(Bloomberg) -- Brexit could cost the U.K. its position as the leading data market in Europe, a government-funded digital innovation group warns.
The British economy could miss out on as much as 67 billion euros ($79 billion) annually by failing to play its cards right in Brexit negotiations with the European Union over data market access, according to a report published Wednesday by the U.K. Digital Catapult. The Digital Catapult is a government-backed center that helps industries commercialize cutting-edge technologies.
The U.K. currently has the largest market for data -- ranging from aggregate purchase data from retail shops to information on mobile phone locations -- in Europe, worth an estimated 13 billion euros in 2016, according to figures from market research firm IDC Europe cited by the Digital Catapult. Before the U.K. voted to leave the EU in 2016, the European Commission forecast this could more than double by 2020.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
But how well the U.K. market performs depends on whether data can continue to flow freely between Britain and the EU. The U.K. is in the process of updating its data protection laws so that they are broadly equivalent to the new European regulations that take effect in 2018. This should allow data to continue to flow smoothly in the immediate wake of Brexit.
The issue will come, the report says, if U.K. data protection rules later diverge from the EU rules. The EU is pressing ahead with efforts to further harmonize data regulation across all the member countries to create a Digital Single Market. What access the U.K. would have to this market is uncertain, the report said.
The U.K. has an opportunity to create a data regulatory framework that would be even more business friendly than the existing rules and it could craft new data sharing arrangements with countries like the U.S., the world's biggest data economy, the report said.
The report urged the British government to consider data flows as part of any post-Brexit trade deal negotiated with the EU. It also said negotiators should try to turn the U.K. into a possible data "hub" between the U.S. and Europe, either as part of a new U.S.-U.K. trade deal or through a separate treaty just on data sharing.
To contact the reporter on this story: Jeremy Kahn in London at jkahn21@bloomberg.net.
To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly Schuetz, Andrew Pollack
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
