Rethinking Data Protection as NZ Advances Towards Digital IDs

New Zealand has taken a step towards digital credentials for online services with the launch of the Trust Framework Authority. The authority will determine which organizations are verified to provide digital identity services. The aim of the digital ID scheme is to simplify transactions such as opening a bank account or accessing government services by moving away from physical documents for identity verification. The Minister for Digitising Government, Judith Collins, has expressed interest in expanding the government’s use of AI, including in health and education. However, it is important to consider these developments within the broader context of the principles that underpin the digital economy. While digital ID is crucial for access and trust in digital services, it must be protected and managed in accordance with personal, community, and national values. Digital ID is just one aspect of a wider digital economy, and it is necessary to think more systemically about how new digital services are developed and by whom. A recent report by researchers from the Veracity Technology Spearhead project and Catalyst Cloud highlights the interconnectedness of digital ID with data management and information flow. The report suggests that the latest developments present an opportunity to fundamentally transform how digital systems are built, moving towards a decentralized model that separates data management from data processing. This adjustment is urgently needed to ensure the safety and choices of citizens and businesses in a digital world, according to a recent OECD report. Many countries around the world are recognizing the importance of establishing their own national data infrastructures. Estonia’s X-Road system has been a pioneer in this field, enabling secure data exchanges between public and private sector databases and supporting various e-government services. The European Union’s GAIA-X project aims to create a federated data infrastructure for Europe, while the Flanders region in Belgium has established a data utility provider using the Solid platform to give citizens control over their data. Despite these global developments, local businesses often find themselves in a difficult position as they rely on services provided by large tech companies, inadvertently giving away their data in the process. This creates a challenge for local businesses as they need digital tools to remain competitive but often have to surrender control over the data they collect. Rebalancing the playing field requires more options for AI startups to access competitive foundation models that have been developed ethically and align with local values. Norway’s research center for AI innovation and the data utility company in Flanders exemplify the potential for new organizational forms that generate value in a data infrastructure ecosystem. Creating equitable national data infrastructures will require collaboration between governments, businesses, and civil society, but the potential benefits, such as increased innovation, fair competition, and democratized access to the digital economy, make it a worthwhile journey.