Quantifying The Value of Data Centers: Report Key Takeaways

Andy Power, CEO, Digital Realty

Back in 2017, the World Economic Forum projected the untapped potential of data for the global economy at a staggering $100 trillion. Now, after just five years, data consumption and its value have surged beyond expectations, cementing its position as an indispensable global commodity. At the core of this data revolution stand data centers, the pulsating engines driving innovation, commerce, and connectivity, fundamentally reshaping our way of life.

Recently, we dug deep into this by working with an independent UK-based economics consultancy to commission research into the value that data centers contribute to the global economy. Our latest report delivers credible insights, not only uncovering the direct economic value data centers bestow upon the world but also shedding light on their indirect contributions through employment, remote work facilitation, supply chain management, and the far-reaching implications for the broader economy.

Here are some of the highlights.

1. The ‘data boom’ is real. Data now powers a vast portion of our everyday lives, from online banking to streaming services. It powers everything from businesses to governments and everything in between. And with society’s increasing reliance on digital services and devices, our need for data processing is only deepening. Between 2017-2021, the demand for global data production increased at a rate of around 30% per annum and forecasts indicate between 2021-2026 this will increase further by approximately 21% per annum.
2. Data centers are critical to the growth of our digital economy. Data centers have become critical infrastructure that society relies upon and are an essential part of supporting modern global economies. At the end of 2022, there were around 5,600 data centers in operation globally, contributing around USD 64 billion to the GDP of the global economy. Over the next five years, this number is anticipated to grow by around 2% per annum to approximately 5,732. With this increasing demand for, and dependency on data, we will need additional data center storage and processing facilities, that are flexible and scalable, to enable this.
3. The data center industry is a key contributor to the global economy. Data centers notably benefit modern economies. The global economic benefits associated with the use of data center services are estimated to be USD 5.55 trillion per annum. This equates to almost 6% of total global GDP. And by 2027, this figure could reach up to USD 6.3 trillion per annum.
4. Data centers mean jobs – direct and indirect. Data centers play an important role in the global labor market and help contribute to the local communities in which they operate. A total of 565,000 jobs are estimated to be attributable to the data center industry – including direct and indirect jobs, as well as those supported through induced effects (jobs supported when data center employees spend their incomes in the wider economy). Our research predicts that by 2027, this could amount to up to 655,000 jobs. More widely, around 13.54 million jobs are supported through the downstream enabling effects of data.
5. Sustainability matters. From contributing to district heating networks to procuring more renewable energy, the data center industry is making significant strides forward in terms of minimizing its environmental impact. However, it’s crucial to stay focused as technology advances. Analysis from the International Energy Agency (IEA) indicates that energy use by the data industry has grown only moderately in comparison to the growth of data centers over the past decade or so, despite very strong growth in demand for services. Between 2015-2021, IEA analysis indicates that energy use by data centers has increased by 10-60%, despite a 440% increase in internet traffic over the same period. As the central nervous system of the economy, our industry is uniquely positioned to assist in the process towards the Net Zero transition, whether it’s the facilitation of widespread remote working, alleviating some of the concerns around vehicle pollution, or the digitization of the energy production and transmission sector.

It’s time to reassess how we view data centers as critical enablers of global growth. From enabling society’s entire online activity and generating global economic contributions to providing direct and indirect jobs to millions of people around the world – data centers are the glue holding global market economies together. As our dependency on them continues to grow, it’s vital that businesses like ours take on the responsibility of expanding to meet this demand in a way that is both sustainable and future-proof.