The Economy, Health-Sapping Costs of Data Localization Rules

Numerous countries around the world, as well as the European Union, have enacted laws to encourage or require that data generated in a particular place be stored within their jurisdiction, and place strict limits on how that data can be accessed. The ostensible rationale for such laws is that governments need to protect their citizens’ personal data from exploitation and--if possible--give a boost to their domestic economy. 

However, these scant benefits come at an enormous cost by impeding all manner of global commerce, most notably the ability of scientists to do comprehensive drug testing. The restrictions significantly slow the developments of both drugs and medical devices, ultimately costing society billions of dollars a year along with thousands of lives lost prematurely. 

 

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