In the minute it takes you to read these first few lines, there will have been 4.1 million Google searches, 190 million emails sent, 19 million texts received, 4.7 million YouTube videos viewed, 1.9 million Facebook logins, and 400,000 apps downloaded1, all within just one minute.
The digital age is firmly here. The so-called ‘Fourth Industrial Revolution’ in which digital technologies pervade every area of life, from how we work and play, to how we navigate day-to-day life, is well underway.
This evolution from analogue to digital has happened startlingly quickly. The technology now at our fingertips operates at a speed and sophistication that would have once fallen well beyond the reach of many of our imaginations.
As the technology available to us grows, so too does the demand for the data which powers and enables it. Data is generated all day, every day, and is increasingly accessed via more mobile means for an ever-increasing number of activities. This ‘Internet of Things’, which connects physical objects, such as domestic appliances, vehicles and industrial machinery to the internet, has resulted in an explosion of new data which needs to be communicated, exchanged and stored. We have a perpetual cycle of connectivity, where more apps create more data, which creates more apps, which in turn creates more data – a continuous data loop.
Since 2010, the number of internet users worldwide has doubled, with global internet traffic growing by around 30% a year according to the Institute for Economic Affairs (IEA). The Covid-19 pandemic has highlighted the extent to which digital technology enables us to stay connected, as well as how much we have come to rely on data services and networks. At the height of the first lockdown in 2020, heavy use of video streaming and conferencing, as well as social media and online gaming, sparked a 40% surge in global internet traffic.2
Even without the accelerating effect of Covid-19 the underlying trends are “driving exponential growth in demand for data centre and network services” the IEA reports. Global internet traffic is expected to double between 2019 and 2022, with the number of mobile internet users expected to hit five billion by 2025. Meanwhile, the number of connections making up the ‘Internet of Things’ is projected to double from 12 billion to 25 billion in the same period. A new lexicon has emerged in reaction to this huge data growth. Megabytes, Gigabytes and Terabytes are now overshadowed by Petabytes (1,024 Terabytes), Exabytes (1,024 Petabytes), and Zettabytes (1,024 Exabytes).
Of course, this does not all happen unaided, and the infrastructure needed to support and enable the storage and transmission of reams of data across the world every day is now as critical as transport networks on road, rail and sea. The demand, and indeed opportunity, for investment is huge, particularly with the continuous emergence of new technology. The 5G revolution, for example, is expected to be a game changer with download speeds projected to be 18.5x faster than 4G, greatly increasing demands on data and the infrastructure that enables it.
Digital infrastructure assets are, by definition, physical in nature; they generate contractual income, have long time horizons and are accessible to investors via liquid listed securities. They are critical in nature as they fulfil a fundamental digital need. The loss of such assets could have a major detrimental effect on not only the availability of digital services, but more broadly on the functioning of society itself.