December 9, 2021

Beyond Going Long

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The data economy and how Europe can protect itself from another economic shock -

The data economy and how Europe can protect itself from another economic shock –

The European Union in Slovakia is viewed mostly positively on most economic issues. It is our main trading partner through the single market and thus provides various opportunities for expansion for Slovak companies. That is why it is necessary to indicate when European decisions can negatively affect Slovak companies.

One such case is seen these days as well. as a result of European Court of Justice decision The Court of Justice has nullified existing data protection and transfer agreements between the United States and the European Union. A legal struggle emerges between the economic and political partners, which has the potential to freeze the work of literally thousands of European companies that have been dependent on legal certainty in this area in their daily operations.

Legal conflict creates uncertainty for European businesses as well as consumers

The EU thus created a legal vacuum in a region that has the potential to significantly mitigate the effects of the coronary crisis and provide small and medium-sized businesses with an opportunity to operate in the digital space. It is this region that provides stability in times of new waves of disease and mitigation measures. With digital services, companies can stay active, innovate their products and services, bring them into new markets and increase their competitiveness. However, small and medium-sized businesses are using digital services in this direction It relies on data transmission seamlessly across the Atlantic Ocean.

All this conflict between the closest economic partners is based on different views on the protection of personal and sensitive data as well as the level of trust in the digital economy. The European Court of Justice has expressed strong doubts about US practices in data security and the protection of personal and sensitive data, calling into question the entire data transfer that currently underpins the European economy.

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There is already a lot at stake in this legal dispute

The European Union, and especially countries like Slovakia, could lose significantly in this conflict. The United States is the European Union’s strongest and most important economic partner, supporting the economy with more than $800 million in goods and services purchased from the European Union each year. The effects of a potential agreement or further escalation of this conflict could affect not only entrepreneurs and their income opportunities, but also research activities, distance learning opportunities and critical security infrastructure, with this snowball effect pulling more and more areas of business and the economy away. ..

So Europe can lose a lot. Economically, we can “lose” €2 trillion and nearly 1.3 million jobs at risk by the end of this decade. This could be a price for the union not finding common ground with its closest trading partner to ensure a seamless transfer of data between the two economies.

In the realities of the economy, we are concerned about the impact estimates of up to 85% of European companies using existing data transmission mechanisms, including 70% of all European SMEs. Only 9% of European companies do not use data transmission at all outside the European Union.

Let’s look at the share of each sector using digital data transmission services between the United States and the European Union. Not surprisingly, the largest user of personal data protection is the ICT industry (2,597 companies), followed by trade and professional services (751). Moreover, companies from various sectors, such as healthcare, media, entertainment, financial services, education, consumer goods, and retail (see Figure 4, which does not include the IT sector, to better highlight the different sectors that use data transmission services).

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“We are aware of the dangers of an indirect impact, which will be broader, as the services of technology companies, platforms or digital leaders are used in Slovakia and throughout Europe by tens of thousands of companies. It is they who may face the failure of channels at this time, full of uncertainty, Which works to reach customers from small and medium businesses or ordinary people.Digital services are essential for More and more sectors of the economy, from entertainment, through financial services, healthcare, education or the sale of essential products,” says Michel Kardosh, Executive Director of the Alliance for Innovative Economy (SAPIE).