A recent article in the Macroeconomic Bulletin has highlighted the importance of considering the infrastructure required to support artificial intelligence (AI) development in Ghana. The author argues that before AI becomes intelligence, it starts off as infrastructure, including land, electricity, fibre, cooling systems, transformers, construction, security, engineering, financing, insurance, maintenance, and logistics. This perspective is crucial in understanding the broader economic implications of AI.
The article cites the example of Malaysia, where a rapid expansion of data centres is underway, with investments equivalent to about 18% of the country's GDP. The southern state of Johor has seen a significant increase in data centre capacity, from 10 megawatts five years ago to roughly 110 times that amount today. This growth has created opportunities for suppliers, including land sellers, concrete installers, electrical system providers, and maintenance services.
The author encourages Ghanaian entrepreneurs to think beyond software development and consider the various business opportunities that arise from AI infrastructure. This includes electrical engineers, property developers, lawyers, logistics companies, training institutions, and technicians specialising in cooling systems. By identifying these opportunities, entrepreneurs can create businesses that support the growth of AI in Ghana.
The article highlights the importance of understanding the value chain and where Ghana can capture value in the AI economy. The country has experience with natural resources, such as cocoa, gold, and oil, but often struggles to retain value after extraction. The author argues that Ghana must be strategic about the kind of AI investment it attracts, focusing on projects that create higher-skilled employment, support research, and develop domestic suppliers.
Malaysia's approach to AI investment is cited as an example of a country being selective about the kind of projects it attracts. The country is focusing on projects that create higher-skilled employment, support research, and develop domestic suppliers, rather than simply hosting server farms. This approach can help create a more sustainable and equitable economy.
The article also highlights the physical infrastructure required to support the digital economy, including energy, water, and industrial land. Malaysia's data centres already use a significant amount of electricity, and concerns have been raised about water supplies. The author argues that policymakers must consider these physical infrastructure needs when developing technology policy.
Finally, the article emphasises the need for a comprehensive approach to developing the AI economy in Ghana, including skills development, infrastructure, capital, and markets. The author argues that training people without building companies capable of employing them can simply prepare talent for somebody else's economy. A coordinated approach is needed to ensure that Ghana captures value in the AI economy.
Key points
- Entrepreneurs are encouraged to explore business opportunities in AI infrastructure, beyond software development.
- Ghana must be strategic about the kind of AI investment it attracts, focusing on projects that create higher-skilled employment and develop domestic suppliers.
- The physical infrastructure required to support the digital economy, including energy, water, and industrial land, must be considered when developing technology policy.
