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4 Mar 2024

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Can Someone Help Turn on the Lights?

One third of the world's population – 2.7 billion people – live on an amount of electricity that's less than 20% of the service enjoyed by the developed world. Add India's 1.4 billion people to that mix, and we see that more than half of the world's population lives with these woefully under-developed electricity grids.

IDCA Research studies the potential of each nation of the world to build and travel an individual path toward creating a Digital Economy. The three big focus areas in these endeavors are:

1. Create sufficient Digital Infrastructure to support a Digital Economy

2. Educate and train people to build and operate Digital lnfrastructure

3. Develop eServices and apps to utilize Digital Infrastructure

Digital Infrastructure encompasses data centers, long-haul and local networking, Internet access and bandwidth, phones and laptops and other devices – and the sustainable electricity needed to operate everything. Anemic electricity begets anemic services, and crushes hope of Digital Economies and the positive socioeconomic growth that they can create.

So creating robust, sustainable grids is the first order of business for the 4.1 billion direly underserved people in the world.

India is Unique
India offers a special case, now the world's most populous country, and a nation that has embarked on IT-driven growth for a couple of decades now. The results are considerable: India's US$3.7 trillion annual economy is now the world's fifth-largest, trailing only the US, China, Japan, and Germany.

Yet India's per-person income is still only about $2,500 per year, ranking 140th in the world, and classifying the nation as a Frontier Market by IDCA Research, the fourth of five income tiers under purview.

Taken as a whole, India retains enough heft and interest to be among the world's top 10 recipients of foreign direct investment (FDI), with inbound flows on the order of $20 billion per year. It seems to have the ability to continue to address its technology and economic shortfalls with some success on its own.

Broad Range of Investment Requirements
The same is less true for the nations containing the other 2.7 billion people cited above. IDCA Research estimates that almost $1 trillion is needed to bring these nations to just the 25% per-person level of the average electricity grid found in the EU.

The amount required varies from as much as less than 1% of the annual GDP of Peru, Ecuador and Greece, to between 25% and 50% of the annual GDP of Ethiopia, Kenya, Tanzania, and Pakistan, to 100% or more of the annual GDP of Burundi, Sierra Leone, and South Sudan.

Finding such funding and putting it to work should not be a game of playing favorites – yet each of these under-served nations has numerous aspects that make them uniquely attractive or unattractive to particular investors. IDCA Research welcomes discussions of this topic, so please reach out with your issues and ideas.

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