Digital Economy Weekly - August 18, 2024

Story of the Week

Data Sovereignty

The unglamorous nitty-gritty of writing laws and creating agreements constitutes the bulk of what government and NGOs do. Data Sovereignty is one of the topics that fits within this humdrum world, and it must be addressed urgently by national and world bodies. 

Overarching issues include: personal data privacy and intrusions to it, the use and misuse of personal data by corporations, and the use and misuse of said data by governments. 

Progress is a Good Thing, Right?

Data continues to grow at around 25% per year, thus doubling every three years and growing by a factor of 1,000 every generation. Personal details and all of the lifestyle data being associated with it is part of that incredible flux. 

The notion that technological progress equals societal progress has remained dominant since the dawn of the Industrial Age in the 18th century – as progress marches on, we can see for example (as cited in one of the Links of the Week below) that there are still billions of people without the means to conduct online transactions. This will no doubt change. 

Yet fears have been raised and much harm has already been done. Downsides range from the annoyance of having to confirm or reject cookies on any initial website encounter (brought about by the GDPR and mirrored in much of the rest of the world), to actual prosecutions, imprisonments, and likely worse from governments who've uncovered the identities of critics or had those identifies handed over to them by large social-media companies. 

The Argument for Self-Sovereignty

Within this spectrum lie issues of routine cybertheft and onerous terrorism, identify theft and online imposters, and the sovereignty issues invoked by governments who do not want any of “their” data to cross international borders. Literal data sovereignty also encompasses “self-sovereign identity,” a concept developed by Christopher Allen almost a decade ago, with stated principles that include:

• Users must control their own identity

• Users must have access to their own data

• Users must agree to the use of their identity

• The rights of users must be protected

These pesky principles are anathemic to corporations that wish to scrape whatever data they can and monetize it, and to governments that wish to control people, you know, for their own good. 

As an example of the latter point's extensiveness, The Economist Democracy Index identifies dozens of “authoritarian” governments in the world, and more than 100 that are either authoritarian or “flawed.” Allen's self-sovereignty principles have a scant chance of taking root in any of these places in the absence of diplomatic urging, negotiated statements or regulatory persuasion from international bodies. 

The developed world, which almost uniformly has “full” or “hybrid” democracies according to The Economist, is at present not the exemplar and beacon for the rest of the world in this area. London in particular and the UK in general has extensive camera networks on a par with China, watching your every step. The US government gives almost untrammeled free rein to corporations sticking their fingers into your online life, and even the EU's allegedly strict General Data Protection Regulation (GDPR) has its consequential critics. 

How Does This Affect Me?

How do these issues filter down to the data center industry? At first blush, we may say “not at all.” Data centers are mere processors and transporters, and their operators are considered such ((thanks to the notorious Section 230). They are considered to be considered in fundamentally the same light as electric utilities, airports, or governmental departments of transportation. 

Yet operators should consider what is passing through and being stored in their facilities, particularly if they are also modern media (and social media) companies as well. The GDPR may be strengthened some day, Section 230 may go away, an world organizations and conventions may rise anew to challenge today's personal-data monarchs. 

(Note: IDCA is holding  a webinar on Wednesday, August 21, from 11am-noon eastern time on the topic of data sovereignty. There is a description and link at the end of this weekend's newsletter.)

Links of the Week

Good Jobs in the Data Center Industry

The data-center industry offers six-figure jobs without a formal, four-year college degree, according to The Wall Street Journal. The article focuses on a young professional who was recently hired in Ashburn, VA's Data Center Alley. The article reinforces the critical need for focused training for data center professionals. Read here.

Sustainability, Scope 3 Policies Attract Business

A reminder that data center builders and operators must to some extent be their brother's keeper comes from Data Center Knowledge, in a piece that discusses Scope 3 emissions and goes on to say Scope 3-focused Sustainability Reporting policies sync up with 83% of data center operators now use Sustainability practices as a way of attracting business. Read here.

Schneider Named the “World's Most Sustainable Company”

Schneider Electric topped a global list of 500 "World's Most Sustainable Companies for 2024" in a recent survey by Time magazine and Statista. The findings emphasized the Schneider Sustainability Impact (SSI) program during the course of its research; Schneider itself reports a 27% drop in Scope 3 GHG emissions as part of the program. Other industry names among the 500 include Apple, Equinix, Google, Microsoft, Nvidia, and ServiceNow. Read here.

Stress on the Golden Grid

A Los Angeles Times article describes the data center industry's energy needs in California as "rapacious, with one example stating that Silicon Valley data centers now chew up 60% of the city of Santa Clara's electricity grid. The piece cites another study that ranks California 49th among the US's 50 states in grid resiliency. Read here.

Digital Identities Sought in Developing World

CIO Africa, based in Nairobi, Kenya, reports an upsurge in efforts to create digital identities for people in developing nations. “The World Bank estimates approximately 850 million people across the world do not have an official ID, (and) 3.3 billion people globally don’t have access to an official identity for online transactions.” Thus, the move toward creating digital identities is gaining momentum. Read here.

ServiceNow Outage at End of Week

Reports of a significant ServiceNow outage throughout the US East Coast have been reported since about noon local time. Many reports are calling it a complete outage. The ship apparently righted itself Thursday afternoon, but resumed Friday morning. More than 25,000 customers worldwide now use the cloud platform-as-a-service (PaaS). Read here.

Small Data Center Fire Raises Alarm

A small fire in a large data center in Chicago was reportedly extinguished quickly, raising awareness of the world's increasing reliance on such facilities than raising concerns about the event itself. The 350 Cermak Rd. building was once the world's largest printing plant and now consumes 100MW to feed the needs of Equinix, Digital Realty, and others throughout its 1 million square feet of space. Read here.

Goog Invests Another Billion in Dallas

“A billion here, a billion there, pretty soon you're talking about real money,” said a famous politician a couple of generations ago. The latest billion-dollar announcement in the data center industry comes from Google, which announced it will invest that amount in the Dallas area, along with agreeing to purchase 375MW in solar-energy purchase agreements. Read here.

AWS Wants More Direct Power in Pennsylvania

With nuclear power in seeming ascendance, questions are being asked whether using this power to feed data centers should be prioritized over consumer and other local needs. Amazon is facing this issue via its recent $650 million data center acquisition in heavily populated Eastern Pennsylvania, and for which it's requested an additional 180MW to be supplied directly through a local nuclear power plant. Read here.

The AI Struggle is Real, So Say Some

Financial markets are remorseless, with the story in the link below already describing the AI market as “ailing.” ln the face of this Herculean struggle, Nvidia reported good results today, thus re-energizing the minute-by-minute outlook on the company itself and on AI as a whole. Read here.

Heard in the Industry

“OpenTelemetry’s unified approach simplifies the process of data collection, allowing IT teams to focus on analyzing and acting on insights rather than managing disparate tools. This efficiency can lead to more accurate performance metrics and faster identification of issues.” - Myles Trachtenberg, CTO of Infrasight Software, discussing the foundational use of open-source OpenTelemetry data in building data monitoring and analytics. 

Heard in the Aisle

“If a server goes down in a rack, I need a body to physically go see what went wrong. Did a breaker flip? Did a server catch on fire? We still need humans.” - Joe Minarik, chief operating officer at DataBank, interviewed by The Wall Street Journal:

https://www.wsj.com/lifestyle/careers/the-tech-job-paying-six-figures-no-college-degree-required-ec85e5f1

Country Close-up: Brazil

The primary socioeconomic issue when considering Brazil and its continued development of its Digital Economy is the well-known and significant income gap among its regions. As a whole, Brazil's per-capita nominal income stands at US$10,413, according to the International Money Fund (IMF). 

Yet there is a wide gap among regions. Compared to the national average, regions vary as follows:

• São Paulo State – 49.6% higher than the national average

• Rio de Janeiro State – 26.4% higher

• Central-West and South regions – 22.8% higher

• Minas Gerais & Espirito Santo States – 12.3% lower

• North and Northeast regions – 43.2% lower

The income gap between São Paulo State on the one hand and the North and Northeast regions on the other amounts to 62% lower income in the north –  São Paulo residents enjoy income levels more than 2.5 times higher than those in the north. 

Brazil's Place in IDCA's Country Rankings

Brazil is among the nations surveyed in the IDCA Digital Readiness Index, which measures how relatively well the nation of the world are performing with respect to each other across four general areas: Economy (which includes technology development), Environment (which includes the use of sustainable energy and GHG emissions level), Social and Governance. 

Brazil has the world's 7th largest population, and its outlook is optimistic when compared to the world's other large countries. In fact, among the world's most populous 10 nations, Top 10 Brazil trails only the United States in its IDCA ranking.

In Latin America, although populations vary widely,  Brazil can be contrasted with two of its neighbors who are also rapidly developing their digital infrastructure and working toward creating their own paths to Digital Economies:

Brazil's aggressive development of its local hydroelectric resources, coupled with consistent efforts to develop wind and solar energy have established it as an example of sustainable energy to the world, and as the world leader among large countries. As a result, Brazil's strong industrial base operates relatively efficiently, generating CO2 and other greenhouse gases at a rate as efficiently as Germany, more efficiently than Canada, and slightly less efficiently than the United States. I Brazil is in statistical parity with the world in its tech-related economic score. For a nation of its size and ambition, it thus needs to do better. Internet access could be improved, and its mobile access is in the middle of the pack within the region. Brazil's server infrastructure is significantly stronger than most of Latin America, but could also benefit from significant development. Brazil's Digital Economy Given the data cited above, a strong case can be made for Brazil to not only focus on its relatively wealthy São Paulo and Rio de Janeiro regions, but to commit o develop the North and Northeast Regions, too. This is not a trivial task, as the responsibility of caring for 60% of the Amazon basin falls within Brazil's Amazônia Legal in its East, Northeast, and Central-West regions. This responsibility also lies within the context of a population drain from less-developed parts to more-developed areas of Brazil, eroding local economic development while straining the resources of São Paulo and other developed regions. 

Inside IDCA

Data Sovereignty Webinar on Wednesday, August 21

Global data analytics management expert and speaker Julia Bardmesser and noted cross-border data sovereignty and human rights attorney Jon Drimmer of Paul Hastings joins IDCA Chief Research Officer Roger Strukhoff for a live Data Sovereignty webinar on Wednesday, August 21 from 11am-noon. This latest IDCA webinar will cover the use and protection of personal and sovereign data by individuals and corporations, along with personal data's collection, use, and potential misuse by the world's governments. Domestic and international policies and regulations are under discussion, along with the many issues of walking the fine lines between the responsible, productive uses of personal data and the consideration of personal privacy. Registration for the event is still open: Register here.