26 October 2026 2:26 pm
The Role of the State in Fostering Growth and Innovation

The Role of the State in Fostering Growth and Innovation

Jul 6, 2026

Scenic view of Muscat’s traditional architecture against rugged mountains during the day. by Uğurcan Özmen via Pexels

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What is the role of the state in fostering growth and the green transition?

Productivity & growth • 6 Jul 2026 Delfina Godfrid, Nicholas Stern
Action to address climate change can drive strong, sustainable growth. The state is central in setting the direction of change and mobilising investment and innovation to achieve it. But time is not on our side. Research to guide policy has never been more urgent; it must proceed alongside action.

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This article is part of an upcoming collection on state capacity and industrial strategy by the Policy Hub for the Huth Initiative for a New Political Economy.

The new growth story of the 21st century must be about sustainability and resilience, and with artificial intelligence (AI) at centre stage. It will be very different to the polluting and unsustainable models that so many countries have followed. Private investment will be at the core. But the role of the state will be critical in making it happen. The task of governments and public institutions is to devise comprehensive strategies, policies and institutions that can foster transformation across all economic sectors.

The role of the state must include setting incentives, aligning expectations and spurring innovation and entrepreneurship. It will be in the vanguard of system change, including in our cities, energy, transport, land and water.

This requires a clear strategic vision, tackling market failures and encouraging private investment in new areas. At the same time, it must manage the socio-economic and political challenges arising from dislocation and vested interests. And it must be aware of and avoid the dangers of government failure. In so doing, it must beware both market and institutional fundamentalisms.

These are ambitious tasks that require a renewed and effective state. This article outlines key dimensions of the state action that are needed to enable this growth story. Together, they form both a sense of direction and a research agenda. Because of the urgency, action and learning must go together. There will be mistakes along the way, but this should not be an argument for inaction. Delay is dangerous.

This is a time of crisis – and a new growth story is needed

Much of the global political landscape is currently divided. Across the world, there has been erosion of constitutional democracy. Some of this is related to the sluggish economic growth that the world has been experiencing, eroding living standards for many, undermining communities and leading to anger and discontent.

In this context, climate action has been characterised by many as an issue for elites. Yet it is not sustainability-aligned policy that has led the world to its current state. On the contrary, the lack of it has contributed to the difficulties. Climate inaction creates instability, migration and conflict. Climate action drives growth.

Transforming our economies towards sustainability can provide exactly what is needed to overcome the political and economic difficulties of the present: integrated, well-designed and well-implemented public policy and institutional structures that drive development through private and public investment, innovation and systemic change. Such actions can unleash the forces that will transform our economies, creating strong, sustainable, resilient and inclusive growth.

Climate action will drive the new world growth story. There is no inevitable trade-off between climate action and growth: the former drives the latter. And it is a much more attractive form of growth than the dirty and destructive models of the past.

Developing nations, where most of future growth and investment are set to happen, are at centre stage. In these places, most of the infrastructure remains to be built, the vast majority of the world’s renewable resources are concentrated and the investment needs are the greatest. Their cities can be built in different ways, choosing health and efficiency over pollution and congestion; their agricultural systems can combine local knowledge and AI to become smarter and less toxic; and their economies can leverage their clean endowments, potentially benefiting from a new world economic geography where abundant clean energy or the availability of specific minerals is a key asset.

Strong investments and innovation are necessary across the whole economy – see Figure 1 for five key climate investment areas. Such investment must reach all forms of capital, including physical, natural, human and social.

Clean energy investment drives development; natural capital investment underpins it; adaptation and resilience investment sustains it; and just transition investment makes change equitable, desirable and possible. This investment would strengthen demand, supply and efficiency in the shorter term; stimulate innovation and discovery, creating new investment opportunities in the short and medium term; and avoid the destructive impacts of climate change in the longer term. Carbon-intensive growth self-destructs; it is not a viable option.

Alongside the necessary increase in investment, the growth story comes from a number of key drivers (see Figure 1):

  • Lower costs and technological advancement, with the clean already being cheaper than the dirty across much of the economy, and innovation proceeding apace across most action areas.
  • Increasing returns to scale, shown by many new products and activities.
  • Increased resource efficiency, leading to higher productivity.
  • Reduced pollution, improving health, reducing mortality and increasing productivity.
  • Improvements in the key systems of cities, energy, transport, land and water – for example, cities where you can move and breathe are much more productive than those that are heavily polluted and congested.

AI can magnify these drivers, enabling green and intelligent growth (Stern et al, 2025). See The Growth Story of the 21st Century (Stern, 2025) for a further description of the drivers of growth.

Figure 1: Key investment sectors and growth drivers

The role of the state: five key areas for action

The role of the state as indicated above is crucial to the delivery of the growth story. It will chart a path, and thereby expectations, create the conditions for investments, steer action towards shared objectives and help to bring society together. The remainder of this article focuses on five key areas for state action. These are also priority areas for research, which must move quickly and alongside action. Time is not on our side.

National strategy and direction

Structural change at speed requires strong political support. The state must establish a clear direction and craft a compelling national vision and narrative. And it must act so that some of the tangible benefits of change are experienced directly and soon. It is crucial to foster a shared understanding that the transition is a growth story with sustainable and resilient investment at its core. This narrative both resists the separation of climate and development, and tackles misinformation.

There is no doubt that many challenges will arise, but the role of the state is to make practical choices to overcome them. The narrative should be one of hope, presenting climate policy for what it is: action with the objective of advancing development and wellbeing. It is about technological innovation, modernisation, efficiency, creation of job opportunities, industrial dynamism, resilience and more.

It is a narrative and strategy that highlight both the growth story that action enables and the immense curtailment of rights to and opportunities for development that inaction causes. By creating a hostile environment, climate change can erode fundamental human rights, such as access to food and health, and damage economic and human development across the board. The argument should also embrace a discussion of what is ethical and responsible in relation to future generations and others in the current generation (Stern, 2026).

Such narratives and action plans were embodied in the European Union’s Green Deal and the US Inflation Reduction Act.

Comprehensive management of market failures

A core task in generating change and building support is the tackling of key market failures (Stern, 2022), thus reframing incentives and helping to create the conditions for the required investment flows. These market failures, which are many and interwoven, must be tackled together in complementary ways.

A narrow understanding of market failures, highlighting only the externality from greenhouse gas emissions, has led many economists to focus overwhelmingly or exclusively on pricing carbon emissions in formulating policy. Such pricing is indeed a critical part of policy, but it must be complemented by action on other key important failures.

These include research and development (R&D) and innovation, which stem from creators’ inability to capture the full value of their ideas due to knowledge spillovers. Without policy, that leads to under-investment in innovation. Research shows that combining carbon pricing and R&D can be much more powerful than carbon pricing in isolation (Acemoglu et al, 2012).

Another critical market failure concerns networks. Without policy, markets do not adequately account for network interdependencies and can ignore systemic risks and opportunities. Understanding and acting to improve ‘feedbacks among interacting elements’ (Catanzaro and Buchanan, 2013) can bolster efficiency and unlock economic value. For example, the quality of urban mobility is linked to urban planning decisions, the value of having an electric car to the availability of chargers, the viability of clean energy generation projects to grid availability, and so on.

Further important market failures concern information – for example, on how products have been made and other co-benefits where health from avoided pollution can be of great importance (see Figure 2). Capital market imperfections can hinder finance for the strong new investments that are required – development banks can play a key role here.

Figure 2: Key market failures related to climate and sustainable development

Institutional strength, governance and the investment environment

Policy predictability, coherence and a clear direction of change are all fundamental in building the confidence needed to foster investment in the green transition. Policies will change as circumstances change and learning takes place.

But for investor confidence, such change should be ‘predictably flexible’. Criteria for flexibility should be transparent – for example, reducing subsidies for renewables as and when costs fall and diffusion occurs. Concerted action across government, to foster policy alignment, and convening stakeholders, to generate cohesive action, can advance investment more quickly than measures that are uncoordinated across ministries.

‘Country platforms’ can provide mechanisms for coordinating the mobilisation of domestic and international sustainable finance in alignment with national development priorities. Standards and regulation can guide investments and signal which forms are consistent with the long-term trajectory of the economy, in alignment with sustainability goals. As far as possible, sharing standards and coordinating strategies across countries can enlarge markets and accelerate progress (Bhattacharya et al, 2025).

An example of consistency in policy-making is in Uruguay. The country has attracted clean investment and transformed its electricity matrix in less than two decades through sustained and clear policy and regulation. It has also built credibility in innovative ways: by holding itself accountable for climate action, having established a sovereign bond with a structure where, if its aims are not met, it will pay a higher interest rate (Godfrid et al, 2025).

Further, creating a positive investment environment requires strong macroeconomic policies, which are fundamental to ensuring the high investment levels needed in sustainable sectors are translated into increased output and not just a crowding out of private investment. Debt management is part of that story. Legal institutions are also of great importance in offering clarity on obligations and for dispute resolution.

Industrial policy for a dynamic and green private sector

Fostering private investment in the new growth story requires tackling market failures, building credibility in strategy and policy, and creating a strong investment environment across the whole economy. It also involves identifying where a country’s clean economic potential and comparative advantage lie. Such was the case with the Danish government’s support for private firms and entrepreneurs in the wind power sector, which was key to creating the country’s renowned innovation ecosystem (Technology Executive Committee, TEC, 2023).

Providing the right support requires that each country crafts tailored measures, as Japan did through its Ministry of International Trade and Industry, which selected and ‘nurtured’ industries through customised measures such as tax breaks and low-interest loans, accelerating their development (Johnson, 1982). Industrial clusters can drive sectoral growth by enabling economies of scale and collaboration, as seen in China (World Economic Forum, WEF, 2026).

Fortunately, the misguided sneering at ‘industrial policy’ typical of the years of market fundamentalism of the 1980s and 1990s has subsided. Building new industries and transforming technologies in a purposive way requires strategy and policies.

While the majority of investment for the transition will be private, there will also be a critical role for public investment, a crucial element of the role of the state. For example, public transport will play a fundamental role. In many countries, the electricity grid will be owned by the public sector. In many cases, this infrastructure facilitates private activity and builds for long-term growth and prosperity.

Finance will play a key role in fostering a green private sector. Priorities include reducing investment barriers, such as high costs of capital. This frequently involves better management and sharing of risk. Given that domestic capital markets in many emerging markets and developing countries are shallow, facilitating access to financial instruments, such as foreign exchange hedging, as Brazil’s finance ministry has done through its Eco Invest programme, can have catalytic effects.

Adequate access to finance is also of importance for households, whose transition requires their own investment. Often poorer households face a higher cost of capital. How households and organisations are supported and costs distributed is a key part of policy for the transition. The national and multilateral development banks can play a central role both in helping to create the conditions for investment and in managing risk and reducing the cost of capital.

Building stability in trade and collaborating across frontiers in innovation and clean energy generation can accelerate the drivers of the growth story, with positive spillovers across countries. State leaders should work through coalitions of the willing to foster market expansion, resource sharing, cohesive policy-making, access to finance and more, contributing both to resilient supply chains and fostering innovation.

Building trust and coordination across countries can generate predictability, while conflict and volatility can be dangerous. Multilateral action is also of importance in tackling the debt, fiscal and financial constraints confronted by emerging markets and developing nations (Stern, 2021).

Public discussion, social buy-in and workforce adaptation

When the transition plans are put into action, there will be deliberate structural change at speed and scale. Some vested interests will push back, in particular fossil-fuel sectors where high rents are at stake. Without pro-active state action, ordinary citizens will face challenges that will understandably create opposition, from dislocation to increases in the cost of living. Careful policy design must manage these risks while pursuing the economic and social gains from change, which will vary across countries with different systems and structures.

Public action will be necessary to help to overcome dislocation, particularly by investing in people and places to create new opportunities, or by providing low-cost capital to help households to manage change. Some vested interests will have to be confronted head-on. Public discussion and building a shared understanding or narrative are crucial to political and social ‘buy-in’. That discussion will often be focused on localised interactions.

It is critical that policy sustains social buy-in and, for this, that the benefits of the transition are shown early. Successful interventions require designing policy packages that account for and reconcile varied interests, articulating and managing negative impacts well in advance.

Still, not all challenges can be foreseen; there will be difficulties and learning that arise along the way. As emphasised, being flexible while maintaining predictability is a critical element of policy-making, both for investment and acceptance. Thus, political systems must remain open and receptive to public input and should be active in initiating civic dialogue.

What Jürgen Habermas called the public sphere – the space in which public opinion is formed – can take many forms, including citizens’ assemblies. Well-managed transitions, rather than generating backlash, should benefit communities and their workers, potentially increasing support for incumbent governments. For example, one study suggests that Spain’s coal phase-out process had some electoral success, with government, industrial and social discussion playing an important role (Bolet et al, 2024).

Research and action

The five areas of action described (see Figure 3) are also five areas for research. In its pace and scale, the necessary transformation is unprecedented in economic history, except in wartime.

The urgency means that this is ‘public policy as if time matters’ (Stern, 2018). It concerns structural and systemic change across the whole economy of a nation. And it will lead to a new economic geography where activity moves towards low-cost clean energy. It will require financing for investment to move much more strongly into emerging markets and developing economies, where the majority of future economic growth will occur.

These are great challenges for both action and research, and they require a new economics of structural transformation. But research and action must move together. Delay is dangerous.

Figure 3: The role of the state – an action agenda

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More Than 90% of New Renewables Are Cheaper Today

More Than 90% of New Renewables Are Cheaper Today

Jul 4, 2026

A young child playing on a rocky terrain near solar panels in Greece under a clear sky. by H O M A D via Pexels

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IRENA: More than 90% of new renewables are already cheaper than any fossil fuel power plant

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By Energía Estratégica • July 3, 2026

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The agency warned that solar and wind energy are not only consolidating their cost advantage, but have also become a key factor in reducing exposure to gas volatility and strengthening energy security.

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IRENA: More Than 90% of New Renewables Are Cheaper Today

IRENA

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Renewable energies consolidated their leadership as the most competitive option for adding new electricity generation capacity by 2025. But, in addition to the economic factor, they are beginning to play an increasingly strategic role in a scenario marked by geopolitical conflicts, volatility in fuel markets, and greater demands for energy security.

This is according to the report “Renewable Energy Generation Costs in 2025” , published by the International Renewable Energy Agency (IRENA), which concludes that more than 90% of the large-scale renewable capacity added during the year was cheaper than the lowest-cost fossil alternative .

The organization argues that the competitive advantage of clean technologies is no longer limited to the cost of generation: it also represents protection against international uncertainty and fluctuations in oil and gas prices.

Wind and solar power extend their lead

The report’s data shows that solar photovoltaic energy maintained an average cost of US$44/MWh , while onshore wind reduced its costs by 4% , to US$33/MWh , consolidating itself as one of the most competitive technologies on the market.

In the case of offshore wind , costs also continued to fall and reached US$78/MWh , 3% less than the previous year.

The contrast with fossil technologies was even more marked.

IRENA points out that the global shortage of turbines has practically doubled the capital cost to build new combined cycle power plants in the United States, while in markets with high gas prices, such as Germany, Italy and Japan , generation costs exceeded US$100/MWh .

Added to this is the uncertainty stemming from the crisis in the Middle East, which continues to put pressure on international gas markets.

A shield against energy crises

Beyond the cost of producing electricity, the report focuses on another growing benefit of renewables: reducing dependence on imported fuels.

According to IRENA, the currently installed renewable capacity made it possible to avoid purchases of fossil fuels of around US$480 billion during 2025 , reducing the exposure of numerous countries to the volatility of international markets.

“Every additional megawatt of renewable energy strengthens economic protection against fuel price fluctuations and protects consumers, businesses and public finances,” said Francesco La Camera, Director-General of IRENA.

The organization believes that the expansion of renewable energy generation has become a strategic investment both to improve economic resilience and to strengthen the competitiveness of countries.

The impact of the crisis in the Middle East

The report also analyzes the effects of the closure of the Strait of Hormuz that occurred in early 2026, which triggered a sharp increase in international prices for gas and other energy commodities.

In that context, existing renewable energy generation helped to mitigate the economic impact of the crisis.

In Indonesia, Thailand, and the Philippines alone, renewable energy installations avoided approximately US$5.7 billion in coal and gas purchases during 2025.

If those same volumes had been acquired during the peak prices recorded between March and May 2026, the cost would have amounted to approximately US$6.5 billion .

China leads the world in savings

IRENA’s analysis of the top twenty economies shows that renewable energy avoided US$377 billion in fossil fuel purchases during 2025.

China topped the ranking by a wide margin with US$177 billion , equivalent to almost half of the total savings.

Behind them were the United States , with US$35 billion , Brazil , with US$32 billion , Germany and India , with US$18 billion each, and Japan , with US$15 billion .

Costs will continue to fall, albeit more slowly.

Since 2010, solar photovoltaic energy has reduced its costs by 89% , while onshore wind power has fallen by 71% , concentrated solar power by 72% , and offshore wind power by 63% .

However, IRENA warns that the pace of that reduction could slow down.

The reorganization of the manufacturing industry in China, the increase in the prices of raw materials and components, the fall in investments in new factories and a trade context marked by greater tariff tensions are beginning to put pressure on installation costs.

Even so, the agency’s projections indicate that renewable technologies will continue to reduce their costs until 2035 , although at a slower rate than that recorded during the last decade.

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The 2026 World Cup is the Greatest Architectural Experiment

The 2026 World Cup is the Greatest Architectural Experiment

Jul 2, 2026

Iconic FIFA soccer ball and Vancouver stadium, showcasing urban sports architecture. by The Six via Pexels

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The 2026 World Cup is the greatest architectural experiment in the tournament’s history

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Mark Gower, Kingston University

The 2026 World Cup is the greatest architectural experiment in the tournament's history

Dallas Stadium is one of 16 venues for the 2026 Fifa World Cup. Jeffrey McWhorter/EPA

When football commentators analyse a World Cup match, they tend to focus on tactics, technical ability, physical conditioning and psychology. If a team wins away from home, we hear about mentality. If a player scores a spectacular goal, we praise their vision or instinct. Yet there is another factor that receives remarkably little attention: the stadium itself.

The 2026 Fifa World Cup, hosted across the United States, Mexico and Canada, presents perhaps the greatest architectural experiment in the tournament’s history. Sixteen stadiums, spread across the three countries, are staging matches in environments that differ dramatically in size, scale, form, lighting conditions and spatial character.

Some are purpose-built football grounds. Others are enormous NFL arenas adapted for the world’s game. Several feature retractable roofs. Others remain open to the elements. Together, they create a fascinating question: can the architecture of a stadium influence player performance?

As an interior designer, I have spent several years researching the relationship between footballers, spatial awareness and stadium design. My research began with a simple observation: across football, teams consistently perform better at home than away.

Traditional explanations focus on crowd support, yet during the COVID pandemic, when matches were played behind closed doors, home advantage did not disappear. This suggests there may be more complex factors at work.

Playing the space

A player receiving a pass rarely begins processing information at the moment the ball arrives. Long before that pass is played, they have already built a mental picture of their surroundings. They understand where they are positioned in relation to the touchline, the penalty area, teammates and opponents. But they also orient themselves through a series of architectural cues embedded within the stadium itself.

These cues can be obvious or subtle. The angle of a stand. The location of a tunnel. The shape of a roof. The position of advertising. The colour surrounding the pitch. The direction of sunlight. The edge of a seating tier. Together, these become reference points that help players orient themselves and make decisions faster.

John Beck, Cambridge City manager in the early 1990s, would set up key markers in each of the four corners of the team’s home ground. The markers would be hoardings printed with the word “quality”. When full backs would receive a ball deep in their own half they would look up and were asked to hit the ball as hard as they could towards the quality signs. These were nicknamed “quality passes”. While quite a primitive tactic, it was effective for Beck; he guided the club to two successive promotions and to two successive quarter-final appearances in the FA Cup.

Mercedes-Benz Stadium in Atlanta, Georgia
Mercedes-Benz Stadium in Atlanta, Georgia is one of the 16 venues for the 2026 World Cup.
Kurtis Toliver/Shutterstock

At the 2026 World Cup, players have encountered some of the most distinctive football environments ever assembled for a single tournament. In Dallas, matches are taking place inside a stadium capable of holding more than 90,000 spectators. For many players, this will be the largest enclosed sporting environment they have ever experienced.

Suspended above the field are giant video screens so large they have become part of the stadium’s identity. Whether consciously or unconsciously, such dominant visual elements contribute to the player’s reading of space.

In Atlanta, a retractable roof and climate-controlled interior create conditions unlike those found in most traditional football grounds. The stadium’s vast pinwheel-esque roof structure and glass end wall produce a highly controlled environment where wind, temperature and external distractions are largely removed.

Mexico City’s Estadio Azteca provides a very different experience. It is one of football’s great cathedrals, steeped in memory and history. Generations of players have competed there, from Pelé in 1970 to Maradona in 1986. Unlike many newer venues, the Azteca was designed specifically for football, creating a spatial relationship between players and spectators that feels fundamentally different from many multipurpose grounds.

Meanwhile, venues such as Vancouver’s BC Place, with its retractable cable-supported roof, or Seattle’s Lumen Field, with its dramatic open end framing the city skyline, create visual identities that players must quickly learn to navigate and interpret.

Estadio Azteca in Mexico City
Estadio Azteca in Mexico City is one of football’s great cathedrals.
Macbeth_GP/Shutterstock

From a football perspective, the challenge is adaptation. The German footballer Thomas Müller once described himself as an “interpreter of space”, a phrase that captures something important about elite performance. Great footballers appear to slow down time. They often know what they are going to do before the ball reaches them. This ability is developed through experience and familiarity.

The more often players operate within a particular environment, the more effectively they build what psychologists call cognitive maps. Over time, the surroundings become familiar and require less conscious processing. This familiarity creates fractions of a second of additional thinking time. At the elite level, those fractions can make the difference between scoring and missing, winning and losing.

The challenge of a World Cup is that players rarely have this luxury. Teams move rapidly between venues. Conditions change from match to match. Architectural cues that were familiar in one stadium disappear in the next. Players must repeatedly rebuild their understanding of space and place. This is why preparation becomes so important.

For decades, coaches have analysed opposition tactics in meticulous detail. Yet comparatively little attention has been paid to preparing players for the architectural characteristics of the stadium itself. Understanding sightlines, lighting conditions, pitch orientation, roof structures and spatial landmarks could offer marginal gains that become decisive in elite competition.

From a design perspective, this raises an equally interesting question. Modern stadiums are increasingly designed around fan experience, hospitality and commercial revenue. Yet the primary performers within these spaces remain the players themselves. If architecture can influence orientation, perception and decision-making, should stadium design place greater emphasis on players? Perhaps this will be the next frontier in sporting performance.The Conversation

Mark Gower, Head of Department of 3D Design, Kingston University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Conversation.


 

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Empower Signs Global Agreement to Expand District Cooling

Empower Signs Global Agreement to Expand District Cooling

Jun 29, 2026

A stunning aerial view of Dubai’s modern skyline, showcasing iconic skyscrapers and urban design. by Nelemson G via Pexels

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Empower signs global agreement to expand district cooling

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Empower has signed an international agreement to strengthen cooperation and accelerate the adoption of district cooling systems worldwide
By Nora Watts

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Highlights by Level 4 AI

Emirates Central Cooling Systems Corporation (Empower) has signed a strategic Memorandum of Understanding aimed at strengthening international cooperation and accelerating the global adoption of district cooling systems.

The agreement was signed by Ahmad Bin Shafar, CEO of Empower and a member of the International District Energy Association Board of Directors, alongside representatives from several countries and international organisations.

The signing took place during the 117th International District Energy Association Conference and Exhibition 2026 in Ottawa, Canada.

The MoU positions district cooling as a practical solution for improving energy efficiency, strengthening energy security, supporting local economies and reducing carbon emissions.

It also seeks to expand the use of district cooling through greater knowledge exchange, innovation and the development of policies and regulatory frameworks that support deployment in cities worldwide.

The signatories committed to supporting the transition towards more sustainable and resilient energy systems and strengthening collaboration across the district energy sector.

The agreement aligns with the objectives of the 2015 Paris Climate Agreement and the climate and sustainability goals of the United Nations Framework Convention on Climate Change.

Empower said the MoU reinforces its role in international initiatives supporting the transition to a low-carbon economy through strategic partnerships and knowledge exchange.

It also strengthens the company’s position as a global district cooling provider and contributor to the development of sustainable urban energy systems.

Bin Shafar said the agreement reflected increasing international recognition of district cooling as an effective climate and energy solution.

“This agreement reflects a growing international commitment to strengthening cooperation and knowledge exchange to accelerate the development and wider adoption of district cooling systems as a practical and effective solution for advancing sustainability, improving energy efficiency and reducing carbon emissions,” he said.

“At Empower, we are proud to represent the UAE in this important initiative, which reflects the country’s leading position in supporting climate solutions and advancing the transition to a low-carbon economy.”

Bin Shafar added that district cooling and district energy would play an important role in creating more efficient, resilient and future-ready cities.

He said stronger international cooperation could help accelerate the development of sustainable urban energy systems while supporting economic growth and improving communities’ resilience to climate change.

Empower participated in the IDEA Conference and Exhibition 2026 as a Diamond Sponsor.

The event was held under the theme “Connecting Networks” from 23 to 26 June.

Empower’s participation included keynote sessions involving Bin Shafar and meetings with senior officials and industry experts.

The discussions focused on opportunities to strengthen international cooperation and share best practices across the district cooling industry.

 

Simone Liedtke

Based in Dubai since 2025, Simone is a seasoned features writer with nearly a decade of experience in technical writing. Previously penning stories for an engineering and a mining magazine in South Africa,…

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AI Sovereignty: Collaborate Globally for Success

AI Sovereignty: Collaborate Globally for Success

Jun 28, 2026

Three professionals in traditional and modern attire collaborate on a project in a contemporary office setting. by Mikhail Nilov via Pexels

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AI sovereignty: Collaborate globally, govern locally

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Carlos Vargas, University World News – 26 June 2026

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Governments across the wealthy world are drafting national strategies for artificial intelligence, and nearly all of them approach sovereignty the same way: as something a country builds and buys.

Compute clusters, sovereign cloud, domestic energy, national champions, a venture fund to convert research into firms. The logic is coherent and, on its own terms, sound. Prosperity and security increasingly belong to nations that can build and govern AI rather than rent it.

The instinct to control the machine is not the error. The error is what the approach leaves out: the capacity to govern knowledge, which no amount of hardware supplies.

The strategies are written around an economic priority, and that priority is real – but it is a short-horizon reading of it. A country can attract the data centre and train the workforce and still find, a decade on, that the science it produces is analysed, owned and monetised elsewhere.

Knowledge governance is the capacity that protects the long return on exactly the economic bet these strategies are making. Leaving it out is not a competing vision of the economy; it is the part of the same vision that pays out later, and that the rush to stand up infrastructure now tends to discount.

Canada’s ‘AI for All’ strategy

Canada’s ‘AI for All’, launched in June 2026, is among the most sophisticated of these strategies, which is precisely why it shows the pattern cleanly.

It is candid about the country’s dependencies and serious about closing them.

It assigns universities four jobs, and all four point downstream: a literacy engine training a million students, colleges as applied-AI upskillers, institutions as nodes in workforce alliances aligned to industrial demand, and research universities as the origin point for AI-native companies fed by capital.

Each role is legitimate. None is the role on which sovereignty actually turns. Read together, they reduce the university to a pipeline – a supplier of talent and intellectual property to an economy that someone else governs.

This is not a Canadian failing. The OECD’s recent work on science and innovation describes member countries reorganising research policy around competitiveness, industrial strategy and national security, and within that shift valuing universities for two outputs only: the workers they train and the research they commercialise.

The pipeline view is becoming the default way the wealthy world understands what a university is for. What that view cannot see is the function on which sovereignty actually rests.

The function the strategies omit

Call it knowledge governance: the capacity to produce research, decide the terms on which it crosses borders, and capture the value it generates. It is the difference between a science system that controls its own knowledge cycle and one that merely feeds someone else’s.

A country that governs its science moves through the whole cycle – it collects the data, analyses it, publishes first, and captures the value. A country that cannot, becomes a supplier of raw material. It generates biodiversity records, genomic data, climate observations, and loses control over who analyses them, who publishes, and whether the findings ever serve local priorities.

As I argued in a technology profile on connectivity and digital sovereignty in the Global South, written for the International Science Council’s Centre for Science Futures, sovereign infrastructure determines whether institutions can conduct, analyse, publish and benefit from their own research, or whether they remain field stations generating data for processing elsewhere.

That was written about the Global South, but the mechanism is universal and it transfers directly to AI. Data is the bloodline of the system, and governance is decided less by who owns the hardware than by who controls the country’s data, identities and research environments – the platform that authenticates a researcher, the cloud that stores a dataset, the environment in which a collaboration takes place.

A recent review of 775 non-United States data centre projects found that US companies operate close to half of them when weighted by investment value.

The study concluded that building a data centre on home soil does not secure digital sovereignty if a foreign entity runs it: the operator’s nationality becomes a jurisdictional hook, letting its home government compel access to the data inside whatever country it sits in.

A nation can own the compute and still cede the science if its universities authenticate, store and collaborate on platforms configured and operated elsewhere.

Owning the machine is not the same as governing what is done on it. This is the gap in AI national strategies, and it is a strange one: a document can detail a university’s place in alliances and standards bodies while saying nothing about the systems its laboratories actually run on.

That silence is where sovereignty is conceded – the identity platform, the cloud tenancy, the data environment chosen years ago for convenience and never revisited, each one a governance decision made by default in favour of whichever vendor arrived first.

Here a distinction matters. The argument is not that universities should run national AI policy; they will not, and claiming otherwise would overclaim. The steering of AI – what gets funded, deployed, regulated, sold – runs through firms, ministries and capital, and the university sits at the periphery of that steering, despite the research and trained people it supplies to all of it.

Nor is the claim that universities will train frontier models; the capital required for state-of-the-art clusters has largely priced them out, and the foundational models of 2026 are built in private labs, not faculties.

But knowledge governance is a different function from strategic direction, and it is the one the strategies have left unassigned. No firm holds it. No ministry can manufacture it.

It lives, latent and unfunded, in the institutions that produce the open, public-interest knowledge a country cannot buy back once it has been ceded – the methods, the datasets, the trained researchers, the science that was never anyone’s product.

The pipeline view does not just undervalue the university; it leaves the governance function homeless.

Why this begins abroad

And here is the part the AI strategies invert most completely. Having decided that sovereignty is built by accumulating infrastructure inside one’s own borders, they treat international engagement as the channel through which dependency arrives – foreign cloud, foreign models, foreign recruitment – and route whatever ambition remains through trade missions and national firms. The university as an international actor in its own right disappears.

But the capacity these strategies want cannot be built behind a border. AI is possible at all only because of an open global knowledge system, in which researchers share methods and solve problems that belong to no single nation.

Knowledge governance worth the name, therefore, does not begin with domestic control and reluctantly admit collaboration; it begins with collaboration and builds control on top of it. International engagement is not a risk to sovereign AI. It is the precondition.

The instruments already exist, and they are institutional and international at once. The hardest gap for most countries is compute itself – the frontier clusters are scarce, expensive and, as the US restrictions on advanced chips to China have made plain, subject to control by whoever holds the supply.

But a nation that cannot build its own cluster is not therefore shut out, because the networks are what make scarce compute reachable and keep the data that runs on it under local terms.

RedCLARA connects the national research and education networks of Latin America, linking their universities to GÉANT in Europe, Internet2 in the United States, and partner networks in Africa – the UbuntuNet Alliance and WACREN among them.

Through that infrastructure it provides federated identity, dedicated high-speed circuits between laboratories, and secure environments for large-scale data exchange. AfricaConnect ties the continent’s regional networks into the same global fabric.

The logic is identical in each case: institutions that could never individually afford intercontinental cables or computing clusters pool their demand, build jointly, and meet dominant providers from greater collective strength – owning capacity rather than renting it.

Europe’s digital sovereignty

These networks are how nationally funded supercomputers are reached and allocated across institutions that could never each own one, and how the datasets those machines run on stay under terms a country sets rather than rents. They are the layer that makes sovereign compute usable, and the reason a country short on compute is not thereby short on sovereignty.

The Global North understands this perfectly when its own autonomy is at stake.

GÉANT, the body that operates Europe’s pan-continental research and education network, defines one of its strategic pillars as maintaining control over intercontinental connectivity in support of European digital sovereignty, and European policy analysts treat research-network infrastructure as a deliberate instrument for reducing dependence on US and Chinese suppliers.

Europe has gone further than rhetoric: EuroHPC pools national money into shared supercomputers, and the European Open Science Cloud builds the federated data layer to match. Most national AI strategies have not followed, even as their own universities sit as nodes in the same federated system and could be resourced to make it carry sovereign AI.

The point holds with most force where resources are scarce. For a wealthy country, these networks amplify a system that already works.

For an under-resourced one, they are the precondition for engaging the global system at all – a university without the capital to build its own compute can still work at the frontier as a node in a shared network, and cannot if it stands outside one.

That a university cannot afford a frontier cluster is the case for federation, not against it: pooled demand is how institutions reach compute none of them could buy alone, and the network is what keeps their data under local terms while they reach it.

So the instruction reverses depending on where you stand. The wealthy country is told international engagement is a dependency to manage; the under-resourced one finds it is the only road to the capacity in question.

For these countries the strategies are not merely incomplete but backwards: the collaboration they treat as a vulnerability is the single route to the sovereignty they say they want, because there is no domestic substitute for it to fall back on.

The harder truth

More collaboration is not automatically better.

The same OECD work that records the securitisation of science also records its cost: international collaboration has lost momentum after three decades of growth, and a chilling effect now pushes institutions to avoid flagged partnerships on thin guidance and researchers to steer clear of important but high-risk fields.

A blanket application of research security measures, the OECD warns, threatens the quality, productivity and integrity of the national research system. Sovereignty pursued through walls has well-documented failure modes.

The remedy is to build the instrument well, not to set it down.

The security-first case deserves a straight answer. That case runs as follows: open standards are how sensitive work bleeds to adversaries, so walls are a necessary quarantine. The answer is that federation governs one dimension of the problem and not the whole of it.

Interoperability and control are not opposites. Federated infrastructure is what makes selective control possible – data held in local custody rather than on a foreign vendor’s servers, access governed institution by institution, sensitive environments segmented from open ones on shared foundations.

It does not, on its own, address the parts of research security that have nothing to do with where data sits: researcher vetting, dual-use fields with direct military application, intellectual property that leaves through a person rather than a server. Those need their own instruments, and federation is no substitute for them.

But on the dimension it does govern, the logic holds: a country that runs its science on systems it does not control has no quarantine to offer; it has already exported the thing it means to protect. The choice is not between openness and security. It is between governing the terms of exposure and not knowing what they are.

That distinction sets the two kinds of sovereignty apart. One breaks interoperability and isolates. The other leaves the shared foundations intact and governs what is built on them – global connectivity on locally governed terms, which is the footing sovereign AI actually requires. The remedy is not less internationalisation but internationalisation built for equity rather than extraction.

That is the version of sovereignty these strategies keep missing. They locate it in infrastructure they can announce and capital they can attract, and treat universities as suppliers and international engagement as a threat to manage.

Buying technology is the visible move. The decisive work is institutional and, paradoxically, external: universities capable enough, connected enough and trusted enough to operate at the frontier on terms they help set.

Sovereignty in a domain with little respect for borders is not won by building higher ones. It is won by science systems that can collaborate globally while governing locally – a capacity that does not begin at home, and that lives, in every country now drafting one of these strategies, in the institutions those strategies have reduced to a pipeline.

Carlos Vargas is the founder of Societas Partnerships, a higher education advisory firm based in Panama City, and the author of a technology profile on connectivity and digital sovereignty in the Global South written for the International Science Council’s Centre for Science Futures. He previously spent 14 years in senior internationalisation roles at the University of Toronto, Carleton University and the University of Calgary in Canada.

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