Capitalising on the data economy isn’t about following the zeitgeist of emerging technologies. Enterprises in search of a competitive edge can focus on a quieter force: data gravity.
The concept of data gravity has emerged as a differentiator for businesses; you could even argue it’s the linchpin of economic progress for the 21st century. In an age where global commerce runs on data, the notion of “data gravity” explains how enterprises can strategically position themselves to be in physical close proximity to their data for economic gain.
Competitive advantage by proximity
Enterprises are accumulating vast troves of data. According to IDC, approximately 291 zettabytes (ZB) of digital data will be generated in 2027, equivalent to watching the entire Netflix catalogue 663 million times.
As the data reservoir grows, modern applications, services, and processes increasingly rely on real-time or near-real-time access to this data. Attempting to move this data away from its source can lead to undesirable outcomes such as latency, inefficiencies, and even application failures. The intricate web of interdependencies within this ecosystem makes data relocation a complex endeavour. It’s not just about moving data; it’s about relocating an entire interconnected ecosystem. Consequently, data centres possess an inherent ability to attract digitally powered enterprises, which in turn triggers a domino effect that fosters innovation hotspots for businesses.
Singapore is one market that has showcased the transformative power of data gravity, and this strategic focus has paid off. Since 1991, Singapore has been investing in the development of the STEM sector under the five-year National Technology Plan, where US$2 billion was channelled towards cultivating the research ecosystem and culture. Since then, the city-state has expanded these efforts by transforming itself into an APJ hub for data centres and simultaneously designing a business environment where data-centric businesses could thrive.
Today, these investments in growing data-centric industries continue through Singapore’s Smart Nation strategy, and the investments are bearing fruit. This is evident in Singapore’s track record of enticing big names, such as Rolls-Royce, FedEx, and Google, to set up headquarters, labs, and innovation centres here, solidifying Singapore’s reputation as a test bed for new technology.
This phenomenon isn’t isolated; it’s a global trend observed from Silicon Valley to Mumbai. These are the hubs where data resides, where businesses converge, and where economic prosperity invariably follows. The implication for Asia-Pacific and Japan (APJ) is clear: Markets that fail to seize this opportunity in creating data gravity hotspots risk lagging behind in economic progress. And enterprises that pull away from their centres of data gravity risk losing a competitive edge.
The opportunity to build for success
Nations and businesses, particularly in Asia, can capitalise on this data-driven revolution. With a burgeoning young workforce, digital leapfrogging, and a history of robust industrial policies, this region has the ideal foundation.
In fact, it is already on this path. Southeast Asia’s digital economy is set to hit US$100 billion in revenue this year — an eight-time revenue increase for digital businesses in the last eight years. These efforts are further compounded by the data storage sector forecasted to grow by 11% annually. We can supercharge this trend if we digitally unite to prioritise data gravity, accelerating market growth and ultimately building an economy that attracts data to the region.
To realise this, we must start with robust infrastructure, as nations invest in critical components to transform their data reserves into economic powerhouses. These investments encompass cutting-edge technological frameworks, secure data management systems, conducive regulatory environments that foster innovation, and strong public, private, and academic collaboration to deliver ‘workforce-ready’ graduates.
A digitally skilled workforce is crucial for advancing the data economy. Collaborative efforts between the private and public sectors are essential to develop a sustainable talent pipeline. Since 2021, initiatives involving partnerships with institutions of higher learning in Singapore have successfully equipped over 5,000 students with essential skills for emerging technologies. These projects are key to fostering the necessary environment for the region’s digital future.
The digital future is upon us, and APJ nations are poised for growth. By adopting a strategic approach, building up the technology ecosystem, infrastructure, and workforce, these nations can reap the benefits of an ecosystem in which digitally powered ideas can turn into breakthrough realities. For enterprises, the future belongs to those who understand the power of data.
