Data Centers: Digital Infrastructure & Local Impact

Understanding Data Centers

Data centers aren’t just digital infrastructure; they are major contributors to local and regional economies. With the potential to generate significant tax revenue, create high-wage jobs, and spark new business development, data centers have become key players in the modern economic landscape. This page serves as an educational resource to explore how data centers work, what communities can expect, and how their impact is being measured.

What is a Data Center?

What is a data center?

A data center is a facility that houses computer systems and associated components—like servers, storage, and networking equipment. These centers store, manage, and distribute digital data used by companies, governments, and individuals worldwide.

Why are data centers needed?

Data centers are essential for storing and processing the enormous amounts of data generated every second. They power the internet, cloud-based applications, streaming services, e-commerce platforms, and enterprise systems used by businesses across every industry.

Who uses data centers?

Nearly everyone—directly or indirectly. Businesses use them for digital storage and operations. Consumers rely on them for services like video streaming, online banking, and social media. Governments and institutions depend on them for secure data handling, communications, and public service platforms.

Are data centers the same as server farms or cloud infrastructure?

They’re closely related. A “server farm” typically refers to the physical servers themselves, while a data center includes the full infrastructure—power, cooling, networking, and physical space—that houses and supports those servers. Cloud infrastructure is the virtual service layer built on top of data centers, allowing users to access computing resources via the internet.

Do data centers create jobs in the long term?

While construction phases create large numbers of temporary jobs, operational data centers also support long-term employment. These include high-paying roles in IT, cybersecurity, facilities management, and maintenance. Additionally, data centers support indirect jobs in sectors like utilities, construction, security, and local services.

What is the environmental impact of data centers?

Data centers are energy-intensive, primarily due to the power required for servers and cooling systems. However, the industry is rapidly evolving to reduce environmental impacts. Many major operators are investing in renewable energy, energy-efficient designs, and carbon reduction strategies. For example, companies like Google and Microsoft have pledged to operate on 100% renewable energy by 2030.

Do data centers strain local utilities?

Data centers can increase demand on local power and water utilities, especially during construction and scaling. However, these impacts are typically studied and addressed in advance through collaboration with local infrastructure providers. Many modern data centers use cutting-edge efficiency technologies to reduce strain and improve sustainability.

How do data centers affect property values?

Data centers are generally quiet, non-polluting facilities and don’t generate significant traffic or public footfall. They are often located in business or industrial zones. While they don’t typically influence nearby residential property values directly, they can increase local government revenue through property taxes, which may fund improvements in infrastructure and public services.

How do communities benefit from data centers?

Communities benefit through increased tax revenue, job creation, and local contracting opportunities. In some regions, data centers have significantly boosted local economies—supporting school funding, road improvements, and other public services. For example, Loudoun County, VA, saw a 170% increase in tax revenue from data center equipment purchases from 2021 to 2023.

Economic Impact of Data Centers

U.S. & Global Impact

Based on a PwC analysis, U.S. data centers contributed $2.1 trillion to the national GDP from 2017-2021. They created an estimated 7.4 additional jobs per direct job, and can contribute significant local and state tax revenue.

State & Local Case Studies

Ohio Case Study

In 2021, data centers in Ohio contributed $7.1 billion to the state's GDP. The sector created 11,500 direct jobs, which supported an estimated 50,000 jobs in total when accounting for indirect and induced employment. From 2017 to 2021, these facilities generated $2.6 billion in state and local tax revenue. Ohio offers state sales tax abatements to data centers that invest at least $100 million and generate annual payrolls exceeding $1.5 million. Additional exemptions can be provided at the local level.

Sarpy County, Nebraska

A 2019 study by the University of Nebraska found that data center development in Sarpy County, including projects from Meta, Fidelity, Travelers, and others, generated $3.1 billion in economic impact during the construction phase. After construction, the centers continued to contribute $232 million in annual direct economic output. In 2022, Meta announced plans to expand its Sarpy County data center by adding nine buildings totaling over 4 million square feet.

Virginia Case Study

Virginia, and particularly Loudoun County, has emerged as a global leader in data center development. Often referred to as the "Data Center Capital of the World," Loudoun County alone hosts more than 275 data centers. In 2018, the industry across the state was responsible for an estimated 45,290 full-time-equivalent jobs, $3.5 billion in labor income, and $10.1 billion in economic output. Despite certain tax incentives, Virginia data centers contributed approximately $600 million in state and local tax revenue. Notably, in Loudoun County, every dollar in county spending related to data centers was matched by $8.60 in local tax revenue. Google’s operations in Northern Virginia alone supported around 3,500 jobs per year between 2017 and 2022 and contributed to local education, infrastructure, and nonprofit initiatives.

Rural Washington State Case Study

In rural Washington, data center investments have significantly enhanced local economies. A 2022 report by the Washington Technology Industry Association revealed that these investments have led to job creation, increased tax revenues, and support for public services. The presence of data centers has also attracted other businesses, creating a ripple effect that benefits the broader community.

Environmental Sustainability

As demand for digital infrastructure grows, the data center industry is actively implementing strategies to reduce its environmental footprint and operate more sustainably.

Many data center operators, such as Google, Meta, and Microsoft, are committed to powering their facilities with 100% renewable energy. Google has operated as carbon neutral since 2007 and is now working toward operating entirely on carbon-free energy by 2030 (source). Meta is also building energy-efficient data centers that achieve LEED Gold certification and use advanced cooling systems to conserve water and reduce electricity demand (source).

Beyond clean energy, the industry is exploring innovations like liquid cooling to reduce energy use, reusing waste heat to warm nearby buildings, and adopting green building standards. Companies are also partnering with local governments and utilities to improve grid efficiency and invest in community-based sustainability projects.

These efforts underscore a growing recognition that sustainability is not only good for the planet, it’s a core component of responsible data center development.

Questions?

The Right Place is here to provide information and resources for businesses, site selectors, and local communities. Have a question or looking for more data? Reach out to VP of Business Development, Brent Case, at caseb@rightplace.org.