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Beyond Fear: Redesigning the Future
The mere thought of a termite will send shivers up the spine of any human, conjuring images of destruction, disaster and despair.
However in the natural world, the termite is often lauded as a silent champion of transformation and evolution, systematically reshaping the landscape of opportunities.
As investors stand at the crossroads of progress, two transformative arenas in infrastructure development beckon for attention – energy transition and digital infrastructure.
Energy Transition
Termites are known to break down and transform organic matter to build resilient colonies.
In particular, the inner workings of its gut have inspired scientists’ research efforts aimed at replacing fossil fuels with cleaner and renewable energy sources such as hydrogen.
Interestingly, the complex mounds that termites build have also influenced the use of climate responsive construction techniques in modern architecture.
Most institutional investors understand how private capital can contribute to a robust and sustainable energy infrastructure, while aligning with global climate goals. However implementation has its challenges.
As fiduciaries first and foremost, investors have a duty of care to their stakeholders, operating within the constraints of benchmarks, time horizons and governance structures.
Government policies and politics play a pivotal role too. The Biden administration’s Inflation Reduction Act clearly demonstrates that.
However, these complexities should not preclude investors from embracing such opportunities. Navigating them requires significant skill and fortitude, though.
Digital Infrastructure
Termites tirelessly expand their colonies, reflecting the growing demand for connectivity in their interconnected world.
In the realm of digital communications network, the demand for connectivity and technological advancements mirrors the termites’ incessant quest for expansion.
According to Frontier Advisers: “Digital infrastructure is a proven sector for investments having demonstrated resilient demand, growth tailwinds and returns before and during the COVID-19 pandemic”.
No doubt, the potential of 5G, artificial intelligence, quantum communication, decentralised networks and other digital infrastructure developments form bedrock of a connected future for global communication and economic growth.
Termites of Economic Evolution
Much like termites working collaboratively to construct intricate and resilient colonies, institutional investors play a pivotal role in fortifying the foundation of emerging infrastructure.
Commentators distil the critical success factors of emerging infrastructure development to:
- Government Policies
- Private Capital
- Social Licence
Notwithstanding the uncertainties of the other two factors, institutional investors, as responsible custodians of private capital, play an important role to forge the future, akin to the termites of economic evolution.
We look forward to a meaningful discussion of the investment opportunities afforded in the emerging sectors of energy transition and digital infrastructure.
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