Data / Economics

Report: Virginia is the ‘world’s largest market’ for data centers

A majority are based in northern Virginia, and tech giants are set to add capacity. The Northern Virginia Tech Council breaks down the economics.

Data centers are lighting up Virginia's economic future. (Photo used via Creative Commons)

If the future of the economy will be driven by tech, Virginia wants it to go through the Commonwealth.

That means securing new data centers – those giant storage facilities where large and small companies keep and disseminate their data. It’s an important issue, since thousands of jobs and billions in property tax revenue will help cash-strapped localities in a state that has spent the last decade diversifying its economy from over-reliance on the federal government.

A recently published report titled “The Economic and Fiscal Contribution that Data Centers Make to Virginia” by the Northern Virginia Technology Council highlighted impressive statistics that have led to Virginia overtaking New York as the “world’s largest market” for data centers. As of 2016, the industry brought 43,275 jobs to the Commonwealth, equating to $3.2 billion in labor income and $10.2 billion in economic output.

“We need to think about diversifying our economy,” Josh Levi, NVTC’s vice president for policy, told DC. “We think that data centers is what that diversification calls for.”

In 2010, Virginia lost its bid to North Carolina over a $1 billion Apple data center, and refined its data center sales and use tax exemptions – measures that are now employed by 30 states in the country.

A majority of the data centers are based in northern Virginia, equating to $143 million in local tax revenue in Loudoun County alone. The most recent example of growth comes in the form of an Amazon Web Services data center that’s being planned on a 44-acre site near Dulles International Airport, according to the Washington Business Journal. Late last year, Google bought a pair of sites in the county, the Loudoun Times-Mirror reported.

Central and southern Virginia are also beginning to attract data centers, as is evident from Facebook’s billion-dollar plans in Henrico County. Here are some economic stats from the report, as of 2016:

  • Hampton Roads: 3,547 related jobs, $202.2 million in labor income and $797.2 million in economic output.
  • Southern Virginia: 1,601 jobs, $64.5 million in labor income and $269.4 million in economic output.
  • Southwest Virginia: 354 jobs, $14.8 million in labor income and $68.6 million in economic output.
  • Shenandoah Valley: 563 jobs, $27.2 million in labor income and $115.3 million in economic output.

More data centers across Virginia will also mean substantially higher paying jobs in more rural parts of the state.

“If Virginia is to maintain its lead and avoid the fate of Washington State which has seen billions of dollars in data center investment migrate to other states because of its off-again/on-again approach to data center incentives it will need to maintain its competitive position in the data center market,” according to the report.


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