- In our increasingly digital economy, data impacts virtually all major areas of policy, from trade to tax to healthcare.
- Individuals and businesses are using digital platforms such as social media to make themselves heard in discussions affecting the changes they want, including those that affect workforce policy.
- With data shifting the sands of the policy landscape, businesses need to prepare internally to weather the coming changes.
Data is no longer confined to the realm of Big Tech. Every company that collects information about its customers and employees is its custodian, and that responsibility is fundamentally changing the way they do business. As regulators pay attention and demand action, leadership is responding.
According to PwC’s recent Top Policy Trends 2020 report, which surveyed more than 400 CEOs, CFOs, and COOs in the United States, nearly 70 percent are actively trying to influence policies on data privacy. Increasingly, policy in a variety of areas is converging around the collection and protection of data.
Data’s role in
As the report notes, data is not only the subject of regulation, it’s also a powerful tool for businesses looking to engage in policy debates, and, importantly, an area of increasing regulation with which to comply. So, it is not surprising that at least seven policy areas have data in their midst — privacy, trade, healthcare, workforce, antitrust, tax, and artificial intelligence (AI). Examples of data’s role in these areas include:
- In terms of trade, more regional deals include technology provisions about how and where data is stored.
- Antitrust investigations are no longer only about traditional physical monopolies and are also focusing on companies that have economic dominance through the sheer amount of data they control.
- European countries wish to impose digital services taxes based on where data is generated, rather than where a business has a physical residence.
- Nations are asserting sovereign rights over emerging technologies, given the import they are thought to have on the economy — in particular, with regard to AI.
- Individuals are exercising their right to control the data they share or generate.
As these trends strengthen, it is likely that regulation will as well, and, as data affects policy, the coming year should see governments and organisations develop informed policy positions and widen enforcement. With citizens, regulators and businesses agitating — and agitated — it is time to prepare for data’s impact on your world.
Rise of the
One emerging trend that is playing a critical role in the evolution of data policies involves lobbying via digital platforms such as social media. Ninety-seven percent of those surveyed believe that an increase in a company’s lobbying efforts and budget will be needed to actively shape policy outcomes, and these platforms have made it easier for people on all sides of an issue to be heard. At the same time, social media is raising the profile of ‘non-regulators’ — self-chosen influencers who are actively shaping the policy landscape.
For example, in 2019, after California passed the gig economy law, Assembly Bill 5 (AB5), freelance writers in the state took to social media to question restrictions the law placed on the number of content pieces a writer could create for a single outlet in a year.1 This group of non-regulators rose to influencer status when they sought meetings with a member of Congress in hopes of getting the legislation amended to better reflect the reality of their work relationships.
The goal of influencers such as these is not just to access data; it’s also to make sure data is being handled responsibly. This groundswell of voices is persuading companies in a variety of areas to be more transparent about their data collection practices and to act with purpose when developing products.
Organisations such as the Business Roundtable have issued guidance on creating robust policies by considering critical issues, such as the well-being of the workforce, the impact on climate change, and the privacy of consumers. While the group has no power to regulate or enforce these recommendations, its guidance is inspiring businesses to act on their own, while also prompting regulators to consider these issues when forming policy.
Another trend in the policy arena, where data is becoming ever more critical, relates to the workforce. As the experiences of workers change with the prevalence of the gig economy, policies need to address questions as fundamental as what makes someone an employee. Indeed, 53 percent of the CEOs in this survey ranked workforce policy as the most impactful to their business, and 61 percent of the C-suite are looking to ‘very actively’ shape workforce issues.
Internally, accurate, up-to-date data is important to business. For instance, data gives a business essential information about its workforce: how many employees it has, at what levels, with what compensation, and how that information has changed over time. This enables a company to assess workforce criteria, such as which workers should be considered employees (rather than independent contractors) under new gig economy laws. Data about staff also lets a firm know whether it is complying with standards for diversity and inclusion.
Preparing for a
When it comes to data, there are several internal actions every business can take to prepare for today’s shifting policy landscape:
- Review legacy systems and verify that data is accurate, adequately protected and meets regulatory requirements, such as privacy laws.
- Automate where you can, particularly around cross-border activity, so you can quickly access data to help determine which products might be affected by tariffs or other types of emerging trade requirements. Then quantify any potential exposures.
- Shift to a ‘privacy by design’ operating model. Start by using a tool to track all the data privacy laws that are cropping up — currently more than 1,800 globally, according to PwC’s Risk Atlas.
- Make sure you have systems in place to collect data on your workforce — everything from defining personal characteristics to skill levels, location, number of hours, rate of pay and total cost of each employee.
Data is changing many policy areas today and will continue to do so in the near future. Privacy and transparency concerns, trade regulations, antitrust laws, digital taxes, AI and a changing workforce are all forcing companies to think differently about policy. And all have implications that business need to acknowledge.
By complying with the highest standards, actively engaging with policymakers and pursuing policies with purpose, multinational businesses will be able to navigate the fragmented policy environment in today’s complex, data-driven, highly digitised world.
For further insights on policy shifts and the best ways to prepare for the future, visit PwC’s third annual Top Policy Trends report.