within the same country, every company will be granted access to data resources, there-
by creating consistency where services are considered. This consistency will mean that compa-
nies have to innovate by providing unique data storage products and services for consumers.
Creation of jobs and competition:
A second opportunity created by data localization of privacy laws is that it establishes domestic
data-related jobs. The country’s unemployment rate and overall economic growth can improve
with increased job prospects. Creating more jobs through data localization resources will re-
quire companies to provide competitive salaries and other benefits that ultimately serve the
interests of prospective employees.
Growth of Industry:
Another reason for enacting data localization of privacy laws is that it promotes the growth
of domestic digital industries. After RBI introduced data localization measures in 2018, which
forced payment firms to store data involving local transactions in servers located solely in India,
organizations set up their data stores in data centers throughout India. Data localization of pri-
vacy laws, therefore, led to not only a growth of data centers but also a growth of India’s cloud
computing industry.
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4. Acceleration of data:
Data that is stored locally increases the possibility of on-demand data flows and data sharing.
The acceleration of data, therefore, requires companies to improve ease of access as well as
efficiency. Through data localization of privacy laws, companies can boost their competitive
edge through data sharing policies that are faster than rival firms.
Reputational advantage:
Companies that comply with data localization can better position themselves as protectors of
data and reputable sources that can provide information about data privacy. Companies can
use this reputation to their advantage by comparing their policies to rivals. This ensures that all
companies prioritize sound data safeguarding in order to remain viable. The reputational ad-
vantage that companies can gain from implementing clear data policies ensures that the data
stores continually develop safe data practices.
Conclusion
Each of the opportunities discussed above helps to boost competition within the country in
which data is stored as well as throughout the world. A country that protects data localization
strategies indirectly contributes to that country’s overall competitiveness in digital industries.
While data localization has its challenges, organizations that can balance data protection
through innovation are well-positioned to capitalize on consumer demands for personalized
data storage, job creation and incentivized benefits for employees, growth of local digital in-
dustries, accelerated data sharing, and reputational advantage.
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