How to Measure and Develop Digital Infrastructure

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The central challenge facing the worldwide Digital Infrastructure community is to bring data centers, networking, and the power they require to carbon-neutral (or better) while, at the same time, managing continuous data growth and throwing no impediments to world economic growth.

Based on the technological and socioeconomic research I’ve been conducting the past several years within a small firm I co-founded known as the Tau Institute, I’ve now created a process that determines the price for meeting this central challenge.

I am happy to build upon my recent research to contribute to the DigialInfra Network, and look forward to being part of this great adventure.

Digital Infrastructure = Economic Development

With more than 30 years in the IT business worldwide, I take the view that a fairminded development of Information Technology and Digital Infrastructure in general is a key to socioeconomic growth among the economies of the world.

The relentless innovation within the world of Digital Infrastructure provide great opportunities for developing nations to climb up the economic ladder, while challenging developed nations to remain in their lofty positions. These opportunities can be measured, and therefore tangible goals can be set, specific challenges outlined, and investors – whether governments, NGOs, impact investors, or public companies – can be knowledgeable in the costs to achieve Digital Infrastructure development goals.

The process I mentioned above can be applied to each of the 142 nations that I’m able to cover. So let’s pick one today for a quick analysis. I’ve chosen Ethiopia, a low-income nation in East Africa that has made recent economic progress and shows signs of being a major influence in its region.

The Cost of Electricity Grids

Let’s start with electricity. Specifically, how much will it cost to bring the electricity supply of Ethiopia, up to a significant percentage of the developed world’s standard? What percentage of this country’s GDP will this investment require?

We should keep in mind that most of the developing world consumes between 1% and 10% of the electricity of the developed world on a per-person basis. These dozens of nations – not including India and China, which are so large they need to be treated separately – comprise 40% of the global population.

To bring Ethiopia, then, up to 25% of the developed-world standard (which I define as the average level of electricity consumption among EU nations), will cost around US$40 billion, or about 38% of the country’s GDP. To bring it up to 40% of the developed-world standard will require more than $60 billion in investment, or more than 60% of the country’s GDP.

The Cost of Digital Infrastructure

That established, the next question is, what is the cost to bring Ethiopia’s remaining Digital Infrastructure – data centers and networking – up to the developed-world standard? According to a complex calculation involving wired and especially mobile connections that would deliver strong connectivity to a high world standard of 80% of the population, and the data center infrastructure to support this, I estimate it would take about another $40 billion.

Summing things up, to bring Ethiopia’s electricity grid to 25% of the developed-world standard and its Digital Infrastructure to be on par with the world standard would require slightly more than $80 billion, or about 80% of Ethiopia’s GDP. This is a very ambitious number, and it implies accompanying development of the physical and economic infrastructure within the country to match its new Digital Infrastructure.

Much of my research focuses on what conditions must be met for substantial progress over 20-year and 30-year timeframes. Substantial economic development on this scale takes time.

There are about 100 nations that would require some level of investment to bring their electricity grids up to a significant percentage of the developed-world standard. Many require a significantly less ambitious plan than Ethiopia would need, and many require a more ambitious plan.

But measuring the challenges is a great first step on embarking down this road. Doing so would enable them to participate fully in building out Digital Infrastructure sufficient to spur sustained growth in their economies.

Measuring the Carbon-Neutral Challenge

I’ve created a second, related process that addresses the difficulty for individual nations to reduce their CO2 emissions dramatically. I’ve integrated a number of factors – several measures of current economic and physical infrastructure development, measures of Digital Infrastructure development, income disparity, and the relative levels of corruption and its effect on a government’s ability to achieve progress.

The specific cost of doing so will vary depending on whether a nation is striving for a significant emissions reduction, a more rigorous carbon-neutral or carbon-negative status, and whether it intends to achieve zero emissions along the way.

But the relative difficulty of achieving substantial progress of any kind can be measured for all of the 142 countries I currently include in my research. A poor, small nation with a relatively small level of emissions but also with an ineffective government will face a relatively larger challenge than a larger country with a more active government, for example.

I’ve been able to reduce the many, interacting factors in my calculations to a single number, expressed as a natural logarithm. I call these Emissions Reduction Challenge (ERC) numbers.

The ERC numbers allow the nations to be grouped by the relative magnitude of the challenge each faces, and color-coded by their difficulty. So there is a green zone for the least difficult challenges, yellow (more difficult) and red (very difficult), and a purple zone for those nations facing the most dire, urgent challenges.

No Parking in the Red Zone

Our sample nation of Ethiopia falls into the red zone, along with several other African nations, as well as nations from every other continent, including the United States. Yes, the US faces a very difficult challenge in getting to where it should be, even with its still-tremendous wealth and culture of technological innovation.

No one should rest easy, though. The UK, for example, lies near the top of the yellow zone and could slip into red if its focus on emissions reduction slips. More unnerving: the world as a whole lies in the purple zone, driven largely by the dire challenges facing China and India.

Continuing the Conversation

Through the auspices of the DigitalInfra Network, I am working to deliver analyses of each of the nations I cover, as well as regions, and the world as a whole. Through the processes I’ve developed, we can put a number on the scope of the problems the world faces in developing Digital Infrastructure while working toward carbon neutrality.

I do not discount the overwhelming amount of excruciating detail that lies within developing nationwide and global programs to do this. I’m happy to engage with any organization to drill down into specific cases as well.

As economist Joseph Stiglitz has put it, humans need to muster an effort akin to battling a World War III, something that will require participation by each of the 7.7 billion or so people on the planet. In fact, the purpose of my research is to make us aware of the difficulty we face.

I look forward to conversations on these topics with members of the DigitalInfra Network as we collectively move forward to address our challenges

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