Capturing Growth Through Digital Infrastructure Investing – wealthmanagement.com

Report on Digital Infrastructure Growth and its Alignment with Sustainable Development Goals

Executive Summary

The rapid expansion of the digital economy, primarily driven by advancements in Artificial Intelligence (AI) and cloud computing, has created an unprecedented demand for data center infrastructure. This report analyzes the current market dynamics, investment potential, and critical alignment of this sector’s growth with the United Nations Sustainable Development Goals (SDGs). The development of digital infrastructure is fundamental to achieving several SDGs, particularly those related to innovation, economic growth, and sustainable communities.

The Role of Digital Infrastructure in SDG 9: Industry, Innovation, and Infrastructure

Data centers represent the foundational infrastructure of the modern digital era, directly supporting the objectives of SDG 9. They are essential for fostering innovation and enabling the technological advancements that drive global industry.

• Enabling Innovation: Technologies like AI and cloud computing, which are critical for industrial and societal progress, are entirely dependent on robust data center capacity.
• Building Resilient Infrastructure: The expansion of reliable and high-capacity digital infrastructure is a core component of building the resilient infrastructure targeted by SDG 9.
• Supporting Global Connectivity: Data centers facilitate the global connectivity necessary for international trade, communication, and economic integration.

Economic Impact and Contribution to SDG 8: Decent Work and Economic Growth

The surge in demand for data centers presents a significant investment opportunity that can stimulate widespread economic growth and create employment, directly contributing to SDG 8.

1. Projected Growth: An estimated 50GW of additional data center capacity will be required by 2028 to meet the demands of AI alone.
2. Investment Characteristics: The sector offers a unique combination of infrastructure-like stability and technology-like growth, attracting investment that fuels economic activity. Key attributes include:
   • Long-term leases with stable tenants.
   • Minimal churn and low vacancy rates.
   • Potential for long-term income and inflation protection.
3. Job Creation: The construction, operation, and maintenance of these facilities, as well as the industries they support, create numerous opportunities for decent work.

Sustainability Challenges and Opportunities: Aligning with SDG 7, SDG 11, and SDG 13

While essential for progress, the high energy consumption of data centers presents a significant challenge. It is imperative that the sector’s expansion is managed sustainably to contribute positively to environmental SDGs.

• SDG 7 (Affordable and Clean Energy): The immense power requirements of data centers necessitate a strategic shift towards renewable energy sources. Future investments must prioritize facilities powered by solar, wind, and other clean energy to ensure sustainable growth.
• SDG 13 (Climate Action): The carbon footprint of the digital infrastructure sector is a major concern. Adopting energy-efficient designs, cooling technologies, and green power sources is critical to mitigating climate impact and aligning with global climate action goals.
• SDG 11 (Sustainable Cities and Communities): Data centers are the backbone for smart city technologies that can improve resource management, transportation, and public services. By developing this infrastructure sustainably, the sector can be a key enabler of more efficient and sustainable urban environments.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 9: Industry, Innovation and Infrastructure

• The article’s central theme is the surging demand for “data infrastructure—particularly data centers.” This directly relates to SDG 9, which focuses on building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation. The text identifies data centers as the essential “picks and shovels” of the modern digital economy, highlighting their foundational role in supporting technological advancement.

SDG 8: Decent Work and Economic Growth

• The article frames the expansion of the digital economy, powered by data centers, as a “generational investment opportunity.” This connects to SDG 8’s goal of promoting sustained, inclusive, and sustainable economic growth. The growth in data infrastructure is presented as a driver for the “digital economy,” which in turn supports economic productivity and diversification through “AI, cloud computing, and global connectivity.”

2. What specific targets under those SDGs can be identified based on the article’s content?

Under SDG 9: Industry, Innovation and Infrastructure

• Target 9.1: “Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.” The article directly addresses this by discussing the massive build-out of data center capacity required to support the digital economy, AI, and global connectivity.
• Target 9.c: “Significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries.” The development of data centers is a fundamental prerequisite for expanding “global connectivity” and increasing access to ICT services like cloud computing, which is a core topic of the article.

Under SDG 8: Decent Work and Economic Growth

• Target 8.2: “Achieve higher levels of economic productivity through diversification, technological upgrading and innovation…” The article highlights that the demand for data centers is driven by “AI” and “cloud computing,” which are key areas of technological upgrading and innovation. This new infrastructure is presented as essential for powering these “transformative technologies” and driving the growth of the digital economy.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Indicators for SDG 9 Targets

• For Target 9.1: The article provides a specific, quantifiable metric that can be used as an indicator: the need for “50GW of additional data center capacity by 2028.” This directly measures the development and expansion of digital infrastructure.

Indicators for SDG 8 Targets

• For Target 8.2: While not a formal UN indicator, the article implies economic indicators that measure the growth and health of the digital infrastructure sector. These include “low vacancy rates” and “constrained supply” for data centers, which reflect strong economic activity and investment in a high-technology sector.

4. Table of SDGs, Targets, and Indicators

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