Very few of us know that a vital part of the Israeli economy is entrusted to a small number of data centers that store and compute the data of thousands of organizations such as banks, insurance companies, retail chains, industrial plants, healthcare facilities and defense agencies, and more. To the naked eye, a bank or retail chain is made up of workers, offices, and branches, but the real essence is hidden, a business organization that actually lives where its data is. The data resides in a small number of underground data centers located in the center of the country that actually act as engines of the Israeli economy.
The blossoming of data centers established in Israel through private initiative and funding is a national achievement. The data centers underline the massive transition of the economy to the digital age and have become an engine of the digital transformation, which is of crucial importance for the future of companies and their competitiveness. The faster growth of data growth reinforces the unmatched importance of data centers as part of economic infrastructure.
The importance of data centers to the economy requires a national policy similar to that of any other critical infrastructure. This is required even though the data centers are privately owned facilities serving private corporations and public and government organizations. Data centers such as electricity, water, gas and other infrastructures are exposed to a number of serious threats, particularly sophisticated cyber attacks, some of which are carried out by terrorist organizations and states. Israel is already embroiled in a de facto war against Iran which, with the participation of Hezbollah and Hamas, could develop into an all-out war.
Covid-19 has proven how fragile the international reality is and how easily and quickly countries can reach economic paralysis. In times of crisis, a country’s infrastructures serve as a safety anchor and a dramatic and critical base for recovery. Without a doubt, Covid-19 will not be the last global crisis. For example, the climate crisis will worsen dramatically in the coming years and will have a direct impact on the switch to alternative energies, including in data centers.
Israel’s data centers were built according to the strictest and highest international standards from a technological and security point of view. However, the government has never considered them as part of the national infrastructure, which requires long-term planning, regulation, reference to economic potential and national security issues. Unlike Israel, other advanced countries have designed and implemented a national plan for data centers. Even a small country like Ireland, which has become a global innovation hub, has drawn up a national plan for data centers that sees them as part of the national infrastructure and addresses the complex issues of investment, attracting multinational companies, economic growth, employment, energy and more. This plan is fully integrated into the Ireland 2040 Project, a high-tech sector development plan, and has become a key element of it. The strategy clearly identifies the contribution of data centers to employment and GDP, attracting investment from multinational companies and heading to Ireland for a planned approach to build their weight in the wider economy.
Amazon in talks to build three Israeli data centers for NIS 1b
Israel should adopt this new approach to data centers and consider them in all respects as part of the national infrastructure. Israel can learn from other countries’ strategies in this area and implement them with the necessary changes. The government should form an inter-ministerial team composed of senior officials from the National Digital Ministry of Government, Science and Technology, Finance, Energy, other ministries, as well as companies currently operating in the sector to determine regulation , and a national strategy. This would include: understanding the economic contribution and potential of the sector; Recommendations for future development; precise definition of the persons authorized to set up data centers; the optimal geographical distribution in relation to security and employment issues; the integration of renewable energies; Investigation of cyber issues; integration into national cyber administration and more. This is not about government investment in privately owned data centers, but smarter integration that would accelerate economic growth and ensure better security for an infrastructure that is one of the most critical to the government today.
Moshe Lasman is the CEO and founder of the Global Data Center
Published by Globes, Israel business news – en.globes.co.il – on August 23, 2020 © Copyright of Globes Verlag Itonut (1983) Ltd. 2020
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