A new study from Digital Realty predicts that Asia-Pacific (APAC) will become a prominent enterprise data powerhouse, with a compound annual growth rate (CAGR) of 153% by 2024.
Four cities in the top six for the Data Gravity Intensity Metro forecast are from APAC, with Singapore leading with 200% CAGR through 2024. This is followed by Hong Kong (2nd), Sydney (4th) and Tokyo (6th). North America and the Europe, Middle East and Africa (EMEA) regions are predicted to have 137% and 133% CAGR respectively.
The research comes as the world readies itself for growth brought about by the fourth industrial revolution, or Industry 4.0.
In the World Economic Forum paper, jointly put together with McKinsey, The Next Economic
Growth Engine Scaling Fourth Industrial Revolution Technologies in Production, Industry 4.0 is touted to have the potential to create US$3.7 trillion in value by 2025.
The IDC report, The Digitization of the World – From Edge to Core, projects that 80% of data worldwide will reside in enterprises by 2025. GlobalData forecasts APAC to account for close to 30% of the data centre space globally by 2023 due to increasing demand for cloud services and digitalisation from investors and enterprises.
All these put the region in a strong position to leverage Industry 4.0’s growth.
Data gravity index – what it means
The Data Gravity Index DGx – which measures the creation, aggregation and private exchange of enterprise data across 21 metros – reveals that regions with strong global connectivity and an abundance of data-led industries, such as a thriving technology scene or prominent financial services sector, create so much enterprise data that they produce a ‘Data Gravity’ effect, exponentially attracting more data to the region.
Measured in gigabytes per second, Data Gravity Intensity is expected to grow by a CAGR of 139% globally. This comes at the back of data stewardship driving global enterprises to increase their digital infrastructure capacity to aggregate, store and manage the majority of the world’s data.
Dave McCrory, vp of Growth and global head of Insights and Analytics at Digital Realty explains that Data Gravity not only attracts data but makes both data and services that rely on it exponentially more difficult to move.
“This gives cities with a particular weight in one industry, like Singapore’s robust financial services space or Japan’s established manufacturing sector, a huge advantage as they naturally attract more of the same kind of data and services – and with them businesses. This also makes it more challenging to attract opportunities away from them,” he added.
Data has become a key strategic resource, but data gravity means too much of it can be difficult to use and impossible to move while constantly creating and attracting more.
APAC’s data lead
Countries in APAC with sizeable industrial base kickstarted their Industry 4.0 initiatives rather early compared to other markets. Per the WEF report, this has allowed them to dive deeper into establishing institutional frameworks to support the scalability of Industry 4.0, rather than cover the surface on creating awareness on new technologies.
Mark Smith, managing director for Asia Pacific at Digital Realty, commented: “Asia Pacific is home to some of the leading business and data hubs spearheading the adoption of advanced technologies including 5G, Artificial Intelligence and Internet of Things in the world.”
He opined that the leading APAC cities of Singapore (200%), Hong Kong (177%), Sydney (159%) and Tokyo (155%) are proven international financial and business hubs, providing rich gateways for global enterprises to connect to various parts of the world.”
Data flow is as important as volume
The Data Gravity Index DGx says APAC is home to many of the world’s most interconnected city pairings. This can be attributed to the regulatory ease of doing business with one another, as well as the cities’ thriving financial and manufacturing centres. These include Tokyo and Hong Kong as well as Beijing and Shanghai.