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The Connectivity Advantage: The Strategic Value of Investing in Inclusive Digital Infrastructure

Cables and wires connected to a computer
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In an era defined by rapid technological advancements and digital transformation, investing in connectivity has emerged as a powerful strategy for future-proofing portfolios. Digital connectivity builds sustainable communities through inclusive economic growth due to the vital access it provides to comprehensive market information focused on increasing productivity and value creation. Despite the uptake in connectivity seen during the global pandemic, 2.7 billion people remain disconnected from basic internet services, hindering progress in poverty reduction, gender equality initiatives, and efforts to accelerate social inclusion.

Digital connectivity plays a key catalytic role in sustainable development, as highlighted in the aim of ‘achieving universal connectivity by 2030’ in the UN’s Roadmap for Digital Cooperation, and the focus of SDG 9 on building resilient and inclusive infrastructure models. With only 35 percent of the population in developing economies having access to the internet, versus 80 percent in advanced economies, strategic infrastructure investments designed to generate superior risk adjusted long term returns are well-positioned to bridge the connectivity gap and support affordable, inclusive, and sustainable internet access for global communities most at risk of being left behind according to the UN 2030 SDG Agenda.

As developing nations continue to build competitive economies while simultaneously attracting significant inflows of public sector infrastructure investment, investment opportunities abound to build an inclusive digital future.

Investing in a Connected Future: The Foundation of Modern Wealth Generation

Digital infrastructure and connectivity investments provide the foundation for “Industry 4.0” innovations, supporting local digital ecosystems across growing global markets. Emerging economies are crucial building blocks of the global digital economy, as they are estimated to grow twice the speed of developed markets in 2023, with $22 trillion in new wealth creation estimated in Asia alone between 2020-2025. Leveraging the rapid economic speed of emerging market development with estimated GDP increases fueled by increasing broadband access penetration, digital infrastructure has become a key driver for resilient portfolio growth.

Investors have always valued infrastructure investments as long term assets for their resilient, counter-cyclical features within a diversified risk adjusted portfolio. Investments in traditional infrastructure drive innovations in digital infrastructure , as well-developed physical infrastructure builds the foundation for stable internet connections that support global productivity and growth.

Digital infrastructure innovations are an essential aspect of closing the digital gap and achieving the UN Sustainable Development Goals, and are complementary to more traditional infrastructure investments as the differentiated characteristics of digital infrastructure may potentially enhance sustainable outcomes and manage volatility in resiliency-focused portfolios.

Navigating the Digital Revolution: Exploring the Untapped Potential of Digital Infrastructure Investments

Digital infrastructure is vital to delivering innovation and key services required for optimal functioning of specific economic sectors, including public utilities, telecommunications, and industrial supply chains. With an estimated rise between 6-11% annually between 2018 to 2030, digital infrastructure investments will continue to support an inclusive global digital economy by filling the $2.1 trillion digital gap and providing access to those separated by distance, gender and social barriers to participate in a more accessible and equitable future.

Digital transformation enables economic progress and is the key to global sustainable development. It must also be intentionally inclusive by ensuring that digital infrastructure investing narrows the social inequity gap, addresses the needs of the most vulnerable and marginalized, and provides accessible digital education opportunities leading to new job creation and increasing productivity. Through access to better data driven decisions, investors may also greatly benefit from the wide range of investment opportunities available within inclusive digital infrastructure innovation, delivering portfolios with higher impact value alignment while mitigating risk.

Actionable Insights - Future Proofing Your Portfolio: Embrace the Digital Revolution through Investing in Connectivity

By harnessing the transformative potential of digital connectivity, investors can position themselves to capitalize on emerging technology trends and capture diverse investment opportunities. To navigate this growing dynamic market successfully, consider the following actionable insights:

  • Research and Identify Growth Potential: Conduct thorough research to identify emerging markets with significant growth potential in digital infrastructure. Consider countries that are experiencing rapid urbanization, increasing internet penetration, and supportive government policies. Analyze factors such as population demographics, GDP growth rates, smartphone adoption, and internet connectivity to gauge the market's potential.
  • Diversify Your Innovation Portfolio: Consider investing in a diversified portfolio of digital infrastructure assets across various emerging markets. This diversification approach may assist in mitigating risks associated with any single market's volatility or unforeseen challenges. Diversification may be achieved by investing in different asset types, such as data centers, fiber optic networks, telecom companies, or technology-focused real estate investment trusts (REITs).
  • Consider Infrastructure Funds or ETFs: Investing in infrastructure funds or exchange-traded funds (ETFs) that focus specifically on emerging market digital infrastructure may provide risk mitigated exposure to digital infrastructure investment opportunities. These funds are managed by professionals who specialize in infrastructure investments and provide exposure to a diversified portfolio of assets across multiple markets. Investing through funds or ETFs can offer convenience, professional management, and risk diversification.

Driving Sustainable Growth and Inclusion with the Power of Connectivity

As the world becomes increasingly interconnected, investors who seize the connectivity advantage build resilient, well-positioned growth portfolios while making a positive impact on society. By bridging the digital divide and ensuring that underserved communities have access to reliable and affordable digital services, investors can contribute to reducing inequalities and support global economic development. Embracing the connectivity advantage through inclusive digital infrastructure fosters social inclusion, drives innovation, and paves the way for a prosperous and inclusive future.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Aisha Williams

Entrepreneur, futurist, and sustainability activist, Aisha is dedicated to reimagining the future of impact and sustainability as the Founder and CEO of ImpactVest. Recognized as a prominent emerging asset management firm and a member of the Council for Inclusive Capitalism, ImpactVest is committed to a mission that drives positive change.

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