How data centers transform and engage with local communities

Behind every successful data centre lies a powerful community story waiting to be told. Beyond the technical specs and operational metrics, your facility can transform local economies, modernise infrastructure and pioneer sustainability efforts.

In today's challenging approval landscape, communicating these benefits has become as crucial as securing power and connectivity. This article shows how highlighting your data centre's community impact can overcome local resistance, accelerate approvals and build the supportive relationships your operation needs to thrive.

As powerful engines of municipal revenue, data centres deliver exceptional fiscal benefits to local governments. In the US, Loudoun County, Virginia's expanded tax base from data centres occupied by global tech companies has significantly improved infrastructure, schools and public service while reducing the tax burden on constituents, according to Jeff Groh, Vice Chairman at JLL. Data centres now generate 38% of the county's General Fund revenue and nearly half of the county's property tax revenue.

Throughout Virginia, the industry paid $640 million in state taxes and $1 billion in municipal taxes in 2022. These facilities are budget goldmines for local governments. In Loudoun County, a data centre pays $26 in taxes for every $1 of public services it uses – far exceeding the $4 paid by manufacturing plants.

Phoenix demonstrates similar economic strength. Both completed and under construction developments in Metro Phoenix represent capital investments exceeding $10 billion, generating $863 million in state and local tax revenues during 2023. Major operators like Google, Microsoft, Meta and numerous others have established significant presence in the region.

Emerging markets in the US are also taking notice. "The QTS data centre campus strengthens our position as a center for emerging technology, demonstrating the value of our efforts to build diverse industry clusters." says Jeff Pomeranz, City Manager of Cedar Rapids, Iowa.

The employment impact extends beyond the facilities themselves.

"In Loudoun County, for every data centre job, there are three-and-a-half jobs created outside the data centre," Groh explains.

Virginia's data centres supported approximately 78,000 total jobs with $6.2 billion in pay and benefits in 2023, while Arizona's industry created 14,430 direct jobs and supported over 81,000 total jobs.

"There's plenty of jobs," says Mark Bauer, Vice Chairman, JLL. "I mean, I can't tell you how many campuses for the last 10 years have had just contractors working there, and those are good jobs."

Across Europe, the economic benefits of data centres are equally impressive. In the UK, data centres are projected to contribute £4.7 billion in gross value added (GVA) for 2024, supporting 43,500 jobs and generating £640 million in tax revenue. Each new data centre brings between £397 and £436 million in GVA, while existing facilities contribute between £291-320 million to the economy.

In Norway, data centres create NOK1.8 million in economic value per annual GWh consumed, highlighting their efficiency in converting energy usage into economic output. Meanwhile, Spain's data centre industry has created 1,500 direct jobs while supporting an impressive 40,000 indirect or induced positions throughout the economy.

In APAC, data centres are having significant economic and employment benefits in all major markets. As an example, data centres contributed an estimated USD$1.4 billion to Malaysia's total economic output in 2024 (equivalent to $0.6bn in GVA), supporting over 4,400 jobs. By 2030, total economic output from data centres could reach USD$34 billion (equivalent to $11.8bn in GVA), and employment supported by the industry is projected to grow to 30,900 jobs annually. This includes around 4,300 high-value knowledge roles within data centre operations and across the wider digital economy.

For each direct job in the data centres, it is estimated that an additional 3.2 jobs are supported elsewhere in the Malaysian economy. Annual wage income supported by data centres is projected to increase nearly eightfold, reaching USD$1.3 billion by 2030. By 2030, data centres could contribute approximately 4.1% of national economic output and 3.5% of national GVA.

Through their substantial community investments, data centres often drive significant improvements to their communities' power infrastructure. These facilities fund infrastructure upgrades that ultimately benefit local residents, strengthening electrical grids, improving reliability and accelerating the development of renewable energy resources. Local and regional utilities continue to shift the economic burden for these upgrades to the data centre providers by driving initiatives to ensure that rate payers are not negatively affected.

The digital infrastructure benefits are equally substantial. Bauer highlights Phoenix as an example where technology access has visibly improved, noting that non-locals are often surprised by advanced technologies they encounter such as driverless cars. These technological developments are only possible because of the strong network infrastructure that data centres help support.

When data centres establish operations in a region, they create a gravitational pull for supporting businesses. Hyperscale facilities attract companies that provide power distribution, IT hardware, cybersecurity and consulting services. Phoenix exemplifies this ecosystem development, where major financial institutions (e.g., BlueCross Blue Shield, AMEX), tech companies (e.g., PayPal, GoDaddy), and specialised data centre operators (e.g., Digital Realty, Aligned Energy) have established significant operations. These clusters of businesses attract skilled talent and revitalise previously underutilised areas.

According to the CEO of a major data centre operator, when a hyperscale data centre moves into a market, businesses that support its services follow. If the applications using that facility are latency-sensitive, the need for speed pushes companies to locate nearby, too.

Data centres can even attract broader retail development. It's common for residents to expect amenities like a Trader Joe's store to follow a new development in the community.

In APAC, Keppel Data Centres' Floating Data Centre (FDC) is a modular, near-shore facility designed to address land, water, and energy constraints in Singapore by utilising seawater for cooling instead of treated water and featuring scalable plug-and-play modules that can be relocated for circular economy benefits. The project reached a key milestone in January 2021 when the Low Carbon Technology Industry Consortium including Chevron, Keppel, and others signed an MOU for collaboration. The FDC includes an independent off-site power generation plant and advanced technologies to significantly reduce Power Usage Effectiveness (PUE), supporting Singapore's net-zero emissions goal by 2050 while reducing operational costs and carbon footprint for the digital economy.

Data centres have become pivotal drivers in the transition to renewable energy. Their concentrated power demands create economies of scale that make renewable energy investments more viable. Many providers are now committing to ambitious sustainability goals that benefit the broader community.

"This is largely done through PPA contracts," explains Daniel Thorpe, who heads EMEA data centre research for JLL. "About 28% of the disclosed contracted volumes are contracted by the IT sector, making this sector an important driver in the realisation of new renewable energy projects."

In fact, Aligned Data Centres gets 100% of its electricity from zero-carbon renewable energy, highlighting how data centre operators are leading by example, said company CEO Andrew Schapp in a Fast Company article. Major hyperscalers like Amazon, Google, and Microsoft are making significant investments in clean energy sources – including wind, solar and nuclear power – with the U.S. sustainable data centre market expected to double to over $35 billion by 2029.

Beyond renewable energy, data centre operators are exploring advanced environmental tools that benefit surrounding communities. In a Data Centre Dynamics article, Jérôme Totel of Data4 Group noted that these include biocircular data centres, where captured CO2 is used to grow algae for recycling as biomass. These approaches demonstrate how data centres can be laboratories for sustainability innovations that extend beyond their operations.

Water conservation efforts increasingly focus on community benefit. In drought-prone regions like Phoenix, nearly all data centres built in the past decade use closed-loop and air-cooled systems requiring minimal outside water. This industry-wide shift, exemplified by providers such as QTS, Edged and Aligned Data Centres, significantly reduces pressure on local water supplies while meeting critical cooling needs. "These data centres use the same amount of water (or less) than a large office build" as referenced by the State of Virginia's Joint Legislative Audit & Review Commission.

In APAC, data centre operators have developed innovative environmental approaches that directly benefit local communities. AirTrunk collaborates with Johor Special Water to develop Malaysia's largest recycled water supply scheme, treating wastewater for non-potable cooling use. Equinix sponsors recycling initiatives at Singapore universities while participating in the nation's 'One Million Trees' movement. Meanwhile, STT GDC Indonesia partnered with conservation groups to plant 1,000 mangrove trees, protecting coastal communities while boosting biodiversity and combating climate change.

Data centre operators are increasingly engaging with local educational institutions to develop the next generation of talent. Microsoft exemplifies this approach in Phoenix with its Data Centre Academy scholarship programme at Maricopa Community Colleges, supporting students pursuing data centre-related degrees and certificates. Virginia has similar programmes with George Mason, Virginia Tech and Northern Virginia Community College. Other operators partner with universities and trade schools to build their talent pipeline, some even retraining military veterans to fill technical roles. Data4 has developed a particularly structured approach in its partnerships with local trade schools and universities, according to Data Centre Dynamics. The company's goal is to train 100 students on each of its European campuses every year. These educational programmes not only create career pathways but also help demystify data centres for community members.

Beyond formal educational initiatives, data centre providers are finding creative ways to integrate with their communities. For example, Data4 participates in local life by organising events such as music festivals and open-air cinema screenings, demonstrating a commitment to being more than just a technical facility.

Some providers are emphasising local procurement, with Data4 running a "speed-dating competition for start-ups in the area every year, selecting some to work with us," Data Centre Dynamics reports. This approach creates economic opportunities for local businesses while ensuring data centres benefit from providers with detailed knowledge of local conditions.

In APAC, data centre operators have developed comprehensive community partnership approaches that extend beyond traditional business operations. Through the Equinix Foundation, the company provides crisis relief funding, employee donation matching, and volunteer assistance during natural disasters, while supporting non-profit organisations focused on digital inclusion and participating in tree planting initiatives. Meanwhile, Microsoft empowers youth with disabilities in India's finance sector and has spent over 28 years helping Indonesia's public sector, educational institutions and communities embrace digitalisation.

Despite these benefits, data centres face challenges in community relations. Communities are becoming increasingly organised in opposition efforts. The days of quietly acquiring space without public engagement are over, and data centre developers must now be transparent about their intentions with their projects.

"Public perception of data centres in Europe is improving," Thorpe notes. "There is a better understanding towards the positive economic benefits and more countries now have an AI strategy plan and are actively encouraging development of critical digital infrastructure."

Overcoming community relations challenges requires engagement and education. "I think a lot of people don't understand really what a data centre does," Bauer says.

To overcome this, operators need to better explain the benefits a data centre brings not only to local communities – from tax benefits to bolstering local employment – but also to the broader digital economy and technological progress. According to Jordi Sinfreu, who heads JLL's data centres business in Southern Europe, companies must address misconceptions about water consumption and regional environmental impacts, while highlighting how data centres enable remote work and digital services that reduce travel needs and lower carbon emissions.

Industry associations are playing an increasingly important role in these advocacy efforts, Totel told Data Centre Dynamics.

As data centres continue expanding to support growth in AI and cloud computing, their relationship with host communities will become increasingly important.

"This is such a new and dynamic industry that the public relations efforts have not kept pace with growth," Groh says. "With the magnitude of related investment and importance to our country's digital future, proactive enumerating of compelling community benefits will become a greater priority."

The most successful providers will be those who view community integration not as an obligation but as an opportunity to create shared value through economic development, infrastructure improvement, environmental leadership and meaningful engagement.

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