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| Data centres are becoming critical economic infrastructure across emerging markets, powering digital services, jobs, and innovation.(Representing ai image) |
Economic Impact of Data Centres in Emerging Markets: Powering the Digital Future
In today’s digital economy, data centres are no longer behind-the-scenes infrastructure—they are economic powerhouses reshaping growth trajectories in emerging markets across Asia, Africa, and Latin America. As demand for cloud computing, artificial intelligence (AI), mobile services, and digital platforms surges, so does the strategic role of local data centres in driving investment, jobs, and long-term economic transformation.
Why Data Centres Matter in Emerging Economies
Data centres are the backbone of modern digital services. They store, process, and secure massive amounts of data generated by businesses, governments, and consumers. According to a recent World Economic Forum analysis, data centres not only support day-to-day digital operations but are rapidly becoming central to global investment dynamics, especially as AI adoption increases demand for compute-intensive infrastructure. (World Economic Forum)
Despite global growth, much of this investment remains concentrated in developed regions. Yet emerging markets are quickly catching up, positioning themselves as regional hubs for digital infrastructure and innovation. (World Economic Forum)
1. Boosting Foreign Investment & Economic Activity
Data centre projects attract significant foreign direct investment (FDI)—a vital source of capital for emerging economies. In 2025, data centres accounted for a large portion of greenfield investment globally, driving overall FDI growth. (UN Trade and Development (UNCTAD))
For many emerging countries, this influx of capital translates into major economic impacts:
Infrastructure spending that fuels construction, logistics, and local supply chains.
Technology transfer and improved digital capabilities tied to cloud and AI services.
Enhanced competitiveness as nations pursue “digital hub” status in their regions.
For example, countries in Africa like Ethiopia, Angola, and Mozambique are drawing investment from global players like Raxio Group, backed by the World Bank’s IFC, to build new data centres that will improve local connectivity and digital services. (Reuters)
2. Creating Jobs and Strengthening Skills
While data centres themselves may not employ large numbers of permanent staff compared to other sectors, their development triggers jobs across the economy, especially during the building phase. Construction, electrical engineering, cooling systems installation, telecommunications, and security are just a few areas that benefit from increased demand.
Economists note that even mid-tier data centre projects in emerging markets, with investments of $100–$500 million, can represent a substantial percentage of local economic activity and create thousands of jobs during construction. (globaldatacenterhub.com)
Moreover, as digital ecosystems expand, so does the need for skilled technical talent—from network engineers to cloud architects—providing long-term opportunities for local professionals.
3. Accelerating Digital Adoption & Productivity
Data centres enable the rapid adoption of advanced digital technologies such as AI, 5G, Internet of Things (IoT), and e-commerce platforms. Countries that host local infrastructure benefit from:
Lower latency and faster internet speeds, enhancing the user experience for consumers and businesses.
Improved data sovereignty, allowing sensitive information to be stored and processed domestically in compliance with local laws.
Growth of digital industries, including fintech, e-health, remote learning, and smart cities.
Regions like Southeast Asia and Africa are seeing especially strong momentum due to rising internet penetration, mobile adoption, and regulatory incentives that encourage local data storage. (Data Centers)
4. Encouraging Economic Diversification
Emerging markets often seek to diversify their economies beyond traditional sectors such as agriculture or natural resources. Investing in digital infrastructure like data centres can:
Stimulate new industries (tech startups, cloud services).
Attract global enterprise clients looking for regional digital hubs.
Reduce reliance on imports for digital services and enhance local value creation.
For example, governments including India’s are proactively shaping policies to position their countries as digital leaders. India’s data centre capacity is projected to grow significantly toward 2030, underpinned by both domestic demand and international investment. (Business Today)
5. Challenges That Must Be Managed
Despite the obvious benefits, emerging markets face legitimate hurdles:
Energy demands: Data centres are energy-intensive, and reliable power grids remain a challenge in many regions. (globaldatacenterhub.com)
Infrastructure gaps: Roads, skilled labour pools, and technology ecosystems need parallel growth to support large-scale digital investments.
Environmental considerations: Sustainable development and resource use must be balanced against economic growth targets to avoid unintended consequences.
Policymakers and private investors are increasingly focused on addressing these challenges through renewable energy integration, workforce training programs, and smart urban planning.
Looking Ahead: A Digital Economic Engine
As emerging markets deepen their role in the global digital landscape, data centres will continue to be a cornerstone of economic development and competitiveness. With strategic investment, thoughtful planning, and ecosystem support, these facilities can be more than just buildings—they can be catalysts for jobs, innovation, and long-term prosperity.
Explore more:
Learn how data centres are changing global investment: UNCTAD: Data centres are reshaping the global investment landscape Data centres and global investment landscape (UNCTAD)
Discover trends in emerging regions like Southeast Asia and Africa: Emerging Data Center Markets in 2025 Emerging data centre markets in 2025 (DataCenters.com)
Frequently Asked Questions (FAQ): Economic Impact of Data Centres in Emerging Markets
1. What is the economic impact of data centres in emerging markets?
Data centres significantly boost economic growth in emerging markets by attracting foreign direct investment (FDI), creating jobs, strengthening digital infrastructure, and enabling advanced technologies like cloud computing and artificial intelligence. They act as foundational assets for digital economies, supporting sectors such as fintech, e-commerce, healthcare, and education.
2. How do data centres create jobs in developing economies?
Data centres generate employment in two main ways:
Direct jobs such as IT engineers, facility managers, cybersecurity experts, and network specialists.
Indirect jobs in construction, power supply, cooling systems, logistics, maintenance, and local services.
Even when operational staff numbers are limited, the broader ecosystem creates long-term employment opportunities.
3. Why are global investors interested in data centres in emerging markets?
Investors are drawn to emerging markets due to rapid digital adoption, growing internet penetration, rising data consumption, and supportive government policies. Lower land costs and untapped demand also make these regions attractive for building scalable, high-growth data centre infrastructure.
4. How do data centres support digital transformation in emerging economies?
Local data centres reduce latency, improve internet speeds, enhance data security, and enable data sovereignty. This accelerates digital transformation by supporting cloud services, AI applications, smart cities, digital payments, telemedicine, and online education.
5. Do data centres help countries reduce dependence on digital imports?
Yes. By hosting data locally, countries reduce reliance on foreign servers and overseas cloud infrastructure. This improves digital self-reliance, strengthens national cybersecurity, and keeps more economic value within domestic markets.
6. What role do data centres play in attracting foreign direct investment (FDI)?
Data centres often involve large-scale, long-term investments ranging from hundreds of millions to billions of dollars. These projects signal economic stability and digital readiness, encouraging further FDI across technology, manufacturing, and service sectors.
7. Are data centres environmentally sustainable in emerging markets?
Sustainability is a growing concern. While data centres consume large amounts of energy and water, many new facilities in emerging markets are integrating renewable energy, efficient cooling technologies, and green building standards to reduce environmental impact.
8. What challenges do emerging markets face in developing data centres?
Key challenges include:
Limited access to reliable power and renewable energy
High upfront capital costs
Shortage of skilled technical talent
Regulatory and land-use complexities
Addressing these challenges requires coordinated government policy, private investment, and infrastructure planning.
9. Which emerging regions are seeing the fastest data centre growth?
Rapid growth is occurring in regions such as:
South and Southeast Asia
Africa
Latin America
These markets benefit from expanding digital populations, mobile-first economies, and increasing demand for local cloud services.
10. How do data centres contribute to long-term economic development?
Over the long term, data centres act as economic multipliers. They improve productivity across industries, enable innovation, diversify economies beyond traditional sectors, and position countries as regional digital hubs in the global economy.
11. Why is data sovereignty important for emerging markets?
Data sovereignty allows countries to store and process data within national borders, ensuring compliance with local laws, protecting sensitive information, and increasing trust among citizens, businesses, and global partners.
12. Are data centres essential for AI and future technologies in emerging markets?
Absolutely. AI, machine learning, and advanced analytics require massive computing power and low-latency infrastructure. Local data centres are essential for emerging markets to compete in the global AI economy and avoid falling behind technologically.
Economic Impact of Data Centres in Emerging Markets
Real data insights on investment, jobs, and digital infrastructure growth
1. Data Centre Investment Growth
Global foreign direct investment (FDI) in data centres exceeded $270 billion in 2025, making them a major driver of digital infrastructure funding worldwide — including in emerging economies. :contentReference[oaicite:0]{index=0}
Chart 1: Estimated global data centre FDI vs contributions from emerging regions.
2. Regional Market Sizes (2025 Data)
According to market forecasts, in 2025:
- Asia-Pacific accounted for roughly 35% of the global data centre market. :contentReference[oaicite:2]{index=2}
- Middle East & Africa held around 5% of market share. :contentReference[oaicite:3]{index=3}
Chart 2: Regional market share estimates for 2025.
3. Example: India’s Data Centre Growth
India’s data centre market has attracted over $6.5 billion in investments (2014–2024), with capacity more than doubling in recent years. :contentReference[oaicite:5]{index=5}
Chart 3: Data centre installed capacity growth in India (2019–2024).
Read more about India’s data centre growth here.
4. Local Projects and Job Creation
Large investments are not just theoretical — states in India and Africa are seeing real projects:
- Karnataka recorded ₹6,350 crore in data centre investments as part of broader capital inflows. :contentReference[oaicite:7]{index=7}
- In Africa, a $100 million investment from the World Bank’s IFC is boosting regional data centre infrastructure across multiple countries. :contentReference[oaicite:8]{index=8}
Read more on the World Bank backing for African digital infrastructure here.
5. Opportunities & Challenges
While demand and investment grow, emerging markets also face challenges such as energy infrastructure demands, regulatory complexity, and sustainability concerns — similar to global trends identified when analysing data centre expansion pressures. :contentReference[oaicite:9]{index=9}
- Energy Demand: Data centres are energy-intensive and emerging markets must balance growth with grid reliability and green solutions. :contentReference[oaicite:10]{index=10}
- Regulatory Frameworks: Local data laws and investment policies strongly influence long-term outcomes. :contentReference[oaicite:11]{index=11}
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