Insight 1/6: ‘Boosting economic growth through regional interconnectivity’
At this very moment, Caribbean nations are tirelessly working to digitally transform their industries and public services. The reason why? Enhanced digital capacity improves the quality of public services, boosts competitiveness of industries – not just locally, but on a global scale – and opens doors for regional collaboration. To make the digital transformation of the Caribbean a success, businesses and governments need access to, and be able to exchange digital information seamlessly. Interconnectivity within the Caribbean is therefore crucial.
What is Interconnectivity?
Interconnectivity refers to the seamless integration of networks – such as those from telecommunication providers – with data centers and digital infrastructure, e.g. payment systems and e-government platforms, enabling the efficient exchange of information. It is the foundation of a modern digital economy, allowing businesses, governments and individuals to access, process and share data in real time. Strong interconnectivity relies on subsea fiber-optic cables, internet exchanges and cloud services to ensure low-latency communication, data redundancy and global connectivity. Without this strategically important critical infrastructure, digital transactions, cloud applications and cross-border collaborations become inefficient, limiting economic growth and innovation.
Current state of interconnectivity in the Caribbean region
Historically all subsea cables – needed for access to the internet and the exchange of data – lead to the U.S. and in the case of the Caribbean, to Florida in particular. This historic arrangement is in place to this day and visible in the submarine cable map. Caribbean nations – just like other nations – depend on subsea cables to maintain connectivity with global markets. However, some of the main subsea cable systems in the Caribbean region, such as Americas-II and ARCOS, are end-of-life in 2025-2026 respectively and many lack a direct connection between Caribbean islands. A lot of data-therefore is still redirected via the U.S. using end-of-life cables, adding to high latency issues, high IP-transit costs and limiting growth of the region.
By enhancing interconnectivity between Caribbean islands, the region can benefit from lower latency, and it can reduce dependency on traditional industries such as tourism to shift toward a knowledge-based economy. Interconnectivity has alternative benefits as well: it strengthens disaster recovery capabilities – which is especially beneficial for islands located on the hurricane belt, ensures business continuity and offers remote work opportunities for locals and digital nomads alike. Moreover, by improving interconnectivity within the region, Caribbean nations can reduce their dependance on the U.S. and improve data sovereignty.
Economic growth
Interconnectivity is a key driver of economic growth in the Caribbean, as it lays the foundation for a unified digital economy that strengthens regional industries and improves global competitiveness. The CARICOM Single Market and Economy aims to create a (digital) economic space where goods, services and people can move freely between member states. A strong digital backbone is essential in the roll out of this vision, enabling local businesses to expand beyond their home markets and foster greater collaboration between governments in areas such as customs, taxation and digital governance. Without seamless interconnectivity, the realization of a CARICOM Single IT Space – a crucial component of economic integration – remains out of reach.
A prime example of how enhanced interconnectivity in the Caribbean can improve services is in the operations of global streaming platforms such as Netflix and Disney+. These services must establish local content caches on each island to ensure smooth streaming, treating each small nation as an isolated market. By interconnecting the Caribbean region, content can be stored and distributed more efficiently across the region – making the Caribbean a more attractive market for businesses that increasingly require advanced digital infrastructures to operate effectively.
Data sovereignty
Another benefit of improved interconnectivity within the Caribbean is data sovereignty. Data sovereignty means that data is subject to the laws and governance structures of the country or region where it is collected, processed, or stored. This brings forth that data generated within a particular jurisdiction remains subject to its laws and regulations, regardless of where it physically resides or is transferred. Caribbean governments often outsource data storage to global technology giants like Amazon, Google and Microsoft. This practice introduces vulnerabilities due to differing jurisdictional laws, especially when data is stored in the United States, which is subject to the U.S. CLOUD Act. This legislation allows U.S. law enforcement agencies to access data stored by U.S.-based companies, even if the data resides outside U.S. borders.
By introducing interconnectivity between a Caribbean cluster of datacenters, in line with the CARICOM Single ICT Space, a regional network of secure data centers across the Caribbean is established. These data centers are owned and operated by Caribbean governments or private entities, ensuring compliance with local laws and standards, and in return improving data sovereignty.
Disaster resilience
The Caribbean is a region prone to hurricanes, earthquakes and other natural disasters, and therefore resilience is both an essential asset and capability. By strengthening regional digital infrastructure, Caribbean nations can ensure faster communication, coordinated emergency response and data redundancy during crises. A well-connected network of data centers and cloud services allows governments and businesses to store critical information securely, ensuring that essential data remains accessible even if local infrastructure is damaged. Curaçao, for instance, is located outside of the hurricane belt and can function as an emergency hub in case of a natural disaster elsewhere in the region. Additionally, real-time data sharing between islands enables better forecasting, early warnings and disaster management, reducing response times and minimizing economic and human loss. Decentralized digital infrastructure also helps prevent complete system failures, allowing businesses and public services to continue operating remotely when physical locations are affected.
Fostering regional collaboration – Caribbean Datacenter Association
Aside from the aforementioned benefits, interconnectivity has an important goal: enhancing collaboration across the Caribbean. True interconnectivity requires cooperation between multiple stakeholders, including governments, businesses and infrastructure providers. The Caribbean Datacenter Association was founded for this exact reason – to foster collaboration and build a cutting-edge infrastructure connecting datacenters across the Caribbean, facilitating the proliferation of the digital economy in the region. By jointly addressing challenges, sharing solutions and harnessing opportunities, stakeholders can collectively overcome barriers and accelerate growth. Interconnectivity is not just a tool; it is the foundation for regional growth and digital transformation.