Digitization has a lot to do with the growing presence of strategic points on the map, where Internet connections are made. These points concentrate sophisticated business services nuclei, important for economic and business development, making this area a more attractive place for companies, individuals and digital infrastructure providers.
This is reported in the recent study published by DE-CIX, “The birth of an international Internet hub: a playbook for developing a digital society” where one of the main conclusions drawn is that these locations are essential for the growth and investment in the region where they are located. In other words, these hubs directly influence the economic development of the largest geographic regions in the world.
To better understand why it is important and what are the great benefits of becoming an international hub, the DE-CIX study reviews the trajectory of the United Arab Emirates in order to understand the success he has experienced in the development of this matter.
In 2012, the coasts of the UAE were already home to thirteen submarine cables, four of them regional and nine reaching other continents. Ten years later, the number of submarine cables already reaches 17, 11 of which are intercontinental and, in addition, another four that are in the process of development for the coming years. Another important aspect where the growth of this digitization can also be seen is, for example, in the increase in data centers. Ten years ago, there were only five data centers in Dubai, while today the number stands at 17. In other words, there has been a growth of 340%. The UAE now ranks first in the GCC for mobile and fixed-line broadband subscriptions, and the country enjoys nearly 100% Internet penetration.
But it’s not just about the speed, cost and ubiquity of the Internet, but rather the effects derived from these improvements and the country’s digitization strategy. The number of international organizations establishing their global headquarters in the UAE has grown by more than 700% since 2012, the number of international universities has doubled, and the number of higher education students has grown from 140,000 to one million in just 10 years. This clearly demonstrates the power of investment in digital infrastructure, combined with a forward-thinking regulatory environment and a strong digitalization strategy.
But what does a city or region need to become an international hub?
It must be taken into account that to build a hub it is necessary to guarantee the supply of energy, the presence of high standards of multimodal transport networks and the deployment of communication systems related to the Internet. DE-CIX has identified the five pillars on which the creation of an international Internet hub is based:
- Internet infrastructure: the essentials. To build an Internet hub, the first thing to do is foster a large number of connection points, be they underwater, terrestrial or both, which means an increase in Internet traffic and also in the number of IP addresses.
- Companies and organizations: production areas. Responding as a center of industrial production facilities and hosting international organizations is essential to form an important financial center. In addition, having an important nucleus of transport and traffic lines provides the necessary visibility to be recognized internationally.
- People and community: highly qualified professionals. Highly skilled local labor is needed to attract and foster the development of IT-related initiatives. A properly established educational system guarantees the creation and retention of talent. At the same time as hosting and celebrating national and international conferences and events of great relevance, they also allow the opportunity to carry out a very enriching exchange of knowledge and experiences.
- Regulatory environment: a stable system. Another factor that should not be left behind is to be in a stable and conducive regulatory environment that attracts international companies; in terms of laws, taxes, licenses, ability to do business there.
- Capital: easy access. Access to the investment community for equity and debt financing must be easy and affordable. This means that the permanent input of investments in the digital infrastructure will allow a highly interconnected and scalable development of the local TMT (technology, media and telecommunications) sector.
In other words, to succeed in building an international hub, it is necessary to ensure a stable regulatory environment, have investment options and a precise roadmap to make it a reality. Without forgetting that for a certain level of digitalization to develop, these requirements must be combined, in parallel, along with talent, community and diversity.