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Wasch: Regulation Overreach on IT Market a Threat

For such an innocuous word, “data” has created some serious tension in the world of tech policy. But given the technological transformation being driven by data, this tension is understandable — and how it is resolved may well determine the future of American innovation.

On one end of the spectrum are those who distrust the data-driven online economy. On the other are those who see data as an asset that is empowering innovation and economic opportunity. What’s increasingly clear, however, is that the data revolution is behind some of the greatest innovations of our time. Policies that seek to curb the use of data threaten to stifle this nascent technological and economic revolution before it can truly take hold.

Driven by the combination of cloud computing, the proliferation of Internet-connected mobile devices, increasing mobile bandwidth and changing culture of users, the IT ecosystem is evolving at unprecedented speed. Rather than simply being accessed on computers — as was the case just a few years ago — the Internet powers myriad devices and will soon be integrated into virtually all devices and into the basic functions of everyday life.

Powering all of this change is data. Data is a critical raw material of production, a new source of immense economic and social value. As computing power, storage and Internet connectivity advance, and data and analytics continue to develop, the scope of useful information has exponentially expanded. We are entering a new era of data-driven innovation — with consumers, businesses and governments increasingly able to ingest massive amounts of data, apply hundreds of analytical queries and develop solutions in real time.

The rapidly evolving IT ecosystem is transforming how we communicate, learn, transact and consume information and multimedia. Entrepreneurs and established businesses are putting data to work to change the world for the better, applying their innovations to everything from roadways, financial services, health care, consumer goods and food production and delivery.

A range of previously unimaginable applications of data-driven innovation are already being produced — or will be in the near future. These innovations are making people’s lives better and safer and more prosperous, while also increasing energy efficiency and saving money.

Right now, hospitals are providing better care by analyzing data about the triage process and using that information to eliminate wasteful steps that prevent patients from getting to the doctor quickly. Traffic-management centers are processing millions of cellphone and GPS signals, combining them with a wide range of other data about car speeds, weather conditions and more to assess road conditions in real time and avoid traffic jams. And financial services companies can collect and integrate customer transaction information in real time to quickly identify questionable patterns and proactively enact new processing rules to reduce fraud.

This data-driven innovation benefits both individuals and the broader economy. In a time of challenge both at home and in the world, data helps society use its resources more efficiently and respond effectively to problems that affect us all, from natural disasters to health care to global poverty.

Of course, without the appropriate precaution, there are risks to data collection and usage. Both enterprises and governments must think strategically about providing privacy and security protections that ensure data is used, not abused. Indeed, many online companies have already implemented proactive privacy policies to protect user data, just as most banks have rigorous anti-fraud measures in place. This balanced approach will enable data-driven innovation to effectively serve our citizens and our economy.

Just this month, the National Institute of Standards and Technology teamed up with the University of Maryland for a forum on how data can help address our national priorities. Big names from both the public and private sectors — Google, the National Institutes of Health, Lockheed Martin — were there to hear about how data can benefit the fields of health care, disaster management, security and finance.

Policymakers have a role in ensuring that this conversation stays focused on benefiting consumers and the broader economy. They should beware, however, of regulatory overreach. Any attempt to impose a fixed regulatory framework on an information technology marketplace that continues to evolve and innovate every day will hurt the consumers. Policymakers must work toward a more considered policy approach that seeks to safeguard consumers while unleashing the enormous opportunities that the data revolution is creating.

Ken Wasch is president of the Software & Information Industry Association.

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