Will Reunion Island become the world′s sixth digital hub? | Business | Economy and finance news from a German perspective | DW | 06.01.2022

Visit the new DW website

Take a look at the beta version of dw.com. We're not done yet! Your opinion can help us make it better.

  1. Inhalt
  2. Navigation
  3. Weitere Inhalte
  4. Metanavigation
  5. Suche
  6. Choose from 30 Languages
Advertisement

Business

Will Reunion Island become the world's sixth digital hub?

A consortium plans to transform the French overseas territory Reunion Island into one of the world's digital hubs. That could help bring down local unemployment.

Watch video 02:43

Will Reunion Island become the world's sixth digital hub?

France's Reunion Island in the Indian Ocean is famous for its divine beaches and lush green landscapes. Roughly 42% of the overseas territory's surface are UNESCO World Heritage Sites.

But the island could soon become known for something else: An international consortium plans to turn it into one of the world's digital hubs.

The plans could help bring down local unemployment — at least to a certain extent.

The first stage was completed in spring 2021: a super-fast internet cable linking the island to Madagascar, Mauritius and South Africa. The cable is, with a capacity of 24 terabytes, 24 times as fast as Reunion Island's existing connections to the outside world.

"The internet speed on Reunion Island is the country's second-fastest and almost as quick as in the capital Paris — it made perfect sense to create a good export internet cable," Nassir Goulamaly, CEO at Reunion-based group Oceinde, told DW. Oceinde's subsidiary Zeop invested €50 million ($57 million) in the new cable called Metiss, together with its business partners Canal+ and SFR from France, Mauritius-based CEB Fibernet and Emtel as well as Madgascar's Telma.

The consortium intends to spend another €120 million on a second cable linking Reunion Island to India.

What's more, several huge data centers are to be built on the island. "We are hoping to convince companies to invest up to €1 billion and are already in talks with several interested investors," Goulamaly explained.

Europe in the middle of the Indian Ocean

The entrepreneur says choosing Reunion Island as their data hub should be a no-brainer for internet companies — even the so-called GAFAs (Google, Apple, Facebook, and Amazon).

"There are five big data hubs in the world: two in the US, two in Asia and one in the southern French city of Marseille," he noted.

"But there is a gap in the Indian Ocean — and Reunion Island could perfectly fill that gap," Goulamaly added.

After all, the island is part of Europe.

"And that means companies can rely on European standards when it comes to data protection, plus they'll have access to very well-trained staff and excellent health care," he argued.

The island's strengths have already won over Beatrice Goujon, CEO and founder of Reunion-based Logipren, a digital platform calculating exact doses of medication for newborns. The pediatrician launched the company in 2016 after having seen in her former job that every sixth prescription for small children is a toxic overdose.

Beatrice Goujon, CEO of Logipren

Beatrice Goujon is excited about Reunion's internet speed and engineering staff

"My co-founder and I deliberately based our company on Reunion Island, as the internet speed here is so fast, there is well-trained management and engineering staff available and we are getting discounts on employer's charges," she told DW.

The company is now profitable with a turnover of €2.7 million in 2021. The platform will soon go live in Morocco, Spain, and Belgium and discussions with hospitals in the UK are ongoing.

But with 15 additional jobs in 2021 — out of a total of 40 staff — the company is now starting to struggle to find new programmers.

Goujon therefore says that turning Reunion Island into one of the world's digital hubs would be good news.

"That would certainly incite more IT specialists to come to Reunion Island and make it easier for us to recruit new staff," she said.

Investors are 'already getting interested'

Reunion Island is meanwhile already on digital companies' radar, thinks Stephane Colombel, chairman of industry association Digital Reunion. The group represents a sector that includes 500 companies with roughly 5,000 staff.

"Investors are increasingly contacting us to obtain information on Reunion Island," he told DW while welcoming visitors at NXSE, an annual digital trade fair in the island's capital Saint-Denis. Since the event's first edition six years ago, the number of participants has tripled to 900.

Colombel reckons the construction of huge data centers would increase the island's appeal to investors. "Reunion Island is well connected to the outside world, but it's always good to back up data locally — that increases data security," he explained.

Philippe Jean-Pierre, economics professor

Philippe Jean-Pierre hopes for a lot more jobs in the digital sector

Additional jobs in the digital sector would also be beneficial for the island's economy and its 900,000 inhabitants, says Philippe Jean-Pierre, professor for economics at the University of Saint-Denis.

"Unemployment is at 18%, that's more than twice the national average," he told DW.

"The digital sector could generate thousands of additional direct jobs, which would translate into indirect jobs in other sectors," he added.

But not all the unemployed would be soaked up by the new activities, he qualified. "There are people who have been working in traditional sectors all their lives and they can't just be retrained for a digital job overnight."

Edited by: Hardy Graupner

Watch video 02:30

Ioannina: A Greek town dreams of becoming an IT hub

Audios and videos on the topic