Northern Virginia Technology Council releases its 5th biennial "The Impact of Data Centers on Virginia's State and Local Economies" report
MCLEAN, Va., May 1, 2024 /PRNewswire-PRWeb/ -- The Northern Virginia Technology Council (NVTC), the trade association representing the region's technology community, today released a research report, "The Impact of Data Centers on Virginia's State and Local Economies" produced by Mangum Economics. The report highlights the data industry's crucial role in strengthening and diversifying the Commonwealth of Virginia's economy, as well as propelling innovation in the state.
Virginia is second to none in terms of data center development. Although Northern Virginia is the largest data center market in the world, the rest of the state has so much data center capacity, that even without Northern Virginia, the Commonwealth would still rank among the top ten states in the U.S.
In 2023, new and expanding data centers accounted for 92% ($45.9 billion) of all new investment announced by the Virginia Economic Development Partnership. The data center industry has flourished in Virginia due to attractive tax incentives, dense and expanding fiber infrastructure, and an increasingly large pool of skilled workers to support the construction and everyday operation of these facilities.
"This report reinforces the fact that Virginia's robust data center infrastructure and supply chain throughout the state represents an unrivaled contribution to the Commonwealth's economy, fostering significant revenue diversification and continuous innovation", said Jennifer Taylor, NVTC president and CEO. "Northern Virginia continues to harbor rich technological resources, delivering ongoing value to the tech industry worldwide and contributing to making our region one of the world's leading tech hubs."
"Data centers are one of Virginia's strongest growth industries," said Fletcher Mangum, Mangum Economics' Founder and CEO. "Coupled with the ways that data center companies are investing in other development in the state, we see a thriving economy in action. For example, Amazon owns 18 solar farms in Virginia, and CloudHQ only uses recycled water for cooling in its data centers in Ashburn. Companies that sell to data centers are opening new facilities in Southern and Southwest Virginia to meet the data center demand."
Highlights of the report's findings include:
● The total accumulated capital investment of data centers in Virginia amounts to $203 billion.
● In 2023, the data center industry in Virginia provided approximately 12,140 operational jobs and 14,240 construction jobs.
● For every job inside a Virginia data center, an additional 3.5 jobs are supported in the rest of the Virginia economy, with 78,140 supported jobs in 2023.
● Northern Virginia's colocation data center market grew nearly 500% between 2015 and 2023.
● Data centers generate significant tax revenue for local governments. Because data center facilities are taxed locally but serve customers globally, they import tax revenue from other states. In 2022, data centers paid $640 million in taxes to the Commonwealth of Virginia and $1 billion to local governments in Virginia.
● Because data centers pay large amounts in taxes, but place few demands on local public services, they have a high fiscal benefit-to-cost ratio. In Loudoun County, data centers pay approximately $26 for every dollar of local public services required (a 26:1 ratio). In Prince William County, the ratio is 13:1. For comparison, fiscal benefit-to-cost ratios for other types of development such as manufacturing plants rarely exceed 4:1.
● Virginia's data center tax incentive programs continue to attract investors and demonstrate that its business climate is welcoming to the high-tech industry.
NVTC was honored to work with the lead sponsors of this report: Dominion Energy and Loudoun County Virginia Economic Development. Supporting sponsors include: AWS, CloudHQ, Fairfax Economic Development Authority and Prince William Economic Development.
Media Contact
Tarin Horan, NVTC, 7039460319, [email protected], www.nvtc.org
SOURCE NVTC
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