ICT infrastructure ignites the growth of the digital-first economy

BrandPost By David Lu, president of Huawei Asia Pacific Strategy Marketing Department
Jun 22, 2022
IT Leadership

The future will be resolutely digital first with this technology and infrastructure driving economic growth and green development.

David Lu
Credit: Huawei

The pandemic has brought significant challenges to everyday life, also throwing a spotlight on the digital divide and the urgent need for socially balanced services, inclusive education, and industrial development addressed through digital technology infrastructure. The future will be resolutely digital first, with this technology and infrastructure driving economic growth and green development. Huawei is committed to bringing digital to every person, home, and organization for a fully connected, intelligent Asia Pacific (APAC).

Digital Infrastructure Is the Main Engine of Future Economic Growth

From connectivity to cloud computing, Information and Communications Technology (ICT) infrastructure is the foundation of the Digital First Economy (DFE). However, its development is uneven around the world.

Among the Association of Southeast Asian Nations (ASEAN), cloud penetration is less than 20%, Long Term Evolution (LTE) penetration sits around 54%, and fixed broadband penetration is approximately 35%. Such numbers show that millions of people and families still lack digital access.

Aside from basic network coverage challenges, the quality of network connections also needs to be improved to ensure that the ICT infrastructure base is robust enough to support a digital-first world. Indeed, strengthening ICT to develop the digital economy is now a commonly held priority for countries in the region. Urgent action is therefore required to prepare for the digital economy.

To this end, 170 countries have already laid out detailed national digital strategies to drive economic digital transformation. Some 58 countries have rolled out 5G and fiber dual gigabit networks for frontier technologies. And some industries — notably, the transport, finance, and education sectors — have expedited digital transformation based on ICT networks and the cloud.

Looking forward, the world is evolving toward a data- and intelligence-driven digital society, casting data as the key asset of the age. From 2021 to 2024, data consumption will increase accordingly, from 70 ZB to 150 ZB. Data governance monetization will move from US$2 trillion to US$13 trillion. Energy consumption is also expected to increase by 50% by 2050, with renewable energy and ICT technology helping to reduce carbon emissions and improve energy efficiency, promoting a green and sustainable economy.

The Kind of Digital Infrastructure Countries Should Build to Lead the Way

If the core theme of the DFE is the use of digital technology and digital infrastructure to drive economic development, what kind of infrastructure should countries build and how can they ensure that they are leading the way?

Every country should push forward targeted DFE development policies and planning recommendations, focusing on ICT digital infrastructure to drive national economic competitiveness and GDP growth.

To begin with, developing policies and top-level plans for digital transformation have to be priorities.

A shift from a reactive response to proactive planning will bring clear benefits, creating new value and improving the competitiveness of enterprises. Organizations need to reprioritize digital investments to increase business resilience and prepare for digital transformation. It has been said that 4G changes life while 5G changes society. But 5G in APAC is still in its infancy. It is clear from the 4G example that, in markets with high spectrum prices, 4G investment and development are relatively slow. But the APAC 4G penetration rate has already exceeded 50%, and 4G prices are reasonable in major APAC countries.

As a key technology to improve national digital competitiveness, 5G spectrum prices should therefore be lower than 4G. China’s model is worth learning from, as the government provides free spectrum to promote the development of the digital industry. This same digital industry continues to contribute tax revenue to the government, achieving a mutually beneficial outcome for the government, operators, and industry.

Government industrial policies, such as spectrum prices and tax incentives, therefore have a big role to play in promoting the digital industry. The advice to governments of developing countries has to be: adopt friendly industry, spectrum, and tax policies to encourage long-term investment and innovation in digital infrastructure.

Next, new economic horizons are emerging, enabled by ICT investment and ICT talent. This requires countries to accelerate ICT infrastructure capabilities and skilled digital talent, in order to plan and guide technologies such as a national broadband network, the 2GHz spectrum, 5G and the Fifth-Generation Fixed Network (F5G), Fibre To The Room (FTTR), cloud-first, XaaS, and more.

Talent is the driving force of digital innovation, but the distribution of talent across APAC is uneven. APAC countries should increase investments in talent planning and actively cooperate with universities. 

Huawei is contributing to talent development in APAC through its Seeds for the Future program, which provides students with opportunities to access the latest technologies, and the Huawei ASEAN Academy, which already works with governments and enterprises and has trained 88,000 individuals in ICT talents since 2019. Over the next five years, Huawei will cultivate a further 300,000 local ICT talents in APAC, empowering the development of the region’s digital economy.

Finally, cloud computing needs to be encouraged, while targeting carbon neutrality.

New cloud-native business practices should be adopted by building business capabilities on the cloud, then growing on the cloud. In the future, the majority of data will be stored and processed on such a cloud platform, making cloud infrastructure a fundamental core for digital industrial development and a key part of economic resilience.

Most developing countries should proactively plan a 30/6X carbon peak and carbon neutrality commitment with National Determined Contributions (NDC) to avoid carbon trading taxes or trade barriers set up by developed countries.

When building a cloud data center, use the very latest technologies to boost Power Usage Effectiveness (PUE), bringing the figure down to 1.2. Power consumption per bit can be minimized by using bits to manage watts: this is where Huawei’s leading ICT infrastructure combines digital and electronic technologies to improve the world’s energy efficiency and enable cloud computing that’s genuinely green and sustainable.

Huawei is willing to strengthen cooperation in 5G, cloud services, and AI technologies to become a strategic partner of all APAC countries for digital transformation, building leading digital infrastructure in the region and accelerating progress toward the DFE.

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