Hear the term “Belt and Road,” and your mind may drift to the massive physical infrastructural projects that are primarily associated with the initiative. The term also conjures up images of concrete and steel, wheels and hulls.
Less discussed, however, are the secondary industries that stand to benefit in the wake of these infrastructural investments. “The hard infrastructure of Belt & Road literally paves the way for a wide range of soft infrastructure and diversified industries to flourish at the intersection of urbanization and digitization,” says Dr. Parag Khanna, Founder & Managing Partner of FutureMap.
From communications to security, all manner of businesses are already springing up as a second layer of supporting infrastructure. A textbook example? Plaza Premium Group, a Hong Kong based company that provides airport lounges for the 85% of airline passengers who aren’t flying first class or business class and don’t have access to a lounge.
“We will take advantage of the Belt and Road Initiative… it creates bigger markets for us,” says Song Hoi-see, Founder and CEO of Plaza Premium Group, which has recently expanded its airport lounge services to Europe and the Middle East. Currently only serving 3% of the market, the trickle-down prosperity of locations along the Belt and Road is hugely exciting to Song, who sees vast opportunity to serve travellers along the route.
More than just aviation, a broad range of industries stand to reap the rewards of the BRI. Dr Khanna states that the retail and logistics sectors benefit from more efficient connectivity as well as larger and more concentrated consumer markets, whilst education and healthcare benefit from investments in new schools and hospitals.
These secondary effects have tertiary effects in turn. “IT grows significantly as broadband demand lifts off,” continues Dr. Khanna. “This multiplier effect is one of the most stable relationships in economic development and underscores how the Belt & Road will be win-win in both obvious and immediate as well as long-term and unexpected ways."