This article first appeared in Digital Edge, The Edge Malaysia Weekly on September 9, 2024 - September 15, 2024

Data centres, often perceived as mere physical infrastructures housing hundreds of servers and consuming vast amounts of electricity, are the unsung heroes of the digital age. They are the backbone of cloud computing and artificial intelligence (AI), enabling countless innovations across various sectors.

By examining their impact on healthcare, agriculture, logistics and more, we can appreciate how data centres optimise operations and expand possibilities in the Asia-Pacific (Apac) region.

During the Covid-19 pandemic, AI-driven research and development processes that relied heavily on cloud-based data centres made the rapid development of vaccines possible.

Facilities offering telehealth services to often underserved patients can also perform real-time lab test results and comprehensive electronic medical records, improving patient outcomes and streamlining healthcare delivery, especially for the millions of people in Asia’s rural and hard-to-reach regions.

Asian farmers use cloud technology to improve crop yields and harvests, enhance desired traits for drought tolerance or disease resistance, achieve faster time-to-market at lower costs and reduce environmental impacts.

Advanced data analytics tools help optimise irrigation schedules, monitor soil health and predict weather patterns — enhancing agricultural productivity. Integrating AI and cloud services enables farmers to make informed decisions, resulting in more efficient and sustainable farming practices.

For instance, precision agriculture in Australia is transforming farming by using drones and Internet of Things (IoT) technologies to monitor crop health, livestock management and land surveying.

Another impactful initiative is the Malaysia Digital (MD) AgTech driven by the Malaysia Digital Economy Corporation (MDEC). In collaboration with stakeholders and ecosystem partners, this initiative aims to digitally empower the national agriculture sector. By integrating digital technologies such as IoT, big data analytics (BDA), AI and drone technology, the goal is to increase productivity, enhance quality, boost income, reduce operational costs, optimise plantations and encourage further participation.

Logistics companies benefit from cloud computing by optimising shipping routes, reducing fuel consumption and improving delivery times. By leveraging data centres, these companies can manage global supply chains more efficiently, ensuring goods and materials reach their destinations faster while using fewer resources.

This operational efficiency cuts costs and minimises the logistics industry’s environmental footprint. Companies like Singapore’s YCH Group are at the forefront of integrating smart logistics and robotics solutions to provide end-to-end supply chain solutions in the region.

Students and educational institutions rely on data centres to enable remote learning and access to vast academic resources. Cloud-based platforms provide interactive learning experiences, real-time feedback and collaboration tools that enhance the quality of education.

These digital infrastructures ensure students can continue their studies uninterrupted, regardless of geographical constraints. Initiatives like Japan’s Global and Innovation Gateway for All (Giga) School Program aim to provide every student with a computer and high-speed internet.

According to an IDC 2023 Smart Cities report, Apac governments are rapidly adopting technologies like IoT to digitalise cities and government services, aiming to reduce traffic congestion, enhance security and improve overall efficiency.

This digital transformation is not only seen as a strategic move to modernise infrastructure but also as a vital approach to empower governments and significantly improve the lives of citizens.

A 2024 IDC report acknowledges that 50% of Apac cities will pilot generative AI in 2024. Municipalities can monitor and manage urban environments more effectively, leading to smarter cities that respond dynamically to the needs of their populations. The deployment of these technologies fosters a more sustainable and connected urban ecosystem, ultimately creating a more liveable and resilient environment for all residents.

Artificial intelligence tools supported by data centres enhance access to green energy sources, such as wind, solar, hydro and geothermal power.

These AI algorithms can track temperature, performance metrics and weather patterns by analysing vast amounts of data. By integrating battery storage solutions, data centres can ensure a cleaner, more efficient alternative to diesel and provide backup power for electrical grids. They also guarantee high availability and contribute to decarbonising local grids.

These innovations help meet the growing demand for renewable energy and reduce reliance on traditional power sources. In India, partnerships are being formed to bring gigawatts of renewable energy capacity, and leveraging low-cost clean energy and storage can ensure long-term affordable electricity, avoiding outages.

The Apac’s airlines and public transport  systems use cloud computing and AI to optimise schedules, flight planning, scheduling routes and maintenance plans, reducing emissions and improving efficiency.

Pilot training can be levelled up by integrating AI-powered software and simulators. Data centres enable real-time data analysis and decision-making, which are crucial for managing complex transport networks and minimising delays. Companies like Japan Airlines leverage cloud solutions to enhance operational efficiency and build resilient airline operations.

Manufacturers in Apac utilise data centres to improve inventory management, streamline operations and optimise staffing levels. AI-driven insights help predict equipment failures, lead predictive maintenance systems, improve production schedules and manage energy consumption.

These advancements lead to higher productivity, lower costs and a more sustainable manufacturing process. China has forged ahead in developing domestic smart manufacturing and smart factories, and it is setting new benchmarks for efficiency, sustainability and innovation.

According to a 2023 report by the Asia-Pacific Economic Cooperation, the prevalence of mobile phones in the Apac region and the remarkable growth of mobile Internet have led to increased use of data centres to facilitate connections to various apps and services on the Internet.

The report noted that by the end of 2023, 1.8 billion people in Apac (63%) would have subscribed to a mobile service. This trend has enabled greater participation in the digital economy and has helped bridge the digital gap, allowing more people to access and benefit from online services and resources.

Despite typically not employing thousands of employees directly, data centres play a crucial role in job creation in their operating regions.

These facilities primarily employ high-skilled workers who earn higher salaries, making a significant economic impact. In Malaysia, for instance, the data centre sector is rapidly expanding and poised for a compound annual growth rate (CAGR) of 13.92% from 2023 to 2029 and, as such, creating numerous high-skilled job opportunities in fields such as network engineering, cybersecurity and data management.

This growth is not limited to the centres but extends to related sectors like real estate, construction, connectivity, logistics and renewable energy. This ripple effect results in thousands of jobs being created indirectly, supporting the overall economic development of these areas.

The emergence of data centres in Asia, particularly Southeast Asia, is reshaping the digital landscape and enhancing connectivity and internet infrastructure. From essential mobile apps to facilitating real-time global financial transactions, these services rely on the robust foundation provided by strategically located data centres.

As highlighted by the ARC Group, countries like Singapore, Malaysia, Thailand and Indonesia spearhead this transformation, positioning Southeast Asia as a key player in the global digital hub. The economic spillover effect of data centre investments on local economies is significant and comprehensive.

The rapid growth of the data centre ecosystem in Malaysia is driving expansion in sectors such as real estate, construction, connectivity, logistics, warehousing, energy (including renewable energy), equipment suppliers, contract manufacturing and talent development. This growth demonstrates how data centres are more than just isolated entities; they are catalysts for comprehensive economic and technological advancement.

Data centres also play a pivotal role in sustainability. Leading providers implement 24/7 carbon-free energy solutions and pioneer water, cooling and waste processing technologies.

Eco-friendly data centres help drive US$6.3 billion (RM27.56 billion) of green investment across Southeast Asia, boosted by energy efficiency regulations in Malaysia and Singapore. Transparency through regular sustainability reports fosters collaboration and drives industry-wide innovation and efficiency.

Chi Ling is the vice-president of real estate and site development (Apac) at EdgeConneX, a global hyperlocal to hyperscale data centre solutions provider

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