Data Centers: Jobs and Opportunities in Communities Nationwide

Abstract

Data centers will continue their fast-paced growth to support the digital economy’s increased demand for massive data storage in a secured environment. There are more than 3 million large and small data centers in the United States. Large data centers occupy several hundred thousand square feet and contain tens of thousands of servers with power backup and temperature control systems. This study focuses on the development of large data centers that have significant economic and social impacts on the communities where they locate. Our data sample consists of 244 large data centers owned by large enterprises and data center service providers, covering over 40 million net rentable square feet in 16 states across the country. We use financial information of the most recent data center development projects and annual income statements of data center service providers and enterprises to characterize a typical large data center in the United States. We then use official regional economic multipliers (RIMS II) constructed and published by the Department of Commerce’s Bureau of Economic Analysis to estimate direct, indirect, and induced economic impacts of a typical data center on local communities. We analyze the economic and social contributions of data centers to discuss the long-term impacts beyond the economic multipliers. In addition to immediate economic impacts, data centers create other long-lasting economic and social benefits for communities. Recognizing the economic and social benefits that a data center brings to communities, many local governments are competing to create business-friendly policies, such as tax incentives, to attract data centers. The economic and social benefits that data centers bring to communities are far reaching.