Virginia’s Data Centers Have a Significant Economic Impact, Driving Investment and Innovation
Research highlights critical role of data centers in Virginia’s economy and importance of tax incentives to maintaining Virginia’s competitiveness
February 5, 2018 – The Northern Virginia Technology Council (NVTC) today released the second edition of a research report that shows that the data center industry strengthens and diversifies the economy and drives innovation in Virginia. The Economic and Fiscal Contribution that Data Centers Make to Virginia 2018 (REPORT) was produced by Richmond-based Mangum Economics and provides updates to the original research published in January 2016.
According to the new report, the total statewide economic impact attributable to the data center industry in 2016 was approximately 43,275 jobs, $3.2 billion in labor income, and $10.2 billion in economic output. The report shows that, while much of this impact is in Northern Virginia, the sector’s impact is increasingly spreading to other regions of the state and this economic activity will likely be accelerated by two new subsea fiber optical cables in Virginia Beach linking the Mid-Atlantic to other areas across the globe.
In addition to outlining how the data center industry strengthens and diversifies Virginia’s economy, the report also calls attention to the industry’s sensitivity to state tax policies. Virginia currently offers a sales tax exemption on equipment purchases to qualifying data centers through 2035.
“Data Centers are a high performing industry that drive significant capital and human investment, while also promoting innovation," said NVTC President and CEO Bobbie Kilberg. "As the backbone of the modern technology economy, data centers are crucial to promoting diversification in Virginia’s economy.”
Highlights of the research’s findings include:
“Data centers continue to offer immense opportunities for Northern Virginia and the entire Commonwealth,” concluded Kilberg. “Maintaining Virginia’s incentives for this valuable industry will be critical to ensuring Virginia remains a top global destination for tomorrow’s technology companies.”
Lead sponsors of the report include AWS, CloudHQ, Dominion Energy, Microsoft, Mid-Atlantic Broadband Communities Corp. and NxtVn. Supporting sponsors include Equinix, Facebook, Loudoun, VA Economic Development, Sabey Data Centers and Visa.
Click here to read the full report.