Why digitisation is key to staying competitive

Investing in modern digital infrastructure is crucial to support economic growth and enable greater connectivity, trade and commerce

Economies around the world are vying for digital technology, talent and infrastructure in the pursuit of socio-economic progress. PA

Investment and innovation in digital infrastructure is transforming the way we live. It is also driving growth and development across sectors.

Economies around the world realise this and are vying for digital technology, talent and infrastructure in the pursuit of socio-economic progress.

The message is clear: if you want to stay competitive, digitise.

Weak digital infrastructure is an inhibitor to progress. The UN’s International Telecommunication Union reported that overall global internet user penetration currently stands at 53.6 per cent. In advanced economies, this figure is 87 per cent, but falls to 47 per cent in developing countries.

This disparity strongly correlates with the availability of digital infrastructure — its absence prevents societies, particularly low-income and rural communities, from harnessing the full potential of technology.

This gap must be plugged. Modern digital infrastructure supports economic growth, enabling greater connectivity, trade and commerce. It also fosters social inclusivity, a key objective of many governments.

According to the World Economic Forum, each additional 10 per cent of internet penetration can lead to a 1.2 per cent increase in per capita gross domestic product growth in emerging economies.

Expanding the digital economy is a central pillar of the UAE’s strategy to grow and diversify its economic output.

Currently, the Emirates’ digital economy represents 4.3 per cent of the nation’s gross domestic product. However, this contribution will increase significantly and officials expect the UAE’s digital economy to double in size over the next decade.

The economic and social benefits of investing in digital infrastructure cannot be underestimated. Highly developed countries are embedding digitisation across their economies to increase productivity and efficiency through better connectivity and access to information and data.

At Mubadala, the Real Estate and Infrastructure platform invests in assets and sectors that drive societal progress while offering stable financial returns. Our digital infrastructure investments illustrate how we achieve both goals at the same time.

With this ambition at the core of our business, we recently announced a strategic investment with our long-term partner EQT in GlobalConnect, a leading fibre-based data communication and data centre services provider in Northern Europe.

Earlier this year, we committed an additional £300 million to CityFibre — the UK’s largest independent full-fibre platform — building on our initial £500m investment in the company in September 2021, as part of the UAE-UK Strategic Investment Partnership.

To date, CityFibre has connected more than two million homes in the UK to its advanced fibre network, a major milestone in its nationwide plan to reach eight million homes, 800,000 businesses, 400,000 local authority sites and 250,000 5G access points.

Once the full roll-out is completed, the network will address approximately one third of the UK market and unlock up to £38 billion in economic benefits.

Its new citywide networks will underpin the digital requirements of urban communities and enable the roll-out of 5G services and other smart-city initiatives.

The possibilities are enormous and fully aligned with Mubadala’s responsible investing ethos.

This level of investment and impact is also evident in other parts of the world. Data centres, cell towers and fibre-optic broadband all represent attractive investment opportunities, including in emerging and frontier markets.

This year, we also invested $350m in Princeton Digital Group (PDG), a leading Pan-Asia data centre operator with a portfolio of 20 data centres and more than 600 megawatts of secured capacity spanning five countries.

Our investment will support PDG’s expansion plans in Asia, one of the fastest-growing data centre regions in the world, owing to its large base of internet users, growing rates of digitisation, high levels of data usage and an increasingly tech-savvy, young population.

As Abu Dhabi’s sovereign wealth fund with a clear mandate to support the UAE’s economic diversification and create sustainable value for future generations, we are resolute in our focus on shaping tomorrow’s industries and trends.

We remain committed to supporting digital infrastructure projects that can accelerate socio-economic progress in the UAE.

Khaled Al Qubaisi is chief executive of Real Estate and Infrastructure Investments at Mubadala