For more than a decade, the rapid expansion of the data center industry has faced few roadblocks or challenges. Increasing demand for digital services – including cloud and media streaming services – has resulted in a massive need for data centers to power them. As a result, large data center markets have arisen in places like Silicon Valley, Northern Virginia, Montreal, Frankfurt, and London, each with hundreds of MWs of capacity.
However, as data center requirements have continued to grow and the footprint of the data center industry continues to widen across many of these markets, new data center projects have begun to face backlash and pushback among communities.
This is currently the case in Northern Virginia, where the data center industry has expanded beyond the original “Data Center Alley” of Ashburn and is now looking to construct data centers in surrounding regions such as Prince William and Fauquier Counties.
While many opposed to these projects have valid concerns about the construction of new data centers – especially around lands that are historic or protected –industry and government leaders agree that a lack of transparency, knowledge, and communication has fueled the opposition to the growing data center industry.
Often what is not communicated are the benefits that data centers deliver to the community and region in which they’re built. Those benefits are generally economic, but there are other, less obvious ways data center owners and operators give back to their community.
Let’s explore six ways data center owners and operators benefit their communities and act as good neighbors.
1) Job Opportunities
Every stage of a data center’s lifecycle requires a dedicated, skilled, and well-compensated workforce. It starts with design and construction, when skilled architects, engineers, construction trade workers, and support staff are employed to bring a data center campus to life. It continues after construction when a dedicated workforce of security, maintenance, and operations support staff is needed to keep the data center functioning. This contributes to reduced unemployment rates and increased income levels.
2) Infrastructure Development
Data center construction and operation requires investment in local infrastructure. The construction vehicles and workers building data centers need roads to get to the project site. Power grids and telecommunication networks must be bolstered to support data center operations.
This means regions with extensive data center development benefit from new roads, improved internet connectivity and accessibility, and more stable, resilient power grids.
3) Increased Property Values and Tax Revenue
Data center construction increases property values and tax revenues for local governments, contributing significantly to the local tax base. In 2020, Loudoun County collected $330 million in tax revenue from computer equipment, $70.4 million in property taxes, and $2.6 million in license taxes. By 2026, Loudoun will generate roughly $1.37 billion in revenues from personal property tax alone.
4) Related Business Ecosystem
Data center-adjacent business activity contributes to the diversification of the local economy. Businesses ranging from construction material suppliers, equipment rental companies, and construction trade businesses all see a surge in demand related to data center construction activity. Moreover, data centers inspire technology companies and data center adjacent business activity in the area.
5) Skill and Career Training
As data centers evolve and technology advances, the demand for skilled workers increases. Data centers require skilled operators to work within the space from design to construction through operation.
In Loudoun County, Northern Virginia Community College maintains a Low-Cost Data Center Operations Program, providing access to fulfilling and financially rewarding careers in the mission-critical data center operations space through a two-year fully accredited program. Programs like these help local employees reskill, find employment, and advance in the high-paying technology and data center industries.
6) Investments In Green Energy and Sustainability
It’s no secret that data centers require a large amount of energy to operate. To help reduce their carbon emissions and meet aggressive carbon neutrality goals, many data center owners and operators turn to sustainable and renewable energy providers to power their operations.
Unfortunately, some areas simply lack access to large quantities of affordable, sustainable power. In these scenarios, data center owners and operators have made strategic investments or entered into purchasing agreements to help establish renewable energy sources in those regions.
For example, data center colocation provider Vantage Data Centers entered into a 20-year power purchase agreement (PPA) with SolarAfrica, a pioneer in South Africa’s solar energy financing. According to Vantage, the company is “…investing in the production of 87MWp of renewable energy to supplement the local grid that powers our Johannesburg campus. Over the agreement’s lifetime, it is forecasted to reduce the emission of CO2 in the region by an additional 3.8 million tons.”
Making A Case For Data Centers
Data center construction is about more than just the growing tech needs of the digital age. The expansion of the data center industry provides local communities with a catalyst for economic growth. In fact, a national impact study conducted by PwC on behalf of the Data Center Coalition found that data centers contributed $2.1 trillion to the U.S. economy from 2017-2021.
New data centers drive employment opportunities, require infrastructure development, and result in the diversification of tax revenues. They foster an expanded business ecosystem and create new opportunities for education and skill development to help local employees reskill and find higher-paying, high-demand careers. Data center owners and operators even invest in their local communities to bring educational programs, sustainable energy options, and other exciting new services to the region.
While concerns about unchecked data center industry expansion and construction are certainly warranted and valid, it’s also important to know and understand just how valuable data centers can be to a community.
