Jim Balsillie is warning that the rise of the data-driven global economy is increasing inequality by concentrating wealth in the hands of the few who control the technologies for gathering and processing it.
And he says international trade deals – including the recently negotiated USMCA – make the problem worse by entrenching tougher intellectual-property protections and making it harder for governments to stop multinational corporations from collecting information on citizens.
In a speech to the International Monetary Fund in Washington on Tuesday, Mr. Balsillie called on the organization to lead a “second Bretton Woods” that would set global standards for dealing with data.
“The production economy of the 20th century created rising tides that lifted all boats,” the chair of the Centre for International Governance Innovation said, while by comparison, the growing IP and data-based economy “lifts mostly a few yachts.”
“The scale of this shift in the source of market value recalls the shift in the source of wealth from land to capital that started with the industrial revolution and marked the transition from the feudal to the capitalist system,” he said.
Mr. Balsillie, the former Research in Motion (now called BlackBerry) co-chief executive, said the data economy is “neo-feudal,” in which tech companies and other large firms concentrate vast amounts of data and intellectual property in their hands and exploit them for profit in the same way that medieval lords profited by controlling land.
He also took aim at recent trade deals that he says go beyond simply lowering tariffs to placing restrictions on how governments can legislate control of data and tightening protections of patents.
The tentative U.S.-Mexico-Canada Agreement concluded last month as a remake of NAFTA, for instance, contains provisions guaranteeing multinational corporations the right to move data – including personal information – across borders, and prohibits governments from requiring that companies use computer servers located in the host country. The USMCA also contains tougher protections for drug patents, a boon to pharmaceutical companies and a hindrance to firms making cheaper generic knockoffs.
“I don’t think these types of agreements have been democratic at all; the degree to which they reach into a nation state,” Mr. Balsillie said during an interview with IMF chair Christine Lagarde.
Speaking with The Globe and Mail afterward, Mr. Balsillie said Canada has been particularly ineffective at retaining intellectual property and data – focusing instead on the immediate jobs that come from foreign tech investment while allowing the IP and data to be taken by foreign firms. He pointed to Waterfront Toronto’s agreement with Sidewalk Labs, which could allow the company to own and control the designs and data that come out of the project.
“We take things that are unambiguously ours and give them away, and somehow hope that that’s going to have something beneficial to us at the end of the day,” he said. “We’re basically playing Bangalore or Ukraine, where they basically say ‘we’re cheap, skilled labour.’ If all you are is a cheap coding bullpen, then … you’re not participating in the wealth effects.”
Mr. Balsillie said the IMF should lead a push to create global rules that would mitigate the inequality of the data-driven economy, as well as tackle the problems it creates for national security and personal privacy. He likened the need for such a system to the international financial order that the Western allies agreed at Bretton Woods in 1944.
Such an imperative is particularly important given the clash between the United States and China over IP rights, and the trade war launched by the Trump administration. Unlike Bretton Woods, Mr. Balsillie said he hoped it would not take a further economic clash or war to get the world’s economies to create a data system.
“There’s certain tremendous shared interests … the shared interest that we don’t have an extreme collision,” he said. “Mankind has proven that it hasn’t always needed a massive crisis that is existential to find its way forward.”