Digital Sovereignty

2 September 2021

Digital Sovereignty

CONCLUSIONS

Digitalization has changed the world, creating new trends and risks

“Thanks to digital technologies, large databases, and artificial intelligence, old business processes have become redundant. This is a global challenge facing governments and states,” Tigran Sargsyan, Deputy Chairman of the Board, Eurasian Development Bank.

“Intellectual property is a powerful instrument and I think that we underestimate its importance for managing economic relations. <...> The digital companies that are driving digital transformations are essentially shaping regulatory norms. Somethat that we usually expect to be shaped by governments. Even when it comes to the familiar private law sector. <...> Digital technologies are changing the ways in which people communicate and interact, essentially – social relations. We are used to seeing these relations be regulated by laws,” Igor Drozdov, Chairman of the Board, Skolkovo Foundation.

“Russia is one of three countries – the US, China, and Russia – that currently have competitive products. We have genuinely competitive social networks, our social networks are successfully competing with global ones in our markets without additional pressure, and we have search systems, search engines, voice assistants – and a number of other products – things we can use as a foundation to sustain and develop our digital sovereignty,” Maxim Parshin, Deputy Minister of Digital Development, Communications and Mass Media of the Russian Federation.

PROBLEMS

Creating a Russian digital market and competitive technologies is at cross-purposes with security and regulatory concerns

“On the one hand, Russia, the US, and China are leaders here [in the digital sector, – Ed.], we have competitive technological advantages, but on the other hand, in order to keep up with this race we must invest more and more funds and resources – which the US and China have more of a priori: because their economies are more developed, their markets larger. And here we have a curious choice: on the one hand we are concerned about data security <...> and on the other, all of that is a barrier to attracting investment and developing technologies. It turns out that we are having to invest government resources, opportunities for attracting private investment are dwindling, and our competitive advantage is shrinking,” Igor Drozdov, Chairman of the Board, Skolkovo Foundation.

“Speaking of digital sovereignty, there are two important questions: is digital sovereignty even currently possible? And the second: do we even need that sovereignty? <...> Today, the issues of security and data management, especially relating to personal data, are top of mind. This is a very complex issue. Interacting with global players means that these instruments must be very finely tuned,” Maxim Parshin, Deputy Minister of Digital Development, Communications and Mass Media of the Russian Federation.

The need to create flexible regulations in the realm of data management

“We don't have any structured document relating to data management. <...> There are many questions and diverging paths, and they’re very serious. <...> What are data? Is there a legal subject pertaining to data? Can we legally limit the right to use data belonging to that or the other subject, individual, or legal entity? Can we require private companies to disclose any types of data? To disclose it or hand it over to the government? In reality, this is an open-ended question,” Maxim Parshin, Deputy Minister of Digital Development, Communications and Mass Media of the Russian Federation.

“On the one hand, we say that we want to develop artificial intelligence, become leaders in this industry, but for that we need a lot of data, and have a totally different approach to this data. <...> In Russia, this [sector – Ed.] is strictly regulated. On the other hand, we say that: private lives are of utmost importance; we are tired of all of those calls, spam, etc. But these are rather mutually exclusive issues. <...> Technological leadership, if that is what we are aiming for, is impossible without sufficiently flexible regulations when it comes to data,” Igor Drozdov, Chairman of the Board, Skolkovo Foundation.

SOLUTIONS

Leveraging the experiences of European countries and international cooperation when developing a mechanism to secure the Russian Federation's digital sovereignty

“Europeans have forbidden American transnational corporations from exporting personal data and have started from the position that: databases must be secured, personal data must stay in the European Union, that is, that the concept of sovereignty has started appearing in real life. They have understood that those who lose digital sovereignty can also lose political sovereignty, because all of these processes will be managed by inscrutable corporations from abroad. Databases must remain within their territories, regulatory agencies must have tight control over the situation: how personal data is being used, how data is being collected, processed, secured – and this is considered an important element in regulating the virtual organization of society within a specific territory,” Tigran Sargsyan, Deputy Chairman of the Board, Eurasian Development Bank.

“In many areas, it is essential to have international cooperation, to cultivate interdependence, in the positive sense of the word. When, on the one hand, we invest something, <...> in this sense, we indirectly advance our products abroad and, on the other hand, depend on foreign products, while our partners depend on our products. In this sense, the open-source model [developing software that is delivered to the end-user with an open-source code, i.e., the application may be altered without violating the developers’ author’s rights, – Ed.], provides a certain alternative to the reign of transnational corporations, because intellectual property has become a very strong tool,” Igor Drozdov, Chairman of the Board, Skolkovo Foundation.

“When we talk about import substitution we’re talking about smart import substitution. <...> If we close ourselves off, then the cool products and solutions that we have developed, exist essentially without competition – only competing domestically – and right off the bat, within a few years, they degrade and we lose those products and solutions,” Maxim Parshin, Deputy Minister of Digital Development, Communications and Mass Media of the Russian Federation.

Creating advantageous conditions for Russian developers of software and other digital products

“There can't be any talk of sovereignty without domestic solutions. <...> The implemented measures: an unprecedented tax regime for Russian companies involved in developing and implementing software, <...> which has been in effect since the start of this year. Its first two quarters, based on tax data, have resulted in truly significant industry growth and development. The ICT [information and communications technology, – Ed.] industry, together with telecom and retail, including the sales of computers and other technology, have come out of the pandemic in the lead compared to other economic industries. <...> We offer preferential loans for implementing domestic solutions – up to [RUB, – Ed.] 10 billion towards digital transformation programmes,” Maxim Parshin, Deputy Minister of Digital Development, Communications and Mass Media of the Russian Federation.

For more information, visit the Roscongress Foundation's Information and Analytical System at roscongress.org/en.

Digital Sovereignty

Read more